Tag Archives: housing affordability

Yeah, but do you really want to live here now?

Yeah, but do you really want to live there now?

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Yeah, but do you really want to live there now?

Housing in Canada’s biggest cities became less affordable over a recent 10-year period, while housing actually became more affordable in many growing cities in the United States – including those with increasing populations and rising incomes, according to a new study from the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

Photo: iStockPhoto.com
Photo: iStockPhoto.com

“Many people make the assumption that when you have a growing, prosperous city, housing will inevitably become less affordable, and the evidence suggests otherwise,” says Steven Globerman, a Fraser Institute senior fellow and co-author of Changes in the Affordability of Housing in Canadian and American Cities, 2006–2016.

The study measures changes in housing affordability – shelter costs as a share of income – over a 10-year period in 396 cities in Canada and the U.S.

It finds that while housing affordability increased by an average of 10.5 per cent for the 344 American metropolitan areas included in the analysis, housing affordability decreased by 7.6 per cent, on average, in the 52 Canadian metropolitan areas over the same 10-year period.

For example, the large metropolitan areas surrounding Dallas and Houston, Texas and Atlanta, Georgia all experienced rapid population growth and rising incomes similar to Toronto, Vancouver and Montreal. But whereas shelter costs relative to income in the three American cities fell by 13 to 16 per cent – meaning housing became more affordable – shelter costs relative to income increased in the Canadian cities by 10.6 per cent in Vancouver, 8.5 per cent in Toronto and 1.8 per cent in Montreal.

“Housing affordability is crucial to attracting top talent, so municipal policymakers in Canada should investigate how American cities managed to grow and prosper while at the same time remain affordable in a way that Canadian cities have not,” says Globerman.


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In Conversation With Frank Clayton, Centre for Urban Research and Land Development, Ryerson

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In Conversation With Frank Clayton, Centre for Urban Research and Land Development, Ryerson

Builders and developers have long been calling for the Province and municipalities to loosen up on land supply and approval processes to allow more new homes to be built, and more quickly. To the uninitiated, however, this seems a self-serving request, since, of course, they believe these companies want to build more and make more money.

But now we have more and more third parties, without any vested interest, expressing the same concerns, and citing hard, objective numbers. One of them is Ryerson University’s Centre for Urban Research and Land Development.

“Toronto’s booming economy has brought with it housing affordability challenges that will continue throughout the next decade,” Frank Clayton, PhD and senior research fellow, said at a recent Toronto Regional Real Estate Board (TRREB) event. The Centre’s recent study, An Economic Outlook for the Greater Toronto and Hamilton Area (GTHA) and What it Means for Housing Affordability, examined the economy and its impact on housing to 2031.

We spoke with Clayton to explore the issues discussed in the study, what government and the industry can do, and what it all means for homebuyers.

HOMES Magazine: Your recent report doesn’t exactly sound like good news for those still looking to buy a home. What positive news can they take from your findings?

Frank Clayton: The affordability picture painted in our report means that, comparatively, more prospective buyers will have to devote more of their budget to housing, rely on parents for down payment assistance or reduce their housing expectations in terms of location, size and type of structure. On the positive side, many prospective buyers (especially double income professional couples) will still be able to afford to purchase a home. Also, once prospective buyers purchase, they will benefit from the appreciation in home values.

H: Given the findings of your study, where do you see the most promising opportunities for prospective homebuyers – in terms of location and housing type?

Clayton: This is not an easy question to answer, as it depends on where people work, household composition and lifestyle preferences. Durham Region is the most affordable of the 905 areas, and has become more attractive with the extension of Hwy. 407 and improved GO train service. For buyers who want to locate closer to Toronto’s central area, there are wide swathes of existing low-density housing in the city’s post-Second Word War suburbs, such as much of Scarborough, which are priced much lower than neighbourhoods closer to the core.

Unit types depend on lifestyle preferences and affordability. The housing choice menu that I have seen over the years goes like this: Many households prefer a single-detached house, but if they can’t afford it, they move up the density ladder until they can afford to purchase. So, if a single-detached house is unaffordable, a semi-detached house, followed by a townhome becomes the targeted housing type. If a townhouse is not affordable, then a stacked townhouse unit, followed by other types of lower-rise condos (four storeys of less) are preferred. If a prospective buyer is considering purchasing in a highrise, they should look at new units being built in a mixed-use project such as those being built on redeveloped shopping centre sites.

