Building homes for a growing population

The residential construction industry continues to be a vital force in driving Canada’s economic growth by generating critical tax revenue, supporting well-paying jobs in the skilled trades and boosting associated manufacturing, financial and supply chain sectors. Yet, as the demand for housing reaches unprecedented levels, the industry faces mounting obstacles that are slowing the construction of new housing supply when it is needed most.

Without new housing, cities face:

• Financial stagnation, with minimal property tax assessment growth
• Aging populations with the number of children and young people gradually decreasing
• A shrinking workforce that leads to economic downturns

Soaring housing costs make homeownership increasingly unattainable and drive young families out of cities across southern Ontario. At the heart of this crisis is a severe housing shortage, compounded by rising construction costs and heavy taxation on new homes. Taxes – accounting for 25 to 30 per cent of a new home’s price – exacerbate generational inequity, forcing young people and families to search for attainable housing outside urban centres.

In just over the last three years, Canada’s population has increased more than it did between 1991 and 2000. Yet, we have built 900,000 fewer homes than we did in the 1990s, failing to keep pace with growing demand. Across Ontario, new housing construction starts have significantly slowed down in 2024, with highrise and midrise condo sales in the GTA and Hamilton reaching a 27-year low. As population growth accelerates, housing supply continues to shrink, largely due to the lack of long-range planning and crippling taxation.

Cities across southern Ontario exemplify this growing challenge. For example, Hamilton’s population is projected to surge from 590,000 today to over 860,000 by 2046. Supporting this growth requires the construction of significantly more housing – well beyond the provincial government’s goal of 47,000 new homes in Hamilton. However, the current pace of residential construction across southern Ontario lags far behind. Labour shortages, high interest rates, tax burdens and outdated zoning regulations are further compounding the problem. The construction sector is also facing a retirement wave, with more than 80,000 skilled workers expected to leave the workforce in the coming decade, creating even more urgency to improve productivity and address all the issues.

To help overcome these challenges, the West End Home Builders’ Association (WEHBA) is leading the efforts in advocating for innovative solutions to alleviate the housing crisis in Hamilton, Grimsby and Burlington.

Some of the key initiatives include:

1. Reducing development charges in Burlington: Municipal development charges are a major factor contributing to the high costs of housing. These fees, levied by local governments on new housing developments to cover infrastructure costs, have surged in recent years. The City of Burlington demonstrated great leadership on this issue, and after working with industry partners to carefully review their future investment needs, it successfully reduced development charges to help address the housing crisis.

2. Limiting increases for development charges in Hamilton: Some municipalities unfortunately use development charges to cover costs not directly related to new development, such as public parking garages and airport facilities, which substantially raises the prices of new homes. Young families, already struggling with the costs of homeownership, are further burdened by these charges, deepening the generational divide and threatening the long-term health of communities across Canada. The West End Home Builders’ Association challenged the initial massive increase in development charges by the City of Hamilton, and while the outcome is still a tax increase, our efforts reduced that increase by more than $5,000.

3. Addressing the housing supply crisis: Through a comprehensive report by economist Dr. Mike Moffatt, WEHBA continues to emphasize the need for housing supply to keep pace with the growing workforce and the need for family-friendly housing options in Hamilton and Burlington.

4. Championing brownfield remediation: Thanks to WEHBA’s advocacy, Hamilton’s Brownfield remediation efforts will be bolstered, ensuring that contaminated sites are cleaned up and redeveloped into valuable residential spaces.

5. Reforming parking policies: The recent push for reduced – and in some areas the elimination of – parking minimums in Hamilton and Burlington will not only drive down construction costs but will also promote intensification and affordability for young families and first-time buyers.

As the Greater Golden Horseshoe continues to grow and evolve, the outlook for our cities remains bright. Through partnerships between governments, stakeholders, community leaders and advocates, we are poised to build diverse, thriving neighbourhoods. By increasing housing supply and offering a variety of housing options, we can make homeownership a reality for countless young families and aspiring homeowners, ensuring that our cities stay welcoming, accessible and well-positioned for future growth. It’s crucial for both policymakers and the public to continue supporting these initiatives. Together, we can ensure that our cities remain affordable, focusing on practical solutions to meet growing housing demand.