How to fix the housing crisis? Experts, mayors bring ideas to annual Ontario summit
Suggestions range from restructuring federal taxes to investing in budding modular housing tech
Key players in Ontario and the Greater Toronto Area's housing sector, along with municipal leaders, gathered virtually Thursday to highlight the problems perpetuating the housing crisis and to discuss possible solutions.
The event, organized by the Residential Construction Council of Ontario, is the third by the residential builders association since the event's launch last year to help tackle the province's housing crunch.
Here's what the panelists had to say.
What's underpinning the housing crisis?
Toronto Regional Real Estate Board chief market analyst Jason Mercer says multiple factors have contributed to today's tight housing market, particularly in the GTA. Of the most pressing factors are high lending rates that hit in a short period of time and the rate of construction not keeping up with population growth over the past two decades, said Mercer.
That means not only is the province behind on housing supply, it needs to overcompensate for the influx of newcomers expected to arrive. If it doesn't, the health of the local, provincial and even national economy is at stake, he said.
"If people don't feel comfortable with their ability to move to Canada and specifically the GTA ... they're going to start to look elsewhere," said Mercer.
Despite this, Marlon Bray, the head of Altus Group's Ontario pre-construction and contract administration services, said the country is building slower thanks to the overall labour shortage of construction workers.
"All of these sources [that] are bringing in labour have kind of been tapped out ... This is being worked on, but it takes time," said Bray, pointing to immigration reforms and a provincial emphasis on the skilled trades as an in-demand career.
Mayors have a say
With those problems serving as a backdrop for their terms, three mayors weighed in on their top priorities when it comes to housing.
Toronto Mayor Olivia Chow says the city set a target to approve 40,000 new affordable rental homes by 2030, and that a new report coming to council in the next few weeks is suggesting that be increased by some 20,000 units.
As part of that effort, she says the city has already committed $8 billion over the next decade that will go toward things like using government-owned land, speeding up development processes and consolidating city departments.
But she says the city needs more funding from both the province and the federal government, citing a gap of billions of dollars between what Toronto has requested and what both governments committed.
"We're asking them to provide land, provide financial support, so we could accelerate," said Chow.
Guelph Mayor Cam Guthrie says his council is looking to "get out of the way" of development processes and allow more projects as of right, along with rehabilitating the city's brownfields — land where past industrial or commercial activities may have left contamination — for affordable housing projects.
But following through on the city's plan has been made more complicated by the flurry of recent changes in provincial legislation, he said. The changes, he said, have "bogged" down staff who have to spend time on consultations and catching up with the latest directives instead of focusing on planning approvals and development.
"Make whatever changes they're really looking at making, and then please leave us alone," said Guthrie, in a message to the province.
Wilmot Township Mayor Natasha Salonen says tackling NIMBY sentiments that may be getting in the way of development and encouraging secondary suites remains high on her list.
The issue affects her personally — even as mayor, she says she can't afford a home in her own municipality. That's partly why finding ways to de-incentivize using housing as a form of investment is something the industry and government should keep in mind, she said.
"When everybody has their own incentives and commissions along the way, that adds up to housing affordability not working out," said Salonen.
So what are the solutions?
Similar to previous years, panelists reiterated the need to streamline and digitize development processes and to do away with restrictive zoning.
New to this year's event was a focus on the need for modular housing.
Panelists argued the country's development industry could focus more on mass producing modular homes — housing units that are built off-site and assembled on-site. It's a method of construction that some non-profit groups have used to get housing built faster for those who need it.
Albert Bendersky, the vice president of design at construction company BECC Modular, says the housing industry has suffered from being slow to innovate and educate stakeholders on new tech.
Modular homes can help bring the cost of projects down while bringing the speed of completion up, he said. The Canadian development industry has had the benefit of watching other players in different countries bring these homes to market, and can help lead the success of it here with more investment from governments, he added.
"You cannot resolve existing crisis with the old tools. And in order to use new tools, you have to learn how to use them," said Bendersky.
Another focus this year was how the federal government can further reform its tax schemes to be more equitable to other governments and help incentivize rental development.
Paul Smetanin, president of the Canadian Centre for Economic Analysis, says recent research from the centre suggests new housing in Ontario is taxed at 31 per cent of its purchase price, with governments taking more than three times than the builder.
One of the main problems lies with the federal government, which takes almost 40 per cent of tax revenues but only invests about 7.1 per cent back into Ontario's public infrastructure, Smetanin said.
"The money is being raised and yet it's leaving the province and it's not coming back to the province in a way, shape or form that would actually help the municipalities on the ground," said Smetanin.
And while the federal government recently announced it would waive GST in the construction of new rental apartments to spur new development, Mike Moffatt, the senior director of policy and innovation at the Smart Prosperity Institute, says it's not enough.
"The GST was a great move, but we got to do more," said Moffatt.
"Governments need to find other ways to fund this infrastructure that don't involve treating new building [as] something that should be taxed out of existence."
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