Cha-ching? London housing starts near target to unlock big funding bonus

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London is looking like it will meet its provincially set annual housing target for 2024, meaning city hall will have access to some significant cash. LFP’s Jack Moulton breaks down where London sits and why it has stepped out ahead of other cities. 

HOW IS LONDON DOING ON ITS TARGET?

Ontario has committed to building 1.5 million homes by 2031, of which London’s share is 47,000 new homes. For 2024, the city’s target was 3,917 units.

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If a city reaches 80 per cent or more of its annual target, it’s awarded a share of $1.2 billion in bonus funding for infrastructure work such as roads, and water and sewer connections. If it surpasses its goal, it can get even more money.

As of October, according to the province’s data, London started construction on 3,012 units, or just shy of 77 per cent of its target. That includes data on housing construction starts and residential conversions from the Canadian Mortgage and Housing Corp., as well as new long-term care beds.

The province has not yet updated its numbers to reflect November data. Mayor Josh Morgan told The London Free Press Wednesday that as of the end of November, London was just 41 units shy of the 80 per cent threshold.

WHAT CHANGED FROM 2023?

The progress on housing starts in the past year is a departure from 2023, during which London only started construction on 1,804 units, little more than half of its goal for the year.

Mike Wallace, executive director of the London Development Institute, a consortium of local developers, said builders were waiting for interest rate cuts.

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“What happened over the last year is that the marketplace had improved, and the demand had come back, and we were ready to meet it,” he said. “If interest rates were still where they were two years ago, we wouldn’t be seeing the growth that we’ve seen here in London in the housing market.”

Morgan credits council and city hall for working with the development community to increase permissions, and bolstering London’s planning department.

WHY IS LONDON AHEAD?

As of October, only 11 of the 50 cities assigned targets by Queen’s Park had met or were on track to meet their targets. London was among those that were falling short of the 80 per cent floor.

Wallace points to London’s explosive population growth generating sustained demand for housing as a reason the city is seeing more homes.

Morgan says the city is leaning heavily into medium- and high-density housing on top of single-family homes and townhomes, offering a wider and more affordable housing spectrum.

“We’re building in a way that is sustainable. That is good for our ability to manage the service capacity, and in a way that is generally good for the economics of the city,” he said. “We’re talking about housing for all individuals. . . . We’re also very conscious of the types of housing we’re creating.”

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WHAT WILL THIS MEAN?

The exact amount is unknown, but the money for which London could be eligible might be significant. Hamilton, which has the same 10-year target as London of 47,000 housing units by 2031, received $17 million last year from Queen’s Park after surpassing its 2023 goal.

Morgan didn’t have a specific project wish list, but said the bonus money could further feed into more housing.

“We know that there are parts of the city where water and wastewater capacity is the limiting factor for some density, where we have actually rolled back density to align with that,” he said. “Having additional provincial money that we could use for housing-enabling infrastructure would allow us to ensure that we’re committed to meeting that . . . 10-year target.”

HOW WILL 2025 LOOK?

Based on the economic upswing and internal improvements made at city hall, Morgan is optimistic about the direction of London’s home building.

That’s echoed by Wallace, who applauded council’s sizable catalogue of approved developments, and said declining interest rates will give even more builders and suppliers confidence to start projects.

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“We’re anticipating that this isn’t just a one-year uptick. We believe this is going to be what London is going to see for the next number of years,” he said.

HOW IS SOUTHWESTERN ONTARIO DOING?

Here’s a rundown of area communities and their push toward 80 per cent, according to provincial housing target data from January to October 2024:

• London: 3,012 of 3,917 units (76.9 per cent)
• Woodstock: 105 of 458 units (22.9 per cent)
• Sarnia: 150 of 83 units (180.7 per cent)
• Chatham-Kent: 136 of 92 units (147.8 per cent)
• Windsor: 1,456 of 1,083 units (134.4 per cent)
• Norfolk County: 155 of 475 units (32.6 per cent)

jmoulton@postmedia.com
@JackAtLFPress

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