H: You note that average home prices and rents are to rise four to five per cent over the study period. This seems low, given that TRREB forecasts home price growth to hit 10 per cent for this year… Why the disparity?

Clayton: Our home price and rent forecasts represent average annual per cent increases from 2019 to 2031. If prices rise by 10 per cent per year early in the period, it will likely be due to irrational exuberance like in 2016-17, when home purchases exploded as buyers and investors rushed to buy before prices rose more. By doing so, they pushed prices up even higher. Typically, these price surges are unsustainable and are followed by stagnant or slightly lower prices. So, if prices rise by 10 per cent for a year or two, there will be years when prices may rise only slightly, if at all.

H: If figures such as TRREB’s are accurate and continue for a couple of years, and are not just an anomaly for 2020, what does that mean for housing affordability? How much worse could it get?

Clayton: It would be very damaging for affordability, and the picture would be bleaker than what our study predicts. Even more potential buyers would be relegated to the rental market, which would put added pressure on rents. If prices were to rise by 10 per cent per year for several years, we could expect to have a rather serious market readjustment so that prices would cease to rise or even decline moderately as they did following 2016-17.

H: What kinds of things can or should builders and developers do in the short-term to deal with these challenges?

Clayton: There isn’t a lot builders and developers can to increase the supply of housing in the short-term. It is important that the industry continue to pressure municipalities to expedite development applications for all kinds of housing, to bring developments to market much more quickly than at present. Builders should be exploring ways to bring more affordable units to market by reducing unit sizes and finding locations where underlying land values are lower, such as in Scarborough and Durham Region.

H: And what can or should municipalities do?

Clayton: Municipalities first have to recognize that they are a primary cause of the shortage of housing. Their land use planning systems have bogged down the production of new and innovative types of housing. The planning system is burdensome, uncertain, time-consuming and costly. What is needed is a change of priorities. The rapid increase in the production of a range of new housing by unit types and price ranges should become the number one priority of all municipal councils and staff in the GTA. Without this, a shortfall of new housing will continue to keep prices much higher than need be.

H: What kind of response or reception has your study received from the Province or City of Toronto?

Clayton: The Province is aware of the causes of high and rising housing prices and is doing what it can to persuade GTA municipalities to increase their housing production sharply. Unfortunately, many municipalities aren’t on side, so it will be a struggle to greatly increase housing production.

Many councillors at the City of Toronto, for instance, fail to recognize how the city’s planning system, along with those in neighbouring municipalities, is a primary cause of the current housing shortage in the GTHA. While the City’s efforts to increase the supply of affordable housing over the next decade is in the right direction, this will not get at the root cause of the affordability crunch – not enough new housing is being built, particularly, non highrise varieties.

H: ReMax is citing Ontario markets as already some of the least affordable in Canada. Even with the economic growth in the GTA, how well will household incomes be able to keep up to housing costs?

Clayton: Our study is clear that average incomes are very unlikely to keep up with rising average prices and rents in the GTA. The only sure-fire way to change this projection is to significantly increase the supply of new housing in the GTA.



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What Bill 108 means for housing affordability in the GTA

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What Bill 108 means for housing affordability in the GTA

Bill 108, the More Homes, More Choice Act, received Royal Assent on June 6. The policy changes are intended to improve housing affordability in the GTA by ensuring cost certainty for development projects, reducing red tape and shortening the time frame for land use approvals. This will enable the delivery, more quickly, of more quality places to live and work.

Let’s take a look at the changes to the Development Charges Act (DCA), which enables municipalities to impose charges on development to pay for municipal services such as roads, water and public works. Bill 108 proposes to narrow the range of services for which development charges can be imposed in order to align with the new Community Benefits Authority (CBA), which will fund soft services like daycare centres and libraries. Development charges would then be imposed for certain hard services, like water, roads and transit. Changes to the DCA will also increase predictability for the industry and for consumers by allowing for development charges to be locked in earlier in the development process.

The government’s key objective in introducing changes to the DCA is to make housing more affordable and provide more certainty about some of the costs associated with building housing in the GTA. Development charges account for approximately 10 per cent of the cost of a new home across the GTA and have been rising quickly. These changes make upfront development costs more predictable and transparent, benefiting the new home buyers who ultimately pay for these costs in the price of a new home.

