The Reality of Regulation: How Political Interference in Building Codes is Making Housing Unaffordable
Fifteen years ago, construction costs were only $204.19 per square foot – less than half of what they are today.
The home building industry is facing a myriad of challenges; from increasing municipal fees to a hesitant investment market. These issues are getting lots of attention, and for good reason. But the issue of an increasingly stringent building code is being overlooked by comparison. The outcome is that overregulation in the housing sector has created a cost-of-delivery crisis and something has to give.
With construction costs soaring to $562.59 per square foot, homeownership is more unaffordable than ever. Even before factoring in profit margins, land acquisition, and DCCs, a buyer would need a gross annual income of at least $140,710 to afford a modest two-bedroom condominium (see Appendix A). Once those additional costs are included, the required income climbs to over $200,000. For perspective, the average gross household income in Canada is $106,300[i] —a stark gap that highlights the growing affordability crisis. [Read Full Article with Supporting Proforma Tables]