Building the future: Addressing Ontario's housing affordability crisis

The Ontario Home Builders’ Association (OHBA) is at the forefront of bridging the gap between industry, government and the public, working to tackle the pressing issues in Ontario’s housing market. Alongside our 28 local chapters, we are committed to collaborating with government decision-makers and key stakeholders to ensure that housing remains affordable while keeping pace with growing demand.

For more than a decade, Ontario, the most populous province in Canada, has witnessed a steady rise in housing costs, driven by a demand that far exceeds supply. In recent years, it has become increasingly evident that expanding housing supply is critical to resolving Ontario’s housing affordability crisis. Since 2022, when the Housing Affordability Task Force set a goal of building 1.5 million new homes by 2031, the provincial government has remained resolute in its mission to create more housing opportunities for Ontarians. OHBA is proud to support this initiative, working closely with home builders across the province to help government officials understand the industry challenges that hinder the construction of diverse housing types.

The municipal challenge: A bottleneck in the system

While the province and industry share common goals, municipalities are the gatekeepers of the approval process needed to start construction. Unfortunately, since 2020, municipal planning and permit approval times have risen by an average of 41 per cent. These delays lead to increased costs for homebuyers and prolonged construction timelines, often resulting in years of delay before builders can even begin a project. If Ontario is to meet its ambitious target of 1.5 million new homes by 2031, reducing these regulatory hurdles is essential.

OHBA has long advocated for reforms to the Planning Act that would establish a more streamlined, unified regulatory framework. With 444 municipalities in Ontario, the current system – where each has its own approval process – is inefficient and unsustainable. A single framework would allow builders to navigate approvals more easily, leading to faster construction and increased housing supply.

Securing land and infrastructure for future growth

Beyond regulatory reform, OHBA has called on the province to secure adequate land supply to meet the needs of Ontario’s population growth through to 2051. At present, land within urban boundaries, particularly in the Greater Golden Horseshoe region, is insufficient to accommodate mid and long-term population growth. Ensuring enough land is available, alongside investments in necessary infrastructure, is critical to supporting housing development.

Initiatives such as the Housing-Enabling Water System Fund have proven to be instrumental in expanding infrastructure capacity, unlocking tens of millions of dollars in funding to support infrastructure projects essential to new home construction. This level of commitment to infrastructure development must continue to meet housing needs effectively.

Financial barriers: The hidden cost of new homes

In addition to addressing regulatory and land supply issues, government action is also needed to reform financial regulations that exacerbate housing affordability challenges. Although OHBA contributed to the recent provincial consultation on surety bonds as an alternative to Letters of Credit (LOCs), the financial burdens on builders remain substantial. Fees, taxes and other charges make up between 25 and 30 per cent of the cost of a new home – adding as much as $250,000 to the final price tag for homebuyers. These costs not only burden builders but ultimately drive-up home prices, placing them out of reach for many Ontarians.

By carefully evaluating the necessity of these charges and eliminating those that are redundant, the province can play a significant role in reducing home costs and speeding up the rate of construction.

The road ahead: A collaborative effort

Ontario is in urgent need of more homes, and they must be homes that people can afford. To achieve this, we need to build faster, more efficiently and with a cohesive strategy that brings together all stakeholders in the process. OHBA believes that every Ontarian deserves the opportunity to own a home that fits their financial means and allows them to thrive in a community.

OHBA acknowledges the Ontario government’s efforts in urging the federal government to take stronger action in addressing high interest rates. Although there are early signs that borrowing costs may decline, it is crucial to see more substantial reductions. Lower interest rates would significantly ease financing costs for new home construction and reduce mortgage expenses for prospective homebuyers, making homeownership more attainable for Ontarians.

By aligning efforts between government, municipalities and the building industry, and taking bold steps to address land supply, infrastructure and financial barriers, we can create a more affordable and sustainable housing market for all. Together, we will build Ontario’s future.