Most homebuyers in the Greater Toronto and Hamilton Area (GTHA) prefer ground-related housing, such as single-detached homes, yet land-use planning policies have favoured apartment construction for much of the past two decades, according to a new C.D. Howe Institute report.
In "Room to Grow: Building More of the Housing Homebuyers Want," author Frank Clayton argues that planning policies have become increasingly disconnected from consumer preferences, limiting the supply of preferred ground-related housing and worsening affordability. He argues policymakers should focus not only on how much housing is built, but also on building the kinds of homes people actually want.
"It is clear Ontario homebuyers prefer homes with an exterior entrance, a garage, and a plot of green space. The evidence is in the numbers," says Clayton, a Senior Research Fellow in the Centre for Urban Research and Land Development at Toronto Metropolitan University. "Between 2017 and 2024, single-detached homes accounted for 40 to 62 percent of all first-time home purchases in Ontario, far exceeding demand for condominium apartments. Yet, by the end of 2022, apartments accounted for 86 percent of all approved and proposed housing units in the GTHA development pipeline."
The report finds that this mismatch has wide-ranging consequences. Limited construction of new ground-related housing reduces resale supply as move-up buyers remain in their existing homes. Buyers seeking more affordable options move farther from employment centres, while renters stay in rental housing longer because homeownership is increasingly out of reach, reducing turnover in the rental market. Together, these trends worsen affordability and limit opportunities for households to build wealth through homeownership.
The report also challenges the ideas that housing demand can be met simply by relying on seniors to downsize, providing more missing middle housing options in existing neighbourhoods or increased densities adjacent to transit stations
As a solution, the report recommends increasing the supply of the housing homebuyers prefer while lowering the cost of suitable alternatives to traditional single-detached subdivisions. This includes maintaining an ample supply of serviced greenfield land, reducing government-imposed development costs, and encouraging greenfield communities that combine townhouses, low-rise apartments, and smaller-lot single-detached homes. This approach has already gained market acceptance and improved affordability in municipalities including Oakville, Waterloo Region, and Ottawa.
"Housing policy cannot succeed if it ignores consumer demand," says Clayton. "Canadians continue to aspire to ground-related homes. Planning for the housing people want, rather than simply counting units, is key to restoring affordability."
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