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Ontario housing plan

Ontario releases plan to address housing affordability and supply issues

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Ontario releases plan to address housing affordability and supply issues

Ontario housing plan

The Ontario government has released its plan to address housing supply and affordability, and homebuilders couldn’t be happier.

Steve Clark, minister of municipal affairs and housing today revealed More Homes, More Choice: Ontario’s Housing Supply Action Plan, a full-spectrum suite of legislative changes to increase the supply of housing that is affordable and provide families with more meaningful choices on where to live, work and raise their families.

“We’ve heard loud and clear from families across Ontario that finding housing that is affordable takes too long and costs too much,” says Clark. “After years of neglect by the former government, there is now a housing crisis in Ontario and the dream of ownership is out of reach for too many. Our plan will make it easier to build the right type of homes in the right places, giving Ontarians and their families more flexibility when looking for a home they can afford.”

GTA homebuilders, through the Building Industry and Land Development Association (BILD), applaud the action, calling it an important step to address the barriers to new homeownership and rental housing.

“The challenge is a basic one,” says Dave Wilkes, BILD president and CEO. “Previous government policies and procedures have created structural barriers to the efficient operation of the housing market which has resulted in a generational shortfall of housing. Today, the Ford government has signaled its intent to address this problem to ensure that the right type of housing is built at the right price across the Greater Toronto Area.”

Clark says the plan will require a province-wide effort that includes municipalities, non-profits and private industry and will also be a comprehensive all-of-government initiative that will include legislative amendments to 13 government Acts.

The new measures proposed in More Homes, More Choicewould streamline the overly complex development approvals process to remove unnecessary duplication and barriers, making costs and timelines more predictable. The plan would also streamline and simplify the process for creating new rental housing options.

As part of the action plan, our government is also launching A Place to Grow: Growth Plan for the Greater Golden Horseshoe,to address the needs of the region’s growing population, diversity and local priorities.

“Whether you are a first-time homebuyer, a family looking for a larger apartment to rent or a senior hoping to downsize, our action plan puts people first,” says Clark. “Combined with our government’s investment in renewed community housing, our Housing Supply Action Plan is sending a clear message that no matter what your situation you can count on our government to always put people first.”

Highlights of the plan

Local Planning Appeal Tribunal (LPAT):Changes will be introduced to allow LPAT to make decisions based on the best planning outcome and remove existing restrictions around the introduction of evidence. The number of adjudicators will be increased and case management powers introduced to acknowledge the need to address the backlog/housing supply.

Development Charges: To increase predictability for the industry and consumers around development charges, changes will allow for rates to be locked in at the time of complete site plan or zoning application. There are also provisions that defer DCs for rental buildings until occupancy.

Parkland/S37/Development Charges: A “community benefits authority” is to be introduced that both acknowledges the cumulative effect that taxes, fees and charges have on housing affordability and allows for more certainty and predictability by eliminating “planning by negotiation.” This new benefit will roll together DCs and will have a cap based on property value by municipality.

Red Tape Reductions:To reduce red tape and help streamline approvals, among other actions:

  • Direction will be provided on how municipalities can use the Ontario Heritage Actwhile allowing for compatible changes and creating consistent appeals.
  • The role of Conservation Authorities is to be reviewed to make sure that they go back to their core mandate, which will reduce overlap in approvals and reduce costs by streamlining roles.
  • The Environmental Assessment Actwill be amended to exempt low-risk actions and remove duplications.

“It just takes too long to build new housing in the GTA,” says Wilkes. “This restricts supply and negatively impacts affordability. When you then layer on a disproportionate share of the cost for new infrastructure, parks, and municipal services to new homes, you now have the recipe for what we are currently experiencing.”

The complex regulatory environment, government fees, taxes and charges add as much as 25 per cent to the cost of an average new home in the region, BILD says.

The roposed LPAT changes will have a beneficial impact on supply, BILD says. Currently, there are as many as 1,000 cases, representing almost 100,000 housing units across Ontario waiting for consideration at the LPAT.

The overall focus on reducing red tape and speeding approvals through modifications to the Provincial Policy Statement, The Ontario Heritage Act, The Environmental Assessment Act and many others will enable the industry to unlock housing supply.

