The math ain't mathing — that seems to sum up the new construction housing market in the GTA, and perhaps it's the story for lots of Ontario and even Canada.

Simple, to the point, it covers pretty much the whole gamut. I wonder why that's never on those little podium boards in front of politicians when they are yapping away endlessly. They have 'Protecting Canada' or 'Canada Strong' or 'Working For You' — largely a lot of nonsense with no basis in actual mathematics and logic, but it sounds wonderful as sound bites to the target audience: people who own a home already.

Drop-the-mic-and-walk-off moment?

Other than this being a cool Urban Dictionary reference and the sort of thing a Mancunian such as myself would say in our finest Northern Queen's English, it is a good summary of the fatberg that is the residential market in the GTA and a lot of Ontario even.

Iffy math example one: we have a target of 1.56 million new homes by 2031 (trying not to snigger….). Can we fix it, not a chance. In 2024 we started 72,118 new homes in Ontario, so at this pace, 2041 might be more a more realistic target. Ford's More Homes Built Faster had that target in 2022 — over 10 years — so we are around 200,000 homes behind pace three years in, and in 2025, year to date, 33% down on last year in Ontario. Hanlon's Razor?

So on that theme, but a little quicker, what other math ain't mathing?

  1. We are solving the housing crisis with the current action by three levels of government.
    • Housing starts plummeting 65% in Toronto, 25% year to date (and down 35% in 2024 versus 2023).
    • Do not panic, purpose-built rental was going to save the market... but wait, that tricky math thing again. Starts were down 25% from 2024 versus 2023, and year to date, down another 37%.
    • Rents down, rental starts also down, CAP rates flat, and rental dead (almost) without Canada Housing and Mortgage Corporation (CHMC). No HST and reduced development charges (DCs) and it still barely pencils... dooooom
    • Planning applications dropped off a cliff, down over 50% province-wide over the past couple of years. So as we look forward the math is foreboding.
    • The famous Toronto crane count melting down by over 20% and falling — not good math
    • Unemployment in construction is rising in Ontario, from 604,000 people in 2022 to 565,000 at the end of 2024. Yeah, that is a big drop off, math again does not look friendly.
    • Social housing waiting list increasing, up 7,000 people from 2023 to 2023 in Toronto and stands at over 92,000. Scary math; especially as they are actively trying to reduce it.
    • Homelessness is increasing across Ontario; Toronto went past 10,000 and is rising, which is very sad math.
    • New home condo sales: dead, deceased, lowest in my memory, and looking horrific. Per the Building Industry and Land Development Association (BILD), 501 sales year to date, which is down 61% year over year, and less than one ninth of the 10-year average (4,516).
    • New low-rise sales: flat, low, and tepid at best. According to the same BILD press release, there were 719 sales year to date, down 45% year over year and well below 10-year average of 2,559.
    • New home closings: risk is increasing, and a blood bath could ensue. This is where math is not your friend. You paid $1 million for the new home and the valuation is $800,000 — the math says you need to find $200,000 in cash beneath the couch seats.
  2. Taxes and fees: they are great in new homes and fully support the goal of housing affordability.
    • Toronto DCs are going up — actually no, they are kindly going to hold them (maybe). But zero starts time $83,000 = erm, well awkward math
    • Over a decade or two, our DCs are rising at not much more than the rate of inflation according to Toronto City Councillor Gord Perks, but inflation is up 6,000% in Canada?????
    • If I give a person a fish, they eat for a day, if I teach them to fish I could tax them every day on the fish: City of Toronto DC math.
    • If growth pays for growth, and we have had a decade of record growth in Ontario, why does everything DCs cover still not work properly? As an example, If you increased them by over 6,000%, surely even by accident, you’d have got something working well in that time-frame?
    • Over $10 billion in excessive DCs collected has sat doing absolutely NOTHING!!!! That is not good math; we have a mountain of cash and nothing to do with it. You could have quite a lot of new homes with that kind of walking around money.
    • DC studies are full of iffy math. Hans Christian Anderson would struggle to be so creative as municipalities (the caveat being that they are following the rules the provincial overlords have given them; there is some gaming going on, but hey, if you make a bad system it will be what it will be).
    • There have been massive property tax increases in Toronto, so why are service levels dropping off a cliff? Especially if you add in all the growth in DCs, parkland monies, land transfer tax, etc. That is some really odd math. Typically if you pay more in life, service increase...
    • Not really directly tax, but it took five seconds for Freeland and Carney to turn on Justin Trudeau and pretend they never met him and we were in a parallel universe for the past nine years. Justin who??? Carbon what??? Tax on capital gains? No way, the Liberals are no socialists. Epic math
    • Carbon tax saved the world of impending doom, and the math proves it right. (Well, you can’t afford to drive anymore, and road trips are a true evil…)
    • If an apartment building costs $400/sq. ft, how can a library cost $700 sq. ft and community centre $1,000+/sq. ft? DCs help pay for the fact the public sector does not care how much anything costs. If they have a budget, they blow it repeatedly. After all, the math says they get paid the same no matter what.
    • If the Ford government keeps wanting to make beer accessible and cheap, but he taxes houses like beer... that math certainly ain’t doing a lot of mathing
  3. Policy can control affordable housing using disincentivizes versus incentives.
    • Rent control, doesn’t work anywhere, is shown not to work anywhere, but the Liberals and NDP are obsessed with it even though the math says noooooo. Maybe comedy math?
    • The finalization of housing is bad, it really is. Then you must live in a well-maintained building with everything operating. Instead you could be in a slum run by the government hanging out with bed bugs. Think of the savings if you just don’t care about the tenants; proformas would look amazing.Thankfully the private sector is not the government…
    • Housing is free, money is free, we don’t need the military, we can hug it out till we all have a pension. (NDP math.)
    • If I give everyone $200, they won’t notice the past eight years... shhhhhh it’s a cunning plan. Did it help? That math mathed really well, so money, not action is the order of the day. Funnily, the amount handed out is very similar to annual DCs collected.
    • Inclusionary zoning increases affordable housing meaningfully... but if you ruin the financial viability of a project and that means 50% less projects are built, that REDUCES affordability. This is one of the more special math exercises municipalities like to do: magic mushroom math, where convenient math comes out of nonsensical numbers.
    • Affordable housing by the private sector could pencil, but the City of Toronto hates private developers (or seems to at least).
    • You can reach Mars in seven to eight months. Anyone else fancy sending Toronto City Councillors on a one-way trip?
  4. Hidden taxes and scope creep.
    • They keep coming. Parking tax (In Mississauga, if you don’t build space, they want to tax you for it); rain tax (that one is genius by Toronto).
    • Sustainability — why not have 400 municipalities go bat-shit crazy and invent their own standards? Sound like madness, ask your MPP why lunacy prevails.
    • Every change has an impact. Building code, urban planning, Councillor wakes up with a migraine — they all cause increased costs.

