Outlook for Ontario housing starts weakens further away from 1.5 million goal

Ontario’s housing start projections have been revised downward once again in the province’s budget, putting the government even farther off track from building 1.5 million homes over 10 years — a target to which the ministers in charge say they pay no mind.

The province is projecting just 64,800 housing starts this year — 10,000 fewer than it expected for this year in last year’s budget and 30,000 fewer than the 2024 plan projected.

The government’s own math early on in its bid to get 1.5 million homes built by 2031 showed that housing starts should be at 175,000 per year. That was a different time, said Municipal Affairs and Housing Minister Rob Flack.

“It was a goal set in 2022 when we had robust housing starts,” he said on March 26 after the budget was tabled. “We don’t today.”

Finance Minister Peter Bethlenfalvy last year referred to 1.5 million homes as a soft target, one of the first signals that the government was backing away from the goal it frequently touted in 2022.

On budget day, neither he nor Flack wanted to talk about it much.

“I’m not focused on the target,” he said. “I’m focused on what we can do today to make it more affordable for people to own homes.”

Flack espoused a similar message of affordability as a new goal.

“I don’t wake up thinking about 1.5, I worry about getting homes built in the next two, three months,” he said. “I think what you’ll see in the months to come is the focus on getting costs down.”

The government announced a temporarily expanded HST rebate on new homes in its budget and it hopes the measure spurs 8,000 new units. Home builders praised the move and said it would help get the sector moving, but they have also been calling for lowered fees, such as development charges.

The budget also says Ontario and the federal government are working on a program for municipalities to reduce development charges, which cities use to pay for housing-enabling infrastructure such as roads, sewers and water.

Housing has faced a lot of headwinds, from high inflation rates to rising construction costs and labour shortages, but critics say while the provincial government’s goal was ambitious, its execution has been the opposite.

“They didn’t have a plan, and … they should have built the plane before they got in the air,” Interim Liberal Leader John Fraser said. “In fairness, it’s not an easy file. You don’t have all the levers, but you’ve got to be realistic and tell people what you can do.”

Green Party Leader Mike Schreiner said the government should be doing more to enable gentle density like multiplexes and mid-rise buildings and invest in deeply affordable, co-op and supportive housing.

“This government was elected on the promise of 1.5 million homes and is utterly failing to deliver,” he wrote in a statement.

“Of course they’re trying to distract from that. Even if the HST rebate successfully spurs the construction of 8,000 homes, that’s a drop in the bucket compared to where we need to be.”

The NDP has been advocating for a public builder to be established, though Flack definitively ruled that out.

“It’s expensive to rent, it’s hard to find a home to buy and homelessness is just going from bad to worse,” said New Democrat housing critic Jessica Bell.

“We would have liked to have seen measures in this budget to get government back into the job of building housing, and we didn’t see that.”