The local housing industry can look forward in the years ahead to a mix of challenges (some of them serious) and opportunities (many of them enticing), according to experts at this week’s Eastern Ontario Housing Summit 2025.
Hosted Oct. 8 by the Greater Ottawa Home Builders’ Association, the Ontario Home Builders’ Association (OHBA) and multiple builder associations across Eastern Ontario, the gathering of homebuilders, planners, consultants and others heard keynote speakers addressed economic growth, housing affordability and types, sustainability, and infrastructure among other topics. The summit was held in the face of the current national housing crisis and projections from the Ontario government that the region will see the fastest population growth in the province: 35.2 per cent during the next 25 years.
Christina Giannone, recently elected chair of the OHBA, captured the housing environment of the past few years when, in opening remarks on the summit, she said that the current housing crisis, including affordability and labour issues, makes industry members “feel like the ground is shifting beneath us.”
The economic lowdown
Humorously titling his keynote presentation on the economic and real estate outlook “Just Tarrific,” Robert Kavcic, senior economist with BMO Capital Markets, dug into the Canada-United States trade war, Canadian fiscal and housing policy under the federal Liberals, immigration, and the country’s current and projected economic growth in assessing Eastern Ontario’s housing outlook.
Despite the impacts of tariffs and other hits to the economy, Kavcic doesn’t see a recession looming but does anticipate slower GDP growth and a core inflation rate of around 2.5 per cent. Most significantly for the housing industry, he warns that while the Bank of Canada may drop its interest rate by 50 basis points in the spring, “we need to budget for having our current interest rates for the next several years.”
His housing outlook sees a small uptick in sales, some increases in prices but a decline in starts during the next few years. He said that although 2024 was the worst year for housing affordability since 1982, that should ease this year and beyond.
On the rental side, Kavcic said the recent boom in purpose-built rentals combined with the sharp cuts to immigration initiated by the Trudeau Liberals in 2024 means less demand and a slide in rental rates, something we saw elsewhere in Canada earlier this year and which is now appearing Ottawa although to a smaller degree than in many other centres.
Kavcic, like many other experts, stressed the traditional resiliency of the Eastern Ontario economy and his forecast is for a balanced housing market going forward.
The population conundrum
Back to the drawing board, folks, insisted Mike Moffat in his keynote address.
Never averse to questioning accepted wisdom, the senior director of the Smart Prosperity Institute, a research institute and think tank based at the University of Ottawa, said a just-released report by the institute’s spinoff, the Missing Middle Initiative, shows the provincial estimate of 35 per cent population growth in Eastern Ontario during the next quarter-century is too low. That’s largely because the number overestimates intraprovincial immigration (people moving within the province) into the Greater Toronto Area (or GTA) and underestimates intraprovincial immigration into Eastern Ontario.
The high number of people moving into Eastern Ontario consists especially of families with children moving principally from the unaffordable GTA housing market to Eastern Ontario, where housing prices are lower.
If Moffat’s numbers — and he revels in data — are correct, he said Eastern Ontario will need 670,000 more homes by 2051.
Of those 670,000 homes, 495,000 need to be ground-oriented, including townhomes, singles and low-rise multi-unit dwellings, and 175,000 will be traditional apartment buildings.
“We have this demographic building up of young people who want to have kids and they don’t want to raise those kids in a shoebox condo on the 57th floor of an apartment building somewhere,” he said. “And they don’t want to do it in a one-bedroom apartment in a mid-rise on a busy arterial.”
Ottawa will need the bulk of those new homes, he said: 346,000 between 2021 and 2051. Of those, about 228,000 will be ground-oriented and the remaining 118,000 will be rental apartments.
The high number of new homes needed comes from not just Moffat’s projected intraprovincial immigration but also from the already-existing shortage of homes in the region, a shortage that extends to many areas of the province, he said.
The population began outstripping the housing supply starting in 2016, said Moffat, thanks in part to the jump in temporary immigrant workers and students during the Justin Trudeau years and the failure to build more homes at the same time.
“Since the start of the pandemic, things have gone absolutely wild,” he said. “In 2015 and 2016, our population started growing but nothing else did: we didn’t start building more homes, we didn’t start building more hospitals … (or) anything. Since the pandemic, everything has been completely broken.”
