For the first time in Canada’s history, homeownership rates are dropping in Ontario.
According to new research released today, and conducted by Ryerson’s University’s Centre for Urban Research and Land Development (CUR) and sponsored by Ontario’s Real Estate Association (OREA) and Ontario’s Homebuilder’s Association (OHBA), the lack of supply, combined with stricter mortgage qualification rules has made it very difficult for first-time home buyers to get into the housing market.
The Ontario Government is well aware of the situation and looking into increasing the supply of the so-called “missing middle” housing supply. One solution offered is to make amendments to current zoning laws to allow for redevelopment around transportation hubs throughout the Greater Toronto Area.
The CUR report states that in the province of Ontario, there’s only been a yearly average of 63,000 new housing units over the last 24 years. Report authors clearly state that this is a problem — a problem provincial authorities, working alongside municipal governments, need to figure out. According to Ryerson Urban Research experts, the addition of another 12,000 housing units per year is required just to keep up with demand.
Urban development around transit hubs could be the answer to Ontario homeownership crisis
There are over 2,000 square kilometres of available land around Ontario’s 200 transit hubs. This could provide the space needed to build over 20,000 additional affordable homes. The biggest obstacle: Red tape. Current zoning laws are woefully outdated and stand in the way of construction, explains report author Diana Petramala, Senior Researcher at CUR.
“Ontario’s pre-disco, early 1970s era zoning rules just don’t reflect modern consumer demand,” stated Tim Hudak, OREA’s CEO. “Back then, cities were largely building single-family homes and suburbs. Today, these out-of-date zoning rules are standing in the way of millennials, young families and the Canadian dream of homeownership.”
The report goes on to say that new homebuyers are actually “OK” with the idea of living near transit hubs since taking advantage of public transportation is cheaper than car ownership.
For generations, the Canadian dream of homeownership was a reachable goal. Anyone willing to work hard, and save up their money could buy a home. A number of factors have resulted in that dream becoming unattainable. Rising costs from 2008 until 2017, the implementation of a “needlessly harsh” mortgage stress test, increasing interest rates and salaries not keeping up with the pace of inflation, have all resulted in an entire generation of millennials that feel the idea of homeownership is as realistic as Santa Claus.
Projected population growth emphasizes the need to re-zone transit hubs for residential development
When we consider that the government of Ontario forecasts that the population of Ontario will grow by 4.3 million over the next 24 years, the idea of homeownership becomes even more worrisome. Unless there’s some sort of social change that transforms the average size of a household, the province will need roughly 1.8 million new homes to house its new population. In other words, Ontario needs at least 75,000 new homes built each year over the next 24 years.
Joe Vaccaro, OHBA’s CEO agrees with Hudak’s sentiment, by stating that “Across Ontario, there is room to add housing along transit lines. But municipalities have not taken full advantage of these opportunities. Now is the time for the province to respond to real housing demand and step in with minimum as-of-right-now zoning to bring more housing supply and choice to our growing communities.”