The actual math:

  • Construction costs are down over 15%.
  • It don't pencil: condo.
  • It barely pencils: rental.
  • My math at a RESCON presentation for the odds of the housing crisis getting better a couple of years ago: 0%. Bang on.
  • Park benches: they pencil, but people have to live on them cause of the other stuff not penciling.
  • Tents: great investment with an amazing IRR, and some municipalities have caught onto this with encampments.

If your revenue is $950/sq. ft and the cost is $1,200/sq. ft, that does not actually work. Nothing to do with developer greed, it’s basic economics (condo and rental have the same overview).

Positives? Anyone?

Math is like a child; it tends to just show the bleak truth 'out of the mouth of babes.' The housing crisis has gotten worse, and this is with three levels of government trying to help. What was it Ragan said about the Government "nine most terrifying words..."? "I’m from the government and I’m here to help." After 10 years of hell in Ontario it’s hard not to feel like the fella was on to something. But we will have a new spa — that seems to match despite it not seemingly mathing. Can we just have new homes please?

Everyone assumes that government officials and politicians and so forth need Economics 101; some just do not appear to care. It is all about elections and math; it’s the same math that we had in one of the earlier articles. It’s a callous disregard for what is right versus what gets them elected. It's not their money, there is minimal accountability, and typically before it all blows up, you have your pension or cushy new job. The system is designed to make sure the political types largely survive and that the people behind them can move from candidate to candidate enjoying the benefits of the system.

We tried them messing around the edges and it wrecked the housing market in Ontario; we tried them "helping" and it got worse. How about we try them getting the 'F' out of the way? Rip up the guidelines, decimate the Team Mission Creep, and we keep it simple and just build baby, build.

The market needs less red tape, less fees, less taxes, less agencies, less task forces, less politicians, less conferences — it needs a lot less of quite a lot to have a lot more housing supply. That is math that would math.

Marlon Math