Are Ontario government policies such as the Green Belt and Places to Grow, which encourage denser urban development over suburban sprawl, pushing Greater Toronto Area home prices through the roof?
Not according to Neptis, an independent research foundation.
“Some commentators have suggested that provincial land use policies have created a land supply shortage responsible for rising house prices in the Toronto region,” reads a brief from Neptis, published this month.
“Neptis research shows that, on the contrary, there is plenty of land to accommodate new communities at the urban edge until at least 2031 and possibly beyond. There is no ‘shortage’ of land supply,” it continues.
From 2006—which is when the province implemented its growth plan—to 2016, about 10,800 of 56,200 hectares of green-field land across the Greater Toronto and Hamilton Area has been developed, Neptis estimates.
That’s less than one fifth of the total supply, it says, leaving enough green-field land for the next 15 years of development, if not further into the future.
Three municipalities account for 45 per cent of the urbanized land so far: Brampton, Vaughan, and Milton. Yet even in these municipalities, developers still have about 15,700 hectares of land to urbanize, a little more than a third of the available designated green-field area land supply in the GTHA, says Neptis.
However, Benjamin Tal, the deputy chief economist for the Canadian Imperial Bank of Commerce, argues land supply is affecting affordability in the Greater Toronto Area, though he notes it is not the only factor to blame.
“A significant driver of house price inflation in the Greater Toronto Area is the lack of serviced land supply for ground-oriented houses,” he writes in an August report.
“Record-low interest rates are working to elevate demand along the inelastic land supply curve, resulting in ever-rising house prices,” he continues.