Toronto Region Board of Trade says fragmented rules, not demand, are holding back new supply
Ontario's goal of 1.5 million new homes by 2031 can no longer be met on its current timeline, the Toronto Region Board of Trade said in a report released Thursday. The board urged the province to standardize municipal zoning and modernize the Ontario Building Code before buyer demand recovers.
The board's analysis of the province's 2026 budget forecast shows Ontario falling more than 550,000 homes short of the required pace by 2029. The budget projects 64,800 starts this year against an annual target of 175,000.
That gap is even wider than the one flagged in internal provincial documents suggesting Ontario may need more than 2 million new homes.
"Ontario's housing problem is now a delivery problem. Governments have set ambitious targets, but targets do not build homes. The Province is well behind the pace it needs because the system that regulates housing is complicated, fragmented, hard to navigate, and unpredictable," the report said.
Why is Ontario's zoning system slowing housing supply?
"Ontario doesn't have one housing market; it has hundreds. Every municipality writes its own zoning bylaws, each with its own terminology and rules on features like building heights, parking requirements, lot size and dozens of other factors," the report said.
Toronto shows the scale of the problem. Its harmonized 2013 bylaw has five low-rise residential designations. More than 20,000 parcels still fall under pre-amalgamation bylaws, however, which pushes the effective count to at least 35.
The board's main zoning proposals are:
- a provincial zoning code
- as-of-right permissions for townhouses and multiplexes
- a "five for five" cap, allowing no more than five zoning categories for residential buildings of five storeys or less
For the building code, it calls for single-stair buildings up to six storeys and smaller elevators in smaller buildings. A Neptis Foundation study cited in the report estimated that targeted code changes could save up to $174,000 on a hypothetical four-storey project.
What cooling prices mean for mortgage brokers
The report arrives as Greater Toronto Area prices ease. The Toronto Regional Real Estate Board (TRREB) put August's average selling price at $993,410, down 2.7% year over year. That softness also shows up in why GTA homes are sitting on the market much longer.
The board argues the cooling hides a deeper imbalance. Toronto-area composite prices rose about 187% between 2006 and 2025, compared with cumulative inflation of roughly 51%.
Daren King of National Bank highlighted that while several major markets posted monthly declines in August, cities such as Quebec City, Montreal, and Toronto recorded gains, reflecting varied conditions across the country.https://t.co/rm5EMleWQd
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 21, 2026
Brokers should watch for pent-up demand. The report cites TRREB data showing GTA homebuying intentions fell to 22% in 2026 from 27% in 2025. It also cites an Ipsos poll for BMO that found 72% of aspiring buyers plan to wait for lower mortgage rates.
"If buyer confidence improves before the supply pipeline has recovered, the region could face renewed pressure on prices and availability," the report said.
Supply has been weak all year, with Canada's housing starts extending their slide as builders pull back.
Elan Weintraub, a Toronto-based mortgage broker at Mortgage Outlet, told Canadian Mortgage Professional earlier this year: "I think real estate is very cloudy and volatile. It's extremely micro-fragmented. Certain pockets might be lukewarm to hot. Other pockets are ice cold."
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