Housing crisis

New legislation tackles the housing crisis

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But ‘more can and should be done:’ OREA

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The provincial government’s plan to build 1.5 million homes over the next decade “is exactly what the doctor ordered” to tackle the housing crisis, but “more can and must be done,” says the Ontario Real Estate Association (OREA).

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The Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA) profusely support what they call a “one-in-a-generation housing plan.”

In a joint statement, the associations say the More Homes Built Faster Act will make it easier to build new homes faster, reduce housing costs and reduce red tape, thereby increasing supply and bringing affordability back to the province.

“Ontario’s Housing Affordability Task Force report, released in February, clearly identified the challenges limiting the supply of new housing and increasing housing costs in the province,” said Dave Wilkes, President and CEO of BILD.

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“We operate in a planning and zoning environment built for an Ontario of yesteryear. It’s simply taking too long to get approvals, it’s too difficult to add the soft density we need in our cities, and too many fees and charges are being imposed on new homes by municipalities. All of this limits supply and drives up costs.

The plan presented (October 25) by the government is the clear and powerful transformation we need to solve our housing supply and affordability crisis.

NOT JUST THE “BIG CITY CRISIS”

Not everyone is so optimistic. In a report released in June, the Canada Mortgage and Housing Corporation estimated that it would take up to 1.85 million homes in Ontario to restore affordability to 2003-04 levels, when 40% of the disposable income of the average household would make it possible to pay for housing at the average house price in the provinces. In 2021, such a household should have devoted nearly 60% of its income to housing.

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If passed, the More Homes Built Faster Act promises that cities, towns and rural communities will thrive with a mix of owner and rental housing types that meet the needs of all Ontarians, from single-family homes to townhouses. row and medium-sized apartments.

“For too many Ontarians, including young people, newcomers and seniors, finding the right home is still too difficult,” said Municipal Affairs and Housing Minister Steve Clark.

“This is not just a big city crisis: the housing shortage affects all Ontarians, whether rural, urban and suburban, North and South, young and old. Our government is delivering on its commitment to Ontarians by cutting time and red tape to get more homes built, faster.

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The plan, which contains about 50 actions, would reduce government costs. On average, 25% of the cost of a new home in the Greater Toronto Area (GTA) is made up of government fees, taxes and fees, calculate BILD and OHBA. That can add $250,000 to the cost of a typical single-family home, and municipalities add more than half that.

HOUSING APPROVALS

This is not the only challenge, deplore the associations. Housing approvals take longer in the GTA and Ontario than in any other jurisdiction in North America. In some GTA municipalities, approval for new housing projects can take almost three years, adding another $50,000 to $100,000 to the price of a home, they report.

The government promises to fix development approval delays that are slowing housing construction and increasing costs.

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The plan puts in place actions to support the development of “soft density” – a so-called “missing” type of housing such as triplexes or garden suites – which bridge the gap between single-family homes and high-rise apartments. Such a move would resolve the “very difficult and costly due to outdated and restrictive zoning” that is currently in place, BILD and OHBA maintain.

The Home Builders Council of Ontario (RESCON) also believes the legislation will help tackle the housing supply crisis and speed up the construction of much-needed new homes. “The More Homes Built Faster Act will reduce bottlenecks, streamline development approvals and accelerate the pace of home building across Ontario, said RESCON President Richard Lyall.

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“MOVE THE NEEDLE”

“Specific reforms in the plan, such as changes to development charges, allowing more homes to be built near public transport and updating heritage conservation rules, will help drive housing forward. “

OREA applauds the government’s plan to roll back exclusionary zoning, which only allows one detached house per lot and instead allows owners to build three units without lengthy approvals or development fees.

OREA is also pleased that the government is considering exempting affordable housing from development charges and freezing or reducing other charges.

In addition, the new legislation will reduce the influence of NIMBY (Not in My Backyard) groups by limiting tactics that delay, cancel and drive up home prices, such as third-party calls for planning issues, OREA adds.

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While the Act will “go a long way toward reversing declining homeownership rates in Ontario,” it will take years to build most of the promised homes, CEO Tim Hudak warns.

More “can and should be done,” he says. “Ontario should provide immediate relief to first-time home buyers by eliminating the punitive land transfer tax for first-time buyers or increasing the existing rebate. This tax adds thousands of dollars to a young buyer’s closing costs, and the increased rebate would help hundreds of struggling families today.

About the legislation

Among other things, the More Homes Built Faster Act includes the following proposals:
• Increase the non-resident speculation tax rate from 20% to 25% to deter non-resident investors from speculating in the province’s housing market and help make home ownership more accessible to residents of Ontario.
• Increase density near transit and unlock innovative approaches to design and construction.
• Increase consumer protections for homebuyers and consult on ways to help more renters become homeowners.

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