Richard Lyall / RESCON
One of the most critical issues facing Ontario’s next Premier is housing, specifically the flawed housing supply chain.
The housing market is systemically distorted, made all the worse with a progressively slower development and building approvals process.
There are a number of statistics that I believe raise the alarm bell for the amount of red tape covering residential construction in this province:
- According to the World Bank, we rank 54th in the world in “dealing with construction permitting,” writes Bank consultant Michael de Lint of RESCON.
- In a decade, according to a University of Toronto report, zoning changes for high-rise residential buildings have gone from nine months to almost 3.5 years between 2006 and 2016.
- There are at least 45 different government agencies involved in the approvals process.
- Costs have increased dramatically as evidenced by a recently released C.D. Howe report which shows government-imposed costs per unit now exceed $200,000 on average.
- A report by the Toronto Region Board of Trade shows median incomes to housing prices have put Toronto on par with London, England. While Toronto aspires to be a major global city, Toronto is not in the top tier and it is not London.
MARKET ISN'T WORKING
The industry is so big that government has no hope in solving the problem by building social housing. Government money for housing efforts are useful but unless the market is working, forget it.
And to be clear the market is not working properly and getting worse. Past policies and repeated claims to “assure an adequate supply of housing” by government have been nothing less than abject failures propagated by misleading claims and assurances to the contrary.
The consequences of a broken housing supply chain has economic, investment, jobs, health care and other associated impacts. Research shows that substandard existing housing increases health care costs.
Millennials are delaying or just forging family formation which in turn has implications for immigration. The new rental development industry is stunted. Low-rise housing has been treated like a pariah. High-rise development in the core has exceeded expectations because one of the few bright spots in job creation has been tech-related jobs in the core. The missing middle remains just that – missing. Attracting investment and new jobs to the region have been impaired because of a lack of housing that is affordable. As such, growth plan targets have been skewed and do not reflect what is really going on. This in turn affects infrastructure and transit planning.
This supertanker of a problem has to be turned around. To do this, housing supply has to be given priority policy status over other considerations.
The process needs to be streamlined and made efficient as befits a self-proclaimed knowledge-based economy. The next premier will need to effect change in the supply change and remove waste, barriers and duplication that serves no one outside of the apparatchiks running those offices. The future of the GTHA and the quality of life of its citizens and associated environmental factors depend on getting the housing supply situation right or at least correcting the more egregious, well-documented barriers.
Government funding depends on a healthy economy which in turn depends on a healthy housing market. There is just no way around this. Governments continue to borrow more money to pay for social programs as delusional thinking is maintained that a few social housing programs will fix the supply chain are just not sustainable.
So what needs to be done? Principally, the approvals process needs to be dramatically streamlined with appropriate performance standards, transparency and accountability. RESCON has a blue ribbon group which has identified what needs to be done.
Secondly, government needs to partner with and support industry on introducing innovative ways to increase productivity on construction sites. Again, RESCON has an ambitious agenda for this as well. Finally, new-home buyers cannot be saddled with development-related charges which far surpass any reasonable calculation. We are just cutting the legs out from under the next generation. The bottom line is vote for the leader and party that you think will actually deal with this problem and try something new. Let’s face it, the housing situation has continued to get continuously worse over the last generation and associated policies have simply failed.
The only answer is to try something new. Who do you think can best deliver on cutting the baloney?
Vote wisely – our future depends on it.
Richard Lyall, president of RESCON, has represented the building industry in Ontario since 1991. He is also a frequent speaker and writer on issues related to the construction industry. Contact him @RESCONprez or at email@example.com.