Ontario has committed to building 1.5 million new homes by 2031 and has assigned housing targets to the province’s 50 largest municipalities to help achieve this goal. To incentivize progress, the province has introduced a $1.2 billion Building Faster Fund, offering funding to municipalities that reach at least 80 per cent of their annual housing target, with bonus funding for those that exceed it.
Ontario’s definition of a new home start largely aligns with CMHC’s. CMHC tracks housing starts and completions through monthly site visits in census metropolitan areas (CMA) and quarterly surveys in smaller areas with populations between 10,000 and 49,999.
CMHC defines a housing start as the point when a building’s foundation is complete. However, for apartment-style developments, including condominiums, significant underground construction, such as digging subgrade structures, typically occurs before CMHC classifies it as a housing start.
Ontario’s definition also differs by including new and upgraded beds in long-term care homes, as well as additional residential units (ARUs). CMHC tracks conversions and demolitions through a monthly survey, which forms the basis for how Ontario measures ARUs.
For most cities in the Toronto CMA, ARUs have minimal impact on overall housing activity. However, Brampton and Toronto stand out, with conversions accounting for about 20 per cent of Ontario’s monitored housing starts in Toronto and nearly half of Brampton’s starts. Not surprisingly, these two cities have the highest level of secondary suite activity in Ontario.
Even with this expanded definition of housing starts, most cities in the Toronto CMA—Brampton, Markham, Mississauga, Toronto, and Vaughan—failed to meet Ontario’s housing targets for 2024.
Source: Tracking housing supply progress | ontario.ca
Why are cities struggling to meet housing targets?
While housing starts (as defined by CMHC) have generally increased over time, the focus has shifted from single-family homes to apartment-style dwellings. Except for Pickering, there has been little to no material growth in single-family housing starts.
Source: Starts and Completions and Market Absorption | CMHC
In the City of Toronto, the time required for apartment construction has more than doubled, rising from around 13 months in the late 1990s to about 30 months by 2020. That means there are more than twice as many active construction sites for the same number of units reaching the market compared to the late 1990s. While other cities—except Mississauga—haven’t experienced the same degree of delay, construction timelines have generally increased. To better understand the factors behind this trend, we looked at how construction timelines have changed over this timeframe.
Source: Starts and Completions and Market Absorption | CMHC
Poor productivity in the construction sector highlights a key issue: if it takes longer to erect new buildings, productivity will inevitably decline. This also raises doubts about whether expanding modular construction will be a panacea for builders and homebuyers.
Opportunities and challenges with modular construction
Modular construction aims to shift much of the building process to an offsite factory, transforming it into a manufacturing operation. Traditionally, homebuilding has largely been a bespoke process—starting with a basic design that can be tailored to individual preferences. However, this customization reduces efficiency. A modular factory requires a standardized set of floor plans, finishes, and features that strike a balance between efficiency and flexibility.
While factory-built homes can generate cost efficiencies, total savings are unlikely to exceed 25 per cent—even before factoring in taxes, fees, and land costs—due to logistics and installation expenses. Without a smooth delivery and placement process, any potential cost savings will quickly vanish. Some homebuilders have successfully used modular construction, with one example being Mattamy, which applied the approach to building low-rise homes in Milton.
The biggest challenge is translating modular construction to apartment development. Transportation remains a major hurdle with volumetric high-rise construction, particularly in a congested city like Toronto. How effectively such a process could be implemented in this environment remains an open question.
Independent Opinion
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