“We need more of all types of housing across the GTA – homes for purchase, for rent and social housing,” says Wilkes. “We look forward to working with all levels of government to address housing supply and affordability as the consultation on the proposed changes continues.”

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Proposed changes to the Growth Plan could help address housing challenges

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Proposed changes to the Growth Plan could help address housing challenges

If you hope to own a home in the GTA one day, you received some good news recently. The Ontario government proposed changes to the Growth Plan for the Greater Golden Horseshoe, the policy that manages growth in our region. The amendments, if approved, would mean more housing supply and choice and, ultimately, better housing affordability.

The Growth Plan was introduced by a previous provincial government in 2006 and was revised in 2017. Both versions brought in new requirements in the planning process. The objective was praiseworthy — to encourage the development of compact, mixed-use communities that would make efficient use of transit, infrastructure and public services.

Unfortunately, many municipalities struggled to meet the new planning requirements, especially density targets that did not recognize the diverse character of our region and did not take into account the availability of transit and infrastructure. For instance, the 2006 Growth Plan called for 50 residents and jobs per hectare in areas that are not yet built up but are designated for future development. This target was already a challenge for many smaller communities that did not have the transit and other infrastructure to support it, yet the 2017 Growth Plan increased it to 80 residents and jobs per hectare. That’s about double the current density of suburban areas like Scarborough and Etobicoke. How would municipalities in rural areas achieve it?

The proposed changes take into account the differences between municipalities and call for varying numbers of residents and jobs per hectare: not less than 60 for Hamilton, Peel, Waterloo and York; not less than 50 for Barrie, Brantford, Guelph, Orillia, Peterborough, Durham, Halton and Niagara; and not less than 40 for Kawartha Lakes, Brant, Dufferin, Haldimand, Northumberland, Peterborough, Simcoe and Wellington. These new density targets are a lot more realistic for municipalities to meet.

The proposed changes to the Growth Plan would also give municipalities some flexibility to develop housing on lands that have previously been designated as employment areas and on small pieces of land that are currently outside their settlement area boundaries.

When municipalities have more flexibility about where and how growth occurs, they can build more housing and the right mix of housing type for their community, while making efficient use of land and maximizing their existing infrastructure. Ultimately, a healthier supply of housing means better housing affordability. That’s great news if you and your family are looking to live, work and own a home in your chosen community, because you are more likely to find the type of home you want and can afford.

Until these proposed changes are implemented, we will continue to face a different reality. The GTA is forecast to grow to 9.7 million people by 2041, yet we are not building enough homes to accommodate this change. We are falling short by about 8,000 to 10,000 homes every year. This supply shortfall drives up home prices and rents, creating pressures that are particularly felt by young families and first-time homebuyers.

The proposed changes to the Growth Plan would help us address this generational challenge. The government is to be applauded for taking these concrete, positive steps in the right direction.

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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Ontario web

Ontario government commits to housing action plan

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Ontario government commits to housing action plan

Ontario web
Steve Clark, minister of Municipal Affairs and Housing

The Ontario government says it is committed to a housing plan that makes more good quality places to live available for “the hardworking people of the province.”

“In communities all across Ontario, people are struggling to find housing they can afford,” says Steve Clark, minister of Municipal Affairs and Housing. “We’re taking action to help create more housing faster, give people more choice and bring down housing costs.”

Ontario is knocking down barriers to people getting housing they can afford that meets their needs, through:

 

  • Legislation that would make new rental units exempt from rent control, effective Nov. 15, 2018, while preserving rent increase limits for existing tenants
  • Ending the previous government’s expensive and ineffective Development Charges Rebate Program
  • Seeking public input on ways the government can remove barriers to building the right kind of housing in the right places. This input will inform a broader housing supply action plan. The consultation includes a downloadable toolkit so community groups can host local roundtables and share their thoughts with the province.

 

The demand for housing in Ontario has risen rapidly in recent years, driven by strong population growth and low interest rates. However, the supply of housing has not kept pace, leading to higher prices and rents.

Building more housing will also help make Ontario more attractive to businesses and investors, restoring the province to its rightful place as the economic engine of Canada.

“High housing costs are a barrier to job creators, large and small, because employees need affordable places to live,” says Todd Smith, minister of Economic Development, Job Creation and Trade. “Making housing more affordable will encourage people to start and grow businesses, right here at home.”

