The two most expensive real estate markets in Canada are suffering inventory dearths, and it isn’t merely affecting buyers forced to pay premiums for their new abodes. The vacancy rates in both cities hover around 1%, meaning renters, forced to engage bidding wars, are the real losers. So why is supply so low?
In both cities, the approvals process for developments is painstakingly slow, and in Toronto up to seven years can pass from when a high-rise is conceived to when it’s occupied. Industry professionals consistently express exasperation, even outright befuddlement, at how little has been done to remedy a problem that was identified years ago.
The provincial government in Ontario rolled out the Fair Housing Plan in April and, through the Housing Delivery Group, one of its objectives is to cut through red tape and other impediments to deliver timely construction developments.
Toronto consistently delivers too few condominiums to market every year, and as the fastest growing metropolitan area on the continent, that’s problematic. Condos provide Toronto’s rental market with an abundance of secondary units without which a full-blown housing crisis would be unleashed upon the city. The Fair Housing Plan also reintroduced rent control, and it’s believed to have had a cooling effect on developers’ plans to construct purpose-built apartment buildings, which—along with below-grade transit infrastructure to support intensification efforts—remain Toronto’s most urgent need.
Vancouver suffers from many of the same problems, but the city’s single-family zoning bylaws are outdated. Should they be rezoned to multi-family en masse, supply could drastically increase. However, NIMBYism is an important consideration at City Hall and it has stymied the political will needed to proffer Canada’s third-largest city the panacea it so desperately needs.
In Toronto, tenebrous clouds have formed over City Hall, where an exodus of experienced, competent bureaucrats has become an unmistakable trend. Although Peter Wallace resigned as the city’s general manager to pursue a post in Justin Trudeau’s Liberal government, Jennifer Keesmaat’s much-publicised departure last year may have been the greatest indication that, in the absence of the political will needed to fortify Toronto’s future, myopia and pandering run roughshod at City Hall.