The Residential Construction Council of Ontario (RESCON) recently hosted Housing Summit 4.0, Accelerating Change: Tackling the Housing Crisis. The event brought together an impressive roster of speakers sharing their ideas and insights into how to tackle the housing crisis.
Amongst the diverse perspectives and open dialogue, a few key themes emerged. Industry representatives want reduced fees and expedited application processes to drive growth. Municipal leaders shared their commitment to effectively managing resources, stressing the need for funding to ensure that infrastructure is in place before new projects can be built.
These are the same arguments we’ve heard before, but what’s different now is that the market lacks pulse. The number of home buyers has decreased significantly year over year, and the investment market is basically non-existent. Inventory, especially in the condo market, continues to collect dust.
Corey Pacht, Executive Vice President of Operations at Fitzrovia, and speaker at the RESCON event, stressed the coming scarcity in the housing pipeline: “Even if everything turns around today, nothing is going to get built over the next couple of years. I think that’s a really scary thought,” he adds. Build Urban is in full agreement.
When interest rates rose in 2022, there was a 27-30 per cent drop in residential resale prices. This had a direct result on the number of new builds, especially in the condo market, with only two new condo launches in Waterloo Region in 2024. Couple that with the rising construction costs in Ontario which have surged by 92 per cent since 2017.
Pacht motioned two possible levers that would contribute to effective change on the development side: either revenue must go up, or costs must go down, adding that the most logical place to find those cost-saving opportunities is on government-related fees – development charges, property taxes, application fees, etc.
However, according to London Mayor Josh Morgan, finding funding to make up for changes to fee schedules is an obstacle municipalities are constantly facing. “We can’t provide a bunch of waivers and then provide no capacity for municipalities to backfill the development charges,” he noted.
As the housing affordability crisis has worsened, calls for “collaboration” and an “all hands on deck” approach have been mounting. If the fix really is collaboration, what does that truly entail? How can we continue to boost housing supply when hundreds of condo units are sitting empty across our region? What can be done to ensure that new developments not only increase supply but also meet the affordability needs of the communities they serve?
These are the pressing challenges the industry must confront if meaningful progress is to be made. As a collective of regional developers, Build Urban believes in a certain form of collaboration that involves the private, public and not-for-profit stakeholders working towards one common goal. This could mean reduced land costs, or reasonable and transparent agreements regarding infrastructure funding.
Municipalities could also incentivize new development in the form of policies that support density bonuses, or expedited approval processes for developments with affordable housing or community benefits. Targeting development in transit-oriented areas would also reduce the cost of infrastructure and improve resident accessibility, in turn, lowering home prices while increasing supply.
The old saying, ‘If we build it, they will come’ is losing its relevance. We need meaningful partnerships between developers, municipalities, and communities, focused on reducing costs, increasing efficiency, and ensuring that housing projects align with local needs. Only by working together can we hope to overcome the current market paralysis and deliver the homes our communities desperately need.