Ontario Votes 2025: Housing

Ontario Votes 2025: Housing

On this page:

• Quick takes for the voting booth
• The starting line: Ontario's recent housing track record
• What are parties proposing to restore housing affordability?

 

Quick takes for the voting booth

The fact that Ontario has lost control of home prices more than other provinces should be a central issue in the 2025 election.

So it is good news that leaders from all parties are talking about housing.

They share common ground. All parties endorse reducing restrictions that sometimes slow down the growth of new market supply.  

The PC’s are sticking with their plan to add 1.5 million homes by 2031; but don't have a strong track record in making enough progress..

Beyond stimulating more supply, the Greens stand out for offering the most comprehensive housing plan with the most policy details. This deserves praise. By comparison with the other parties, the Greens have better ideas to dial down various kinds of harmful demand in the housing market. For example, the party promises to introduce taxes on vacant homes, house flipping, and multi-property ownership, and to restrict short-term rentals. As a result, the Green platform is better aligned with the principle that housing should be for "Homes First. Investments Second."

The NDP offers fewer policy details, but promises the largest increase in spending on housing -- promising another $2.5 billion/year.  This is slightly above the $2.1 billion that the Greens would add. It is impossible to determine from the Liberal platform how much new spending Liberals would add for housing. So far, the Conservatives haven't made any specific promises about new housing investments -- outside of what is already known about the provincial plan in the fall 2024 economic update, which all the other parties assume in their cost projections.

The Greens and NDP offer the strongest version of rent control by promising to restrict rent increases when units are vacated.  The Liberals propose rent control to protect tenants in their units.  But they don't propose restrictions on rent increases when units are made vacant.

The Liberals and Greens both plan to reduce municipal development cost charges to facilitate home building; and promise to compensate municipalities for the lost revenue. Neither party wrestles with the revenue hole this will create for the provincial budget. Anyone vying to lead Ontario should be keenly concerned about driving up the province’s $10 billion deficit – especially when one clear path could be asking home owners who gain housing wealth thanks to municipal up-zoning to share some of these unearned windfalls with the public purse to offset the cost of cutting development charges.

The bottom line: No party has a robust plan to address Ontario’s massive intergenerational housing tensions – though the Greens deserve credit for acknowledging "the systemic unfairness that has now locked out multiple generations from the housing market.” Home owners have gained substantial wealth from rising prices, while young Ontarians must work over 3 times longer than did retired home owners to save a 20% down payment on an average home. As prices spiral out of reach, more young people rely on renting – where prices have also skyrocketed. By failing to acknowledge or address the double-edged sword of rising prices, all parties overlook the crux of Ontario’s housing crisis.

The starting line: Ontario's recent housing track record

None of Canada’s most populous provinces can claim a strong track record of protecting housing affordability. However, Ontario stands out as especially weak. 

The average home sale price in Ontario increased from $592k in 2017 – the year before Premier Ford took office – to $865k in 2024.  That’s an increase of $273k, or 46%*

Ontario home prices have risen more than the Canadian average of $176k. They’ve gone up more than Quebec’s $230k increase. And far more the $89k increase in Alberta. The pace of home price inflation in Ontario is only on par with BC – the wild west of Canadian real estate.**

The last two years have offered a glimmer of hope for Ontarians struggling to pay rent or get into the housing market. Average home prices have tailed off, dropping by $79,000 from their peak in 2022. However, this still leaves costs out of reach of what Ontarians earn from their hard work.

Most young Ontarians must now work for close to two decades to save a 20% down payment on an average-priced home – up from around five years when today’s retirees started out. With ownership out of reach for far longer (if not forever), more younger people turn to rentals to make a home. That’s a tough slog, since average rents have skyrocketed alongside rising prices for home ownership.

Average home prices would need to fall by hundreds of thousands of dollars to become affordable for today’s young adults — a drop at which most current home owners would balk. Since home owners are the majority of voters, politicians also tend to focus on protecting home owner equity (aka retirement 'nest eggs’).  For many, rising home values have generated six figure housing wealth increases – just since the pandemic.

We should be honest about what this means. We’re asking younger people to sacrifice their financial security and standard of living to protect older people who’ve banked on the equity they’ve gained from rising home prices to fund their retirements. This is a profound expression of intergenerational solidarity. Younger people deserve credit (possibly compensation) for safeguarding housing wealth accumulation and retirement security for today’s retirees.

