Record planning approvals not triggering enough new construction to address London’s housing crisis

Almost ten times as many new housing units have been approved by city council this year compared to the number that have actually started construction.

A report updating the Planning and Environment Committee about progress to address the local housing crisis reveals a startling inconsistency between zoning approvals by city council and the number of new housing starts in London.

“We need places for people to live, not permissions on a piece of paper,” said Mayor Josh Morgan, who asserts that council is doing its part to address the crisis. “What we still see is those permissions not actually turning into units on the ground. There are certainly more than there has been in the previous year, but not to the level that we'd like to see.”

So far this year, council has approved developers’ requests for a total of 10,398 new housing units.

That year-to-date figure is on top of the record-setting total of 5,337 approved last year.

However, in 2024 there have been just 2,251 building permits issued and according to the Canada Mortgage and Housing Corporation (CMHC), just 1,028 new units have started construction.

It’s well behind the pace needed to meet London’s housing target of 47,000 new residential units by 2031.

The London Home Builders’ Association (LHBA) points to the Site Plan Approval process at city hall as a significant factor extending the timeline between approval and construction.

Site Plans ensure that a new development’s design and functionality meet municipal criteria.

“When it comes to things like Site Plan Control, that's where a lot of negotiation back and forth occur, and there's a bit of subjectivity in there,” explained LHBA CEO Jared Zaifman. “It tends to make the process quite a bit longer before permits can be released and shovels can get in the ground.”

Zaifman would like to see the process standardized and streamlined.

He added that financial challenges are also slowing new home construction.

“Our builders want to be building,” stated Zaifman. “Unfortunately, we haven't seen homeowners or potential homeowners coming out nearly as much. [It’s] partly because of interest rates and certainly affordability challenges.”

The mayor said the city is doing what it can including Community Incentive Programs, office-to-residential conversion, and other programs that lower the financial hurdles facing residential construction.

“Where we are seeing some success is where we have incentivized different zones, whether it be through the CIP programs or the Housing Accelerator Fund or the different initiatives that we've brought online to try to spur on development,” Morgan added.

Both Morgan and Zaifman told CTV News that they recently met with Ontario Minister of Municipal Affairs and Housing Paul Calandra about the challenge London faces turning planning approvals into actual homes.

“We now need some support from the other entities in the housing-building spectrum, the province, the development community, (and) the financial community,” said the mayor.

The Planning and Environment Committee will consider the progress report on London’s housing target at its meeting on August 13.