Ontario underestimated population growth, overestimated new housing: report

Housing forecasts in Ontario over the past seven years have underestimated population growth while simultaneously overestimating the number of new homes being completed, a new report from the Building Industry and Land Development Association (BILD) has found.

The report, focusing on the Greater Toronto and Hamilton area, says that municipalities across southern Ontario have been planning for growth “based on inaccurate or outdated assumptions,” leading to “a shortage of needed infrastructure and a shortfall in housing to support new residents.”

These forecasts are completed for the province by Hemson Consulting Ltd. and are used to inform Ontario’s Growth Plan.

“Forecasts of population growth and housing completions are the foundation on which municipalities base their projections of future housing requirements,” said Dave Wilkes, BILD president and CEO. “The Growth Plan seeks to manage growth by determining how much housing gets built, where it gets built and how dense it is. If the forecasts that inform the plan are inaccurate or not up to date, then the housing supply that comes to market in the future may not match demand.”

The new report, titled “Forecast for Failure: How a broken forecasting system is at the root of the GTAH’s housing shortage and how it can be fixed,” says that between 2016 and 2021, forecasts underestimated population growth in the GTAH region by about 120,000 people. It also claims that the forecasts overestimated new housing supply by about 26,000 units, “contributing to the excess demand for housing.”

“Planners should consider a range of potential scenarios rather than assuming current forecasts will necessarily prove accurate,” the report reads.

Russell Mathew, partner at Hemson Consulting notes that the forecasts are prepared several years in advance and are used for longterm planning for land in infrastructure.

“Most of this concerns the forecasts that are prepared in 2012 and 2013 that were in the Growth plan and they did end up being in the Growth Plan until 2020,” Mathew told Daily Hive. “In some cases, of course, the forecasts are a bit higher and occasionally a bit lower and there are a whole number of reasons for that. It’s hard to predict the future, so you won’t get these things exactly right all the time.”

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BILD offers a number of recommendations to remedy the problem, including creating a set of common, agreed-upon data and revisiting forecasts when major policy changes are introduced, especially around immigration targets.

Mathew, however, says that regular updates to the forecasts based on new developments wouldn’t necessarily have any effect once an existing Growth Plan is already underway.

“In general, the planning you’re doing for these things is big and long term,” Mathew said. “The Ontario Line, say, is going to be built and it’ll take probably eight years to build. You’re not going to redesign that thing every two years while you’re in the middle of building. That isn’t kind of thing you do. So I’m just not sure that the suggestions there would do anything to help with the problem out there in terms of price.”