Ontario’s business community is calling for an all-hands-on deck approach between industry and government to address the province’s housing affordability crisis.
A new report says Ontarians are spending so much of their earnings on housing, there’s not much left to spread around the rest of the economy.
“People have to cut back, that means less spending in other areas, and that’s not great for our economy or our business community,” said Kristen Duever, vice president of public affairs for the London Chamber of Commerce.
She said businesses are also having trouble retaining talent. According to the Ontario Chamber of Commerce report ‘Home Stretched: Tackling Ontario’s Housing Affordability Crisis Through Innovative Solutions and Partnerships,’ 68 per cent of organizations report labour shortages in their industry.
“Employers are looking for people, but people need places to live, so it really affects every aspect of our lives and the economy,” said Duever.
Housing prices are also resulting in low-income earners being pushed out of their homes in some cases. London renter Tammy Thibert told CTV News London she gets a fair deal on the rental she’s been in for decades, but many of her friends struggle.
“The old standard was always 30 per cent per month of what you brought in,” she said. “That should be the max you’re spending. I know people are 70, 80 per cent of their income.”
London homeowner Jonathan Raon said with inflation on the rise, it’s getting harder and harder to keep up.
“Well nowadays is just kind of ridiculous, really. You have to look for a second job just to keep up with the bills,” said Raon.
And while the price of a home in the London region is softening ever so slightly, it’s still very high compared to pre-pandemic.
In fact last month’s average sale price of $675,923 is 83 per cent higher than just five years ago, in June of 2018. It comes as economists anticipate an interest rate hike of 25 basis points.
Adam Miller, the president of the London St. Thomas Association of Realtors, said some homeowners will feel the pain.
“Doesn’t matter if you’re in a 1.5 million dollar home, or if you’re in a 400,000 [dollar home]. Any time you double or triple your payments it does become a tough barrier to swallow every month,” he explained.
The Chamber report says 1.85 million more homes than what are already in the pipeline are needed to restore housing affordability. It’s recommending a number of measures from both industry and all levels of government.
“The first is immigration and workforce to make sure that we have the people to build the houses that we need,” said Duever. “The second area is incentivization of developers, so that we’re not just building one type of house, we’re building houses across the spectrum that are for everybody. And then the third area is innovation. How can we get the housing we need faster,” she said.
