Report: Housing Affordability Crisis Costs the GTA up to $7.98 Billion Annually

“Overall, we estimate the cost of the affordability crisis to the GTA economy and to GTA employers ranges from $5.88 billion to $7.98 billion per year. Over a five-year period, the cumulative losses would be an estimated $29.4 billion to $37.9 billion. These staggering numbers show that housing solutions must be part of our region’s economic recovery plans.” says Jan De Silva, President and CEO of the Toronto Region Board of Trade.  

The report draws on analysis by Prism Economics and identifies the direct and indirect costs of inaction to employers and employees, as well as the societal costs. The report introduces the GTA Wage Premium, a metric which calculates what is required to retain workers and account for the higher cost of living in the GTA compared to other parts of Ontario.  

“As we begin to look at a post pandemic reality, the need for workforce housing is urgent,” says Anne Babcock, President and CEO of WoodGreen Community Services, adding, “More than a third of occupations do not receive a wage premium – this includes teachers, nurses, and social service workers. These are essential workers who are struggling to stay in the city, making outmigration a serious issue for the region. The good news is that we don’t need to start from scratch, workable models do exist.”  

Economic Trends  

The nearly $8 billion in economic impact to the GTA comes from four main trends:  

1. Outmigration: For every two international immigrants settling in the GTA, there was one established resident moving to another region in Ontario. Ten years ago, the ratio was five arrivals to one departure. This outmigration amounts to $3.05 billion in lost economic output per year.  
2. Higher Turnover: Increased job turnover rates attributed to housing affordability are increasing employers’ recruitment costs and are estimated to cost employers $180 million per year.  
3. Wage pressure: For employers that can pay a premium to hire within the city, rising wage pressure is eating into their bottom line. Wages and salaries in the GTA have increased 1.4% faster than outside the region – resulting in up to $2.8 billion in additional payroll pressure for employers.  
4. Lost Productivity: Long commutes for GTA workers are harming worker productivity and morale. Roughly 16% of GTA workers commuted more than one hour to work – resulting in a productivity loss of up to $1.95 billion.  

“While these numbers are shocking, they are only part of the whole picture,” said De Silva. “To protect our city and region’s future prosperity, we need a commitment from governments and both the private and not-for-profit sectors to build the workforce housing units we desperately need.”  

True success will be measured by how many more low- and middle-income workers are living in decent homes that they can afford. 

Measuring Success

The report recommends the following actions:

• Set targets for workforce housing units that align with the city’s current goal of building 40,000 new units of affordable housing over the next ten years;  
• Strengthen existing multi-sector partnerships, and build new ones that engage the expertise needed to successfully deliver projects;  
• Unlock more low-interest public and private financing for projects that will provide workforce housing; 
• Commit more publicly-held (including institutional) land for mixed-income housing, and leveraging density to maximize this scarce resource;  
• Deliver both rental and ownership options that can meet the needs of workers and provide longer-term affordability; 
• Streamline approvals processes for projects that will deliver a substantial amount of workforce housing.