Ford government unveils plans to fix soaring Ontario housing prices

Premier Doug Ford’s government is unveiling the first phase of its plan to deal with the skyrocketing cost of buying a home in Ontario.

The government has tabled a bill that, in part, takes aim at delays within the city planning process, suggesting the approval process in place slows down home construction and drives up prices.

The legislation “lays the foundation” for what a government official, who CBC News agreed not to name, described as a long-term strategy to address the root causes of Ontario’s housing problem.

The province first revealed the details of its plans in a dense, 42-page document during a technical briefing with reporters Wednesday afternoon. You can read it at the bottom of this story. 

The plan comes after a housing affordability task force convened by the government released a report last month offering 55 recommendations, including a goal of building 1.5 million homes in 10 years. That target is double the current pace of new construction.

Government officials say the task force report gives them a long-term roadmap, but many of its recommendations are not addressed in today’s legislation, including changing municipal zoning rules to allow more housing to be built aside from single-family homes.

To get more homes built more quickly, the task force recommended the province impose sweeping changes on cities. The proposals include increasing density in neighbourhoods of single-family homes, spending less time spent in public consultations on housing projects and imposing deadlines for housing approvals. 

A senior government official says new legislation introduced Wednesday takes aim at delays in city planning approvals that slow down home construction and drive up prices. (Evan Mitsui/CBC)

While high housing prices are nothing new in the Greater Toronto Area, the cost of buying a home just about everywhere in Ontario is also soaring.

In 2021, the average sale price of homes in the province was 44 per cent higher than two years earlier, according to figures from the Canadian Real Estate Association.

The legislation was tabled Wednesday by Municipal Affairs and Housing Minister Steve Clark.

“The bill is really focused on making the planning process work better and smoother and faster,” said the official. The legislation also includes measures that make it easier to build affordable housing and to preserve Ontario’s existing stock of affordable housing, the official added.

New municipal powers

Municipalities will also get a new power as part of the incoming legislation. The province says they can use its new Community Infrastructure and Housing Accelerator tool to speed up approvals for the creation of non-profit housing, community centres, hospitals, long-term care homes or other similar projects.

However, to do that, city councils must submit a request to the housing minister explaining why they want the project, what approvals they need and how the public has been consulted. In turn, the minister will be able to impose conditions on the project. The accelerator can’t be used for Greenbelt land, the province said.

The bill also contains measures to streamline subdivision and site plan approval processes, which deal with elements such as walkways and parking, as wekk as approvals for modular multi-unit residential buildings.

Municipalities would also have to refund zoning by-law amendment fees after Jan. 1, 2023 if they don’t make a decision within legislated timelines.

The province says it is also putting $19 million over three years toward reducing backlogs at the Ontario Land Tribunal and Landlord and Tenant Board.

Ford has blamed high house prices in part on city councils moving too slowly to approve housing developments. At a summit in January with mayors from Ontario’s 30 biggest cities, he announced a $45-million fund to streamline approvals. 

The affordability task force’s report did not go over well with many of the mayors and councils in the province, particularly in suburban cities of the GTA. 

That could influence the Ford government’s willingness to forge ahead with the recommendations, since seats in the 905 region are expected to be key battlegrounds in the upcoming provincial election and could ultimately sway the result. 

Late Tuesday afternoon, the Ford government announced it is increasing Ontario’s speculation tax on non-resident homebuyers to 20 per cent and expanding the scope of the tax to cover the entire province. Since it was created in 2017, the foreign buyers tax was 15 per cent and only applied in the densely populated Greater Golden Horseshoe region. (Evan Mitsui/CBC)

The official said the bill reflects a balance between what the task force recommended and the feedback the government received from municipalities and the public. 

Municipal councils “have been frank about needing to be involved in the design and development of the policies in the task force report,” said the official, adding that the government acknowledges it needs to work together with the municipalities to make things happen.

Immediate impact uncertain

It’s far from certain whether the measures coming from the government Wednesday will have any short-term impact on the price of buying a home in Ontario. 

The task force’s recommendations were almost entirely focused on boosting the supply of housing over the coming years. 

Some real estate analysts and the opposition parties are calling on the government to address demand factors that drive up prices. Recent sales figures show that 25 per cent of Ontario home purchases are being made by investors who own more than one property.   

In 2021, the average sale price of homes in Ontario was 44 per cent higher than two years earlier, according to statistics from the Canadian Real Estate Association. (Patrick Morrell/CBC)

Late Tuesday afternoon, the Ford government announced it is boosting Ontario’s foreign buyers tax on residential real estate to 20 per cent and expanding its scope to apply province-wide.

Ontario’s “non-resident speculation tax” was introduced in 2017 by the then-Liberal government of Kathleen Wynne at a time when home prices were rising sharply. It had a significant impact, pushing prices downward into 2018.   

The tax rate was 15 per cent on purchases by non-resident buyers of homes in the GTA and across a swath of southern Ontario stretching from Peterborough through Barrie, Waterloo and the Niagara Peninsula.

The new 20 per cent rate and its application across the province takes effect immediately.  

The Opposition New Democrat and Green parties are proposing additional speculation taxes as well as a vacancy tax to try to dampen demand from investors who don’t live in the homes they buy.  

“This government has had four years and they finally discovered there’s a housing crisis,” NDP Leader Andrea Horwath said at a news conference on housing last week in Stratford.  

Horwath dismissed the task force recommendations as “pretty much one side of the coin” for their focus on the supply of market housing.  

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