Recently, the Regional Planning Commissioners of Ontario (RPCO) released an analysis showing that more than 1.1M housing units had been either approved or proposed for construction in Ontario’s major municipalities as of last year. The analysis suggested that municipalities are therefore well on the way to meeting the objective of building 1.5M new homes in a decade — the number that Ontario’s Housing Affordability Task Force has called for to address the province’s housing supply crisis.
On closer examination, this argument is merely a distraction from the urgent task of building more homes for Ontarians. It underscores the need for all of us to focus on more significant metrics of housing supply, such as actual housing starts, which the Canada Mortgage and Housing Corporation defines as the beginning of construction work on the building where the dwelling unit will be located.
The RPCO counted proposed housing unit applications and those being processed, in addition to those that have been fully or conditionally approved. But a proposed housing unit or even an approved housing unit is not guaranteed to turn into a home, because some planned housing projects do not proceed, while others take longer than intended or sit in limbo for a period of time.
There are many factors that affect whether a project is able to proceed from proposed or approved status to actually being built, including its feasibility and basic financial viability, the developer’s ability to obtain financing, appeals and the availability of servicing such as water, waste water, and gas. Even projects that overcome these hurdles can take years to complete, with low-rise projects in the GTA currently taking, on average, 11 years, and high-rise projects taking, on average, 10 years.
RPCO’s analysis makes the erroneous assumption that all housing units that have been proposed or even approved actually go on to be constructed and become homes for people to live in. In fact, past experience has shown that there is frequently a mismatch between units that have been approved by municipalities and actual housing starts. In the absence of comprehensive data analysis, it is difficult to quantify the extent of this mismatch, but given that on average over the last decade, housing starts in Ontario have been approximately 75,000 units annually — or 750,000 in a decade — a very rough estimate could be more than 25%.
To build the homes Ontarians will need in the future and to achieve our common goal of bringing stability and affordability back to the housing market, we cannot meter approvals on the expectation of a 1:1 relationship between approvals and finished homes. We need to keep an eye on the supply metric that really counts — housing starts. After all, it’s only when we begin construction that we truly start building someone’s home.