Toronto’s housing crisis is on track to get “far worse” without government intervention as the region sees a “serious decline” in development applications, according to a new study commissioned by a group representing GTA developers.
According to the study, which was developed by Altus Group Economic Consulting on behalf of the Building Industry and Land Development Association (BILD), the number of new homes being built in the Greater Toronto Area is “lagging significantly behind” population growth.
The report, published Wednesday, notes that the GTA is seeing a “serious decline” in development applications, an issue that it says signals a “further deterioration of housing supply.”
According to the study, the number of applications for new projects fell to 1,225 in 2023, down from 2,187 in 2022, and 2,482 in 2021.
“The study shows that the gap between housing stock and population growth in the GTA is the widest it has been in over 50 years,” David Wilkes, president and CEO of BILD, said in a news release.
“This a bright red warning light on dashboard for all levels of governments. Without bold steps, the housing crisis in the GTA is going to get far worse in the years ahead,” Wilkes said.
According to Wilkes, the GTA housing market is facing “structural challenges” that have contributed to higher construction costs.
The average approval time for a new development in the GTA, according to the 2024 study, is 20 months, a delay that drives up the cost of the development.
In the GTA, the study notes, fees, taxes and charges collected by all three governments account for about 25 per cent of the cost of a new home and municipal fees and charges make up a “significant portion of that.”
The report also noted that the average household would need to dedicate about 60 per cent of their monthly income to pay their mortgage in the regions “highest cost areas,” which include Toronto, Mississauga, Oakville, and Vaughan.
“To improve housing affordability, governments must act to accelerate approvals and reduce the overall tax burden they are placing on new home buyers,” Wilkes said.
“Without bold and immediate action, the region’s housing crisis will be exacerbated, leading to fewer housing starts, reduced jobs, and compounded affordability issues in the years ahead.”