Rental housing is not left out. In order to support a range and mix of housing, including new rental buildings, changes allow for the deferral of development charges for rental housing and not-for-profit housing until occupancy, with payment occurring over five years, and freeze development charge rates at an earlier point in time. This provides an incentive, and reduces barriers, to build rental and not-for-profit housing by allowing for an amortization of some of the upfront costs over a period of time.

Speeding development

An overall focus on speeding development and reducing duplication is woven throughout Bill 108 and gives communities and the development industry more confidence on what they can build and where they can build it. It can take years before shovels can break ground on a new housing project. Some government policies and processes are duplicated and can create delays for no reason, which drives up costs for new home buyers. Complex administrative red tape can slow down developments as a project can face dozens of municipal, regional and provincial studies, reports, checklists, plans and standards required as conditions of approvals, many duplicate. This is in part why it takes 11 years to complete a lowrise project and 10 years to complete a highrise project in the GTA.

Lastly, the changes provide more clarity when it comes to being able to build denser communities near transit nodes, in areas where it makes sense due to investments in infrastructure that have been made to support growth. It will now be easier and faster to build more housing, including affordable housing, near transit. Municipalities will get help to implement community planning permit systems near major station areas and provincially significant employment zones, which will streamline planning approvals to 45 days. Transit supportive housing just makes good planning sense.

Desperate needs

As the government moves toward developing regulations to support Bill 108, there will undoubtedly be lots of discussions. It would serve us well to remember that the changes are about encouraging more housing that the region desperately needs, in the right mix, quicker, near transit and at a price the average resident can afford. It’s hard to argue with that.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD). bild.ca


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Toronto City Hall

City of Toronto councillors’ decision ‘irresponsible,’ will worsen housing affordability and supply problems

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City of Toronto councillors’ decision ‘irresponsible,’ will worsen housing affordability and supply problems

Toronto City Hall

The Building Industry and Land Development Association (BILD) is outraged by the announcement made today by City of Toronto councillors Joe Cressy, Mike Layton and Kristyn Wong-Tam. The trio said they would red light any development that supports council approved TO Core Plan, ignoring the direction given by the Minister of Municipal Affairs and Housing’s approved plans. These actions are a clear example of political interference that slows the development of new housing and increase costs.

Blatant disregard

“This blatant disregard of provincial policy is the opposite of a housing strategy, in fact it’s an anti-housing strategy,” says Dave Wilkes, president and CEO of BILD. “The net impact will add cost to the City, add cost to new home purchasers, increase the delays of much needed livable housing close to transit and lengthen approvals times as challenges and appeals are undertaken to ensure that the law is respected,” adds Wilkes.

It was the City of Toronto’s decision to file the Official Plan Amendment for TO Core with the province under Section 26 of the Planning Act. This rarely used mechanism requires ministerial approval and is non-appealable. Disliking the results of this decision, the councillor’s statements to developers that they will de-prioritize projects that are in accordance with the Minister of Municipal Affairs and Housing’s decision and not the City’s version of the plan is like asking them to take sides in schoolyard spat. Councillors Cressy, Layton and Wong-Tam are disregarding the planning process, abdicating their responsibility and adopting planning by threat.

“The decisions to amend the official plans just prior to the last election was politically motivated and went against the recommendations of the City’s own planning staff,” says Wilkes.

Desperate need

“More housing is desperately needed to accommodate growth in the region. It makes sense for this type of housing to be built in places that can leverage existing investments in infrastructure and be transit supportive. We are calling on Toronto City Council to take the necessary steps to address housing supply and affordability in Toronto.”

The provincial government rightly recognizes that changes are desperately needed to provide adequate and affordable housing to a growing province. More than 115,000 new residents are expected in the GTA every year through 2041 and the population is set to grow by 40 per cent. Meeting this generation challenge will require policies that enable housing supply and affordability, not illegal actions that add cost, delays and restrict supply.

BILD is the voice of the home building, land development and professional renovation industry in the GTA. With more than 1,500 member companies, the industry provides $33 billion in investment value and employs 271,000 people in the region.

TREB reminder

The Toronto Real Estate Board is also concerned about the councillors’ decision.

“With some City of Toronto councillors announcing plans that could add obstacles to the creation of new housing supply in their wards, TREB is reminding all levels of government that housing supply is one of the most important issues in Toronto and the GTA, and is encouraging cooperation between governments,” the organization says. “TREB has been at the forefront in calling for governments to do what they can to ensure an adequate, appropriate and affordable supply of housing for the Toronto and GTA real estate markets.

