1. Make sure Government Fees, Taxes and Charges are Fair and Equitable
Almost one quarter of the cost of a new home in the GTA is composed of the fees, taxes, levies and development charges applied by all levels of government. Development charges have increased between 236% and 878% across the GTA since 2004. Over the same period, inflation in Canada rose just 22% and the average home price in Toronto increased 143%.
These fees, taxes and charges are paid for by the buyer in the final price of the new home. Municipal fees typically make up more than half the added government costs and they continue to skyrocket. They include taxes by local and regional governments, as well as GO Transit and education boards. They contribute to the capital costs of municipal services such as roads, water services, sewers, parks and recreation and emergency services.
New home buyers should pay their fair share of these costs, but some municipalities are loading excessive costs on new development. pricing many new and first-time home buyers out of the market. How is this fair to new home buyers?
2. Fund and Build Critical Infrastructure That Supports Development
Building housing in new communities or expanding housing in existing communities requires new infrastructure to be built and existing infrastructure to be upgraded. Critical infrastructure is the roads and highways we drive on, the systems that provide our water and make it safe to drink, the public transit that we travel on, and the parks and spaces we use for recreation. Good, reliable infrastructure is the foundation on which successful cities are built.
Despite the $1.6 billion provided to municipalities in the GTA every year through development charges or the roughly similar amount in land transfer taxes, provincial sales tax portion of the HST or other fees, infrastructure in the region continues to fail to keep up with requirements.
When infrastructure is not in place the development of new homes slows and are delayed or stop completely. Around the GTA there are a number of cases where critical new housing supply is being slowed by lack of proper infrastructure. Critical infrastructure planning and building literally lays the ground work for new housing and increased supply – let’s get it built.
3. Cut Red Tape: Making Our Communities Investment-Ready
Across the GTA it is taking longer and longer to get the go-ahead for new projects.
Housing and development is heavily regulated in Ontario with overlapping layers of requirements and planning at the provincial and municipal level. A typical new low-rise development can take a decade or more for approvals and high-rise projects can take up to seven years.
Stalled development means that it takes longer for new housing to reach the market while increasing costs for home buyers—We need to accelerate the construction of new housing supply by streamlining the planning approval process and cutting red tape.
Five ways municipal governments can help:
- Pre-designate land for development and pre-zone that land appropriately — More homes will be available for purchase when development faces fewer delays and rezoning costs.
- Updating local official plans — In some cases, the municipal plans to direct and accommodate growth are out of date by decades. Builders and developers have to get land re-zoned, leading to more delays and fewer new homes.
- Updating zoning bylaws — Updating zoning bylaws would streamline the long and costly process of re-zoning, enabling more rapid development and increased housing supply.
- Encourage the province to expedite outstanding environmental assessments on critical infrastructure — Assessments are important to considering potential environmental effects before a project begins. Municipal officials can demonstrate their support for critical infrastructure by encouraging the province to move quicker on these vital assessments.
- Streamline the list of conditions for municipal approvals — There are up to 52 different studies, reports, checklists or plans that could be required for building projects seeking approval. Many have provincial and municipal overlap. Focusing on alignment between provincial and municipal requirements and only on what is essential will increase efficiency and reduce costs.
4. Adopt a Standard of Service Excellence
A major barrier to the speed at which new housing can be built in the GTA is the lengthy process for obtaining building permits and approvals. This also impacts the existing homeowners who may be looking to renovate a property or build an addition.
Poor access to inspectors, delays in inspection, and availability of inspection report can tangle up home owners up in bureaucracy and costs.
For major renovations and new builds, the process of obtaining a permit can touch multiple departments and can take up to a year. If municipalities adopted a Service Standard of Excellence new building and renovations would be sped up. Under this standard municipalities would:
- Commit to turnarounds for building permit applications with specific and reasonable timeframes.
- Smooth application processing by replacing outdated approvals channels with a one-window, online portal that would increase transparency and accountability.
- Improve service by building inspectors; making them accessible to renovators by cell phone and providing reliable, two-hour windows for inspections. Inspectors should also provide copies of inspection reports and issue a final report after project completion and final inspection.
