June 25, 2024

Housing Finance Development

It's Your Housing Finance Development

Ontario housing minister encouraging comments on development, affordability and Greenbelt

As the conversation continues around housing affordability, the government is asking you to offer your thoughts.

They have posted a consultation page for their proposed changes to the Greenbelt’s boundary.

“We’ve been encouraging people, on both sides of the issue, [to] post a comment,” said Housing Minister Steve Clark in an interview Wednesday with Durham Radio News (DRN). “I’m not going to presuppose the outcome of the consultation, but I do want to emphasize […] that it does take too long to build. I think we can all acknowledge that we’ve got a generation that doesn’t feel that there’s a realization of homeownership.”

Comments will be accepted until December 4.

Shovels in the ground

Queen’s Park has drawn criticism from multiple fronts over its execution of a plan to incentivize development.

Bill 23, the More Homes Built Faster Act, would allow more triplexes and garden suites to be built in residential neighbourhoods.

However, it would also reduce the fees that municipalities can charge to developers, which Durham Region has argued would have to be made up by taxpayers. The Association of Municipalities of Ontario (AMO) has argued it would cost cities and towns $5.1-billion over a nine-year period.

Bill 23 has also been the subject of concerns by conservation authorities. In a joint statement in October, they argued the bill would impact how much power they have over the permits they grant, and would prevent them from taking ‘pollution’ and ‘conservation of lands’ into account.

Bill 39, the Better Municipal Governance Act, strengthens the “strong mayor” powers given to the mayors of Toronto and Ottawa when it comes to spurring development. It also explores the possibility of offering the powers to other municipalities, including those in Durham.

It has been characterized by some, including multiple Toronto councillors and the Ontario Liberal Party, as circumventing municipal democracy.

As well, Queen’s Park has turned around on a 2018 pledge not to alter the Greenbelt’s borders. The government is proposing to remove 15 parcels of land from the protected region and add other lands in their stead.

When the additional lands are taken into account, the government argues the Greenbelt will wind up growing by a net 2,000 acres.

“Experts have told us that to meet demand, we need to build 1.5-million homes over the next 10 years,” said Clark. “The best year our province has had in over 30 years was last year, when we had 100,000 starts.”

Clark referenced aims by the federal government to welcome 465,000 new permanent residents in 2023.

“We’re going to be welcoming half a million more people to Canada,” he noted. “I suggest, and the Premier [Doug Ford] and I both agree on this, that we’re going to get, in the GTA, probably 60 per cent of that number. So that will even put more pressure on us to get shovels in the ground faster.”

On Saturday, several separate environmental groups gathered outside Finance Minister Peter Bethlenfalvy’s office to decry the tampering of the Greenbelt.

The largest of the 15 parcels of land is in Pickering, and makes up a sizeable portion of the Duffins-Rouge Agricultural Preserve. It has historically been set aside for farming.

“The 15 parcels of land have all the same characteristics,” argued Clark. “They’re serviced land. They’re adjacent to an existing urban residential area. And our estimates show at a minimum, we can build 50,000 homes.”

Housing costs

Questions are being raised about affordability.

Municipalities put charges on new developments to connect them to roads, sewers and other infrastructure. By waiving some of these charges, the government argues it will encourage construction and lower prices.

“What we’re trying to do is reduce those baseline costs,” said Clark. “There’s the average home in the GTA. The average homeowner will face about $116,900 in municipal development charges and fees. That’s right on the price of a home.”

Clark appears to have been referencing a study commissioned by the Building Industry and Land Development Association (BILD), which was released in September. BILD is an advocacy group for the development industry (the group was recently successful in pushing for a more-protracted expansion to Durham’s urban boundary).

The researchers modelled the prices of single-detached homes and townhouses in 16 GTA-area municipalities (including Whitby, Oshawa and Clarington). They calculated the average municipal charges at $116,870 per unit, or $53 per square foot.

“In fact, if you took the interest rates at a 5.6 or [5.7] per cent mortgage rate over 20 years, that’s going to add more than $800 to the monthly payment,” Clark argued. “That’s essentially the cost of a downpayment.”

“The plan that we have in front of parliament right now will give the deepest development charge discounts to affordable housing, nonprofit housing, as well as inclusionary zoning units,” he added. “Also, purpose-built rentals can have a reduction of up to 25 per cent.”

“I’m the Minister of Housing, and I meet with anybody who wants to build housing,” said Clark, later in the interview. “I don’t care whether you’re Habitat for Humanity, whether you’re a nonprofit, whether you want to build supportive housing with wraparound mental health services. I don’t care whether you build one house a year, or 1,000 houses every season. The government needs to do more, and you need to be able to build.”

‘At the expense of taxpayers’

There are counter-arguments.

“The province has offered no evidence that the radical elements of [Bill 23] will improve housing affordability,” reads a submission by the AMO to the government. “It is more likely that the bill will enhance the profitability of the development industry at the expense of taxpayers and the natural environment.”

A series of reports by the City of Toronto cast a similar tone.

The city recently adopted an ‘inclusionary zoning’ policy, which requires certain new buildings to make a portion of their units affordable to families with lower incomes and keeping them affordable for decades-long periods.

Despite the province’s attempts to encourage more construction, city staff argue the bill could impose limits in other ways.

In one document, staff argued it would cap the number of inclusionary zoning units in a building at five per cent, and reduce the affordability period in the city from 99 years to 25 years.

“There is nothing in the bill compelling a developer to advance an approval to construction or to pass forward any cost savings to consumers,” added staff, in another document. “Developers sell housing at the price that the market will bear.”

Staff estimated the city would miss out on $230-million per year in lost development charges. This, they argued, would make it harder for Toronto to fund new infrastructure.