“This is an issue that will require both provincial and municipal government efforts and policy initiatives from various perspectives, including minimizing unnecessary red tape, while maintaining the high quality of life that makes Toronto and the GTA such a desirable place to live, work, and play.  TREB is encouraging provincial and municipal decision makers to work cooperatively to make the interests of homebuyers their first priority.”


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Three opportunities to positively impact housing in 2019

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Three opportunities to positively impact housing in 2019


In 2018, the underlying issues impacting housing supply in the GTA and in turn the impacts on housing affordability, cost of living and its broader societal impact were a defining part of the public debate of the future of our region. Population growth combined with restrictive regulations, bureaucratic red tape, added costs and infrastructure challenges have created a generational challenge for the region. As we look forward, there are three opportunities to have a positive impact on these issues in 2019.

Housing Supply Action Plan

In late November, the government of Ontario announced that it would be developing a Housing Supply Action Plan. The provincial government rightly recognized that strong demand for housing and limited supply in Ontario has resulted in rapidly rising housing costs over the last few years, and that in fast growing areas like the GTA, high housing costs and rents are squeezing families and individuals out of the market. The Province is looking at what can be done to speed up the approval process so new housing can be built at a faster pace, how to encourage the right housing mix to be built, and the impact that high land costs and fees and taxes are having on housing prices. In addition, the action plan will look at home rental and ownership, not simply one or the other. These important initiatives are a great opportunity to begin to address the fundamental causes of housing affordability.

Revisit the stress test

While the issue of housing affordability is firmly on the provincial agenda, pressure is now growing on the federal government to consider the impacts of its mandated mortgage stress test. The program has succeeded in balancing the hot 2017 market, but is having a disproportionate impact on young and first-time homebuyers. The test, in effect, reduces the maximum amount of a mortgage that a home purchaser can borrow by roughly 20 per cent. Young and first-time homebuyers are the most likely to borrow close to their maximums, however, they also have the longest horizons for repayment and are often in the growth phase of their careers and earning potential. A growing chorus of industry professionals are urging Ottawa to fine-tune the approach and perhaps the potential for a one-time, longer amortization period for first-time buyers can provide some relief in 2019.

Lastly, municipalities can no longer ignore the issue or the role they must play as a partner to industry and the other levels of government in finding meaningful solutions to this issue.

Municipal involvement

During the fall municipal elections, voters in the GTA ranked housing affordability as a top priority for new local governments and the need to increase housing supply as a key mechanism to address  affordability was supported by nine out of 10 respondents to an IPSOS poll conducted by the industry last fall. With new councils and mandates in place, now is the time for new ideas.

This must be the year of action on this issue. With the arrival of 115,000 new residents to the GTA every year, and as we fall short in providing new housing at the levels required, we cannot afford to wait.

Dave Wilkes is president and CEO of BILD (Building Industry and Land Development Association), and can be found on: Twitter.com/BILDGTA) Facebook.com/BILDGTA YouTube.com/BILDGTA and BILD’s official online blog: BILDBlogs.ca


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Inclusionary Zoning: Collision Course or Opportunity?

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Inclusionary Zoning: Collision Course or Opportunity?

As we prepare to enter 2019, newly elected governments at all levels think solutions the “affordable housing crisis” might it be found in a new regulation — inclusionary zoning. Are we on our way for a severe collision course and another regulatory disaster?

In the dying days of the Kathleen Wynne government, Toronto was given the regulatory authority of what’s being called inclusionary zoning — the right of a municipality to designate or impose a certain number of units of a new development as “affordable.” The definition of affordable and how the inclusion is to be effected have yet to be defined — and may never be — but a negotiated settlement may be part of a site plan approval or subdivision agreement.

This may be the collision course. The unintended consequence will lead to higher prices for market housing and ultimately less affordable accommodation to subsidize the designated affordable units.

And many questions remain: Is inclusionary product contained within an existing building or allocated as cash in lieu of a separate affordable housing project? Are these rental or ownership units and who manages or owns the block of units? These questions are yet to be answered, and that may be a good thing. Let the creativity of each developer and municipality come together to find innovative solutions on a site-specific basis — much better than an arbitrary set of rules.

