An impossible housing market some are calling a crisis has prompted BarrieToday to examine the cause of the shortage of homes and rentals in the city, the effect and the solutions in this ongoing series. To read Part 1, click here. Part 2 can be found here.
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Speculators have been rushing to pluck up housing in Barrie and other parts of Ontario much like shoppers did with toilet paper early in the pandemic.
A difficult housing market which provides few options at ever-increasing prices has been exacerbated during the pandemic. But the year-over-year double-digit percentage price increases in rentals and purchase property is symptomatic of a larger problem.
“The Barrie area has historically been one of the popular destinations for families coming out of the GTA or the Toronto area,” Western University professor Mike Moffatt, who heads up the Smart Prosperity Institute based at the University of Ottawa, told BarrieToday.
Moffatt says Oshawa, the Hamilton area and Barrie have historically, over the last few years, been the big three destinations.
“It’s primarily driven by young families. In general, the most common age to leave the GTA is zero, it’s basically kids under 12 years old," he said.
In his recent study, titled Baby Needs A New Home, Moffatt examined Ontario’s housing shortage and concluded Ontario will need one million new homes over the next 10 years.
With that increasing demand for the limited availability came the speculators, driving prices up even further in what Moffatt described as a self-perpetuating cycle.
The Teranet Market Insight Report for the last quarter of 2021 shows that multi-property owners zoomed past others as the largest single buyer group in 2018 claiming an ever-growing chunk of the market. By last August, those investors claimed 25 per cent of the housing transactions in Ontario.
Teranet’s analysis, based on Ontario Land Registry data, shows that Simcoe County claimed 4.81 per cent of all Ontario property transactions from January 2011 to August 2021, having the province’s sixth highest volume of transactions after Toronto (17.2 per cent), Peel (8.72 per cent), York Region (8.29 per cent), Ottawa-Carleton (6.31 per cent), and Durham Region (4.87 per cent).
Simcoe County’s largest buyer group is listed at others, which includes buyers from outside of Ontario or Canada, or re-entry into the property market after an extended absence, claiming 25.3 per cent. Movers accounted for 20.8 per cent, first-time home buyers were 16 per cent, multi-property owners at 20.4 per cent, and 17.5 per cent were prompted by life events.
The analysis follows widespread concern that the rising prices resulting from a housing supply shortage has led to a housing crisis, described by some as shelter instability.
Barrie Mayor Jeff Lehman is concerned that housing is next to unavailable for many.
“The price of all homes to purchase has gone up so much during COVID… that it’s now out of reach for all but households with relatively high income,” he said. “For your average family, the idea of being able to buy a home now, certainly a single detached or town home, is almost out of reach.
“What I’m hearing, which tips it from tough situation into crisis, is that there are people now who can’t find housing at all in Barrie that they can afford and are having to live a long way away and having to commute into their jobs," Lehman added. "Or people who have been literally priced out of the market where the rent has increased so much or they were evicted or whatever have not been able to find something new in their price range that they even can make work.”
Some Barrie professional services employers are now helping new employees with the cost of housing, he said. That then begs the question about how low-wage employees can possibly manage.
“What makes Barrie different is that we have historically had such a small supply of rental housing and that’s because when we grew in the '80s, '90s and 2000s, overwhelmingly what was built was homes for purchase,” Lehman said. “That big engine of home building ramped up in Barrie and we added 100,000 people and we added very, very few apartments over that same period of time.”
Purpose-built rental towns or apartments accounted for only 22.7 per cent of the city’s rental accommodation, according to the latest census conducted by Statistics Canada in 2016. That’s less than half of the 47.1 per cent average in Canada and falls far short of the average in Ontario of 43.7 per cent.
Most renters in Barrie have, therefore, been relying upon alternatives such as basement apartments or rental condos.
Moffatt points to an overall supply gap resulting from mix-match in the 413,753 households expected to have been formed during the last five years in Ontario and the 349,039 homes that were built.
During that period, he said Ontario saw an unusually rapid population growth of one million people driven substantially by the number of international students and young workers staying in Canada under the Post-Graduation Work Permit Program.
Newly formed households then looked outside of the Toronto area to buy a house in what is being described as “drive until you qualify." The result, said Moffatt, was a ripple effect of population growth from around Toronto’s CN Tower to outlying communities, causing housing prices to rise in all those communities.
The pandemic then introduced a shift in housing patterns as many office-bound workers started working from home, wherever home happened to be. That put further pressure on communities like Barrie.
He pointed to Ministry of Finance population growth projections of 1.1 million per five-year period, with a growth of 1.2 million people in the next five years as the international students come back post-pandemic.
Simcoe County is projected to grow by 104,000 between 2021 to 2031.
“We couldn’t keep up with home building when we were growing by about 950,000 people. Now we’re going to grow by 1.2 million people so our demand challenges just grow,” Moffatt told Ontario home builders and municipal representatives in a presentation over Zoom last week.
“We just have to make sure there’s enough housing for everybody. Failure to build that housing will lead to an inability for Ontario to attract and retain talent.”
