October 25th Ontario's Provincial Government Announced new lesiglation, that if passed, would support Ontario's newest Housing Supply Action Plan to build the homes.
Toronto, Ontario, Oct. 25, 2022 - The Ontario Home Builders’ Association (OHBA) supports the introduction of the Ontario government’s new, once-in-a-generation housing plan. The More Homes, Built Faster Act will make it easier to build new homes faster, reduce housing costs, cut red tape and enable the construction of the 1.5 million new homes needed in the next decade, ultimately increasing supply and bringing affordability back to the province.
On average, 25% of the cost of a new home is composed of government fees, taxes, and charges. This can add as much as $250,000 to the price of a typical single-family home, and municipalities add more than half of that. Housing approvals take longer in Ontario than in any other jurisdiction in North America. In some municipalities, it can take almost three years to approve new housing projects, which adds a further $50,000 to $100,000 in costs to new homeowners.
The More Home Built Faster Act will help get Ontario back on track towards housing affordability by addressing the core underlying problem, a lack of housing supply. By incentivizing municipalities to meet legislated timelines for new housing approvals, adding more transparency on the municipal fees and charges imposed on new homebuyers and designating more lands for growth, the province is taking the bold action needed to build more homes so that future Ontario families have a better shot at the dream of homeownership.
“The current housing supply and affordability crisis is a man-made problem that was created in the course of a decade and a half and will take time to fix,” said Luca Bucci, CEO of the OHBA. “It starts today with Ontario’s new big, bold housing plan. The More Homes, Built Faster Act increases accountability for municipalities in enabling the construction of housing supply the province needs, increasing transparency on the funds collected on the back of new homes, capping fees to the economic conditions of the day and removing roadblocks to adding gentle density. Put simply; the government has delivered the regulatory framework to enable necessary change.
The measures the province has brought forward will help preserve the competitiveness of Canada’s economic engine and ensure more Ontarians have a better shot at finding a place to call home where they can live, work and play.
The Ontario Government has introduced legislation that, if passed, would support Ontario’s newest Housing Supply Action Plan, More Homes Built Faster. This plan is part of a long-term strategy to increase housing supply and provide attainable housing options for hardworking Ontarians and their families. Initiatives in the plan include:
Building on a suite of as-of-right residential tools Ontario has provided municipalities with since 2019, Ontario is proposing changes to the Planning Act to create a new provincewide standard threshold for what’s allowed to be built by strengthening the additional residential unit framework. If passed, up to three residential units would be permitted “as of right” on most land zoned for one home in residential areas without needing a municipal by-law amendment. Depending on the property in question, these three units could all be within the existing residential structure or could take the form of a residence with an in-law or basement suite and a laneway or garden home. These new units must be compliant with the building code and municipal bylaws. These units would also be exempt from development charges and parkland dedication fees.
Ontario is taking action to ensure that complete, sustainable communities are built near and centred around our historic investments in provincewide transit expansion. Proposed changes to the Planning Act would help move towards “as-of-right” zoning to meet planned minimum density targets near major transit stations, reducing approval timelines and getting shovels in the ground faster. Once the key development policies for major transit stations are approved, municipalities would be required to update their zoning by-laws within one year to meet minimum density targets.
Ontario is creating the conditions for building more affordable and purpose-built rental housing across the province. Ontario is proposing regulatory changes to provide certainty regarding inclusionary zoning rules, with a maximum 25-year affordability period, a five per cent cap on the number of inclusionary zoning units, and a standardized approach to determining the price or rent of an affordable unit under an inclusionary zoning program.
Ontario is also taking action to help streamline the construction and revitalization of our aging rental housing stock that in some cases is many decades old, grossly energy inefficient, and is starting to fail. As it stands, under the Municipal Act and City of Toronto Act, municipalities may enact bylaws to prohibit and regulate the demolition or conversion of multi-unit residential rental properties of six units or more. These by-laws vary among municipalities and can include requirements that may limit access to housing or pose as barriers to creating housing supply. Ontario will be launching consultations on potential regulations to enable greater standardization of these municipal by-laws, while ensuring that renter protections and landlord accountabilities remain in place.
Government charges and fees significantly impact the cost of housing—adding up to nearly $200,000 to the overall cost of building a home. That is why Ontario is proposing changes to the Planning Act, the Development Charges Act and the Conservation Authorities Act to freeze, reduce, and exempt fees to spur the supply of new home construction and help address Ontario’s housing supply crisis. This includes ensuring affordable, and inclusionary zoning units, select attainable housing units, as well as non-profit housing developments, are exempt from municipal development charges, parkland dedication levies, and community benefits charges. Rental construction would also have reduced development charges and conservation authority fees for development permits and proposals would be temporarily frozen. Ontario is also undertaking a review of all other fees levied by provincial ministries, boards, agencies, and commissions to determine what impact they may have on the cost of housing with the intent of further reducing, if not eliminating these fees altogether.
