More supply is the only solution to the housing crisis
August 27, 2021
Hamilton made eyepopping headlines last month when the city was reported to be the third-least affordable city in North America when it comes to housing (topped only by Vancouver and Toronto). How did we reach the point where Hamilton is less affordable than major U.S. metros such as San Francisco and New York City?
New research from the environmental NGO The Smart Prosperity Institute shows that Hamilton and other municipalities across the GTA are not building enough housing of all types to keep up with our population growth. In fact, the report’s author, Dr. Mike Moffatt, found that over the past five years, Ontario has come about 100,000 new housing units short of population growth and household formation.
Rapid population growth
Rapid population growth, combined with slower home construction, has pushed up housing demand and, consequently, housing prices. As a result, more people “drive until they qualify” for a mortgage. It started in Toronto, with families driving away from the city, driving prices up in communities such as Barrie, Hamilton and Oshawa.
These price increases in surrounding areas have led to the musical chairs effect, in which existing residents in communities such as Hamilton, who wish to buy a property, can no longer afford homes in their own city. They, in turn, have to drive until they arrive
at an affordable community, often down the QEW in Niagara Region or up the 403 in Brantford and beyond. This has generated a cascading effect on housing affordability across southern Ontario.
The Hamilton-specific research implies that although the city gained new residents from Toronto, in the past five years, it also lost more than 15,000 existing residents to more affordable communities further out. This lack of affordability, which started well before the pandemic, has caused an exodus of young families from more expensive communities due to lack of available housing that suits their needs. It is now in the hands of local political leaders to decide on the level of affordability and inclusivity of their own communities moving forward, by enacting better policies to encourage the construction of more housing supply.
The population pressures leading to this point are not likely to diminish. The Greater Golden Horseshoe will continue to attract international talent, especially with the federal government’s recent announcement of increased immigration targets. With our strong and diversified economy, this region has the potential to entice talented newcomers and graduates to stay and work.
However, if the housing supply fails to keep up with demand, more young families will embark on the “drive until you qualify” route to find cheaper housing further and further away. If the housing shortage aggravates, it will increase housing prices even more, pricing out both newcomers and existing members of our community.
As more young families and talent are looking for room to settle and grow, the need for balanced solutions to address the chronic undersupply of housing is prominent. This means our region needs room to grow both up, through intensification, and out, through new opportunities for more spacious housing and a backyard.
Young Ontarians need to have more choices, not less. We need to stop constraining our housing supply and ensure that we are planning for a full range of different housing types to suit all our needs.
About Mike Collins-Williams
Mike Collins-Williams, RPP, MCIP, is CEO West End Home Builders’ Association. westendhba.ca.