With a sharp drop in new home builds last year, it’s not likely Guelph will receive a provincial ‘reward’ this time around for working to address the housing crisis.
There was a 65 per cent drop in new housing starts within the city last year, as noted by the Canadian Mortgage and Housing Corporation (CMHC), to 462 from 1,280 in 2023.
That’s less than one-third of the provincial target set for the city, which called for the construction of 1,500 new units last year. Meeting that threshold is what triggers provincial funding meant to be put toward the cost of infrastructure supporting the creation of more new housing.
Last year, the city received $4.68 million for meeting 98 per cent of its 2023 target.
“It's just such a weird time. I don't think I've ever seen anything like this in my career before, where all the stars are not aligning,” deputy CAO Jayne Holmes said of the drop in starts. “We're trying to do everything we can. We don't build houses … but we try to facilitate a process and have things ready for (developers) when they are ready.”
Housing starts were up two per cent nationally in 2024, with 227,697 new units recorded. Provincially, starts were down eight per cent last year, with 5,381.
Looking elsewhere in Ontario, starts were up 35 per cent in Barrie (1,505), 91 per cent in London (4,171) and 19 per cent in Peterborough (313), though most were down. Among the falling municipalities were Kitchener-Waterloo-Cambridge (28 per cent, 3,411), Oshawa (14 per cent, 1,591) and Brantford (58 per cent, 359).
“There's going to be 41 municipalities out of 50 who are not going to get that funding,” Holmes said. “When we don't get the funding, it hurts our ability to be able to facilitate those projects that will help housing.
“There's no magic wand that makes houses appear. There's no magic wand that makes processes and policies appear.”
Though many of the influencing factors are outside of municipal control, some of the blame sits with the city, believes Guelph and District Home Builders’ Association (GDHBA) president Mark Hofstee.
“The 65 per cent drop in Guelph's housing starts in 2024 reflects Guelph's broken housing continuum,” Hofstee told GuelphToday via email. “While apartments, making up 74 per cent of the short-term supply, are an essential part of the housing mix, they don’t address the needs of family-focused housing. Rising interest rates, soaring construction costs, and tighter financing have made high-density developments financially unfeasible.
“Additionally, taxes and development charges now represent over a third of housing costs, further straining affordability.”
The provincial government’s housing target for Guelph in 2024 was 1,500 new units – a combination of new housing starts and additional residential units (ARUs), such as accessory buildings with residential units and basement apartments.
Last year saw 325 ARU permits approved in Guelph, Holmes noted.
When combined with housing starts, that lifts the city to 787 new units in 2024.
Hofstee anticipates housing starts will remain low in Guelph throughout this year.
“Economic uncertainty, red tape and delays in the approvals process continue to hinder the delivery of new housing,” he wrote. “On a positive note, the expectation of lower interest rates could support some recovery. However, a shortage of townhomes and single-family dwellings, which are in high demand, remains a significant challenge.
“Many housing starts have shifted north to Centre Wellington and beyond, where conditions better support a broader range of housing options that meet consumer demand.”
Municipalities with a population of less than 100,000 are not reported by the CMHC.
Efforts to determine the number of housing starts last year in Centre Wellington are still underway, notes Kendra Martin, the township’s manager of strategic initiatives and communications.
In 2023, the township saw 886 building permits issued. That’s down from 1,211 in 2022 and 1,082 in 2021.