How Homebuilding Incentives Can Transform Housing Affordability and Local Economies
New Research Shows Why Building Faster Pays Off for Everyone
A recent study, Build and Benefit: How Homebuilding Incentives Can Pay Off for Cities, Homeowners, and Local Economies, explores the link between housing supply, affordability, and economic growth in Canada. The findings are clear: accelerating housing construction and streamlining approvals can improve affordability while generating long-term fiscal and economic benefits.
At UTES Design & Build, we see these insights as critical for shaping the future of residential and commercial development in Toronto and beyond.
What Was the Study About?
The research analyzed housing affordability using the Mortgage Pressure Index (MPI)—the ratio of annual mortgage payments to median household income. It examined how municipal approval delays and housing completions affect affordability and economic activity. The study also modeled the impact of targeted housing incentives on local tax revenues and business formation.
Key Findings
- Canada’s housing shortage persists: Even record construction hasn’t solved affordability. Prices remain high because demand outpaces supply.
- Faster approvals matter: Cutting municipal approval delays by 20% can improve affordability by 17% compared to 2024 levels.
- Supply thresholds are critical: Affordability improves meaningfully only when annual completions exceed 4–6% of existing housing stock. For Toronto, that means building 96,000 homes per year, more than double the 2024 rate.
- Economic ripple effects:
- A 20% improvement in affordability can lead to 15–45 new businesses per 100,000 residents.
- Improved affordability expands municipal tax bases through property and business revenues.
- Fiscal payback is fast: In Toronto, a $3 billion housing incentive program could generate $672 million in annual tax inflows, achieving payback in 4–5 years.
- Regional benefits: When affordability improves in major cities like Toronto or Vancouver, housing prices in surrounding areas drop by 5–15%, easing pressure on peripheral markets.
The Build and Benefit Cycle
The study highlights a self-reinforcing cycle:
- Increase housing supply and speed approvals.
- Improve affordability, reducing household financial strain.
- Stimulate local business activity and job creation.
- Expand municipal revenues, offsetting initial public investment.
- Spillover benefits stabilize housing markets in surrounding regions.
How Does This Affect You?
Homeowners
- Faster approvals and incentives could make custom homes and additions more affordable.
- Improved affordability may stabilize property values and reduce financial stress.
Builders & Developers
- Streamlined permitting and potential incentives create opportunities for large-scale residential projects and multiplex developments.
- Lower regulatory friction means shorter timelines and reduced carrying costs.
Commercial Property Owners
- Economic growth driven by housing supply boosts demand for retail and office spaces.
- Mixed-use developments become more viable as communities grow and local businesses thrive.
At UTES, we’re ready to help clients leverage these trends—designing and building projects that align with evolving policies and market dynamics.
Why UTES Design & Build Is Your Partner for Growth
- Integrated Expertise: Architecture and engineering under one roof.
- Regulatory Knowledge: We navigate approval processes efficiently.
- Future-Ready Design: We incorporate sustainability and cost-efficiency into every project.
- Client-Centered Approach: From concept to completion, we deliver value and clarity.
Let’s Build Smarter, Together
Housing incentives and faster approvals aren’t just policy—they’re an opportunity to create thriving communities. UTES Design & Build can help you take advantage of these changes, whether you’re planning a custom home, a multiplex, or a mixed-use development.
Contact us today to learn how these insights can shape your next project.