I recently met with Fred Heller, a long-time friend of the housing industry, who is part of a relatively new non-profit builder called Trillium Housing, which is advocating for modest income families to provide “housing affordability.” The Trillium model may help avoid an inclusionary zoning collision and, in fact, provide a viable alternative to affordable product with little or no market price distortion.

What Trillium does is provide financing that bridges the gap between the house price and what the families can afford for a first mortgage, all within the province’s affordable housing income guidelines. The beauty of the program is that the Trillium Mortgage doesn’t have to be repaid until the house is sold or refinanced and, better still, the consumer makes no scheduled payments on their Trillium Mortgage. Trillium gets repaid when the property is sold, plus Trillium earns its portion of the equity appreciation. The consumer down payment is as low as 5 per cent and the Trillium loan is considered equity, so there is no CMHC insurance fee on the first mortgage. A $100,000 Trillium mortgage applied against a $400,000 condo means $600 per month lower carrying costs and $24,000 lower qualifying income. This means a family of a modest total household income of about $70,000 per year could afford this home, even with the tough new bank qualifying rules. Not only does Trillium bring financing to the table, it works with the developer, the municipality and others to source the funding. Just imagine for a moment a municipality suggesting that in order to meet affordable housing targets they might just waive all fees and charges associated with a new home — currently these charges range from $100,000 to $150,000 per unit — and imagine the developer, who has to front these charges anyway, instead participates in a non-profit foundation that funds a Trillium-like mortgage. A WIN-WIN-WIN for government, developer and consumer — and no inclusionary zoning collision.

Interesting times ahead for 2019. With programs like Trillium, innovation and creativity will soar and the objective of providing more affordable housing is achieved!

Andrew Brethour is chairman and CEO of PMA Brethour Realty Group.



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5 steps

5 steps to solving the housing affordability issue in Ontario

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5 steps to solving the housing affordability issue in Ontario

5 steps

Promising to create more housing supply was the first step, now industry leaders are calling on the Ford Government to action solutions that will bring much-needed supply into the marketplace and help solve the housing affordability issue facing many Ontarians.

This week, leaders from housing associations – the Ontario Real Estate Association (OREA), Ontario Home Builders Association (OHBA) and the Federation of Rental-Housing Providers of Ontario (FRPO) – gathered at the second annual Housing Summit event to examine bold policy prescriptions that will help Millennials get their hands on the keys to their first home.

“Keeping the dream of home ownership alive in Ontario requires bold policies and action from the provincial government,” says Tim Hudak, chief executive officer, OREA.

“First and foremost, to get more new homes in the marketplace, the building approvals process must be streamlined and zoning updated to allow for more homes in the right places. The best and fastest way to give Ontario’s first-time homebuyers a break is to eliminate the punishing land transfer tax for first-time buyers.”

“#Homebelievers know that government can support more housing choice and supply needed to make the great Canadian dream of home ownership a reality in existing, expanding, and established communities across Ontario,” adds OHBA chief executive officer Joe Vaccaro.

As advocates for greater home supply and home affordability in the province, OREA, OHBA and FRPO say the solutions to keeping housing within reach for young Ontarians include:

1 Speed up the planning approvals process

The home development approvals process can take up to 10 years in some parts of Ontario. Better alignment of municipal and provincial housing priorities, will get new homes to the market faster.

2 Build more homes and build them higher around and above transit stations

Use “As of Right” zoning to ensure housing intensification along rail transit lines and stations, exactly where many Millennials want and need them.

3 Provide first-time home buyer tax relief

Eliminate the land transfer tax for first-time homebuyers or dramatically increase the current rebate offered to first-timers.

4 Bring back the Ontario Municipal Board

The traditional role of the OMB has been to take the NIMBY out of housing decisions. Bringing back the OMB means evidence-based planning decisions, which will create more housing supply and choice.

5 Create new rental stock by reducing barriers and red tape

Adjust the annual rent increase guideline to CPI plus two per cent, implement a 20-year rent control rolling exemption on new construction and maintain vacancy decontrol.


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Millennials Pic

Vast majority of GTA Millennials fear buying a home is out of reach, poll says

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Vast majority of GTA Millennials fear buying a home is out of reach, poll says

Millennials Pic

There is great concern among GTA Millennials that they will be unable to afford a home, according to a new poll from the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB). 