Complete the Update of York Region’s Official Plan Without Layering on Additional Red Tape:The last planned update of York Regions’ Official Plan was interrupted when the government of Ontario initiated the process to update the Places to Grow Act in 2016. As a result York is working with a plan that is almost a decade old. The province of Ontario has seen an unprecedented amount of changes to housing policy and the housing market in the past 5 years. In order to bring certainty to the building industry and expedite new housing supply to the region, it is imperative that York Region Update its Official Plan as soon as possible and make sure that new rules or changes do not add more layers of bureaucracy.
Build Critical Infrastructure to Support New Housing Development.York needs infrastructure development to accommodate roads, transit, sewers, watermains and other social services for new residents of the Region. One of the most significant bottlenecks is the approval of the Upper York Sewage Solution (UYSS) project to provide waste water treatment to a large portion of the Region. The approval of the UYSS’s environmental assessment was delayed again in February 2018 – stalling the addition of new housing in the Region. Municipalities and the province need to prioritize the approval of the UYSS environment assessment and get this vital project back on track.
Keep Government Fees, Taxes and Charges on New Homes Fair and Equitable.The rising cost of government imposed fees and charges are significant challenge to housing affordability. Currently in York Region taxes, fees and charges from the government can account for almost 30% of the cost of a new home. Governments need to be aware of the cumulative effect of these rising costs and not add more financial constraints to hard working residents of York Region.
Adopt a Partnership Model For Inclusionary Zoning:One of the many changes introduced by the Ontario government in the last 5 years, Inclusionary Zoning (IZ) is a new planning tool that is intended to assist with the development of affordable housing. Unfortunately, if used incorrectly it has the ability to raise the cost of market priced units higher to compensate for the additional costs associated with providing housing units at lower than market price. As the City of Toronto looks to utilize IZ it is imperative to draw practical experience from other markets that have used this planning tool to adopt a partnership model with the industry to ensure that regular home buyers are not penalized and find workable models to incent the affordable housing market.
Keep Government Fees, Taxes and Charges on New Homes Fair and Equitable.The rising cost of government imposed fees and charges are significant challenge to housing affordability. Currently in the City of Toronto taxes, fees and charges from the government can account for almost a quarter of the cost of a new home. Governments need to be aware of the cumulative effect of these rising costs and not add more financial constraints to hard working residents of Toronto.
Pre-Zone For Housing:City of Toronto zoning is not set up to support growth and development. Currently 80% of new building permits in the City of Toronto are required to go through a re-zoning review process. This is compared to the provincial average of 34%. Having land re-zoned delays new housing and adds costs. By pre-zoning more land for development the City of Toronto can take a meaningful step in improving affordability and supply.
Keep Government Fees and Charges on New Homes EquitableThe rising cost of government imposed fees and charges are a significant challenge to housing affordability. Currently in the Region of Halton, these imposed fees and charges can account for almost 25% of the cost of a new home. All levels of government and government agencies need to be aware of the direct impact these costs have on the price of a new home and first time homebuyers.
Don’t Limit Development by Misusing the Cultural Heritage Landscape (CHL) DesignationMunicipalities are responding to resident resistance of development proposals by looking to designate proposed, controversial development lands as cultural heritage landscape. This approach prevents or severely limits development, stopping or restricting much needed housing from being built. It is important to protect our cultural heritage landscape and sensitive lands, but this tool should not be used as a means to support Nimbyism.
Approvals of the Development Lands Under the Allocation Program:Under Halton’s allocation program, the Region has committed to building infrastructure (water, sewers, roads) to service new communities. This infrastructure is paid for by the development community and to date, the approvals needed to pull building permits under this program are several years behind for lands that are currently serviced. At last count, 7,300 new housing starts are being impacted by this delay. All levels of government and government agencies need to streamline and expedite the development approval processes in order to get these new housing starts under construction and make the most of significant infrastructure investments.
Keep Government Fees, Taxes and Charges on New Homes Fair and Equitable.The rising cost of government imposed fees and charges are a significant challenge to housing affordability. Currently in Simcoe County taxes, fees and charges from the government can account for almost 22 % of the cost of a new home. Governments need to be aware of the cumulative effect of these rising costs and not add more financial constraints to hard working residents of Simcoe.
