It isn’t just the housing industry lamenting the lack of supply – academics are now voicing their own concern.
The number one solution to affordability issues in the GTA housing market is to significantly increase ground-related home supply, according to the Centre for Urban Research & Land Development at Ryerson University.
“What is required is a shift in the direction of the Provincial Government’s land-use planning policy to one of aggressively supporting a major initiative to bring more serviced sites for ground-related housing to the marketplace as soon as is practically possible,” the authors Dr. Frank Clayton and Professor David Amborski of the Centre, wrote in the study. “There is a need to attack this fundamental supply shortfall of serviced sites for the construction of ground-related housing independent of short-term measures designed to curtail short-term speculative-type demand.”
In the study, entitled Countering Myths about Rising Ground-Related Housing Prices in the GTA: New Supply Really Matters
, the authors argue targeting speculative investors in a bid to cool the market won’t suffice; but that increasing the number of ground-related homes built each year is the best way forward.
The authors tackled a number of – what they refer to as – myths about the housing market in Toronto, including the argument that sufficient home building has been done to match population growth.
Supply and demand would have been balanced if not for the preference for ground-related housing over condos among homebuyers, the authors argue.
“Unfortunately, there has been a marked mismatch between the types of units brought to the market and the types demanded,” they wrote. “A large proportion of the new completions have been high-rise condominium apartments whereas a large proportion of the demand has been for owner-occupied ground-related housing.”
The authors cite a 2005 Hemson Consulting forecast that argued 68% of new housing built between 20011 and 2021 should be ground-related and 32% should be apartments.
However, a mere 46% of homes built between 2011 and 2016 were ground-related compared to 54% apartments.
That trend can be drawn back to the 2006 Growth Plan, which prioritized apartment homes over ground-type dwellings, according to the authors.
“Under the Growth Plan providing sites for apartments became the priority for the regions to the disadvantage of land for ground-related housing, especially single-detached houses,” they wrote. “The Growth Plan encumbered an already dysfunctional municipal urban land-use planning system and delays in the extension of trunk servicing infrastructure, like sewer and water, thus hampered the provision of serviced sites for ground-related housing.”
To read the entire study, click here