Why You Can't Afford a House
Report blames Ontario's 2006 growth plan for soaring house prices
"The Ontario government’s 2006 growth plan for residential land development has spurred soaring increases in house prices in the Toronto region by limiting construction of new low-rise family homes, according to a report to be released Tuesday.
While the number of housing units built in the Greater Toronto Area over the past decade has roughly tracked the increase in population in the region, there has been “a marked mismatch” between the types of units completed and the types demanded, according to the report from the Centre for Urban Research and Land Development at Ryerson University in Toronto.
Demand for low-rise homes – especially detached homes – has not been matched by new supply, while the supply of condominium units has soared, the report says. The result has been major price inflation in all types of “ground-level” homes, including townhouses, semi-detached, and detached homes.
Frank Clayton, a senior research fellow at the Ryerson research centre, said soaring prices in recent years can be directly traced to the new development policy adopted by the province’s Liberal government in 2006 for the “Golden Horseshoe” region around Toronto.
The growth plan was aimed at encouraging denser development in the Toronto area and reducing the environmental impact of urban sprawl, but Dr. Clayton argues it has had the unintended consequence of driving prices higher by creating scarcity.
He said the province’s policy assumed more people would be willing to live in high-rise developments if they were built in transit-accessible areas, even though forecasts at the time suggested a large majority of housing would still need to be ground-level family homes.
“It’s one thing to pursue an environmental objective on something, but don’t deny you’re having an impact on house prices, and that’s what they did,” Dr. Clayton said in an interview...." READ MORE