For years, the housing crisis was treated as an unfortunate byproduct of growth rather than the defining economic challenge of our time. That is finally changing.
Governments have begun to recognize that housing affordability is not merely a social issue but a fundamental economic one. Reforms have been introduced, taxes have been cut and regulatory barriers are under scrutiny. Progress is being made. But progress is not the same as success.
The reality is that Canada, and Ontario in particular, remains far from solving its housing crisis.
Housing is fundamental to our economic prosperity and well-being. It sits alongside food and security as a basic human need. Yet it is still often treated as an economic “want,” taxed and regulated as though shelter were a luxury rather than a necessity.
That mindset must change. If governments are serious about restoring affordability, they must stop treating housing like a revenue source and start treating it as critical infrastructure.
The federal and Ontario governments have introduced temporary measures that reduce housing taxes and lower development charges (DCs). However, excessive fees, slow approvals and outdated regulations are still making homes more expensive than they need to be.
The crisis remains severe.
Latest figures show there is little chance of meeting housing supply targets. At the same time, demographic realities mean demand is not going away.
The affordability crisis cannot be ignored. Twenty-five years ago, a typical home cost roughly three to four times a household's annual income. Today, in many Ontario markets, that figure is seven to nine times income.
A report commissioned by the Ontario Home Builders' Association in 2025 found that homes in major markets such as Toronto, Hamilton, Kitchener-Waterloo, Guelph, and Barrie now cost more than seven times annual pre-tax income.
For many young families, homeownership has become little more than a distant dream. At the same time, the ownership housing pipeline is weakening.
A recent analysis by Desjardins economist Kari Norman found that while rental construction has surged, condominium starts have collapsed. Rental starts reached roughly 130,000 units over the past year, while condo starts fell below 50,000 for the first time since the global financial crisis.
Elevated construction costs, financing expenses and government fees have made many condominium projects too expensive to build at current selling prices. Canada is building more rental housing, which is desperately needed, but fewer homes that people can actually buy.
A growing body of research, including studies commissioned by RESCON, points to one of the key reasons. Taxes, fees and government-imposed charges have become a major component of housing cost. They now account for approximately 36 per cent of the cost of a new home.
DCs alone have exploded. In Toronto, they’ve increased by more than 5,000 per cent over the past quarter century, adding tens of thousands, and in some cases well over $100,000, to the price of a newly built home.
So where does housing reform go from here? Six priorities should guide the next phase.
First, the new HST rebate on housing must be made permanent. Recent tax relief measures were welcome and will help improve project viability, but temporary programs create uncertainty. Builders and buyers need confidence that relief will remain in place for the long term.
Second, DC reductions should also become permanent. The Canada-Ontario Development Charge Reduction Program is helping municipalities cut charges by 30 to 50 per cent for a limited period. That is a positive step, but affordability gains will disappear if the reductions eventually expire.
Third, Ontario should move aggressively on building code and regulatory reform. The government is presenting reviewing the code. Long-delayed measures such as allowing single staircases in mid-rise apartment buildings and removing restrictions on floor plate sizes and angular planes would increase housing supply without compromising safety.
Fourth, governments should modernize and streamline approvals. Builders continue to face lengthy and unpredictable approval timelines that add cost and uncertainty to projects. In a province facing a housing shortage, inefficient bureaucracy is a luxury we can no longer afford.
Fifth, Ottawa should reconsider policies designed for a very different market. Mortgage stress tests and foreign buyer restrictions were introduced to cool an overheated housing market during the pandemic. The environment today is dramatically different. At minimum, foreign buyer restrictions should be lifted for newly constructed housing.
Finally, land transfer taxes, particularly Toronto's municipal land transfer tax, should be eliminated. These taxes do nothing to increase housing supply and simply add another barrier to homeownership.
Governments deserve credit for the progress already made. But housing affordability will not be restored through half-measures or temporary programs.
The solutions are increasingly clear. The challenge now is finding the political will to finish the job.
