Why Zoning Alone Won't Solve the Housing Crisis: Lessons for London, Ontario

When Approved Developments Don't Get Built

West Vancouver is facing a troubling reality: despite provincial pressure to densify, approved housing projects are stalling or being abandoned entirely. One 200-unit development made it all the way to the building permit stage before the developer pulled the permits. For London, Ontario residents watching our own city's growth plans unfold, this situation offers important insights.

The Math That Breaks Development

West Vancouver has completed just one-third of the housing targets the province set in 2023. The culprit isn't red tape or slow approvals—it's economics. Rising construction costs, elevated interest rates, and weak demand have made it nearly impossible for developers to sell units at prices that cover building costs.

Even when the provincial Housing Minister overruled local council to allow more density, projects haven't materialized. Zoning changes alone don't build housing.

What This Means for London's Growth

London is experiencing significant growth pressure. Our population continues climbing, driven by immigration, migration from the GTA, and the expansion of our healthcare and educational institutions. City planners have identified areas for intensification, including along transit corridors and in emerging communities like Talbot Village.

But West Vancouver's experience serves as a cautionary tale. If construction costs remain elevated and financing stays challenging, even well-intentioned density plans may not translate into actual homes.

Where London Differs

There's reason for cautious optimism in our market. London's development economics differ from West Vancouver's luxury-focused landscape:

- Lower land costs compared to GTA and Vancouver markets - Strong rental demand from Western University and Fanshawe College students, plus healthcare workers - Growing employment base attracting young professionals and families - More affordable price points that can still cover construction costs

Neighbourhoods like Oakridge, Lambeth, and areas near Boler Mountain continue attracting builder interest because the numbers work better here than in overheated markets.

The Supply Challenge Remains Real

Still, London faces genuine supply constraints. Purpose-built rental construction takes years from planning to occupancy. Infill development in established neighbourhoods like Byron or Wortley Village faces its own challenges, from neighbourhood resistance to infrastructure limitations.

For buyers, this means that while we have more inventory than during the 2021-2022 frenzy, we're not seeing the flood of new supply that would dramatically shift pricing.

Practical Implications for Buyers and Sellers

For Buyers: Don't assume that approved developments in your target neighbourhood will be completed on schedule—or at all. If you find a home that meets your needs in an established area along Commissioners Road or near the Thames River, waiting for new construction may not be the sure bet it seems.

For Sellers: Existing homes in desirable, established neighbourhoods maintain value precisely because new supply isn't guaranteed. Well-maintained properties in Masonville, Westmount, or near Springbank Park command attention from buyers who value certainty.

For Investors: Understand that rental supply constraints may persist longer than expected. Properties near post-secondary institutions or major employers like London Health Sciences Centre continue offering strong rental fundamentals.

The Bigger Picture

Housing affordability requires more than rezoning—it demands economic conditions that make building profitable. Interest rates, construction costs, and buyer purchasing power all play crucial roles that no zoning bylaw can control.

As London continues evolving, understanding these dynamics helps buyers, sellers, and investors make informed decisions.

Questions about how London's housing supply affects your real estate plans? Contact Nickey Calford at Calford & Co. Real Estate Team for insights tailored to your situation.