Despite the residential construction industry being recognized as an essential workplace under Ontario’s emergency orders during the COVID-19 outbreak, a recent survey from the home building industry found that nearly 500 construction projects have been delayed throughout the Toronto-area due to the pandemic.

The Building Industry and Land Development Association (BILD), conducted a survey of its members in mid-May to gain a better understanding of the magnitude of project delays related to high-rise projects located in Toronto.

Altus Group advised on the formation of the survey, which revealed that 498 active construction projects, representing 156,000 units at various stages of construction, have been delayed as a result of the pandemic. Of these delays, 276 of these projects are located in Toronto alone.

BILD warns that these interruptions will have "far-reaching" impacts on the housing supply in an already tight market and will have negative financial impacts on government coffers.

READ: BILD Submits 20-Point Plan to Help Kick-Start Economy in Post COVID World

BILD says despite being considered an essential workplace, the industry was only able to complete homes that were near completion and work on important infrastructure projects such as hospitals. 

“One might ask, if the building industry was granted essential workplace status, why are there new housing slowdowns,” said Dave Wilkes, President and CEO, BILD.

“The response is a bit complicated. Disruptions to the supply chain negatively impacted the ability of the industry to secure vital building materials. Worksites had to appropriately adjust to COVID-19 protocols as social distancing rules negatively impacted productivity and some municipalities had to adjust to working remotely. This slowed processing of planning and building applications and stalled developments and construction projects.” 

A deeper look at the survey results revealed that 65% of projects in Toronto reported interruptions of three to six months while 32% were greater than six months. 

Eighty-three percent of construction sites that were not yet in the above grade stage when Ontario declared an emergency in March reported delays of three to six months and 11% are greater than six months. Additionally, 85% of projects under construction permitted for the above-grade reported a delay of three to six months and 5% are greater than six months.

BILD said the results were similar in other parts of the GTA.

Altus group examined this survey data and said the company believes these delays will result in the loss of about 9,000 housing starts over the course of the next 18 months.

What's more, this will setback occupancy of over 8,000 units by the end of 2021, potentially exacerbating an already existing shortage of housing in Toronto, while further reducing construction activity and leading to a loss of 10,000 jobs per year.

BILD says all levels of government revenues will be impacted by the loss of housing starts over the next two years. Lost revenues include $340 million in lost development charges, $13.5 million in lost education development charges (TCDSB), $26.0 million in property taxes, $364 million HST, $53.8 million in provincial land transfer tax, and $52.5 million in lost municipal land transfer tax.

“Now more than ever, all levels of government must work together to make sure that proper measures are in place to remove barriers that will unlock consumer and industry construction investments to help kick-start the economy,” added Wilkes.

This news comes after BILD released a 20-point plan two weeks ago that recommended making changes to mortgage rules, eliminating security deposits for Ontario Land Transfer Tax on affiliated transfers, freezing municipal increases to Property Tax Reassessment and development charges, and billions in stimulus spending.

Real Estate