The fear goes deeper, as GTA residents also expressed a lack of confidence about the likelihood their children will be able to remain in the communities where they grew up.

“According to a recent Centre for Urban Research and Land Development study, there are about 730,000 Millennials living in the Greater Toronto and Hamilton Area who may be planning to move on from living in their parents’ homes and from sharing a dwelling with roommates in the next 10 years, potentially creating 500,000 new households,” says Dave Wilkes, BILD President and CEO.


When considering the issues in the municipal elections on Oct. 22, GTA residents say they are concerned with the ability of today’s youth to afford a home in the GTA, including:

  • 94 per cent of respondents between the ages of 18 to 35
  • 84 per cent of respondents between the ages of 35 to 54
  • 80 per cent of respondents age 55 plus
  • 88 per cent of women and 82 per cent of men

Interestingly, although Millennials are concerned about the ability to own a home, they are also the most optimistic group regarding housing supply, with 41 per cent of them believing that the GTA is well prepared to provide housing for the number of new residents that settle here every year. This is substantially higher than those age 35 to 54 (31 per cent) and those over 55 (27 per cent).

GTA residents are pessimistic in terms of their ability to achieve home ownership, as well as their children’s future abilities to afford homes in their communities. There is also a consensus among residents that the GTA has an inadequate supply of affordable housing being built, or that the city will be able to accommodate the 115,000 new residents that enter every year.

Source: 2018 Ipsos
Source: 2018 Ipsos

When picking a new home, 60 per cent of GTA residents say they value a neighbourhood that is walkable and bikeable, in addition to being within proximity to shopping, entertainment and government services. This is closely followed by those who prefer access to convenient transit (56 per cent) and proximity to work and school (54 per cent).

Nearly seven out of 10 respondents feel that their children will be unable to afford a home in the community where they grew up. These respondents agrees it is important for young families to be able to afford to live and work within the GTA without having to deal with long commutes.

When asked, “To what extent do you strongly or somewhat agree or disagree with the following”:

  • 92 per cent agree that the dream of home ownership is becoming more difficult to achieve for young people living in my city
  • 86 per cent agree that it is important that young families can afford to live and work within the GTA without having to commute over an hour to get to work
  • 39 per cent agree that there are enough homes being built in my city to help keep housing affordable
  • 33 per cent agree that the GTA is well prepared to provide housing for roughly 115,000 new residents that settle here each year
  • 33 per cent agree that my children (or my friends’ children) will be able to afford a home in my community when they grow up



The best public policy is proactive, not reactive,” says Garry Bhaura, president of the Toronto Real Estate Board. “We hope these poll results demonstrate that the time for municipal decision-makers to start thinking about housing choice and supply for all GTA residents who want to own a home is now.”

“In the next decade, we are likely to be part of a significant housing shift in our region, as a large wave of Millennials start looking for a place to live of their own,” adds Wilkes. “Add the estimated 115,000 new residents that come to the GTA every year, and the area will see itself in a housing crisis. I urge voters and candidates to learn more about BILD’s recommendations at buildforgrowth.ca.”

“With a municipal election just a few short weeks away, the public has an opportunity to ask candidates to commit to policies that will make it easier to fill their housing needs,” says John DiMichele, chief executive officer of TREB. “GTA homebuyers do not have adequate choice in housing available for sale or rent, and municipal government policy is one of the key reasons.

DiMichele suggests GTA residents visit UnlockMyHousingOptions.ca to send messages to candidates.


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THE INDUSTRY LEADER: Housing policies must focus on supply

THE INDUSTRY LEADER: Housing policies must focus on supply

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THE INDUSTRY LEADER: Housing policies must focus on supply

Not enough new housing is being built for sale or rent and this results in higher prices, higher rents and long waits lists.

by Dave Wilkes

The other day I was listening to pundits on talk radio debating the issue of housing affordability — and what can be done to address the high cost of putting a roof over your head.

It sounded like the experts were talking right past each other, apparently discussing completely different issues. I realized it was because their definitions of housing affordability were different.

It seems to me, though, that some of the solutions can be the same. Housing affordability is a complex subject. At the risk of oversimplifying, there are really three different definitions. The first is housing — houses and condos — that the average family can afford to buy. The second definition is housing that the average person can afford to rent. And the third is not-for-profit rental housing, where collective ownership (co-op) or a degree of social assistance (subsidized housing) helps ensure that the cost of housing can be borne within the income of the resident.

