Ontario has over a million homes in the pipeline, but needs developers to put shovels in the ground: report
Ontario has more than 1.25 million potential new homes already in the development pipeline — it just needs to figure out how to convince builders to get shovels in the ground, say experts who manage planning in cities across Ontario.
The Regional Planning Commissioners of Ontario (RPCO) came to that conclusion in a new report released this week on the state of the province's unbuilt housing supply.
The figure reflects the number of homes developers have been approved for permits to build, but have not yet materialized. Once approved by municipalities, there is no set timeline by which a developer must build the homes.
The RPCP says its calculations are based on numbers from late last year, before the Ford government passed the controversial Bill 23, the More Homes Built Faster Act.
The bill aims to help the government build 1.5 million new homes over the next decade — a figure that does not include the homes already approved to be built. But the planners say if the province could incentivize developers to build what is already approved by municipalities, they'd be 85 per cent of the way toward their goal, well ahead of their target.
"I think (the report) starts to tell the story that the housing supply challenge isn't really a land supply or development approval problem," said RPCO chair Thom Hunt. "The bigger problem is, probably, how do you compel a developer to build? How do you increase the rate of construction?"
Ford's Greenbelt 'land swap' not needed, planners say
Premier Doug Ford's government says Ontario is in a housing supply crisis, and has introduced a number of bills to address it, including Bill 23. The legislation contains a number of controversial elements including waiving or freezing development charges which are used to pay for sewers, parks and community centres around new homes.
The province has also proposed what the government has called a "land swap" to remove pieces of the protected Greenbelt to build 50,000 new homes, a move that contradicts an earlier promise not to touch protected area.
But the RPCO report shows the government doesn't need to move ahead with that plan, Hunt said.
"The takeaway from this is that you don't need to do urban boundary expansions for the most part and you certainly don't need to go into the Greenbelt area," he said.
Hunt said the numbers also suggest that the government will need to make special efforts to ensure that affordable housing will be built amongst that supply. Partnerships between the federal and provincial governments, not-for-profits and the private sector will be required to address that urgent need, he said.
"That is probably the better way to engage on the housing crisis than say, looking at it through the land supply lens, which may only realize market rate housing at the end of the day," he said.
Planning approvals not the full picture, councillor says
Toronto city councillor Brad Bradford cautions people against looking at the numbers in the report and thinking the province has solved the housing crisis. As it points out, getting those homes built is complex, he said.
"I think that the development pipeline often gets weaponized by folks that don't want to see more housing built," he said. "We are facing historic headwinds in our effort to deliver more housing and deliver more supply across Toronto."
Those include rising interest rates, which makes building more expensive for developers, inflationary pressures on supplies and the on-going labour shortage, he said.
"We can't rest on our laurels of approval," said Bradford, chair of the city's planning and housing committee and a former city planner.
"It's going to require a whole of government and collaborative response with industry."
Toronto's chief planner Gregg Lintern said the city approved an average of over 29,700 residential units a year from 2017 to 2021. During that same period, only around 16,000 units were built annually.
That creates an average yearly surplus of approximately 13,700 units, ensuring a "steady supply of approved housing," he said in a statement.
"While the City typically approves twice as many units as get built, it is important to ... enable a full range of housing supply to meet diverse needs and work to improve the development review process and reduce approval timelines," he said.
Misconceptions surround approvals process: expert
Matti Siemiatycki, the director of the Infrastructure Institute at the University of Toronto, said the RPCO's numbers show that there are sometimes misconceptions around the approvals process. While approvals can take time for some projects, it's clear there are market forces at work that result in approved developments not getting built immediately, or sometimes at all.
"We also know that not every unit that gets approved gets built," he said. "And I think we need much more of an investigation into why that happens."
Siemiatycki said developers are sensitive to market forces and are also wary of community pushback over projects. Sometimes they are also subject to internal shifts in direction within their own companies which can derail approved housing plans, he said.
But municipalities are under enormous pressure to expedite planning work, so when they spend the time vetting a project and it fizzles, that's a problem, he said.
"We ultimately need more places for people to live in more housing units," he said. "And if the system is being blocked up with projects that aren't being built and if there's a way to thin that out … that's really important."
A spokesperson for Municipal Affairs Minister Steve Clark said the government can't "sit idly by" as the cost of housing continues to rise. Even if all of the homes in the report are built, the province will still need hundreds of thousands more to meet the 1.5 million home target by 2031, Victoria Podbielski said in a statement.
She said Bill 23 is already speeding up approvals and the construction process.
"We will continue to build on this progress with further housing supply action plans that ensure red tape and excessive costs do not stop hypothetical approvals from becoming real homes."