Ontario's housing affordability crisis is no longer a temporary issue. It is a structural problem shaped by four decades of public policy failures. According to Richard Lyall, president of the Residential Construction Council of Ontario (RESCON), the data reveals a stark reality: housing starts in the province totaled roughly 12,700 units in the first quarter of 2025, the weakest quarterly performance since the 2008-09 financial crisis. In the Greater Toronto Area (GTA), new home sales collapsed to just 5,314 units in 2025.
Structural Imbalance
The province targets 175,000 new homes annually, but actual delivery falls short by more than 100,000 units per year. The affordability ratio—the share of household income needed for home ownership costs—peaked at 63% in 2022, far above the long-run average of 38%. Although it eased to 42% in early 2025, it remains elevated. Without reform, a return to historical norms is unlikely before the mid-2030s.
Five Key Reforms
Lyall outlines five evidence-based reforms to address the crisis:
1. Restructure Development Charges
Government-imposed costs now account for 35.6% of a new home's price. In some markets, municipal fees add $102,000 to $196,000 per unit. In Toronto, charges have risen over 1,000% since 2009. Shifting infrastructure funding from upfront levies to long-term financing would lower entry costs.
2. Enforceable Approval Timelines
Approval timelines in the GTA range from 14 to 25 months, far above the national average of 11.6 months. Statutory limits under 12 months with financial penalties for delays are needed.
3. Permanent HST Relief
Making HST relief permanent on new homes up to $1 million would remove a significant barrier for first-time buyers and improve market confidence.
4. Scale Up Industrialized Construction
Modular and off-site construction can reduce timelines by up to 50%. Governments should support this through incentives and procurement reforms.
5. Modernize Building Codes
Adopting single-stair designs for mid-rise buildings, as used in Europe and B.C., would unlock urban land for gentle density and increase supply without altering neighbourhood character.
Path Forward
Lyall emphasizes that the crisis is policy-constructed and therefore policy-addressable. Recent federal-provincial co-operation creates a window for change, but it will not remain open indefinitely. Without action, an entire generation will be priced out of the market. The goal of restoring affordability is achievable only if governments confront the policies that created the problem and commit to long-term fixes.
