A key factor is municipal red tape
According to the study, the gap between housing stock and population growth in the GTA is the widest it has been in over 50 years.
“Without bold steps, the housing crisis in the GTA is going to get far worse in the years ahead.”
A key factor contributing to this issue is the length of time it takes for new housing projects to receive municipal approvals. The study found that, on average, it takes 20 months for housing projects to gain approval, adding significant costs to developers and, ultimately, to homebuyers. For each month of delay, an additional $2,673 to $5,576 is added to the cost of each unit. Based on average approval timeframes, this results in an increase of $43,000 to $90,000 per new home.
Adding to the burden are high municipal fees, taxes and charges that account for almost 25 per cent of the cost of a new home in the GTA. The study notes that since 2022, municipal fees alone have increased by an average of $42,000 per unit for low-rise developments and $32,000 for high-rise units. As a result, municipal fees now add an average of $122,387 to the cost of a condominium and $164,920 to the cost of a single-family home in the GTA.
“The GTA housing market faces structural challenges that have driven up construction costs, including unattainably high government fees and taxes — which are among the highest in Canada,” Wilkes said.
The study highlights that these escalating costs are not only squeezing developers but also pushing potential homeowners out of the market, as affordability becomes increasingly out of reach. It warns that the decline in development applications signals an impending worsening of the GTA’s already strained housing supply, exacerbating the region’s housing crisis.
Wilkes said that without significant intervention, the region’s housing crisis could worsen.
“Without bold and immediate action, the region’s housing crisis will be exacerbated,” he said. “This will lead to fewer housing starts, reduced jobs, and compounded affordability issues in the years ahead.”
The report urges all levels of government to take proactive measures to address the approval delays and high fees that are stalling new developments.
“To improve housing affordability, governments must act to accelerate approvals and reduce the overall tax burden they are placing on new home buyers,” Wilkes said.