Setting the Frame
You’ve been very direct in saying Canada’s housing crisis is not the result of “greedy developers,” but of policy and governance failures. Where do you think the public narrative has gone most wrong?
RG: The public narrative has gone wrong in two ways, and the development industry has to own one of them. Developers are highly visible, and for the most part, they have not made much effort to explain how housing actually gets built or priced. That vacuum has allowed a simple but misleading story to take hold: that housing costs are high because developers are greedy.
But visibility is not causality. Housing prices are not set by moral intent; they are set by supply, demand, cost, and risk. Development is a highly competitive business with significant capital exposure and long timelines. If there is no reasonable prospect of profit, projects simply do not proceed, and supply disappears. But the degree of profit is moderated by market forces, as with all goods and services.
“Housing prices are not set by moral intent; they are set by supply, demand, cost, and risk.”
What the public rarely sees is how profoundly government policy shapes housing outcomes. In Canada’s largest cities, it routinely takes up to five years for a project to move from concept to approval; in comparable U.S. cities, this is measured in months, not years. Time is not neutral in real estate. Every year of delay compounds land carrying costs, financing costs, consultant fees, and risk premiums. Those costs do not vanish; they are embedded in the final price of housing.
Governments are also creating significant uncertainty. In Ontario alone, land-use policy has been rewritten repeatedly since 2021 through a series of major provincial bills, each well-intentioned, but collectively creating a system that is more complex, not less. Rules change mid-process. Assumptions get reset. Projects chase moving targets. That uncertainty drives up costs and discourages new supply. The same happens at municipal governmental levels as well.
The result is a housing system overloaded with regulation, inconsistent policy signals, and rising taxes, administered by governments that face little direct accountability for whether homes actually get built.
So when people say this is a failure of markets, I push back. The market is doing exactly what markets do when supply is constrained, timelines are unpredictable, and costs are escalated by policy. This is not a story about greed. It is a story about governance—and until we simplify, stabilize, and speed up the system, the housing crisis will persist regardless of how loudly we blame developers.
Municipal Accountability
You’ve pointed to municipal governments and bureaucracies as the biggest contributors to housing unaffordability. What specific municipal decisions or behaviours have done the most damage to supply and affordability?
RG: The damage comes from how municipal systems operate day to day. In every major Canadian city, virtually all new housing must go through a multi-stage municipal approval process before construction can even begin. In Toronto, that means rezoning and site plan approval; other cities use different labels, but the effect is the same. What should be an efficient technical review process routinely stretches into years.
Most municipal staff involved in these reviews are well-intentioned, but the system they work within has become overly complex, internally inconsistent, and overly risk-averse. Multiple departments review the same project independently, often with overlapping or contradictory mandates. Developers are then left to navigate disputes between branches of the same government, at high cost and delay.
For example, I was involved in a situation where one municipal department insisted on extending a public road through a site, while another argued the existing building in the way had heritage value (it did not!) and should be preserved. Both were acting in good faith. But it took months to reconcile the conflict, even though the developer was open to either solution. In other cases, projects have been delayed because staff raised concerns in a third or fourth submission (years into the process) about elements that had been present since the first submission and could have been dealt with way earlier.
These behaviours matter because time is one of the most expensive inputs in housing delivery. Every delay increases financing costs, consultant fees, and uncertainty. Those costs don’t get absorbed by developers; they get baked into rents and sale prices, or the project simply doesn’t proceed.
“The deeper issue is that many municipalities have drifted away from a facilitation mindset.”
The deeper issue is that many municipalities have drifted away from a facilitation mindset. Their role should be to facilitate good housing outcomes within clear rules. Instead, the rules are often unclear, inconsistently applied, and constantly evolving. That creates a system where housing supply is slowed not by public debate or democratic choice, but by process friction, and that friction is a major driver of unaffordability.
Development Charges & Fees
Development charges, fees, and taxes have risen dramatically over the past decade. From your perspective, how much of today’s housing cost inflation is directly tied to municipal cost-loading?
RG: Development charges, fees, and taxes have become a major driver of housing cost inflation, and this is a relatively recent phenomenon. Before the late 1990s and early 2000s, government charges typically represented a much smaller share of the total cost of a home, often in the single digits, generally in the 5–10% range. Municipalities relied more heavily on senior government transfers and general taxation to fund infrastructure, rather than loading those costs directly onto new housing.
That model has fundamentally changed. In the Greater Toronto Area today, there are credible studies showing that combined government charges and fees can account for roughly one-fifth to nearly one-third of the cost of a new home, depending on the municipality and housing type. Altus Group’s work for BILD, for example, estimates 18% to 29% of a modelled low-rise home price is government charges, while new apartments average about 24%, with some municipalities approaching 30%. Think about that: the average cost of a new home in Toronto in 2024 was $1,117,000; so, up to $330,000 of that cost goes to the government. For what, exactly? What did they do to create that new home?
