GTA builders warn of looming housing shortage
Census data reveals the community has grown 30 per cent in the last five years.
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There’s a housing supply shortage looming in the Toronto area. That’s the warning the head of the association for new home builders has been issuing every chance he gets in recent months.
Even with a “making-it-happen attitude” it will take five to seven years to get the supply of new homes up to a healthy level again, said Bryan Tuckey of the Building and Land Development Association (BILD).
The inventory of new homes for sale in the Toronto region has sunk to historic lows, he said. There are various reasons, including lengthy provincial approval times for water and waste water servicing that’s required before a single toilet can be flushed in a new neighbourhood.
Figures from the Toronto Real Estate Board suggest a similar shortage exists on the resale market. People aren’t listing their homes because they worry about what they’ll be able to afford among the region’s soaring prices.
If government and builders don’t figure something out soon, Toronto is heading down the road of cities like London and San Francisco, says Tuckey.
“You have the most affluent parts of British society not being able to afford a home in London or in San Francisco where we see jobs being lost because people can’t afford to live in communities where they want to work and play and live,” he said.
The census data released Wednesday reinforce his concerns, said Tuckey.
It shows Toronto’s population grew 6.2 per cent between 2011 and 2016, above the national average of 5 per cent. But that growth was exceeded by several communities outside the city including Brampton, Caledon, King, Markham and Bradford.
For the second consecutive census, Milton has proved to be the GTA town with the biggest boom. It registered 30 per cent population growth in the census period.
“We talk a lot about Toronto, and still, about 65 to 70 per cent of the growth is going to be outside Toronto. Plus, it’s family oriented growth, so communities like Oakville, Brampton, Milton, Bradford, West Gwillimbury where growth was intended to happen,” said Tuckey.
He’s not surprised that those families want what the industry calls ground-related homes — townhomes, semi-detached and detached houses.
Some will happily sacrifice space for affordability. Tuckey calls townhomes the new single-family home even though they don’t usually have big yards for the kids to play.
To get that ground-related property, many are moving outside the city to the booming 905-area communities.
In Milton, three-storey stacked townhomes and the more traditional two-storey towns with basements are the highest demand category among home buyers, said Royal LePage agent Amy Flowers, whose business is flourishing in the town that now stands at a population of just over 110,000.
Those homes run between $500,000 and $600,000 on average for about 1,200 square feet of living space.
Toronto buyers in search of the holy grail of GTA housing are typically paying between about $750,000 and $800,000 for that detached house with a yard, said Flowers.
“Our buyer demographic is interesting,” she said. “We’re one of the only towns in the country where our median age is actually going down.”
In little more than a decade, the influx of families has transformed Milton. The old theatre has closed in favour of a multiplex near the highway. There’s a Wal-Mart.
When Flowers moved into town about 15 years ago, it took about 10 minutes to drive across Milton. Now, with traffic, it is double that.
When it comes to buying homes, Milton has its share of big-league competition. On Thursday there were only 68 freehold listings and eight condos listed on the TREB’s Multiple Listings Service for Milton. Of those, four of the houses and half the condos were already conditionally sold.
Like Toronto, list prices have pretty much lost any bearing on the final sale amount and competitive offers are routine, said Flowers.
Buyers, who often experience the disappointment of three or four unsuccessful home bids, need to go in firm on the set offer date, advised Flowers. Home inspections are nice but they’re not always possible, she said.
If it all sounds familiar to Toronto’s property scene, Flowers concedes one difference: “We don’t have 30 offers on a house. We’ll have more like five.”
But Milton has an edge over Toronto in that buyers don’t have to pay a municipal land transfer tax. As well, the federal government’s new mortgage stress test rules make it necessary for some to stretch their dollar by moving northwest of the city.
It can be a long commute for downtown workers, but lots of couples use it as a halfway point between jobs in Mississauga-Brampton and Kitchener-Waterloo, she said.
There is an influx of families moving in from Mississauga and Brampton, “looking for a nice safe place to raise their children,” said Milton councillor Colin Best.
The growth has brought some benefits, including a new hospital that is expected to open in the fall, he noted.
But the supply of homes for newcomers is dire. Best said he’s had realtors compare it the 1990s, before the population tripled.
The town approved about 6,000 homes three years ago. They’ve only built 1,000. Of 11 zoning applications, only three developments are being built. Best said a lot of that is due to delays, development charges, appeals and labour turmoil in the building industry.
Transportation is emerging as a big problem though.
“I have people spending three hours a day commuting from Milton to Toronto,” said Best.
While GO has increased the number of Milton trains, he is dismayed that Metrolinx says it will be 2041 before his community gets the all-day, two-way service being rolled out in the coming decade across much of the rest of the Toronto region.
“Sixty-three per cent of Halton Region goes outside the region to work. That’s based on a previous census. It’s probably worse now. If you come to the Milton GO train, the parking lot is full by 7:30 a.m. Twenty-five per cent of (those GO riders) are coming from the west,” said Best.
Don’t even get him started on the rush hour traffic on Highway 401.
The youth of the community has its challenges too, he said. There was a community dispute among older residents and younger families about whether the town should install a splash pad at Dorset Park.
“It was quite the divide,” said Best.
While the province is rushing to build enough schools for the booming number of students in Milton, children are being bused and moved around in the transition. There are 16 kindergarten classes among four schools and at one point, consideration was being given to the idea of having one school just for kindergarten kids, said Best.
“We’ve had clients who have had their kids in six different schools and sometimes the same household will have kids going to different schools,” said Flowers.
It’s another reason to buy a resale home even though she acknowledges it’s in her best interest to say so.
“If you buy a resale house, that has everything all sorted and figured out. You’ll know what school you’re going to,” she said.
Besides, she adds, “If you’re buying new, you’re on a waiting list for a year to two years.”
It’s just one more sign of the bifurcation of housing that has been happening in Toronto is also happening in the maturing communities surrounding the city, said Cherise Burda, executive director of the Ryerson City Building Institute.
She favours the region’s sweeping transit expansion. But Burda says she wonders too if some of the billions of dollars should perhaps be invested in housing closer to the city.
We have a choice, she said: We can build out or we can build up. Building up is costly. Land on the periphery is cheap and municipalities make it cheaper by subsidizing infrastructure to entice the development charges new builds bring to the community.
The census just shows that sprawl is continuing and opportunities are being missed, she said.
“The fact that those are the economic options for developers and for home buyers shows that we’re missing the types of policies to fix that,” she said.
The region needs more of what’s called “the missing middle” — housing that falls somewhere between the highrise and the sprawl option. Before the war, families lived in flats downtown. It wasn’t until after the war that the automobile spurred sprawl. In Paris and Barcelona, mid-rise apartments are the norm for family living.
“We’re going to buy the options we’re given,” said Burda.
“We’re not building enough infill development, we’re not building enough townhouses and mid-rises — not just in downtown Toronto but also in suburban centres,” she said.
“If we look at downtown Toronto, 75 per cent of people walk, cycle or take transit,” said Burda. The region would look very different and our lives would be better if we built homes that put people within easy access of transit and jobs.
“There are all these plans for building houses in the periphery,” she said. “We have enough land to keep building ground level housing for decades to come. But is that going to serve a population that doesn’t want to drive to get to work?”