For years, the conventional wisdom around housing affordability in Ontario has been built on a flawed premise: that land is scarce, and high prices are simply the inevitable result of too little space and too much demand.
But the evidence tells a different story.
Ontario does not have a land shortage problem. It has a shortage of serviced, approved and buildable land — a crisis created not by geography, but by decades of policy choices. Government charges layered onto housing, glacial approval timelines, and restrictive planning rules have turned land into one of the biggest cost drivers in new home construction, pushing ownership further out of reach for families and threatening the economic viability of building homes at all.
That matters because land is not just another input in the cost of housing — it is the foundation of every project. And when the cost of bringing land to market becomes distorted by regulation, fees and delays, affordability suffers.
Serviced buildable housing land in the Greater Toronto Area and broader Greater Toronto and Hamilton Area is materially more expensive than in nearly every comparator jurisdiction studied, including Alberta, Texas, and much of Colorado. In some cases, Alberta serviced lots are two to four times cheaper than comparable lots in the GTA.
Why?
Not because Alberta has more land. Ontario has plenty of land. The difference is that Alberta has lower government charges, far shorter approvals, and a planning framework that allows supply to respond to demand. Housing approvals there take roughly 3.4 to 4.2 months. In Ontario, the average is 18.8 months — and in some municipalities, stretches beyond two years.
Those delays are not benign bureaucracy. Every month adds carrying costs estimated at thousands of dollars per unit. Multiply that across large projects and the cost is staggering.
Then there are government-imposed charges.
In Ontario, municipal fees and development charges can add between $144,000 and $195,000 per unit on low-rise housing in the GTA. Comparable costs in Alberta can be a fraction of that. In Texas, they are dramatically lower still.
These are not marginal costs. They are embedded into the price of homes.
The uncomfortable truth is that much of Ontario’s affordability crisis is substantially regulatory in origin.
But that also means it is fixable.
The problem is often framed as if the market simply needs to correct itself. But that misunderstands the moment.
In fact, land prices in the GTA have already corrected sharply. High-density land values have fallen roughly 50 per cent from their 2019 peak.
Yet housing production remains stalled.
Why? Because even with lower land values, the overall development cost stack — land, construction, financing, taxes and government charges — still often makes projects impossible to underwrite.
This is why condo launches have collapsed even as the housing shortage worsens. Urbanation recently reported that, for the first time in three decades, there were zero new condo projects launched in the GTHA in the first quarter of this year.
It is why Ontario continues to miss housing targets. And it is why this crisis will not solve itself.
Residential construction employs hundreds of thousands of Ontarians. When projects don’t launch, construction workers lose work. Tradespeople face thinning pipelines. Suppliers suffer. Economic growth slows.
Calgary’s average new detached home sits around $800,000. In the GTA, comparable homes can range from $1.4 million to $1.6 million.
That gap is not just demand or geography. It reflects fundamentally different policy environments.
Alberta has demonstrated another model is possible. Ontario should pay attention.
The first priority must be permanently reducing government charges on housing. The recent federal-Ontario agreement to reduce development charges is an important start. But temporary relief will not be enough. Ontario needs durable reform that ends the over-reliance on new homebuyers to finance broad municipal infrastructure through front-loaded development charges.
Second, approval timelines must be dramatically shortened. An 18- to 30-month approvals regime is indefensible in a housing crisis. Municipal approvals need hard timelines, streamlined processes, and far less discretionary friction. Time is money in development — and in Ontario, delays are inflating housing costs every day.
Third, supply constraints need reform. Ontario’s combination of Greenbelt restrictions, intensification mandates and rigid zoning has produced some of the lowest supply elasticity in North America. In practical terms, when demand rises, prices rise - because supply cannot respond.
More serviced land needs to come to market. More zoning flexibility is required. More housing forms need to be permitted as-of-right.
Fourth, governments must recognize that housing affordability is inseparable from housing feasibility. If projects cannot pencil out, homes do not get built.
For too long, governments have acted as though escalating land prices are some natural phenomenon. They are not. They are, in large measure, the product of public policy. And what policy has created, policy can change.
Ontario has the land. It has the labour. It has the demand. What it needs now is the political will to remove the barriers that have made housing so needlessly expensive.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.