The developer, who took all the risk and did all the work, makes significantly less. And the new homeowner has to pay for it all.
“Think about that: the average cost of a new home in Toronto in 2024 was $1,117,000; so, up to $330,000 of that cost goes to the government.”
Development charges in particular have risen dramatically. Another Altus/BILD study shows that development charge rates across Greater Toronto Area municipalities increased by approximately 156% between 2009 and 2021, far outpacing inflation or income growth.
Construction costs, interest rates, and land values matter, and these are also culprits in the rising cost of homes in Canada. But the shift from modest cost recovery to heavy cost-loading has quietly become one of the most powerful drivers of unaffordability in Canada’s housing system. The recent announcement by the Province of Ontario, in collaboration with the Federal government, to reduce Development Charges in Ontario by 50% is essential and very helpful, though until we see the regulation that implements this political announcement, it is impossible to understand the real impact. Again, the development community is waiting.
The Myth of the Freeze
Governments often talk about “freezing” development charges or fees. Why do you believe freezes are insufficient, and what would meaningful reform actually require?
RG: Freezing development charges at today’s levels fails because it assumes the problem is the rate of increase, when in reality the problem is the level itself. These charges are already so high that they materially distort housing economics. Locking them in simply preserves a broken baseline.
Development charges are paid upfront, long before a home is occupied or generates tax revenue. That timing matters. Requiring tens or even hundreds of thousands of dollars per unit at the front end dramatically increases financing needs, raises risk, and eliminates marginal projects that could otherwise add supply. A freeze does nothing to relieve that pressure. Projects that don’t work today still won’t work tomorrow.
There is also a fundamental mismatch between who pays and who benefits. Housing is long-lived infrastructure. Roads, pipes, transit, and parks serve entire communities over decades, yet we ask the next unit of housing to pay for a disproportionate share of those costs immediately. In any other context, that would be considered poor public finance. The result is that new buyers and renters are effectively subsidizing broader municipal systems through higher housing costs.
“When housing is treated as a revenue source rather than essential infrastructure, affordability will continue to deteriorate.”
This is why meaningful reform requires more than restraint, it requires reduction or elimination. If governments are serious about increasing supply, development charges should be scaled back to true growth-related costs, spread over time through property taxes or utility rates, or funded in part by senior levels of government with broader tax bases. When housing is treated as a revenue source rather than essential infrastructure, affordability will continue to deteriorate.
Build Canada Homes – Directionally Right, Structurally Weak?
You’ve said the federal government’s launch of Build Canada Homes is a positive signal, but that the details remain vague. What concerns you most about the program as it’s currently framed?
RG: Build Canada Homes is directionally right and welcome. But there are real concerns, as well as hopes, about how it will affect development in Canada. The federal government is finally acknowledging that housing supply is a national economic issue, not just a local planning problem. That’s progress. My concern is how the program risks confusing enabling housing with delivering housing.
Canada already has a highly skilled, competitive, and experienced private development industry; arguably the best in the world, certainly one of the busiest. Nearly all housing built over the past 50 years has come from that ecosystem. We do not have a shortage of know-how. What we have is a shortage of feasible projects, driven by cost, risk, and policy friction. Creating a new federal delivery entity risks addressing the wrong problem.
“If the federal government moves aggressively into direct housing delivery through Build Canada Homes, it risks crowding out private developers who are already sidelined by today’s cost structure.”
Very few people seriously believe government-led procurement produces lower-cost construction. Canadian infrastructure projects (transit, hospitals, public buildings) are full of examples where cost overruns are not the exception but the norm. If the federal government moves aggressively into direct housing delivery through Build Canada Homes, it risks crowding out private developers who are already sidelined by today’s cost structure. A large, non-market-sensitive builder entering the system could actually push construction costs up at the exact moment they were starting to stabilize.
That said, the picture is not fully formed yet. The program is still early, and the rhetoric coming from its leadership has been encouraging. Ana Bailão, the CEO, has spoken openly about collaboration with the private sector and about being pragmatic rather than ideological. That matters. To scale housing quickly, we do need the government, particularly the federal government, to play a stronger role in financing, risk-sharing, land assembly, and enabling faster delivery.
So my concern is less about intent and more about execution. If Build Canada Homes becomes a top-down developer, it will likely distort the market and slow supply. If it becomes a catalyst by lowering financing costs, absorbing risk, unlocking land, and partnering with experienced builders, it will be genuinely helpful. Right now, it could still go either way. In a year, we’ll have a much clearer sense of whether it’s helping unlock supply or unintentionally making the problem harder to solve.