The construction rate of ground-oriented homes, especially in the GTA, has been a particular problem — one reason there’s been a flight of young families from there — and Moffat said the number of homes needed between now and 2051 simply can’t be built there.
Ottawa can also expect to see its own out-migration because of housing availability and price, he said. Young people unable to get into the capital’s housing market along with others have already made the move to outlying areas like Carleton Place, Rockland and elsewhere, and Ottawa builders are increasingly ramping up in those places.
In the end, said Moffat, “Eastern Ontario is going to grow faster than we think.” That presents challenges and opportunities alike for not just the homebuilding industry but for planners, politicians, residents and others.
Water and the right mix
Along with presentations by Kovcic, Moffat and others — including lunch-hour sessions on changes to development charges and the desperate need for more affordable housing — the summit featured two plenary sessions. One addressed achieving the right mix of housing types and the other explored infrastructure needs to support growth in small rural communities.
The housing mix
At the housing mix panel, representatives from home building, rental investing, infill planning and community housing explored the mix of homes we need to consider to accurately reflect Eastern Ontario communities.
Moderator Sabine Matheson of StrategyCorp, a self-confessed “municipal mechanic” — “farm mechanics get grease under their fingernails; I get bylaws under my fingernails” — asked the panelists what challenges they faced, what’s working and what are potential solutions.
Key barriers
Red tape, which leads to delays and extra costs, is a prime challenge to development of all kinds, even when processes are streamlined, they said. “A relatively simple or innocent question can sometimes drag out the process significantly because it causes another churn in the overall process,” said Christian Szpilfogel of The Aliferous Group, a mid-sized rental housing provider and developer.
Also driving up costs are the hefty development charges applied to all homes by all three levels of government. “Developers don’t make nearly as much as everybody thinks they do,” he noted, adding that both buyers and renters can only afford so much.
Restrictive or outdated bylaws and zoning rules were also cited as a culprit to progressive development.
“When we’re looking at bylaws that give larger rear (or) side yard setbacks, it starts to shrink the building envelope. The smaller that building box that we have, the smaller or the taller we have to make that (home),” said Alyssa Stack of production home builder Patten Homes.
Similarly, looking at land use in terms of numbers of units is the wrong approach, said architect Rosalyn Hill, who has been focused on “missing middle” housing (in between single-family homes and high-rises).
“We really need to get away from typologies and from numbers and ask instead what shape and size of building would be appropriate.” She gave the example of a 50- by 100-foot lot in Ottawa, which typically would accommodate a semi-detached home, or possibly four units if there were accessory units in the basement. “That exact same building size fits eight units; one-bedroom, two-bedroom and three-bedroom units. That would be a much better use of our existing built-up neighbourhoods to allow for that kind of diversity.”
When it comes to non-profit housing, Preeti Prabhu of United Way East Ontario noted that normally, discussions around housing, especially among decision-makers, begin with the supply. “We are urging people to look at the need.”
What’s working
Hill saluted planners in Sudbury, Ont., who worked with her team to forecast housing growth in existing neighbourhoods if they adjusted some regulations. As a result, Sudbury will enable multi-unit, low-rise infill in areas that are well suited to it, and has put in place uniform zoning throughout the city for a simpler, faster and more consistent approvals process to allow for more predictable development.
“(They’re) a really thoughtful group of people who made some very deliberate choices and I’d love to see more of that,” she said.
Stack pointed out the ability to be flexible and pivot within the constraints of a site plan to adjust to the needs of a shifting market. For instance, developing a plot of land for a subdivision is a years-long process and by the time a builder is ready to build, the type of homes approved for the site may no longer be what buyers are looking for.
By being able to adjust while still conforming to the zoning and approvals in place — such as turning a single-family home floor plan into a multi-generational one — there’s less likelihood of derailing the pro forma (or financial statement) for the project. “Those are things that builders can do in the short term.”
Most importantly, perhaps, Prabhu noted that recent polling data has shown that, right now, “all levels of government care about this issue.… We are in that political window where, for all levels of government, affordable housing is a priority.”
And it’s a priority for the public as well, Matheson pointed out, citing quarterly Angus Reid polling that found affordability in general was the No. 1 issue, followed at No. 3 by housing affordability (No. 2 was health care).
Other solutions
Building on what’s already working, Stack said development should not be about how many housing units are put on a piece of land, “it’s more about what do we want this community to look like?”
