The Greater Toronto Area is in danger of becoming the next London or Palo Alto, places that are highly desirable but unaffordable for most people.
This is a growing region and people want to live here but the lack of housing, especially low-rise homes, keeps pushing prices higher. Like London and Palo Alto the demand for housing is greatly outstripping the supply of housing that is available.
It is becoming more difficult for many people to find homes here that they can afford, regardless of whether they are looking to buy a new or resale home or looking for rental accommodations.
The home building and land development industry wants to design and build homes and communities that meet the housing needs of the GTA, that is our business, that is what we do, but it is getting harder as challenges grow in number and scale. Complicated and restrictive government policies, already lengthy yet still worsening approval processes, a shortage of shovel-ready and approved land on which to build, escalating land prices, and the growing issue of NIMBYism, are impeding our ability to build homes and communities.
Unfortunately, many of these challenges are shared by London and Palo Alto.
To help our members keep abreast of builder best practices and innovation in other parts of the world, BILD organizes an annual tour to a different city where we learn about that city’s housing market, meet with local developers and builders and visit sites.
This year we went to London, one of the world’s most dynamic and historic cities. We saw a lot of industry innovation and amazing urban development projects under construction. But we also witnessed London’s prevalent housing affordability issue with prices that many people can’t afford.
While we were there, the media was reporting that the average price of housing in the U.K. was £2,200 per sq. ft. ($3,564 CAD) which means $2,138,400 CAD for a 600 sq. ft. home.
We visited King’s Cross, one of the largest and most exciting redevelopments in London. This site has been transformed into a complete community with a broad range of housing types. While the project includes a component of subsidized rental housing, the market housing is not affordable to many Londoners. For example one-bedroom suites start at £730,000 ($1,175,300 CAD).
London is also attracting a growing number of large international investors and financial backers which differs from the GTA where most of our developers and investors are from here. We toured Battersea Power Station, an innovative redevelopment where a group of Malaysian investors purchased the site and are turning it into a luxury high-rise and community development.
In an effort to curb their housing crisis, the British government has recently doubled their housing budget to help increase the supply of affordable housing. They’ve also launched a major homebuilding stimulus package and plan to boost housebuilding by using surplus public lands.
Meanwhile, Palo Alto is another example of a great city suffering from lack of housing supply and eroding affordability. Located in the centre of Silicon Valley, it offers a lot of employment opportunity but people can’t afford to live there. Their cost of housing is astronomical to the point where job openings for positions like teaching or enforcement can’t be filled and professionals are choosing to move away. The city needs to make their housing supply a priority and restructure zoning policies so that people that want to work there can also afford the price of housing.
We don’t want to be a London or a Palo Alto. In the GTA, we need to work together to address the growing challenge of inadequate housing supply so that we can better meet the region’s housing needs and offer consumers choice.