All of these definitions of housing affordability are valid and all come with specific issues to address if affordability is to be tackled as an issue. Unfortunately, as is often the case with highly political topics, it is the differences that get debated — winners and losers get picked and opportunities get missed.

What is common to all three definitions is lack of supply. Not enough new housing is being built for sale or rent, and there is not enough not-for-profit rental housing to meet the need. This results in higher prices, higher rents and long wait lists. A number of factors affect the supply of all three forms of housing. All are subject to the same lengthy bureaucratic approvals process prior to being built. All three require land that is adequately serviced with existing infrastructure that can accommodate the increased usage (for infill projects) or new infrastructure if it is an entirely new development. Lastly, all three forms of housing are subject to layers of regulation, reliance on community acceptance and the political will that exerts influence on building projects around the GTA.

Any one of these factors can add cost, impact the number of new units that come to market, delay new housing from being built or halt construction entirely.

On the cost side, newly built homes that fall under the first two definitions are also subject to government fees and charges that increase purchase price or impact rental costs. BILD recently published a study on the government fees, taxes and charges applied to new homes in the GTA. It demonstrated that the layers of tax-on-top-of-tax added almost 25 per cent, or $186,500, to the price of an average single-family home in the GTA.

In the lead-up to this year’s municipal election, we need our governments not to pick winners and losers, but to focus on housing policies and reforms that can have broad benefits and increase housing supply.

David Wilkes is president and CEO of the Building Industry and Land Development Association (BILD).

He can be found on Twitter, Facebook, and BILD’s official blog.


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Home Realty : The Missing Middle

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Home Realty : The Missing Middle

Creative concepts could do a lot help housing affordability

It’s the one thing everyone in the GTA seems to be talking about these days: the soaring price of real estate. It’s a sticky wicket to be sure, and it’s left many wondering if they’ll ever be able to find a place to call home in this bustling metropolis. Here are three creative concepts that could do much to alter the affordability equation.


The City of Toronto has more than 2,400 laneways and publicly owned corridors covering 250 linear kilometres. Laneway houses are small homes built above garages that face these laneways. Development of such secondary suites — which are serviced from the main house like a basement apartment — could inject considerably more affordable homes into the Toronto rental market. And advocacy groups, like Lanescape and Evergreen, are partnering with the city to look at ways to clear the bureaucratic path toward the development of laneway housing.

This kind of gentle intensification can add value to existing properties for owners, and, in providing a much needed infusion of supply into the rental market, provide more people access to affordable housing.



They’re known in Paris as “parasite homes,” and they would be an ingenious solution to the affordability problem here in the GTA. These apartments are perched upon the roofs of existing buildings. The prefabricated units are built offsite then bolted to the structure with steel supports, a construction process that takes under a year. And these units are priced 40 per cent cheaper than comparable properties.

Paris is calling for 70,000 new dwellings to be built each year, and parasite homes are a good way to squeeze all those new homes into the densely populated French capital. Parasite homes are an innovative idea and one that could help Toronto to provide more people with housing options they can afford. And building owners would also stand to make a good return for thinking a bit outside the box.


Don’t let the name fool you. In-law suites — secondary dwellings within a home — can be rented out to anybody you choose. And they’re growing in popularity as more and more people in the GTA face affordability challenges.

In-law suites are cheaper to rent than standalone apartments and they provide an effective and relatively easy way for homeowners to pay off their mortgages or pad their retirement incomes. Of course, these suites can be used to house aging in-laws (but it’s probably not cool to charge granny rent). Or, perhaps more common in today’s economy, it could be the cash-strapped younger generations remaining at home, but wanting an independent living situation.

Secondary flats typically include sleeping and living areas, a basic kitchen and a separate entrance. They can be created via a garage conversion or basement reno. A unit could be a bump-out or addition on the home. Or it might be a separate cottage or a back house on the property.

Owners could also create an in-law apartment by combining rooms in the existing house without changing the original footprint.

The governing bodies of the GTA have to be more creative and open minded in dealing with the shortage and affordability issues in our housing market.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years. She has sold and overseen the sale of over $15 billion worth of real estate and, with Debbie at the helm, In2ition has become one of the fastest-growing and most innovative new home and condo sales companies. In2ition has received numerous awards from the Building Industry and Land Development Association and the National Association of Home Builders.


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