Proposed changes to the Planning Act would remove site plan control requirements for most projects with fewer than 10 residential units (with limited exceptions). This would reduce the number of required approvals for small housing projects, speeding things up for all housing proposals, while building permits and robust building and fire code requirements would continue to protect public safety. Proposed streamlining changes also include focusing responsibility for land use policies and approvals in certain lower-tier municipalities to eliminate the time and costs associated with planning processes by upper-tier municipalities. This would give the local community more influence over decisions that impact them directly, clarifying responsibilities and improving the efficiency of government services for citizens.
The Ontario Land Tribunal is a critical part of Ontario’s land use planning system. Proposed legislative changes to the Ontario Land Tribunal Act would help speed up proceedings, resolve cases more efficiently and streamline processes. This includes by allowing for regulations to prioritize cases that meet certain criteria (for example, that create the most housing), as well as to establish service standards (i.e., timelines for completing specific stages of a case). Proposed changes would also clarify the Tribunal’s powers to dismiss appeals due to unreasonable party delay or party failure to comply with a Tribunal order, as well as clarify the Tribunal’s powers to order an unsuccessful party to pay the successful party’s costs. Building on the $14.7 million over three years announced in the Budget, Ontario would also invest $2.5 million in other resources to support faster dispute resolution and to help reduce the overall caseload at the Tribunal.
Ontario is creating a new program to support the dream of homeownership for all Ontarians. The new program will leverage provincial authorities, surplus or underutilized lands, and commercial innovation and partnerships to rapidly build attainable homes in mixed-income communities that are accessible to all and will help families to build portable equity.
Ontario is further strengthening consumer protections for new home buyers by doubling maximum fines for unethical builders and vendors of new homes who unfairly cancel projects or terminate purchase agreements. These proposed changes under the New Home Construction Licensing Act, would, if passed, increase existing maximum financial penalties from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties, and be retroactively imposed for contraventions that occurred on or after April 14, 2022. These changes would also enable the Home Construction Regulatory Authority to use funds from these penalties to provide money back to affected consumers, making Ontario the first jurisdiction in Canada to provide such funds to consumers. If passed, the amendments would come into force in early 2023.
In January, during the Ontario-Municipal Housing Summit, Ontario’s mayors expressed concerns that lands planned for residential development are sitting empty because home builders are taking too long to complete their planning applications, delaying the creation of new homes. To further investigate these concerns, Ontario will work with industry partners to consult on the issue of land speculation as a detriment to the housing supply goals of the government, and whether potential regulatory changes under the New Home Construction Licensing Act, are needed to address the issue.
Proposed changes to the Ontario Heritage Act would renew and update Ontario’s heritage policies and strengthen the criteria for heritage designation and update guidelines. This would promote sustainable development that conserves and commemorates key places with heritage significance and provide municipalities with the clarity and flexibility needed to move forward with priority projects, including housing. Ontario will be consulting on how it manages natural heritage, including improving the management of wetlands, while supporting sustainable growth and development. Ontario will be seeking input on integrating A Place to Grow: Growth Plan for the Greater Golden Horseshoe and the Provincial Policy Statement into a single, provincewide planning policy document. This review will also include consultation on how to address overlapping planning policies that currently negatively impact precision in mapping and municipal planning.
Ontario is calling on the federal government to come to the table and work with us on potential GST/HST incentives, including rebates, exemptions and deferrals, to support new ownership and rental housing development. All levels of government need to work together to get more homes built and address the housing crisis.
Currently, property tax assessments for affordable rental housing are established using the same basis as regular market rental properties. Ontario will explore potential refinements to the assessment methodology used to assess affordable rental housing so that it better reflects the reduced rents that are received by these housing providers.
In addition, Ontario will consult with municipalities on potential approaches to reduce the current property tax burden on multi-residential apartment buildings in the province.
This winter, there will also be a consultation on a policy framework setting out the key elements of local vacant home taxes. Right now, only a handful of municipalities have the authority to charge this tax on unoccupied residential units to incentivize owners to sell or rent them out. A provincial-municipal working group will be established to consult on this framework, and to facilitate sharing information and best practices.
At 25% and provincewide, Ontario now has the highest and most comprehensive Non-Resident Speculation Tax (NRST) in the country. This initiative is meant to further discourage foreign speculation in Ontario’s housing market.
On October 25th, the Ontario government introduced the More Homes Built Faster Act, which takes bold action to advance the province’s plan to address the housing crisis by building 1.5 million homes over the next 10 years. The proposals in the More Homes Built Faster Act would, if passed, ensure that cities, towns and rural communities grow with a mix of ownership and rental housing types that meet the needs of all Ontarians, from single family homes to townhomes and mid-rise apartments.
“For too many Ontarians, including young people, newcomers, and seniors, finding the right home is still too challenging. This is not just a big-city crisis: the housing supply shortage affects all Ontarians, including rural, urban and suburban, north and south, young and old.” said Steve Clark, Minister of Municipal Affairs and Housing. “Our Housing Supply Action Plan is creating a strong foundation on which 1.5 million homes can be built over the next 10 years. Our government is following through on our commitment to Ontarians by cutting delays and red tape to get more homes built faster.”
