London 'middle of the pack' for housing starts despite rapid rise in building permits

A new report suggests London is falling behind when it comes to housing starts. That’s despite a rapid rise in building permits issued in the city in the past year.

“London’s kind of in the middle of the pack. We’re not doing too badly, but there’s certainly I think room for improvement,’ explained economist Mike Moffatt, the Founding Director of the Smart Prosperity Institute.

The Ontario based economic think tank has released a report ranking the 100 biggest cities and towns in Canada on their homebuilding record over the last six years. It shows London’s rank at number 47, despite its ballooning population.

According to the report, London averaged 37 housing starts per 1,000 residents in the six-year period beginning July 1, 2018. That compares with number one ranked Burnaby, B.C., which recorded 91.8 housing starts per 1,000 residents.

Moffatt said London’s middle of the pack position in the rankings is due to a number of factors.

“Land costs and availability absolutely play a role,” he said.

“Development charges play a role. In the city of London development charges are $47,000 on a single detached home. 20 years ago, they were $5,000. That’s three to four times higher than they are in many surrounding communities.”

But the city said it’s doing its part to get shovels in the ground. Speaking last week at an affordable housing announcement, Mayor Josh Morgan said London is a leader when it comes to issuing building permits.

“And we are making tremendous progress on the council permission side,” said Morgan.

“We, a couple years ago, approved about 4,000 units a year. Last year, we approved about 5,000 units. This year, so far, we’ve approved over 22,000 units. So, we have significantly ramped up our permissions for housing across this community, and we’re now seeing those permissions start to come to fruition.”

The London Development Institute, which represents industry, said once planning begins on a property, it can take five to seven years to actually get shovels in the ground. Executive Director Mike Wallace said the city has been working with industry to shorten that timeframe.

“The actual pulling of a permit is to actually dig the basement, whether it’s a high-rise or a single-family home,” Wallace said.

“Determining that is often market conditions, crews being available to be able to actually do the work.”

London’s position in the rankings may seem modest, but it’s certainly not alone. The report shows Ontario lagging behind much of the rest of the country overall.

Citing data from the Canada Mortgage and Housing Corporation, the Smart Prosperity institute said, “from January to October 2024, Ontario started 13,000 fewer homes than the previous period last year, while the rest of Canada started 14,000 more homes.”

In fact, only Pickering, Oakville, and London’s neighbour, Kitchener, cracked the top 20 for housing starts in Canada, and nine, 12 and 16, respectively.