* Source: Custom data from the Canadian Real Estate Association.

** BC started with higher prices, so the same dollar increase is a smaller percentage increase (39%).

What are parties proposing to restore housing affordability?

This analysis is current as of February 21. We will update as we get closer to the election date, and welcome parties being in touch with us to draw our attention to policy announcements.

Mike Schreiner’s Green party has the most detailed housing platform, so we use it as the benchmark by which to compare others in our analysis of housing promises.

The Greens draw attention to the intergenerational tension in Ontario’s housing system much more explicitly than other parties, which is a major asset. For example, the party is honest that Ontario faces a “generational challenge” (p.10) because the “vast majority of young” people “have given up hope of ever being able to buy a home.” It emphasizes that “Creating more pathways to home ownership is about reversing the systemic unfairness that has now locked out multiple generations from the housing market.”

The Green party platform would put to work many tools in the housing tool box, and do so in a more comprehensive way than is articulated by the other parties.  The party ticks many of the boxes in Generation Squeeze’s comprehensive plan to restore housing affordability forever.

From the Green's costed platform, we estimate that the party would increase total spending on housing by $2.1 billion/year -- spread across the following initiatives.

Dialing up supply

Like all the parties, the Greens emphasize the importance of adding new supply.  Their ambition is to add two million homes to Ontario within a decade. Truth be told, that’s unlikely.  The entire country is only building around 250,000 new units a year at present, so the prospect of Ontario adding 200,000 per year in its jurisdiction alone is a big stretch goal at best. 

The Green party hopes to dial up the construction of new supply through tools now common across the country, especially in BC.  These include:

• Permitting additional density in land that has historically been reserved for single-detached and other low-density housing
• Mandating municipalities to permit development proposals that use pre-approved designs
• Updating building codes and related regulations to incentivize the use of faster, lower-cost and labour-efficient construction methods using sustainable building materials

The Greens also focus on non-market housing. The party would work with non-profits to build 250,000 new affordable non-profit and co-op homes, and 60,000 permanent supportive homes with guaranteed funding for mental health, addictions and other supports. The Green platform offers more costing details than any of the other parties – but it’s hard to assess whether the funds allocated for this promise are enough to get the job done.

Dialing down harmful demand

While working to dial up the right housing supply, the Green party would dial down examples of harmful demand. The Greens would introduce a province-wide vacant homes tax, an anti-flipping tax on quick turnaround sales, restrict short-term rentals to rooms within one’s principal residence, and crack down on money laundering – all of which is now in place in BC. The Greens would go one step further than BC by discouraging people from commodifying housing by implementing additional taxes on those who own more than two homes, consistent with a desire that Ontario should prioritize homes for people first, with investment returns a distant second. 

Protecting renters

The Greens share with the NDP the boldest plan to protect renters. Mr. Schreiner’s party would restore controls on how much a landlord can increase rent while a tenant lives in a particular unit.  This would close a loophole created by the Ford government starting in 2018. The Greens also aim to reduce the backlog of cases at the Landlord-Tenant Board.

The Greens would go further by also restricting rent increases after a tenant vacates a property. This proposal is called vacancy control.  It aims to prevent a subsequent renter from facing a substantially higher rent than the person who just moved out, to reduce the incentive for some unethical landlords to use bad faith evictions to jack up rents. 

This idea has lots of potential to protect younger residents, and newcomers of any age. The only catch is that some who specialize in financing purpose-built rental construction argue that this level of rent control makes it harder to develop the business case for building new rental supply. That is the needle this policy will need to thread: protect renters from bad faith evictions without dampening down the construction of new purpose-built rental units that are critical for supplying shelter to the growing number of renters in Ontario.

Reducing development cost charges to bring down the cost of newly built homes

To ensure the cost of newly-constructed units is as low as possible, the Green platform promises to remove Development Cost Charges (DCCs) on homes under 2,000 square feet built within urban boundaries.

Municipal governments collect DCCs from developers to help pay for public amenities like water, sewer, etc. Governments also view DCCs as a way to collect some of the profits from “land lift” in their communities. When governments change zoning to permit additional density, the value of the rezoned land increases, because more homes can be built on it. This "land lift" raises an important question. Who should keep this newly created wealth — current owners, or the public who created the wealth through the zoning change?