The plan puts in place actions to support the development of “gentle density” – housing like triplexes or garden suites – that bridge the gap between single family homes and high-rise apartments. For example, it would remove exclusionary zoning, which allows for only one single detached home per lot. Instead, it would allow property owners to build three units without lengthy approvals and development charges.
The plan, which contains around 50 actions, addresses the housing crisis by reducing government fees and fixing developmental approval delays that slow down housing construction and increase costs. Actions in the plan include:
The government will also consult with the public, stakeholders and municipalities while engaging with Indigenous communities to review provincial housing and land use planning policies to find ways to remove more barriers to getting homes built.
“Ontario’s housing supply crisis is a problem which has been decades in the making. It will take both short-term strategies and long-term commitment from all levels of government, the private sector and not-for-profits to drive change,” said Michael Parsa, Associate Minister of Housing.
OHBA is pleased to advise you of a significant change that reflects OHBA's advocacy efforts.
As part of a legislative package introduced in March 2022 (Bill 109), a regulation was passed in April 2022 under the Condominium Act that resulted in the removal of the 2% deduction from the Bank of Canada (BOC) rate, set twice yearly, used to calculate interest paid on purchasers’ deposits. This resulted in a net increase to the interest rate of 1.75%, as the new applicable rate was to be the BOC Policy Rate, which is .25% below the BOC Rate.
The increased rate would apply to interest payable to purchasers both on an interim occupancy closing, as well as when a purchase agreement was cancelled by the vendor or by the purchaser when the outside occupancy date had not been met. This change was scheduled to be implemented on January 1, 2023, for all projects launched after that date, which would have had the potential to add significant costs to new condominium projects.
OHBA has been working with the provincial government to amend the regulation so that the new formula would apply only to deposit refunds and the previous formula continue to apply to deposits paid under closed agreements.
As indicated in the embedded correspondence, the Minister has amended the Condominium Act regulations and reverted to the previous treatment for completed projects by reintroducing the 2% deduction from BOC Rate for deposits paid under closed agreements.
TORONTO — As part of its plan to tackle Ontario’s housing crisis, the government is prioritizing Ontario families and homebuyers by increasing the Non-Resident Speculation Tax rate from 20 per cent to 25 per cent, effective October 25, 2022.
This increase will strengthen efforts to deter non-resident investors from speculating on the province’s housing market and help make home ownership more attainable for Ontario residents. For many years, there have been concerns that foreign real-estate speculation is an important factor driving up the cost of housing in Ontario.
“Young families, newcomers and those all over the province dream of having their own home, a dream which continues to be out of reach for too many,” said Peter Bethlenfalvy, Minister of Finance. “To help Ontario homebuyers, our government is increasing the Non-Resident Speculation Tax rate by another five percentage points to 25 per cent, making it the highest in Canada, to further discourage foreign speculation in Ontario’s housing market.”
This increase builds on the government’s previous actions taken in March 2022 to make Ontario’s Non-Resident Speculation Tax the most comprehensive in Canada, including:
This increase to the Non-Resident Speculation Tax rate is part of a suite of concrete actions the Province is taking to address Ontario’s housing crisis. Last week, the government announced that Ontario is also cracking down on bad actors by doubling the fines for unethical and illegal new home cancellations. These steps, built on recommendations from the Housing Affordability Task Force and the first-ever Provincial-Municipal Housing Summit, will deliver both near-term solutions and long-term commitments to provide more attainable housing options for Ontario families.
“Today’s announcement is another step in our government’s plan to make housing more attainable for all Ontarians,” said Steve Clark, Minister of Municipal Affairs and Housing. “We are working to end Ontario’s housing supply crisis – both by building 1.5 million new homes over the next 10 years, and by ensuring Ontarians are able to access our existing housing supply. These measures are a clear indication of our commitment to do precisely that.”
Rebuilding Ontario’s Economy is the first pillar of the government’s plan. While Ontario lost 300,000 manufacturing jobs between 2004 and 2018, the government has a plan to help create jobs and build prosperity everywhere, for everyone.
Working for Workers is the second pillar of the government’s plan. Ontario workers deserve a government that works as hard as they do for Ontario. That’s why the government has a plan to support better jobs and bigger paycheques.
Building Highways and Key Infrastructure is the third pillar in the government’s plan. For too long, the people of Ontario have been stuck in gridlock, with thousands of hours wasted on packed trains, or behind the wheel in bumper-to-bumper traffic, costing billions to the province’s economy. This has to change. The government is getting shovels in the ground to build highways, transit and other infrastructure projects to fight gridlock, boost the economy and create jobs.
Investing about $14 billion in capital grants over the next 10 years to build and renew schools and child care spaces.
See A Capital Plan for Building Ontario for further details.
The Construction Life podcast with OHBA CEO Luca Bucci
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