SOURCE: Residential Construction Council of Ontario (RESCON)

Residential Construction Council of Ontario (RESCON)

Residential Construction Council of Ontario (RESCON)

December 10, 2015 17:03 ET

New 'Policy Tool' to Measure Housing Affordability Creates Buzz

TORONTO, ON--(Marketwired - December 10, 2015) - With the revelation that at least 1.2 million Ontario homeowners (26 per cent) experience significant housing affordability pressure, an event unveiling independent research by the Canadian Centre for Economic Analysis (CANCEA) had a number of industry leaders and politicians reacting positively to the research's key findings.

Among them, CANCEA created a new index to measure housing affordability in its independent research study "Understanding Shelter Affordability Issues," financed by the Residential Construction Council of Ontario (RESCON). The Shelter Consumption Affordability Ratio (SCAR) Index takes a systemic approach to measuring the many socioeconomic factors that affect homeowners and renters, including health care, lack of funding in infrastructure, transportation and proximity to work opportunities, among others.

Speaking at an event held at Ryerson University to launch the research, Municipal Affairs and Housing Minister Ted McMeekin welcomed CANCEA's contribution to the affordability discussion.

"The affordability index is a helpful policy tool and I look forward to the next phase of CANCEA's research. It will help us assuredly because good information helps us to make good decisions," McMeekin said.

"Housing is not the problem. It's the solution."

Toronto Councillor Ana Bailao, chair of the city's affordable housing committee, also spoke at the event.

"When thinking about housing affordability, we need to think about the entire housing spectrum," Bailao said. "And that's what CANCEA's research does. This is an important contribution to the dialogue on this issue.

"We need the private sector involved in affordable housing. In response, the city has created the Open Door Program to stimulate their involvement."

Sal Guatieri, senior economist with BMO Capital Markets, who was part of a panel discussion at the event, said the day's dialogue underscored how much of a challenge housing affordability is in the Greater Toronto and Hamilton Area.

"It's a challenge that only seems to be getting worse, and will if interest rates go up. There's a need for different players -- governments, builders, realtors, everyone -- to come together and try to solve this problem, for both demand and supply. We need to build the right type of housing where it's needed in this area at an affordable cost. Part of the solution for the region is to build more three-story row houses along major transportation routes in Toronto and near GO stations."

Ted Tsiakopoulos, senior economist with Canada Mortgage and Housing Corporation, said: "Understanding the factors that are contributing to an erosion of affordability is crucial, because we do know that affordability impacts financial stability. Having different levels of government at the table and having different ideas around the table is also critical to understanding the issue. I think today's event addressed some of the factors that we should be looking at when it comes to affordability whether it's renting or owning a home."

Report author Paul Smetanin, CANCEA president and CEO, said part of the problem stems from "societal pressures and complex interaction of range of demand and supply factors."

"Housing is not well understood and therefore not well measured. We're having the conversations in silos. There are many socioeconomic factors that are interconnected -- health care, lack of funding in infrastructure, transportation and work, among others. Not one index brought them all together until now.

"Our research shows more than 26 per cent of Ontario's 4.8 million households are under significant affordability pressure, while the affordability pressures are at an all-time high across Canada.

"Housing prices have more than doubled over the last 10 years, and debt has almost doubled. I would question if there is a good use of credit in Ontario versus in investing in improved and new goods and services production."

RESCON president Richard Lyall concluded the event by adding that, "This is a critical time for housing affordability as millennials and young families struggle to achieve the dream of home ownership, or even keep up with rising rents. Housing is critical to our long-term economic prosperity. We have to get it right."

Lyall said the event, both at Ryerson and on social media (see #affordability2015 and #affordability15), was very positive among more than 100 industry leaders, members of government and academics in attendance. He added that there was a great spirit of cooperation between industry and government to work together toward a solution for affordability.

Minister McMeekin added: "We have a great working relationship with RESCON and we're grateful for that. We value your input."

To see the report's executive summary, please go to: http://bit.ly/1M5sxZk

For the bulletin analysis, visit: http://bit.ly/1jQXZDQ

What is CANCEA?
CANCEA is a state-of-the-art interdisciplinary research organization that is dedicated to objective, independent and evidence based analysis. They have a long history of providing holistic and collaborative understanding of the short- and long-term risks and returns behind policy decisions and prosperity. For more, go to cancea.ca.

What is RESCON?
The Residential Construction Council of Ontario (RESCON) is a non-profit association for GTHA builders that commissioned this independent, peer-reviewed research report to better understand housing affordability in Ontario. For more, go to rescon.com/index.php.

Contact Information

  • Contact Information:
    Aonghus Kealy
    Director of Communications, RESCON
    Tel: 905-760-7777, x. 111
    C: 647-530-4855
    kealy@rescon.com