Toronto has a housing supply problem and the reason why may lie in Ontario's 2006 growth plan
The plan favours multi-family housing and other strict rules, creating a demand-supply mismatch as buyers seek coveted detached homes and developers wade through regulations
Toronto, Canada’s largest city and one of the world’s hottest property markets, has a supply problem and the nation’s housing agency admits it is not quite sure why soaring prices have not spurred more construction.
New homes replace demolished ones at a sharply lower rate than early this decade, completion times for multi-family projects have doubled and prospective buyers have far fewer new homes to choose from than only a few years ago.
The reason, in part, may lie in an ambitious growth plan for the greater Toronto area the Ontario province forged over a decade ago.
With new “density” targets favouring multi-family housing, designated urban growth areas and tougher environmental rules, the 2006 plan sought to check urban sprawl while supporting the area’s further growth as North America’s major economic hub.
The market, though, did not follow that vision.
Detached homes are still most sought-after and their tight supply keeps prices high even as some condominiums and multi-family projects languish.
Developers say the growth plan, updated in 2017 with higher density targets, both created a demand-supply mismatch and added a layer of new municipal regulations.
“The growth plan has throttled growth severely,” said Matthew Cory, principal at planning consulting firm Malone Given Parsons.
Ryerson University economist Frank Clayton said part of the problem was the plan’s emphasis on protecting the environment and heritage sites at the expense of development.
“That superimposed more planning on a planning structure that was already bureaucratic-heavy,” he said in an interview.
Toronto’s troubles are of national concern given its role as Canada’s top financial and technology hub, which, together with surrounding towns, accounts for a fifth of the nation’s economy.
Read the rest of the article at the Financial Post