BILD reaction

“The Building Industry and Land Development Association (BILD) of the GTA is very supportive of the development of a Housing Supply Action Plan for Ontario,” says David Wilkes, president and CEO. “Shortfall in supply is a key factor undermining housing affordability, increasing rents and creating barriers to home ownership. We applaud the Ford government’s commitment  to address key issues affecting the housing supply and ultimately the affordability of housing in the GTA.”

TREB approves

The Toronto Real Estate Board, for its part, applauds the Province’s announcement.

“The Toronto Real Estate Board applauds the provincial government for taking action to ensure that our city, region and province have an adequate supply and appropriate mix of housing,” TREB said in a release.

Nowhere are housing supply and mix issues more of a priority than in the GTA, where TREB’s 53,000 members operate, the association says. “TREB realtors work with home buyers and sellers every day and they see the challenges caused by inadequate supply and mix of housing.

“We look forward to participating in the provincial government’s consultation process on this issue and helping our region and province to remain one of the best places to live in the world.”

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5 steps to solving the housing affordability issue in Ontario

 

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Approval web

Delays in approval process contributing to housing affordability issue in GTA

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Delays in approval process contributing to housing affordability issue in GTA

Approval web

The former Ontario government’s growth policies have had the unintended consequences of lengthening the land development and approval process in the Greater Toronto and Hamilton Area (GTHA), negatively impacting housing supply and affordability.

This is among the key findings in the Greater Toronto and Hamilton Area Land Supply Analysis from the Building Industry and Land Development Association (BILD) and Malone Given Parsons Ltd. (MGP).

“Growth policies implemented by the former provincial government from 2006 and 2017 have reduced the amount of available land for new housing communities, increased land prices and have caused home prices to skyrocket,” says Dave Wilkes, president and CEO, BILD, referring to the 2006 and 2017 Growth Plans.

Read more: 5 steps to solving the housing affordability issue in Ontario

Read more: Pent-up demand for townhomes building in the GTA

Read more: GTA new home market shows some improvement in September

“Land use in the province of Ontario is highly regulated  and the 2006 and 2017 Growth Plan changes have slowed down the approval process to bring new land on stream for new communities,” adds Matthew Corey, principal, MGP. “Increasing the supply of new land for housing is subject to a process that can take as long as a decade or more.”

The analysis is intended to provide an accurate accounting of greenfield land supply in the GTHA and Simcoe, to determine if the 2031 population and job forecasts of the Growth Plan will be achieved.

Key observations

  • The percentage of available land that has been approved for new housing communities in the GTHA is 4.5 per cent and decreasing.
  • Some municipalities in the GTHA have yet to conform to the 2006 Growth Plan requirements, missing the 2009 target by nearly a decade, resulting in less housing being built across GTA municipalities versus Growth Plan forecasts.
  • As land supply dwindles and as municipal delays increase, the value of serviced land has increased by more than 300 per cent since 2006.
  • Existing low density neighbourhoods in the GTHA are resistant to intensification, pushing density to urban cores and to new communities near the fringes of the GTHA. The latter are far away from transit and infrastructure, putting a greater reliance on cars and increasing traffic congestion.
  • More gentle density homes (stacked-townhouses and lowrise apartments) should be built within walking distance of transit in built-up areas of the GTHA. This will maximize investment in infrastructure and transit. However, community resistance to increased density makes building in this area time-consuming, expensive and subject to intervention at the municipal level.

Recommendations

BILD and Malone Given Parsons offer six recommendations to help solve the issues:

  1. Make more vacant land available for new communities
  2. Cut bureaucratic red tape and reduce duplication in the planning and approval process
  3. Avoid pushing too much density to fringe areas and away from transit and existing infrastructure
  4. Encourage moderate or gentle intensification across the region by clarifying and amending Growth Plan policies to encourage intensification across the GTHA
  5. Maximize investment in transit and infrastructure
  6. Provide greater certainty for future development by identifying the agricultural and rural lands in the inner-ring (Whitebelt) as future urban areas in the Growth Plan.

 

 

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Construction

Ontario’s new apprenticeship ratio a boon to home building industry

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Ontario’s new apprenticeship ratio a boon to home building industry

 

Construction

The Ontario government’s plans to change the 40-year-old apprenticeship system is welcome news to the home building industry.

