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Good news for the GTA

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Good news for the GTA

The Housing Supply Action Plan (Plan) announced by the Government of Ontario on May 2 represents the first major step by any provincial government to address the supply challenges facing the housing market and their effects on affordability. The actions announced recognize that the “tax and restrict” approaches taken by previous and other levels of governments have simply fuelled the generational challenge faced by many in the Greater Toronto Area (GTA) and other large Canadian cities.

Layers of bureaucracy, outdated zoning, and complex policies and procedures have created structural barriers to the efficient operation of the housing market that have resulted in a generational shortfall of housing. These barriers delay development of new homes, add costs and have contributed to the run-up in housing costs experienced over the last decade. On average it now takes 10 years to build a typical highrise project and 11 years to complete a lowrise project in the GTA.

It is estimated that since 2006 the region fell short approximately 98,000 units versus forecasts, and is now falling behind by nearly 10,000 additional units per year. In addition, demand has increased as the GTA has become one of the fastest growing regions in North America with an estimated 115,000 new residents arriving every year. The population of the GTA is set to grow by 40 per cent or an estimated 9.7 million people by 2041. Residents in the area looking to buy their first homes and renters will be impacted the most.

Ontario’s new Housing Supply Action Plan takes meaningful steps to try to balance the housing market through supply and speed. First, it has recognized that the Local Planning Appeal Tribunal (LPAT) is not working for anyone, as evidenced by the nearly 1,000 cases and nearly 100,000 housing units that are stuck waiting for adjudication. Clarifying rules and increasing resources for the tribunal and being able to proceed with even 50 per cent of the units currently before the tribunal will go a long way to address the existing housing shortfall.

Second, the Plan acknowledges that it takes far too long to get approvals and looks to reduce duplication, cut red tape and speed up the development approval process. This will enable the industry to unlock housing supply and bring new product to market to meet demand. At the same time the Plan acknowledges that speed cannot come at the expense of other things that matter and explicitly recognizes the importance of the Greenbelt, cultural heritage assets and key employment and agricultural lands.

Third, the Plan adjusts provincial policy to encourage a mix of homes and to make it easier and faster to build more housing near transit. This will encourage more of the missing middle type housing (townhomes, stacked townhomes and midrise) so sorely needed in the GTA.

Lastly, the proposed changes also acknowledge the cumulative effect that taxes, fees and charges have on housing affordability. For market housing, providing the ability to lock in development charges early in the process increases predictability for the industry and consumers. Deferring development charges until occupancy provides greater incentive to build rental units and special provisions for social and not-for-profit housing will also lower the upfront cost of building.

The beneficiaries of these changes are the people and businesses of Ontario. The benefits for the average resident include having a greater choice in housing at the right price for them and their children. A healthy market that ensures that housing will not be a barrier to attracting and retaining the right talent will benefit businesses looking to grow.

Dave Wilkes is president and CEO of BILD (Building Industry and Land Development Association), and can be found on: Twitter.com/BILDGTA Facebook.com/BILDGTA YouTube.com/BILDGTA and BILD’s official online blog: BILDBlogs.ca

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