Ontario’s financial watchdog is pouring fresh cold water on the Ford government’s ambitious plan to build 1.5 million new homes by 2031, with a new report signalling construction continues to stall and the number of new single-family homes is at its lowest in almost 70 years.
An economic summary released by the Financial Accountability Office of Ontario Thursday painted a dire picture of the province’s housing starts, although it found home resales were increasing slightly and some general positives in growing employment and trade.
The report found new housing starts declined by 17 per cent from April to September this year compared with last. Over those three months, generally among the most productive for homebuilding, Ontario saw a total of 20,600 new units started, below the four-year average of 22,900.
Those figures also saw a historic dip in the construction of more traditional, sprawling developments.
“Construction of single detached homes has been weak so far in 2024 and is on track for the lowest level of annual starts on record back to 1955,” the FAO’s report said.
In order to meet its plan of building 1.5 million new units by 2031, a commitment the Ford government ran its successful 2022 election campaign on, quarterly housing starts need to almost double, according to the FAO.
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Over the initial 10-year period, Ontario would have needed 34,100 new units but a slow start means the province now needs to average 39,900 new units per quarter to have any hope of hitting its goal.
“This represents a 74 per cent increase in the pace of units started since 2021 and about 5,500 above the highest number of starts ever recorded of 34,400 in 1973 Q3,” the FAO wrote.
The weak third-quarter numbers come on the back of equally low projections in the government’s fall economic statement in October. In that document, aggregated industry projections suggested the government would fail to hit its housing targets every year until 2027.
While the government originally projected nearly 88,000 housing starts in 2024, the latest update shows the government is now projecting 81,000 starts — falling well below the government’s own target of 125,000 in 2024.
In 2022, the government announced it planned to build 1.5 million new homes by 2031. To hit that goal, it needed an average of 150,000 new housing starts every year.
After the fall economic statement predicted housing starts well below what Ontario needs to hit its goal, Housing Minister Paul Calandra remained bullish in his prediction he could hit the target his government had set itself.
“I have a target, I’ll meet that target, and I’ll remove obstacles so that I reach that target,” Calandra told reporters on Oct. 31. “We will not fail in the goal of building 1.5 million homes.”
Ontario Liberal MPP Adil Shamji said it simply wasn’t possible for the government to hit its target, claiming it is already out of reach.
“This government cannot build houses when interest rates are up; they also cannot build houses when interest rates are down because we’ve seen repeated interest rate drops over the past year,” he said.
“These are just distractions and they are excuses from the fact Doug Ford is a massive failure on many things, including housing.”
A separate report, commissioned by climate advocacy group Environmental Defence, which has opposed the Ford government on several fronts, including Highway 413 and the Greenbelt, suggested a failure to build medium-height buildings was part of the province’s problem.
“Adding large numbers of midrise buildings to major streets in existing built-up areas is the only approach that can quickly and sustainably generate enough homes to catch up with housing need and end Ontario’s housing shortage,” part of the report suggested.
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