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Ontario government commits to housing action plan

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Ontario government commits to housing action plan

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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.”

RELATED READING

Delays in approval process contributing to housing affordability issue in GTA

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5 steps to solving the housing affordability issue in Ontario

 

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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.”

RELATED READING

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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