In Ontario, the current answer is that everyday home owners should keep such wealth windfalls, but developers should pay fees. This singular focus on developers has resulted in taxes on land lift adding substantially to the price of newly-built units.  For example, a recent study by the Canadian Centre for Economic Analysis finds that the tax and fee burden in Ontario adds on average 36% to the final purchase price of a new home. These costs are then passed on to the sales price, making the cost of newly-added supply more expensive to purchase.

The Ontario Greens propose to reduce DCCs to bring down the cost of modest-sized newly-built homes, and spark the development of more supply. The party would compensate municipalities for revenue shortfalls by replacing the DCCs with provincial payments. This would be an excellent idea, if there was a plan to generate the required funds by collecting a fair share of the additional land lift value from owners who benefit when land is up-zoned.

The Greens don’t have such a plan, and nor does any other party. This means that the Greens are proposing a major new expenditure in the context of a provincial budget already $10 billion in deficit. There’s no reason to overlook an obvious source of revenue to fill this fiscal hole – the wealth windfalls all owners gain from up-zoning. This is a primary weakness in the Green party’s housing plan.

 

Doug Ford’s PCs: By comparison with the impressive range of policy ideas in the Green platform, the governing PCs have little to say on housing affordability. The party generally reiterates its commitment to addressing the housing crisis by increasing housing supply, including their former promise to build 1.5 million homes by 2031 by reducing regulatory barriers.

Unfortunately, the party offers few new ideas to meet this goal to date – though you can check out his remarks at the leaders debate about previous achievements (time index 1:12). When reflecting on that record, keep in mind data reported by the Smart Prosperity Institute showing that Ontario has ranked in the bottom half of provinces for homebuilding since 2018. In terms of homebuilding per 100 new residents, the province places 8th, ahead of only New Brunswick and Saskatchewan. Clearly Ontario is not on track to reach the PC’s 2031 goal.

More generally, there is nothing in PC commitments that engages directly with the intergenerational inequities in Ontario’s housing system.

Bonnie Crombie’s Liberals have made several promises about housing. They focus on reducing taxes, increasing supply, and restoring some modest rent control protections that were lost from any units built after 2018 due to the loophole created by the Ford government. 

The Ontario Liberal rent control plan offers strong protection for renters who remain in a unit, but doesn’t embrace the vacancy control idea proposed by both the Greens and NDP.  (See our discussion above for the pros and cons of this decision). The party also emphasizes its intention to reduce the backlog of cases at Landlord-Tenant Board.

Bonnie Crombie’s team joins the Green party in promising to eliminate the land transfer tax for first-time buyers. People struggling to buy a first home may appreciate this tax savings. But the Liberal plan goes one step further in a direction that doesn’t make sense, because the party would also eliminate the land transfer tax for seniors. This idea would exacerbate intergenerational tensions in the housing system, because retirees selling their homes are especially likely to be cashing out some of the windfalls they have gained from decades of rising home prices.

Like the Green, the Liberals propose to reduce Development Cost Charges (DCCs), and compensate municipalities for the lost revenue by issuing provincial payments. But Crombie’s team would not limit this reduction to homes under 2,000 square feet in urban boundaries. 

Her plan suffers the same shortcoming as the Greens (see above), because it makes no mention of raising funds to compensate municipalities for reduced DCCs by taxing the wealth windfalls from which all owners benefit when their neighhourhoods are up-zoned. In the absence of a revenue solution, this proposal risks exacerbating the large deficit that Ontario is already running outside of a recession.

While the Liberals provided some additional costing information (p. 17) in its platform released February 21, the costing estimates are so high-level that it is impossible to assess how much the party would invest in housing specifically.  This is surprising, since housing is likely the most significant domestic policy issue in this election.

Marit Stile’s housing plan for the Ontario NDP (pp. 10-11) doesn't have as many details as the Green party platform.

The NDP prescribes robust rent control protections, re-zoning to add density, and promises to build 300,000 new non-profit, deeply affordable homes.  These themes overlap with the other opposition parties.

The NDP share with the Greens the most aggressive rent control protections, because the NDP platform also embraces vacancy control. Recall, vacancy control is designed to reduce incentives for landlords to use bad faith evictions to jack up rents. 

The NDP and Greens have similar goals for growing the number of non-profit homes. 

Whereas the NDP sometimes provides fewer policy details in writing, it's costed platform appears to promise more new money for housing than the other parties. The NDP would add $2.5 billion for its "Homes Ontario" plan. This is higher than the $2.1 estimate we generated for the Green Party.  The Liberal party provides no clear estimate. 

 

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