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That Toronto is growing is not surprising to anyone; that it is the fastest growing city on the continent does put our growth in a new light. So let’s illuminate how the City is changing with respect to construction, infrastructure, and policy.
According to a new report from the Centre for Urban Research and Land Development, Toronto is the fastest growing city in the US and Canada. From July 1, 2021 to July 1, 2023, Toronto gained more than 193,000 new residents. For comparison, Calgary had the second highest population growth, with over 125,000 people in the same two-year period; New York City, meanwhile, lost 204,000 residents during this time.
As anyone who lives here knows, the city is not sitting idly by. There are major changes underway. Here are some quick summaries:
Construction of Housing
The number one conversation in the city is about housing. Yes, we are building a lot of housing, but the question is, is it enough?
To get a sense of the answer, we will draw insights from our premium data service, UTPro. UTPro tracks every “large” application in the Greater Golden Horseshoe, from Niagara Falls to Barrie to Bowmanville, and everything in between. “Large” is defined as anything requiring a new development application like a rezoning, so excluding minor changes like a new addition to an existing home. By our internal estimates, there are only a few hundred of these smaller units built per year, so our data captures most of the new construction happening in the city.
From July 1, 2021 to July 1, 2023, UTPro data shows 189 large projects that began construction in the Toronto Census Metropolitan Area (the City of Toronto proper, plus the cities and townships of Toronto, Mississauga, Halton Hills, Brampton, Aurora, Markham, Georgina, Vaughan, Whitchurch-Stouffville, Richmond Hill, New Tecumseth, Oakville, Bradford West Gwillimbury, Ajax, and Orangeville). These projects will provide a total of 54,609 new homes ("dwellings"). But this is this enough?
Currently, there are an average of 2.7 residents per dwelling in the Toronto Census Metropolitan Area, and only 2.4 in the City of Toronto proper. Both these numbers have been steadily declining over the last 20 years. This may be surprising to learn, given that there are many news stories about overcrowded housing conditions, especially among international students. But these are the numbers as reported to the official Census, so they are the starting point for our analysis.
This means that for 193,000 new residents in the City proper, there should be roughly 80,000 new homes built to accommodate them. And for the 332,000 new people who now live in he Toronto CMA, there should have been roughly 122,000 new homes built for them to maintain the same average household size. Yet construction only began for merely 55,000 units for the entire CMA.
Moreover, these projects projects usually take about 3 years to complete. So it doesn’t mean much for the population that’s currently here.
We can do a bit better, and look at completions during this time. In 2022, 12,432 homes were built, and that number fell to 11,001 homes in 2023, for a total of 23,433 over two years—enough homes for approximately 61,000 people, leaving approximately 130,000 new people to compete for the existing housing stock.
This does not paint a pretty picture. But the outlook improves somewhat if we expand the window to look at new construction and completions to include all new development up until June 1, 2024 as well. With this view, construction began on 75,499 new homes, but completions were still only 48,288, short by about 70,000 homes for the CMA. This is, again, not counting any population growth that happened during the 2023 to 2024 period.
Construction of Infrastructure
While the Eglinton Line 5 Crosstown has become notorious for construction delays, the good news is that it is nearing completion as trains are being actively tested across its length. Moreover, seven new stations are planned to begin construction at the Etobicoke end of the line, known as the Crosstown West Extension.
The even better news is that it is not the only major new transit project under construction in the city—let alone the only one that is planned.
Currently, work on Ontario Line 3 is underway, with ground recently breaking at the future station at Queen Street West and Spadina Avenue and several other places. Ontario Line 3 will have 15 stops, and cut across the city in a reverse-L shape, from Exhibition Station, then cutting across the city through Queen Street, before dipping south through Corktown to then cut across the Don River before making its way north to the shuttered Ontario Science Centre site. Four of these stations are already currently under construction, with 11 more set to break ground soon.
Beyond the Ontario Line, Metrolinx is also planning on extending Yonge Line 1 to go north to Richmond Hill. Officially called the Yonge Street North Extension (YSNE for short), 5 new stations north of Finch are scheduled to go into service after the Ontario Line is complete (to avoid overcrowding on the existing Line 1).
Finally, Metrolinx is planning on adding a number of new GO Stations in the city: among the first will be St Clair-Old Weston GO Station and King-Liberty GO Station, both on the Kitchener corridor, and Park Lawn GO Station on the Lakeshore West corridor. Other additional new GO stations in Toronto are coming.
All in all, there are 77 new transit stations that are currently planned or under construction in the city, and will include subway stations, LRT, and commuter rail lines.
Policy Changes
There have been many policy changes affecting housing construction that have been enacted at the municipal, provincial, and federal levels since 2022. We covered the impacts of many of these changes in our report published in January of this year, which you can read in full here.
At the municipal level, parking minimums were largely eliminated across the city. Parking minimums impose large construction costs; their removal, therefore, means lower costs, making more projects viable to build than otherwise would be. While most developers are still proposing parking spaces for their high-rises, and in fact the average number of parking spaces per resident has slightly increased, the number of projects proposing zero parking spots has increased substantially.
Provincially, the Ford government passed Bill 23, the The More Homes Built Faster Act. Among other things, the legislation clarified the rules around building around so-called Major Transit Station Areas—designated areas around rapid transit stations which are supposed to have higher densities than surrounding areas, with also more affordable housing. After passing this legislation, the number of new projects proposed in those areas began to increase after years of stagnation.
Federally, of course, has been the impact of interest rate policies. As interest rates have increased, not only did new applications for new proposals drop, but developers also started to propose smaller units. Fewer and smaller units can house fewer people in them, so this does not bode well for the future of housing affordability if population growth continues at the same pace.
Even since that article was published, new changes have been announced by all three levels of government (rental construction HST rebate federally and provincially; The “Cutting Red Tape to Build More Housing” Act provincially, and the “Major Streets” policy from City Council). The effects of these policies will likely be positive, but it will take a couple of years to fully evaluate their impact.
Conclusion
The biggest overall hurdle to building more housing remains to be policy; however, governments at all levels are taking significant steps to address these issues almost on a weekly basis. While the City of Toronto and the surrounding regions are seeing huge growth in population, we have also seen similar changes to the skyline, transit, and legislative frameworks in response.
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UrbanToronto has a research service, UrbanToronto Pro, that provides comprehensive data on construction projects in the Greater Toronto Area—from proposal through to completion. We also offer Instant Reports, downloadable snapshots based on location, and a daily subscription newsletter, New Development Insider, that tracks projects from initial application.
