Ontario's Housing Start Projections Revised Downward Amidst Growing Concerns

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The Ontario government has revised its housing start projections downward again, falling short of its ambitious goal of building 1.5 million homes by 2031. With just 64,800 starts expected this year, the government faces mounting criticism over its plan's execution and the need for immediate affordability measures.

Ontario's housing start projections have been revised down once more in the latest provincial budget, signaling a significant deviation from the ambitious target of constructing 1.5 million homes over the next decade. The government now anticipates only 64,800 housing starts this year, which is a decrease of 10,000 from last year's budget expectations and 30,000 less than what was initially projected for 2024. The original plan indicated that to achieve the target of 1.5 million homes by 2031, housing starts would need to reach an annual figure of 175,000. Municipal Affairs and Housing Minister Rob Flack acknowledged this discrepancy, stating, "It was a goal set in 2022 when we had robust housing starts. We don’t today," during remarks made on March 26 after the budget was unveiled.
Finance Minister Peter Bethlenfalvy previously referred to the 1.5 million homes target as a soft target, indicating a shift away from its previous prominence in government discussions. On budget day, both he and Flack were reluctant to discuss the target in detail. Bethlenfalvy stated, "I’m not focused on the target. I’m focused on what we can do today to make it more affordable for people to own homes," echoing Flack's sentiment that immediate affordability is now the priority.
To that end, the budget introduced a temporarily expanded HST rebate on new homes, with hopes that this measure will lead to the construction of an additional 8,000 housing units. Home builders have welcomed this initiative, suggesting it may help stimulate the sector. However, there are ongoing calls from builders for reduced fees, specifically development charges, which municipalities utilize to fund housing-enabling infrastructure such as roads, sewers, and water.
The housing sector is grappling with numerous challenges, including high inflation rates, escalating construction costs, and labor shortages. Critics argue that while the government's housing goal was ambitious, its execution has been lacking. Interim Liberal Leader John Fraser commented, "They didn’t have a plan, and … they should have built the plane before they got in the air," acknowledging the complexity of the housing issue while urging for realistic expectations.
Green Party Leader Mike Schreiner criticized the government's failure to deliver on its housing promise, stating, "This government was elected on the promise of 1.5 million homes and is utterly failing to deliver." He further emphasized the need for more measures to enable gentle density, such as multiplexes and mid-rise buildings, as well as investments in affordable housing options.
The New Democratic Party (NDP) has been advocating for the establishment of a public builder to address the housing crisis, but Flack has ruled this out, citing the associated costs. NDP housing critic Jessica Bell lamented, "It’s expensive to rent, it’s hard to find a home to buy and homelessness is just going from bad to worse," expressing disappointment that the budget did not include measures to reinstate government involvement in housing construction. The situation remains critical as the province struggles to align its housing starts with the ambitious targets set in previous years.

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