The Systemic Issues of Building Green.
December 12, 2023
Residential builders in Ontario have taken a number of significant steps to build greener, more sustainable homes and condos and reduce carbon emissions.
They have become leaders in green building in North America and continue to do everything in their power to be part of the solution to climate change, despite facing market forces and a perfect storm of issues that have made it increasingly difficult to build homes that people can afford.
But now, in the midst of a generational housing crisis, even more challenges are being heaped on the industry.
While attempting to build homes that are affordable, stakeholders are facing additional green initiatives and building standards being developed in regions like Durham, Mississauga and Caledon. The standards are being rolled out, without giving builders and developers time to react and adapt.
In Durham, for example, the region is seeking to mandate that all new homes be electric powered by 2025, while the rest of Canada will not be building to that level until at least 2040 or later. The region is forging ahead without doing a cost-benefit analysis or considering infrastructure challenges.
All this, while national and provincial building codes are working towards implementing zero-emission or net-zero energy-ready homes by 2030, and Canada is targeting a decarbonized grid by 2035.
It’s a heck of an uphill climb for developers and builders.
Meanwhile, in an effort to cut carbon emissions even further, the industry is under increasing pressure to fully electrify new homes.
This is simply illogical as we probably won’t have the power to make that happen. The electricity grid is already under pressure, and it is probable that we will have to resort to natural gas to ensure we can generate enough power for our homes, offices and factories.
Recently, the province extended contracts with six natural gas power plants as it has become clear that Ontario is facing an energy shortage due to the planned closure of reactors at Pickering GS in 2026. A refurbishment project is under way at Darlington Nuclear GS but won’t be done until 2026.
The City of Toronto, under the Transform TO Net Zero Climate Strategy that aims to reach a GHG emissions target of net-zero by 2040, calls for 27,000 homes to be retrofitted by residents each year. The catch is that the homeowners are expected to do it at their own expense. Unlikely to happen.
By 2028, to get site plan approval to build in Toronto, buildings will be required to be fully electrified. Natural gas-fired equipment for space heating and domestic hot water heating will be banned.
Undoubtedly, this will put more demand on aging distribution infrastructure and the province’s electrical generation capacity.
To top it all off, residential buildings will be required to use 61 per cent less energy by 2025 and 65 per cent less by 2030, in comparison to 2019, under the federal government’s Emissions Reduction Plan. It’s anticipated the measures will increase home construction costs by an average of about 8.3 per cent by 2030, and adding an estimated $70,000 to the average cost of a new home.
According to a Canada Mortgage and Housing Corporation (CMHC) report, to restore affordability the country needs to build about 3.5 million more houses by 2030 above and beyond what is currently planned. The report also indicated Canada is projected to build fewer, not more, new homes by 2030.
Last year, CMHC forecast there would be 18.58 million new housing units by 2030. This year, that projection is down to 18.19 million.
Meantime, a separate report from the Canadian Centre for Policy Alternatives indicates that new housing construction is at a lower level today than it was at the worst point of the COVID-19 pandemic.
Investment in new single-family homes has decreased by 21 per cent from April 2020, row home building is down eight per cent and investment in new apartment construction has seen a two-per-cent decrease.
In Ontario, more than 170,000 homes must be built each year over the next decade to restore housing affordability. To reach that, we must double our production. That is not happening, though, due to a variety of factors and the figure is more likely to be 100,000 or less new units a year.
There’s a need for quick action on the housing front. Roughly 65 per cent of new housing construction is in the high-rise sector and, unlike a single-family home, it takes years to build a condo tower.
The move to building green is important, and developers and builders support that progression. Builders have families. They get it. But it’s just as important to rectify systemic issues that slow down production of new homes and condos. We have a lot of work to do and a lot of ground to make up.
