An appropriate supply of housing for all members of the community is essential for the continued growth and well-being of any municipality or city. Ensuring that suitable and affordable housing is available for everyone in growing regions is a key challenge across Canada. Since the majority of the existing housing stock and the ongoing development of new stock is privately owned and managed, it is subject to market forces. Therefore, any approach to estimate how many dwellings must be built to meet the needs of a growing population must take market factors into account.
Population growth estimates and projections of household size can be used to determine how much and what type of stock will be required to suitably house the future population. However, this approach does not guarantee that housing will be affordable. There are many additional factors that drive the choice of dwelling, including income, affluence and local amenities. Therefore, basing planning decisions on the estimates generated from the straightforward method described above may result in affordability and sustainability issues in the future. F example, higher income households tend to prefer dwellings exceeding their minimum suitability requirements, resulting in increased competition for larger units, and creating affordability pressures.
While a full market analysis of future prices is difficult with many unquantified or unknown factors, more heuristic approaches have been proposed. One such approach, proposed by the Department for Communities and Local Government (DCLG) in the United Kingdom, attempts to adjust the new stock required as estimated from the expected population growth and takes into account current market signals.
This report applies the DCLG’s methodology for estimating future housing need to Ontario. This exercise can help gauge the usefulness of this approach and its applicability to the Canadian context.
Download report: AssessingTheAdequacyOfSupply_20180926