What type of housing are buyers looking for? What do they need and what can they afford? And at the community design level, it’s the conversation between the builder and the buyer, the land developer going through the approvals process, as well as the municipality, she said. “If everyone’s at the table, we can then design a community that fits the esthetic of the municipality, gives the product mix that the buyers need, and we walk away and everyone is happy.”
Hill noted that it’s also important to consult with the community early, not at a point in the process when most of the decisions have already been made.
With an intensification exercise in Almonte, for instance, her team consulted with the community, asking what features of the existing neighbourhood were valued and should be enriched. “Many of them were surprised to see that the scenarios (we presented) with significant amounts of intensification checked all the boxes.”
Not surprisingly, the issue of development charges came up. Certainly, being able to defer paying those charges so that a developer or builder doesn’t have to pay them up front helps (that’s coming to Ontario), as does having a buffer period to accommodate increases, but the high percentage of development charges in the first place is seen as an impediment to affordability.
“We need to be much more radical in the way that we think about this and recognise that with 30 per cent of the cost of a new home being taxes and fees and charges that things have gotten way off track,” said Hill.
Szpilfogel added that for him to build a one-bedroom apartment right now in Ottawa, to break even he needs to charge at least $1,800 a month. Getting rid of the development charges and fees drops it to $1,200. “That’s what 30-35 per cent means. And that’s huge.”
Infrastructure
For this housing panel, and with the summer’s drought and water shortages across the region as a vivid background, representatives from the water treatment and engineering sectors delved into fresh and wastewater solutions for Eastern Ontario rural communities.
Pierre Dufresne, vice-president of land development for Cavanagh Communities, led the panel of three in a question-and-answer format.
Water challenges
Managing water and wastewater can be major hinderances to the growth of smaller, outlying communities, including rural villages and subdivisions. Dependent on wells and septic systems, the amount of new-home construction, including density, is typically tied to the need to ensure adequate fresh water and the safe, affordable treatment of wastewater.
Dufresne noted the rapid growth of rural municipalities and subdivisions and the obstacles that growth often faces, including delays in the approval of development applications because of water and wastewater concerns. Those delays, he said, slow the growth of rural communities, which can offer both affordability and sustainability.
Technology
Michael Skinner, CEO of Miranda Water Technologies, explained the decentralized, modular wastewater treatment systems his company now sells in 40 countries. With a small physical footprint and requiring low energy to operate, the system transforms wastewater from small communities and subdivisions into water used for irrigation.
One of the many pluses of the system, which costs about $15,000 to $25,000 per household — less than the cost of a typical septic system — is its adaptability, said Skinner. No one knows exactly what future demands will be, including the growth of commercial wastewater needs, but “units can be added as the community grows.”
He later added that the payback of a modular system like his is typically four or five years, considerably faster than the 25 years-plus of a traditional wastewater treatment facility.
Community concerns
Justin Bromberg, CEO of Frontenac Municipal Services, explained that his company helps facilitate rural housing development by offering communal drinking water and sewage systems to replace traditional well and septic approaches.
That, he said, helps rural communities grow sustainably while enabling increased housing density and mixed-used construction that wouldn’t be possible with the larger lot sizes required by wells and septic systems.
Asked about hinderances to communal systems, he pointed to some residents’ understandable wariness that the introduction of communal water systems could lead to overwhelming changes in their village or neighbourhood. “It’s important residents know and feel they are part of these discussions and this process… (and that) we’re not looking to create massive subdivisions.” Rather than entirely changing the fabric of a community, he said the technology will help ensure these communities survive and thrive.
Policy vs. implementation
Tim Chadder, an associate and senior consultant with J.L. Richards & Associates, which provides engineering, architecture and planning services in Canada and abroad, noted the “weak linkage” between policy and implementation — good intentions coupled with a failure to act — that can impede growth.
In addition, “the desire for growth and acceptance of growth is still not consistent between municipalities,” which creates problems for growing rural communities. Municipalities can (also) be resistant to new systems when they’re used to traditional ones.
The need for new systems and fresh solutions applies not just to rural areas or water infrastructure but to our entire approach to housing as we navigate everything from economic headwaters and population growth to determining the kinds of homes and communities we want. That was clear from this year’s Eastern Ontario Housing Summit. Equally clear was the rich diversity of innovative, forward-thinking insights and ideas available to help guide us through the coming years and beyond.
