The city is facing a "critical shortage," says real estate board president
The ongoing housing market slowdown and lower demand shouldn’t distract from the “critical shortage” of homes available for purchase in the Greater Toronto Area (GTA), the president of the region’s real estate board has said.
Kevin Crigger (pictured), president of the Toronto Regional Real Estate Board (TRREB), told Canadian Mortgage Professional that the number of new listings in the GTA remained troubling, despite purchase activity having declined in recent months.
“If you look at any period where we’ve had changes in the market, whether they be regulatory or otherwise, we’ve seen periods where people sit on the sidelines and take a wait-and-see approach,” he said. “I think that certainly is the biggest thing contributing to a decrease in the number of transactions.
“But when you look at the number of new listings coming to market, we effectively are seeing a 20-year low. So despite changing market conditions, we still are in a market that is fairly tight in terms of supply.”
That will pose a challenge when the housing market eventually kicks back into gear, Crigger said, with a release of pent-up demand set to shine a light once again on the inventory shortfalls facing the Toronto region.
TRREB recently launched a campaign ahead of municipal elections on October 24 urging candidates to understand the importance of prioritizing affordable housing. The association wants candidates to address measures it says delay or prevent the construction of new homes such as lengthy approval processes and exclusionary zoning, as well as prohibitive development fees and land transfer taxes.
Excessive red tape is one of the most significant contributors to Toronto’s housing supply problem, according to Crigger, particularly at a municipal level.
“The municipal level is where supply is ultimately brought to market. Building permits are issued, the approval process occurs,” he said. “So there’s no level of government more impactful to the supply conversation than municipalities.
“Even speaking to mayors of major cities within Canada, I think you’ll see that there’s agreement that the lengthy periods now for approval, and the often-confusing process, is certainly not acceptable and is really exacerbating the problem.”
Streamlining development applications could help bring more inventory to the housing market – but it’s also important to focus on building the right type of homes he said, such as midsize developments, especially with most neighbourhood land throughout the city currently zoned exclusively for single-family homes.
Despite the grim outlook for housing supply facing Toronto, one positive is that “for the first time in memory,” it has become a key conversation at all levels of government, Crigger said.
“TRREB, for many years, has been sounding the alarm on supply-related issues while the government [was] focused on attempts at suppressing demand. And I think, finally, every level of government agrees that we have a substantial supply problem,” he said.
“It’s very encouraging to see that all levels of government understand the need for collaboration and, most importantly, that it’s a key policy objective at all levels.”
That said, the urgency of the problem is one that authorities have been slow to realize, with short-term solutions aimed at cooling demand having prevailed over decisive longer-term action in recent years, according to Crigger.
“Solutions that focused on sort of Band-Aid, short-term end results have had less than no effect on the overall market,” he said. “And unless politicians are willing to truly lead and govern and address supply head on, we’re going to have a worse and worse issue as it relates to not only ownership affordability – but also rental affordability.”
TRREB recently revealed new polling results conducted on its behalf by Ipsos that showed 71% of residents of Toronto and the “905” – the suburban area surrounding the city – want municipalities to focus on increasing housing and rental supply, instead of attempting to cool demand.
That’s an “incredibly important” number, Crigger said, especially ahead of the municipal elections at the end of October.
“I would encourage voters to look very closely at the platforms put forward, at policies put forward,” he said, “because definitely supply needs to be a key conversation to address concerns related not only to the ownership side of housing, but the rental side of housing as well – which seems to be less of a conversation.”