Two years after the Ford government vowed to build 1.5 million new homes over a decade to tackle Ontario’s housing crisis, key indicators show that home construction is slowing dramatically. 

Decline in Housing Starts

Data from the Canadian Mortgage and Housing Corporation (CMHC) reveals a significant drop in housing starts. Between January and June 2024, only 36,371 new homes were initiated in areas with more than 10,000 residents, marking a 14% decrease compared to the previous year. Even more striking, June saw a 44% year-on-year decline, with housing starts plummeting from 10,114 in June 2023 to just 5,681 in June 2024.

Impact on the Housing Market

This downward trend in housing starts suggests a troubling forecast for future home construction. New home sales, a predictor of future construction activity, are also falling. The slowdown raises concerns about the province’s ability to meet its ambitious housing goals.

Ford Government’s Housing Legislation

Since the 2022 election, the Ford government has introduced several housing laws aimed at addressing the crisis. These measures were supposed to boost construction to an average of 150,000 new homes per year, with the goal of reaching 1.5 million new homes by 2031. 

Legislative Measures

The government’s plan includes increasing housing starts through various legislative initiatives. These initiatives range from zoning changes to incentivizing the development of long-term care beds and basement units, all in a bid to increase the overall housing stock.

Criticism from Opposition

Despite these efforts, critics argue that the results are lacking. Ontario Liberal housing critic Adil Shamji has been vocal about the apparent failure of the Ford government’s housing strategy. He pointed to the stark drop in housing starts as evidence of the ineffectiveness of the government’s policies. “Doug Ford may like to wear a hard hat and hold a shovel, but he certainly is no homebuilder,” Shamji said. He criticized the government for not delivering on its promises, despite passing numerous housing laws.

Meeting Housing Targets

The Ford government set a target of 110,000 new housing starts for last year. By including long-term care beds and basement units in the CMHC’s data, the province claimed it achieved 99% of that goal. However, this inclusion has been contentious, as critics argue it inflates the numbers without addressing the core need for new residential homes.

Long-Term Goals

The government hopes to see higher yields in housing starts in the later years of its plan. However, the current trends suggest that meeting the average annual target of 150,000 new homes is becoming increasingly unlikely. 

Economic and Social Implications

The slowdown in home construction has broader implications for Ontario’s economy and society. The housing crisis continues to affect affordability, with many residents struggling to find suitable housing. The construction industry, a significant contributor to the economy, also faces challenges as demand for new homes declines.

Affordability and Availability

With fewer homes being built, the already tight housing market is likely to become even more constrained. This exacerbates issues of affordability and availability, making it harder for residents to secure housing within their means. The reduction in new housing starts could lead to increased competition for existing homes, driving prices up further and placing additional strain on those seeking to enter the housing market.

Construction Industry Challenges

The construction industry’s slowdown not only affects housing availability but also impacts jobs and economic activity. Fewer housing starts mean less work for builders, contractors, and associated trades, which can lead to job losses and reduced economic growth in the sector. This decline in construction activity can ripple through the economy, affecting suppliers, manufacturers, and other businesses connected to the housing market.

Moving Forward

The Ford government faces significant challenges in meeting its housing goals. The current data highlights the need for a reassessment of strategies and potentially new approaches to stimulate housing construction. Policymakers may need to consider additional incentives for builders, streamline regulatory processes, and address other barriers that hinder new home development.

Potential Solutions

1. Incentives for Builders: Offering financial incentives, tax breaks, or grants to developers who commit to building new homes could help stimulate construction. These incentives could be targeted at areas with the greatest housing needs or designed to promote affordable housing projects.

2. Streamlining Regulations: Simplifying and accelerating the approval process for new housing developments can reduce delays and encourage builders to start new projects. This could involve revising zoning laws, reducing bureaucratic red tape, and implementing fast-track approval processes for certain types of housing.

3. Public-Private Partnerships: Collaborating with private developers through public-private partnerships (PPPs) can leverage both public resources and private sector expertise to increase housing construction. These partnerships can help address funding gaps and bring innovative solutions to housing challenges.

4. Addressing Land Availability: Ensuring an adequate supply of land for new housing developments is crucial. The government could identify and make available underutilized or vacant land for residential development, especially in high-demand areas.

Conclusion

The promise to build 1.5 million new homes by 2031 is an ambitious and necessary goal to address Ontario’s housing crisis. However, the current trends in housing starts indicate that achieving this target will require significant adjustments in strategy and execution. The Ford government must take immediate and effective action to reverse the slowdown in home construction and ensure that its legislative efforts translate into tangible results. The housing crisis remains a pressing issue, and the path forward will require collaboration, innovation, and a commitment to meeting the housing needs of all Ontarians.