Housing crisis could get even worse, says RESCON

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New report gives 22 of 34 Ontario municipalities a failing grade when it comes to enabling housing starts

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Most municipalities in the Greater Golden Horseshoe, including the City of Toronto, have been given a failing grade in a comprehensive new report done by the University of Ottawa’s Missing Middle Initiative for the Residential Construction Council of Ontario (RESCON).

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Disturbingly, of the 34 municipalities that were graded, 22 received an F, another five received a D, and the other seven municipalities received a C or higher. Brantford had an A-plus and Milton an A.

Municipalities were graded in five categories: three related to housing starts (ground-oriented, condo and rental), and two related to sales (ground-oriented and condo.)

Ajax, Aurora, Barrie, Brampton, Caledon, Cambridge, Clarington, East Gwillimbury, Georgina, Guelph, Halton Hills, Hamilton, Innisfil, Newmarket, Oakville, Oshawa, Peterborough, Toronto, Vaughan, Waterloo, Whitby and Whitchurch-Stoufville were all given an F.

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Burlington and Richmond Hill both received a B; St. Catharines, New Tecumseh and Pickering received a C; and, Kitchener, Markham, Mississauga, Niagara Falls and Welland received a D.

“The findings of this report are troubling and should set off the alarm bells for policymakers across all three levels of government,” explains RESCON president Richard Lyall. “Housing projects have been shelved and the industry has hit a wall. The outlook is bleak, and we are trending in the wrong direction. We need governments to take concrete action to lower the tax burden and modernize the process to kick-start the industry. Our economy will be in dire straits if we do not act quickly.”

The assessment is based on data obtained from Canada Mortgage and Housing Corporation and Altus Group. Researchers did a deep dive on housing starts, sales and industry employment across municipalities in the Greater Toronto Area and Greater Golden Horseshoe region over the first six months of 2025, relative to the same time period in the previous four years (2021-25).

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In the first six months of this year, housing starts were down an average of 40 per cent in the 34 municipalities. Condo apartment starts over the first six months were down 54 per cent relative to 2021-24 while purpose-built rental starts were up eight per cent. Starts for everything other than apartments were down 42 per cent, showing the weakness is not just confined to condos.

In the City of Toronto, starts in the first six months of 2025 were down 58 per cent and sales declined 91 per cent compared to the same period between 2021-24, causing employment to fall by an estimated 10,209 jobs.

According to RESCON, the research comes at a particularly important time, as housing unit sales and starts have all but ground to a halt. Pre-construction sales, which are considered a prime indicator of the market’s health, are down 89 per cent for condominiums and down 70 per cent for ground-oriented homes,  a clear indication that Ontario’s housing situation will get worse before it gets better, and that market weakness is not isolated to the condo market.

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Industry employment has also taken a major hit. The reduction in housing starts in the municipalities over the first six months of the year, relative to 2021-24 averages, translates into 24,195 fewer person-years of employment.

“We are in the midst of the worst housing crisis in a generation,” says Lyall. “While the situation is bad it could get worse if governments fail to reduce the tax burden on new housing.”

And although the report is focused on municipalities, Lyall says you can extrapolate from it that both the province and the federal government deserve a failing grade.

If there is a silver lining, or any basis for optimism, he said in an interview, it’s that we have “the levers” to get out of this crisis situation which include: first, taking the taxes, fees and levies out of new homes (which add an estimated 38 per cent to the price of a new home); second, eliminating the red tape which slows down the approval process; and third, the greater and expanded use of new technologies both in the home construction, and the land development and approval process.

“We have the technology here (in Canada) to do so,” he is convinced, and based on his extensive travels, there’s also a lot to be learned from how other countries are improving the way they plan for and build new homes, he adds.

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