“This is a game changer,” says Rick Martins, president of the Ontario Home Builders’ Association (OHBA). “This means our industry will finally have a system in place to close the trades skills gap across Ontario. This means employers can finally bring apprentices into their small businesses and train the next generation of skilled trades workers. This opens thousands of new opportunities for youth, and people looking for new employment opportunities.”

COMPETITIVE BOOST

The new one-to-one ratio, a significant change from the current ratio of 3-to-1, will enable home builders and renovators to more easily hire and train new apprentices.

“The existing apprenticeship system in Ontario includes ratios that are among the most restrictive in Canada – this is why it hampers builders,” OHBA CEO Joe Vaccaro told Homes Publishing. “Most other provinces have had a 1-to-1 ratio for years, and as a result Ontario ranks last in Canada in the number of tradespeople with certification. The high ratio limits Ontario’s ability to compete and remain competitive.”

OHBA says it has been recommending lower apprenticeship ratios for about 10 years, to help make Ontario a competitive training and business jurisdiction and removing a major barrier for young people to enter the skilled trades.

“Ontario will grow by more than 4.3 million people in the next 25 years, and with that there will be an overwhelming need for skilled labour in the building and renovation sector,” says Vaccaro. “With this new apprenticeship plan, our members are now going to be able to hire and train the skilled workers they need to build the new housing choice and supply for future #homebelievers.”

For home builders and renovators employing carpenter apprentices, the current ratio of 3-to-1 means a company must have three licensed journeypersons on staff before they can hire an apprentice.

“This ratio may not be a reality that makes sense how builders and renovators operate their businesses,” says Vaccaro. “For example, they may not have the exact mix of employers to apprentices, or they may want to take on more than one apprentice but not have the proportionate number of staff to support additional apprentices.”

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5 steps to solving the housing affordability issue in Ontario

Home construction and renovation the largest contributor to Canada’s underground

economy

 

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The View From Inside: The Fallout From A Double Whammy

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The View From Inside: The Fallout From A Double Whammy

Fair Housing Plan plus new mortgage stress test has affected many new homebuyers

The year 2017 was an eventful one for new home sales in the GTA. The first two quarters represented the height of the market with regard to prices for both new and resale homes. New homebuyers went into their purchases with expectations that between the time they bought and when their homes were move-in ready, the value of their current home would have appreciated anywhere from 5 to 10 per cent, depending on location.

Then the Ontario government introduced the Fair Housing Plan, intended to, among other goals, curtail overheated markets and make homes more affordable. The plan included the implementation of a 15 per cent Non-Resident Speculation Tax on the purchase or acquisition of specific residential properties in the province by foreign corporations or individuals who are not citizens or permanent residents of Canada. Since foreign buyers account for less than 10 per cent of these purchases in the GTA, the impact was negligible, but it did have a negative effect on consumer confidence.

The double part of the whammy I mention in the title of this column refers to the stricter mortgage rules Canada’s federal banking regulator announced in October, which took effect on January 1. The new rules, which apply to new mortgages as well as mortgage renewals if borrowers switch lenders, extend the requirement for a mortgage stress test to all homebuyers including those with larger down payments.

Federally regulated financial institutions (Tier 1 banks) must qualify applicants by using a minimum rate equal to the Bank of Canada’s five year benchmark rate (5.14 per cent on April 4) or their contractual rate plus 2 percentage points. In December, a Bank of Canada analysis suggested that approximately 10 per cent of Canadians who obtained mortgages between mid 2016 and mid 2017 would not qualify under the new rules. The net effect means that for many Canadians, the amount they will be able to borrow in a mortgage will, given their income and a certain down payment, be significantly reduced.

These two policies combined have resulted in buyers sitting on the sidelines, some decline in resale home prices (the picture is different in condominiums) depending on where the property is located, which in turn led to a swing in the resale market to a more stable balance between sellers and buyers.

What is frustrating to many industry participants is the lack of consideration given in these policies to those who purchased homes in the first half of 2017 and are now ready to move into the new home.

Their incomes are likely the same, or possibly increased, and their down payment is still with the builder. Yet what they expected to obtain in a mortgage amount could be vastly lower than they were pre-approved for 12 months ago.

Tony Hunt is CFO of Geranium. For more than 40 years, Geranium has been creating many superb master-planned communities and built more than 8,000 homes in Ontario. Geranium.com

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