Ontario announces new plan to tackle housing shortage

Houses for sale in Ottawa

‘Of everything I’ve seen in Canada to address the problem, this has the best chance of actually closing the gap’ — Royal Lepage CEO

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The Ontario government unveiled a series of new measures aimed at tackling the province’s housing supply shortage and affordability crisis on Tuesday, including plans to cut development costs and to allow property owners to build up to three residential units on a single lot without a bylaw amendment.

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The government provided details on the new legislation, which largely targets red tape and municipal zoning laws that stall housing construction, this week.

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“The legislation supports our new plan to further reduce bureaucratic inefficiencies that delay construction and increase costs for homebuyers and renters,” Minister of Municipal Affairs and Housing of Ontario Steve Clark told reporters on Oct. 25. “It also supports greater density near transit, as well as measures to protect and help homebuyers and also use provincial lands as sites more for attainable housing.”

Clark said the proposals would help the province reach its goal of building 1.5 million homes over the next 10 years. The City of Toronto has been given a target of creating 285,000 new homes by 2031, Ottawa is tasked with delivering 161,000, Mississauga holds a target of 120,000, and Brampton’s goal is 113,000 new homes.

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The new measures drew strong praise from some in the real estate industry, including Phil Soper, chief executive officer at Royal LePage.

It’s the boldest step I’ve seen to try to address the problem

Royal LePage CEO Phil Soper

“This is pretty dramatic,” Soper said. “It’s the boldest step I’ve seen to try to address the problem in our most populous municipality or region – the Golden Horseshoe, in particular. And I’d say of everything I’ve seen in Canada to address the problem, this has the best chance of actually closing the gap.”

Still, there could be some jurisdictional challenges as Premier Doug Ford’s government gets tougher on overriding municipal zoning laws that slow the pace of housing construction. Soper hopes that these territorial stand-offs do not turn into acts of bureaucratic spite.

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“One of the things I fear is jurisdictional anger over intrusion into another leader’s sandbox,” Soper said. “There are lots of other tools they can use, a leader at the municipal level, to slow down the effectiveness (of these measures): environmental studies, they could blame supply chains, there could be lots of ways they could throw roadblocks. My hope is that (municipal leaders) see this as an opportunity … and we use this as a turning point.”

The Toronto Regional Real Estate Board also supported the measures.

“Municipalities have a direct impact on housing affordability, not only by adding direct costs like development fees and land transfer taxes, but also by delaying and preventing desperately needed new housing supply with slow approval processes, duplication, and outdated restrictive zoning,” TRREB president Kevin Crigger said in a statement.

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Crigger added that the board respects the role municipalities play in community development, but noted it’s important for such policies to reflect the wider public interest.

Some environmentalists, however, bristled at details in the technical document accompanying the announcement, which included proposals to streamline the process through which conservation authorities issue permits to develop in wetlands or areas prone to flooding, potentially exempting certain developments from requiring a permit set out by the Conservation Authorities Act.

This new legislation comes in the same week that the Ontario government announced it would be raising the non-resident speculation tax on homes purchased by foreign nationals to 25 per cent from 20 per cent, making it the highest rate in Canada. Finance Minister Peter Bethlenfalvy said the increase would come into effect on Tuesday and would aim to curb foreign speculation.

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The Ontario government previously raised the foreign homebuyer tax to 20 per cent from 15 per cent in March, and made the measure province-wide as opposed to focusing solely on the Greater Golden Horseshoe region.

Real estate experts were quick to cast doubt on the effectiveness of the tax hike, arguing that markets are cooling already. Soper is among the skeptics, arguing it’s more of a provincial revenue generator than an effective piece of housing policy.

“It’s very few people that are paying that tax, but it contributes to government coffers and general revenue, and so it’s hard to argue against that,” Soper said. “Will it make a condo for a young family in Toronto more affordable? No, not at all. It’s such minutiae in the face of the overall problem.”

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The Ford government has brought other measures to the table aimed at reducing red tape, including a move to give Toronto and Ottawa mayors “strong mayor” powers that would give city leaders the ability to overrule council decisions that interfere with home building.

“I know, the actions are bold,” Clark said. “Our government stands ready to do what it takes to help meet the demand of housing with a plan aimed at solving the housing supply crisis in the long-term. These measures place a very strong foundation in our province of Ontario and will help us get to the 1.5 million homes over the next 10 years in partnership with municipalities, the private sector, non-profit and the federal government.”

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