The Ontario government has unveiled a series of measures to cut red tape and make Ontario housing more affordable. The goal is to boost the housing supply and, in turn, address the affordability crisis in Canada’s most populous province.
Let’s take a closer look at “More Homes, Built Faster: Ontario’s Housing Supply Action Plan 2022–2023.” In particular, the plan’s ambitious goal of building 1.5 million homes in Ontario over the next decade.
The Problem
Canada may be the second biggest country in the world by land size, but it has a housing supply shortage. This isn’t only a big city problem, it affects those living in the suburbs and rural areas as well.
The lack of housing supply has driven home prices sky-high. For example, to afford an average home in Toronto these days, you need a household income of at least $200,000. Similarly to other parts of the province, most people don’t earn that much in Toronto. Home prices are a lot higher than the average family can afford.
Something has to change. More Homes, Built Faster is looking to change things for the better. Here are some of the solutions the plan is proposing.
Gentle Density
Gentle density means increasing how many units are in an urban area without it affecting the current neighbourhood.
On one side are the NIMBYs (short for Not In My Back Yard) that are concerned about preserving the character and history of the neighbourhood. They are generally against more density. This means that they often oppose any new housing development proposal.
On the other side are the YIMBYs (short for Yes In My Back Yard) composed of those that recognize the need for new housing to address the affordability crisis. They are open to different forms of housing, including the so-called missing middle (meaning affordable housing for the middle class).
This strategy loosens regulations around the allowable number of units constructed without needing further planning approval. It allows for the construction of up to three residential units on most residential lots in the province, without needing to apply for a by-law amendment. By-law amendments are what can really slow down the process and are a major contributing factor to the lack of housing supply.
In most cases, you wouldn’t need a by-law amendment to build a main residence, basement apartment and garden house.
The big benefit of this is that it will help expand the renting supply and help homeowners have more space to let aging family members live at home.
Homeowners wouldn’t need to pay costly development charges or parkland dedication fees. There also wouldn’t be the need for at least one parking spot and there wouldn’t be a minimum size for the units either. It’s a win-win for everyone.
Transit Hub Density
This one really seems like a no-brainer. More Homes, Built Faster wants to build more housing close to major transit hubs. We’re talking about TTC and GO Train stations as an example. By doing this, residents of Ontario cities and towns will be able to get to where they are going easier, be it to local shops, work or school, and back home again.
Local municipalities have a year to update their zoning by-laws to get more units built more quickly.
Housing Targets For Municipalities
The Ontario government is working with local municipalities to set housing targets.
The reality of the situation is that as the population of Ontario has grown, the pace at which homes haven’t kept up. Enough homes need to be built to address the current demand and meet future demand as well. If these two needs aren’t met, home prices will keep rising and challenge affordability even more.
Cities and towns already make forecasts for jobs and population growth. This helps them plan ahead for what amenities they will need in the future. However, a flaw with this is that it’s assuming that there will be enough homes to address demand when, currently, this isn’t the case.
The Ontario government asked its largest and fast-growing areas to address the housing shortage. They’ve set a goal of fixing the shortage within the next ten years. The goal is to build a total of 1.5 million homes across the province over that timeframe.
The City of Ottawa, has the goal of creating 161,000 homes over the next 10 years. Meanwhile, Canada’s economic engine, Toronto, has the goal of building 285,000 homes. Whereas, Mississauga and Brampton have the goal of 120,000 and 113,000 homes, respectively.
York Region continues to grow at a rapid pace. To accommodate the population growth, the Ontario government will be upgrading wastewater infrastructure.
Making More Land Available For Housing
The Greater Toronto Area (GTA) is an island. Well not literally. It’s an island due to something called the Greenbelt that limits housing development around the GTA. The idea is to protect the environment, but that comes at a cost. Limiting the amount of land available to build new housing delays the construction of homes and drives up costs. To address this, the Ontario government is looking at making more land available for housing development.
The government proposed cancelling the Parkway Belt West plan and has officially revoked the Central Pickering development plan. They say that by getting rid of these plans, homes can be built faster, while still protecting the environment.
They’re also suggesting streamlining its plan to build housing on provincial lands. As part of that that they are helping to speed up the process of conservation authorities selling and leasing their lands.
Constructing More Schools
Building more housing is fine and dandy, but it’s equally important to build new amenities as well to keep up with population demand. That’s where schools come into play.
Besides new roads and sewers, new communities also need schools. More Homes, Built Faster promises to establish a new working group to figure out how to get schools built more quickly. In turn, helping students avoid having to travel kilometres away from their homes to go to school.
Better Protection For Pre-Construction Consumers
The media reports that pre-construction condo developers are asking for more funds at closing. Furthermore, some are even threatening to cancel a buyer’s purchase agreement.
To protect consumers, the Ontario government is doubling the maximum penalty that can be levied against builders from $25,000 to $50,000. This should hopefully deter builders from trying to change a buyer’s purchase agreement unfairly after it has been signed.
Lowering Construction Fees and Costs
Construction fees and costs make new homes more expensive than they should be. The CD Howe Institute says that by reducing development and zoning expenses by half, the purchase price of a new home would be $75,000 less in Toronto. Similarly, York Region would see an $80,000 reduction.
To help reduce the sticker price of new homes, the Ontario government is recommending freezing, discounting and lowering government fees. By doing that, it’s the government’s hope that more homes will be built.
They also want to exclude affordable homes, non-profit homes and inclusionary zoning from government charges. The Ontario government says this would help increase the housing supply.
Lowering Parkland Fees
A proposal to lower the parkland fees for new condos and apartments has also been put forth. The fees will be capped at 15% of the land’s value. Accordingly, this would make costs more predictable for builders and speed up the construction of new homes.
Making Development Approval Faster
There are a series of rules to follow in order to build a home in Ontario. These rules are important to ensure the construction is safe, but it slows down and adds costs to the home construction. According to the Ontario Association of Architects, it’s costing between $300 and $900 million each year for slow site plan reviews.
The government wants to scrap site plan control requirements for new home construction projects under 10 units. With fewer applications to approve, it will speed up home construction for everyone.
Faster Municipal Processes
Generally, each time a builder makes changes to the draft plan of a subdivision, a public meeting must be held. The Ontario government wants to get rid of this requirement and make it optional.
In cities governed by Peel Region, the Ontario government wants to give development approval to the city. Approval from just one government instead of two would speed things up. It would also give residents at a local level more input.
Speeding Up The Ontario Land Tribunal
When there is a dispute about how land should be used, it can end up at the Ontario Land Tribunal (OLT). The OLT can be a great way to resolve disputes, but this takes time and can really slow down the process of building new homes.
The Ontario government wants to get shovels into the ground quicker by reviewing the cases that build the most housing first. They’ve committed to reviewing cases within a set timeframe and are investing more resources to do so.
Updating The Heritage Guidelines
The Ontario government recognizes that protecting heritage buildings is important. At the same time, it also wants to get more housing built.
The Ontario government proposed a review and update of heritage policies, some of which haven’t been reviewed in 10 years. This will still allow cities and towns in Ontario to protect heritage buildings while getting housing built more quickly.
Final Thoughts
Things aren’t going to change overnight. It takes work and planning. The Ontario government is laying the groundwork to make housing more affordable and to meet the needs of Ontarians in the decades to come.
More Homes, Built Faster is a comprehensive plan to make housing affordable for both young and older Canadians. Through a host of short- and long-term strategies, it helps to keep the dream of homeownership alive for decades to come.
