In what’s unlikely to come as a surprise amidst skyrocketing housing prices, home ownership is on the decline in Greater Sudbury.
In 2011, 68.4 per cent of Greater Sudburians lived in owner-occupied homes, according to Statistics Canada data. A decade later, in 2021, this figure had dropped to 65 per cent.
These latest-available figures follow a national trend that saw 69 per cent of Canadians living in owner-occupied homes in 2011, and 66.5 per cent doing so by 2021.
With the City of Greater Sudbury working on a Housing Supply Strategy (slated to be finalized this year) as part of a broader goal of growing the city’s population to 200,000 by 2050 (which the city is currently on-track to achieve), Sudbury.com sought clarity on whether it will address the trend of Greater Sudburians pulling away from home ownership.
City senior planner Melissa Riou told Sudbury.com that the strategy “is aimed at aligning housing supply with current demand in the regional market area.”
Included in this demand is for more entry-level housing to help get Greater Sudburians into the home ownership market.
Policy changes are being proposed to help make it easier for developers to build more-affordable housing types, such as row houses, by allowing them without requiring developers to go through the rezoning process.
Further, the city’s new development charges bylaw (to face a city council vote on June 25) includes lower development fees for single-detached dwellings up to 1,200 square feet in size than larger dwellings (an increase from the current 1,000-square-foot limit for reduced rates).
Unlike some other municipalities that have mandatory-minimum residential building sizes, Greater Sudburians can build housing units of any size, Riou said. In 2018, the city introduced R1-7 zones, which allow smaller standards for lot areas and frontages as an option to encourage more-affordable small lot growth. The city didn’t pre-zone any lots with this classification, so it will be up to developers to submit rezoning applications.
The strategy will also encourage policies to spur the construction of secondary dwelling units, Riou said, “to help homeowners offset their mortgage cost by having rental income, at the same time increasing the supply of rental supply across the city.”
Originally scheduled to be tabled with the planning committee of city council this month, Riou said the Housing Supply Strategy is still being worked on to accommodate the recently approved plan to end homelessness by 2030, the upcoming development charges bylaw to face a city council vote on June 25, and other updates. There’s no set date for its return to city council, but it’s still expected to be this year.
Southern home investor effect
The Sudbury Real Estate Board is keeping a close eye on the Housing Supply Strategy, chair Amanda Denis told Sudbury.com.
“From experience, renting has certainly gone up because home ownership is just not affordable for many,” she said, adding that she suspects even more people are renting locally than what the 2021 Statistics Canada data indicated.
Part of the issue has been the trend of investors from southern Ontario buying up older single-family homes in Greater Sudbury for use as rentals, and driving up the cost of this typically more-affordable housing stock, which isn’t increasing in quantity as demand spikes.
“When (southern investors) came and started buying up properties, they used agents from down south who didn’t know locally what our prices were, and drove our prices up,” Denis said, adding that this has joined other factors in creating a “snowball effect” with trickle-down impacts throughout the community.
“Now you’re having more than one person per bedroom,” she said. “I’ve gone into homes where there are multiple people staying in bedrooms in a house meant for single families. ... These are popping up all over the place and are not safe.”
The average residential resale price in Greater Sudbury almost doubled between July 2012 to July 2022, from $237,700 to $452,500.
“Currently, Capreol and Onaping Falls have the most affordable residential prices of around $300,000, while the former City of Sudbury remains the most expensive, with an average price of $488,500,” according to the city’s Housing Supply and Demand Analysis.
“The impact of COVID-19 and emergence of work from home models is also having an impact, where higher-income households in the Greater Toronto Area are moving to lower-cost municipalities.”
The report cautions that “limited new and resale housing supply will continue to put upward pressure on prices as population grows while higher mortgage rates and stricter qualification requirements will pose barriers for many potential buyers, particularly those entering the market for the first time.”
When the city’s Housing Supply and Demand Analysis report was published last year, the average cost of a new single-detached home in Greater Sudbury was priced at an average of $518,219.
The “modest amount” of new housing built in Greater Sudbury in recent years has targeted “a very narrow segment of the market,” the report notes — “expensive, single-family homes positioned towards the upper-end of the market.”
As a result, typically lower-priced existing homes have faced greater demand and “are experiencing strong price growth and selling very quickly.”
“Local households will therefore likely continue to face affordability challenges in the ownership market,” according to the report.
“Limited new housing supply will continue to put upward pressure on prices as population grows while higher mortgage rates and stricter qualification requirements will pose barriers for many potential buyers, particularly those entering the market for the first time.”
Although some Greater Sudburians have given up on home ownership, Denis said that others have been seeking out other options.
“An option could be purchasing with another family, purchasing with friends and some are purchasing with complete strangers and pulling their money together and getting into the housing market any way they can,” she said.
Even with these tactics, she said the current high cost of living, including rising rental costs, can make coming up with a down payment difficult.
Local residential rental rates have more than doubled in the last 20 years, from an average of $605 in October 2003 to $1,251 in October 2023.
During this timeframe, the local vacancy rate dropped from 3.4 per cent to 1.1 per cent. A vacancy rate below five per cent is considered indicative of tight market conditions and housing supply not keeping up with demand, according to the city’s housing supply and demand analysis report.
“We don’t have enough supply or affordable housing, and we need a solution now,” Denis said. “We can’t wait, because it’s just going to get worse.”
Tyler Clarke covers city hall and political affairs for Sudbury.com.
