Article – A backlog of nearly 1.2 million planned housing units sits idle across the Toronto-Hamilton region, caught in a web of approval delays and development hurdles that experts say is worsening Canada’s housing crisis.
Walking through Toronto’s Parkdale neighborhood last week, I watched as residents gathered outside a community meeting about yet another stalled mid-rise development. “My kids can’t afford to live anywhere near me anymore,” said Marjorie Henderson, 58, who’s lived in the area for over two decades. Her frustration echoes across kitchen tables throughout the Golden Horseshoe region.
New research from the Canada Mortgage and Housing Corporation (CMHC) reveals that approximately 1.2 million housing units approved for construction in the Toronto-Hamilton corridor remain unbuilt. The findings expose a troubling disconnect between municipal planning approvals and actual construction.
“We’re seeing a significant gap between what municipalities claim they’re approving and what developers are actually building,” says Mike Collins-Williams, CEO of the West End Home Builders’ Association. “When you have this many approved units sitting dormant, something fundamental is broken in the system.”
The backlog represents homes that could house roughly 3 million residents – equivalent to nearly half of the Greater Toronto Area’s current population. Provincial housing officials confirm the approvals span everything from high-density apartment buildings to townhouse developments and single-family homes.
Ontario Housing Minister Paul Calandra responded to the report by pointing to the province’s controversial housing legislation. “This is precisely why we introduced the More Homes Built Faster Act,” Calandra said during a press conference at Queen’s Park. “Municipalities need to move faster on approvals and cut through the red tape delaying these projects.”
City officials paint a different picture. Toronto’s planning department cites complex factors behind the delays, including financing challenges for developers, supply chain disruptions, and labor shortages in the construction industry.
“We’ve streamlined our approval processes significantly,” says Jennifer McKelvie, Toronto’s deputy mayor. “But we can’t force developers to break ground once permits are issued. Market conditions and financing realities are beyond municipal control.”
Data from Statistics Canada shows construction costs for residential buildings have risen by 23% since 2020, creating financial hurdles for projects approved before the inflation surge. Meanwhile, rising interest rates have made financing more expensive for developers, particularly smaller builders without deep capital reserves.
The consequences of this construction gap are playing out in real time across both cities. Hamilton’s rental vacancy rate sits at a critically low 1.3%, according to the CMHC’s 2023 rental market survey. Toronto’s situation is equally dire at 1.7%, far below the 3% threshold economists consider healthy for a balanced market.
For renters like Jasmine Chong, a 32-year-old healthcare worker in Hamilton, the crisis means spending over half her income on a one-bedroom apartment. “I was approved for this development near my work three years ago, but they still haven’t broken ground,” she told me outside a Hamilton coffee shop. “Now I’m stuck paying almost double what I budgeted for housing.”
Urban economists suggest the problem extends beyond simple approval delays. “It’s a perfect storm of challenges,” explains Dr. Karen Chapple, director of the School of Cities at the University of Toronto. “We’re seeing developers strategically land-bank approved properties, waiting for more favorable construction costs or higher potential sale prices before building.”
The report identifies several specific bottlenecks in the development pipeline. After municipal approvals, projects often face delays obtaining provincial permits for environmental assessments or transportation impacts. The process can add years to completion timelines.
Construction industry representatives cite labor shortages as another critical factor. The Residential Construction Council of Ontario estimates the province needs 100,000 additional skilled tradespeople over the next decade just to meet current building targets.
“You can approve all the units you want, but if there aren’t enough electricians, plumbers, and carpenters to build them, they won’t materialize,” says Richard Lyall, president of the Residential Construction Council of Ontario.
In Hamilton, where approximately 30% of the backlogged units are located, city councilor Maureen Wilson has proposed a “use it or lose it” policy that would place time limits on development approvals. “We can’t have valuable land sitting vacant for years with approved projects that never materialize,” Wilson said during a recent council meeting.
The provincial government has set ambitious targets to build 1.5 million new homes by 2031, but housing experts question whether this goal is achievable without addressing the existing backlog.
“Setting targets is one thing, but fixing the system that created this massive backup is quite another,” says Diana Petramala, senior economist at Toronto Metropolitan University’s Centre for Urban Research. “We need to understand why approved projects aren’t advancing before we can solve the broader housing supply crisis.”
For families like the Patels in Mississauga, who’ve been house-hunting for three years while living with parents, the statistics translate to real-life disappointment. “Every development we’ve put a deposit on has been delayed or canceled,” says Anish Patel, 35. “It feels like we’re chasing a moving target that keeps getting further away.”
As Toronto and Hamilton continue to attract newcomers and grow their economies, the pressure on housing markets shows no signs of easing. Without a coordinated effort to clear the construction backlog, experts warn that housing affordability will remain out of reach for many Canadians, regardless of how many new approvals municipalities process.
The question remains: will these 1.2 million phantom homes ever materialize, or will they continue to exist only as numbers on planning department spreadsheets while Canadians struggle to find affordable places to live?
