Understanding Ontario’s housing crisis
By Brittany Stuckless
Posted on October 18, 2021
Ontario is Canada’s most populated province. It has Toronto, the capital city Ottawa, and plenty of other beautiful towns and urban centres. Unfortunately, Ontario is also in the midst of a housing crisis, with a complex yet somewhat recent history. This article will help newcomers understand why there is a housing crisis in Ontario, what it means, and how to navigate the uncertainty it may bring.
What is a housing crisis?
A housing crisis is when there is a lack of affordable housing in an area. It generally affects large cities, but the impact can be noticeable in an entire province. The Advocacy Centre for Tenants of Ontario notes that the “majority of Ontario urban centres have experienced larger increases in housing costs between 2011 and 2016.”
The Canadian Real Estate Association also states that by the end of 2021, the average cost of a house in Ontario will be around $850 000. Additionally, most homes in downtown Toronto cost at least $1 million. These averages are expected to rise again by the end of 2022. The housing crisis affects most people who aren’t making a large salary. The effects can cause stress for tenants and future buyers.
Why is there a housing crisis in Ontario?
Affordable housing is becoming more difficult to find for several reasons. Here are some factors that contribute to the housing crisis in Ontario:
Low supply
The government of Ontario notes that the housing supply is not keeping up with demand in the Greater Toronto Area (GTA). They also mention how rural and northern areas of the province can be affected. As more and more people from the GTA realize housing is affordable, they move to smaller areas of the province, causing those housing prices to rise as well.
Low supply is a complex issue and takes a long time to solve. For instance, it takes a while to approve building permits, and it can take up to a decade to build a high-rise or a low-rise project. There are also the issues of securing enough land, high land prices, and government fees.
Population growth
The population of Ontario has been regularly increasing since 2015. There are currently around 14 million people living in Ontario. This number increases annually by approximately 140 000, according to the province of Ontario’s website.
Population growth has an impact on the housing crisis, and more people need homes every year. Currently, the supply is not keeping up with the population’s demand for homes, causing prices to rise.
Prices vs. income
The minimum wage in Ontario is too low compared to high housing prices. The minimum wage is currently $14.25 per hour. In contrast, the average cost of a home in Ontario is rapidly increasing. The Canadian Real Estate Association notes that prices are rising by as much as 30 per cent per year. To compare, the minimum wage in Ontario has only increased by around three dollars since 2017.
Short-term rentals
Companies like Airbnb let homeowners make some extra cash. The concept lets people save a lot of money and avoid hotel prices. Airbnb is a convenient service providing people with accommodations; however, it has greatly affected the housing crunch.
In many famous cities, including Toronto, wealthy buyers often buy several properties they don’t need for themselves. Afterwards, they list these properties on Airbnb as short-term rentals. This creates a shortage of homes for future buyers. It also affects the number of rental units available for tenants.
Luckily, many cities are introducing bylaws to fight the impact short-term rentals have on the housing market. In Toronto, you can no longer list a residence as an Airbnb unless it is your primary residence. Enforcing these bylaws will eventually make an impact on the housing crisis.
How does this crisis affect immigrants?
Being new to Canada, immigrants will generally notice the high housing prices in Ontario. Furthermore, newcomers in certain cities and towns will feel the effects of the housing crisis more than others. For example, the city of Brampton has a high immigrant population.
In an article featured in the Toronto Star, readers learn about what needs to happen to give immigrants in Brampton more of a sense of community, access to affordable housing, and other services. The article discusses “Smart Growth” and how intensification can help drastically. Intensification means “the process of increasing and densifying the amount of housing development per hectare.”
While it is still possible to buy a home, many new immigrants may have to start their lives in Ontario by renting. Settlement.org helps newcomers with how to find suitable rental units and steps to buying a home.
What needs to be done?
Ontario is a beautiful province that everyone deserves to enjoy. Additionally, the housing crisis shouldn’t keep newcomers from planning to spend their lives there. Before buying a home, it is possible to find a decent apartment in Ontario that fits into their budget. In the meantime, they can start saving while waiting for the housing crisis to improve.
We’ve already touched on intensification, but there is more work that needs to be done. The provincial government needs to work to improve the housing crisis. With help from the federal government, there needs to be a focus on quality, large-scale community housing and ‘cutting the red tape’ that makes it so challenging to secure permits and start construction. The Ontario government outlines a plan that focuses on achieving the following goals:
- Providing housing for people in need
- Helping tenants financially
- Reducing waitlist times
- Improving the quality of community housing (safety, amenities, etc.)