How do you walk back a promise to build 1.5 million homes? Carefully. Finance Minister Peter Bethlenfalvy recently conceded that the target is no longer “hard,” a quiet admission that CMHC data had already made obvious: Ontario’s six-month average for housing starts has fallen to the lowest level in a decade. The trend line is heading away from the goal, not toward it.
January 2026 did offer a 12% bump over the same month in 2025. But the vast majority of those 3,905 units were multi-residential: 2,200 rentals, 1,158 condos. Single-family homes? Barely a blip.
January 2026 Housing Starts by Type (3,905 units)
↑ 12% vs. January 2025, but six-month average at decade low
Where the 1.5 Million Target Came From
The 1.5 million homes target originated in a 2022 report by the Ontario Housing Affordability Task Force, a panel convened by the Ford government. Their conclusion: Ontario needed 1.5 million new homes over the next decade. Roughly double the building pace. The government adopted the number, assigned targets to individual municipalities, and made it the centrepiece of its housing strategy. The task force also made 55 recommendations: fourplexes in all residential zones, faster approvals, fewer third-party appeals, development charge reform.
The government cherry-picked. Density near transit got through. The fourplex-everywhere policy was adopted in principle but implementation has been uneven across municipalities. Several other recommendations were quietly shelved.
Starts Are Not Homes
A “start” is not a home. CMHC data shows a growing disconnect between starts and completions: 81,000 housing units completed in Ontario in 2024, against a pace that needs to hit 150,000 per year to meet the 1.5 million target.
The province has never exceeded 100,000 completions annually. Not even at peak construction activity in 2022 and early 2023.
The gap between breaking ground and handing someone keys keeps widening. Labour shortages, permit backlogs, supply chain problems, financing challenges: a housing start in 2023 may not become a completed unit until 2026 or later.
Condo Projects Dying on the Vine
Dozens of pre-construction condo projects across the Greater Toronto Area have been cancelled or shelved since late 2023. High interest rates pushed financing costs beyond what many developers could absorb, concrete and steel rose 15 to 20% between 2021 and 2024, and pre-sale absorption rates dropped sharply as buyers facing higher mortgage qualification thresholds pulled back. More than 20,000 planned GTA condo units were cancelled or indefinitely deferred in 2024 and 2025 combined.
Years of lost time and opportunity cost for buyers who put down deposits. For the housing supply pipeline, each cancelled project represents hundreds or thousands of units that will not be built any time soon.
Why Building Stalled
Development charges, the fees municipalities levy on builders to fund roads, sewers, and parks, have become one of the most expensive line items in housing construction.
In the City of Toronto, development charges on a single condo unit can exceed $60,000. In some 905-region municipalities, even higher. The original idea was that growth should pay for itself, but critics say the fees have grown into a barrier to building. Stack development charges on top of parkland dedication fees, building permit fees, and section 37 contributions, and government-imposed costs can represent 20 to 25% of a new home’s sale price.
That number tends to get left out of affordability speeches.
The government tabled another housing bill in October 2025, Bill 17, which paved the way for development charge deferrals. Instead of paying the fee when a building permit is issued, developers can now pay when the property is handed to the buyer. Regulations enforcing the law were approved in November and made mandatory for municipalities.
The Ontario Real Estate Association went further in March 2026, calling for a two-year suspension of development charges entirely.
Interest Rates and the Missing Middle
Between 2022 and mid-2024, the Bank of Canada took the overnight rate from 0.25% to 5.0%. Construction financing costs doubled. A project modelled at 3% borrowing suddenly faced 6% or more. Many projects that were viable in 2022 became unprofitable by 2024. Rate cuts beginning in late 2024 have provided some relief, but lending conditions remain cautious: banks want more pre-sales before advancing construction loans, and insurance requirements have tightened.
The “missing middle” problem persists through all of this. Ontario’s housing stock is dominated by single-family homes and high-rise condos, with very little in between. Townhouses, low-rise apartments, duplexes, and laneway housing remain difficult to build in many municipalities because of zoning restrictions, neighbourhood opposition, and permitting complexity. These mid-density housing forms are typically the most affordable to build and buy. They represent a small fraction of new construction.
Seventeen Groups, One Letter
In March 2026, a coalition of 17 housing and development organizations wrote to both Prime Minister Carney and Premier Ford, warning that without immediate policy changes, thousands of planned homes may never be built. Their demands: expand the federal GST rebate on new homes to all buyers, reform municipal development charges, eliminate regulatory barriers that delay projects. The Ontario Home Builders Association went further, pushing for the removal of the provincial sales tax on all new home purchases, arguing it would “rejuvenate the industry” in 2026.
Seventeen groups, one letter. That’s either a sign of consensus or desperation.
Help for Buyers (Sort Of)
Federal policy shifts are providing some help to buyers. First-time buyers can now access 30-year amortizations on new builds and homes under $1.5 million, and the insured mortgage cap was raised to $1.5 million from $1 million, allowing smaller down payments on more expensive properties. None of that helps if there’s nothing to buy. More qualified buyers chasing the same limited homes just pushes prices higher.
The Math Doesn’t Work
The 1.5 million homes target was always ambitious. Now it is a talking point.
Fee deferrals and regulatory streamlining have not changed the core economics. Interest rates, construction costs, a cautious lending environment: the pipeline is stalled. The March 26 budget will show whether the government is willing to spend real money or keep pulling regulatory levers that haven’t moved the needle yet.
Sources and verification: The decade-low housing start average is from CMHC data as reported by RBC Economics and Global News. The January 2026 housing start figures (3,905 multi-residential units, 2,200 rentals, 1,158 condos) are from CMHC and Global News. Bethlenfalvy’s “no longer a hard target” quote is from Global News reporting. The Housing Affordability Task Force report (February 2022) and its 55 recommendations are from the Ontario government publication. The 81,000 annual completions figure is from CMHC housing data. Condo cancellation estimates are from Urbanation and CMHC market reports. Development charge figures for Toronto are from the City of Toronto’s published fee schedules. Bill 17 and the development charge deferral provisions are from Ontario legislature records. The 17-organization coalition letter is from ConstructConnect reporting, March 2026. OREA’s two-year DC suspension recommendation is from their March 2026 press release. Bank of Canada rate history is from the Bank of Canada. Federal mortgage changes (30-year amortization, $1.5 million cap) are from Government of Canada announcements.
Follow Ontario housing legislation at Ontario Pulse.