Fund Growth Related InfrastructureOuter-ring municipalities in Simcoe County are experiencing rapid growth and are dealing with the challenges of delivering the necessary services and infrastructure while trying to keep up with the costs. For example, the Town of Innisfil’s sewage treatment plant is nearing capacity and needs to be expanded in anticipation of housing units coming to the area. This is very expensive and the Town is looking to the development community to assist through development charges. This will load more cost on new residents and home buyers in the Region. Municipalities need to consider alternative, balanced funding sources and strategies to pay for future infrastructure that benefit and service residents for generations to come.
Build Infrastructure to Support the Region’s Future Growth NeedsUncertainty surrounding the Northwest GTA Corridor Identification Study and the February cancellation of the environmental assessment for the GTA West Corridor (highway) is hindering the Region’s ability to plan for growth to 2041. This decision significantly impacts the Region’s ability to accommodate future growth and keep people and goods moving across the GTA. The cancellation and uncertainty have placed thousands of acres of developable land in a holding pattern, and will slow growth and economic development in not only Peel Region, but Halton and York Region as well. Meeting the GTA’s future housing needs requires 55,000 units per year, which is why the Northwest GTA Corridor needs to be prioritized and recognized as an important piece of necessary infrastructure that will unlock much needed housing supply, stimulate jobs and the economy, and alleviate congestion.
Keep Government Fees, Taxes and Charges on New Homes Fair and Equitable.The rising cost of government imposed fees and charges are a significant challenge to housing affordability. Currently in Peel taxes, fees and charges from the government can account for almost 30% of the cost of a new home. Governments need to be aware of the cumulative effect of these rising costs and not add more financial constraints to hard working residents of Peel.
Keep Government Fees, Taxes and Charges on New Homes Fair and EquitableThe rising cost of government imposed fees and charges are a significant challenge to housing affordability. Currently in Durham Region taxes, fees and charges from the government can account for almost 25 per cent of the cost of a new home. Governments need to be aware of the cumulative effect of these rising costs and not add more financial constraints to hard working residents of Durham.
Proactively Plan and Fund Growth Related InfrastructureWith a number of new communities coming online, Durham Region is experiencing rapid growth and are dealing with the challenges of delivering the necessary services and infrastructure while trying to keep up with the costs. To ensure the timely delivery of these community and their future prosperity, Regional municipalities need to properly plan for the necessary growth-related services and infrastructure while also considering a responsible, balance approach to their funding. Collaboration and open communication with the industry in this regard will better position the Region to achieving their growth goals.
TAKE THE CITIZEN VOTING PLEDGE
Our government needs to support policies that enable growth. We need leaders that are committed to building communities that are affordable and where people can work, live and play.
I support new projects that will help take the pressure off of the housing market, that add infrastructure like parks, leisure facilities, roadways and transit that will help families like mine. People just want to get ahead—to save for their children’s education, support aging parents, and plan for retirement. Others families just need a bit of help to make ends meet. No matter the situation, housing is almost always the biggest household expense and addressing affordability is crucial to help everyone in this community.
With the growth we are experiencing, our Region desperately needs more new homes to remain the livable, comfortable place I am proud to call home. Our municipal governments need to create a system that works and that prioritizes the building of much needed housing. I pledge to support candidates who are committed to taking action.
Housing affordability has become a significant challenge in our region—not enough new housing is being built to meet demand in the GTA.
In October municipal elections will be held across the GTA. Housing affordability and availability are key issues that must be considered this year.
Municipal governments play a significant role in setting the conditions that make it possible to add new housing, and update and renovate homes. If they do not take steps to correct this problem housing costs could become even more of a challenge for many residents of the GTA.
To learn more about how our communities can build for growth check out our resources.
CHOOSE YOUR REGION
Around the Greater Toronto Area (GTA), there is a lot of discussion about housing affordability and availability. People are concerned about where young families and first-time home buyers will live, or if they will be able to afford to live in the GTA at all.
Underlying all of these discussions is a simple fact – there is simply not enough new housing being built to meet demand in the GTA, increasing prices and making affordability a challenge for many.
Demand for housing in the GTA is high. 9.7 million people will live in the GTA by 2041. That’s 115,000 new residents per year and housing them require 50,000 new homes to be built every year.
Only 38,000 homes were built last year in the GTA This shortfall was not unique to 2017. Why is there a supply shortage when demand is so high?
Some of the factors impacting the GTA housing supply are the layers of bureaucratic red tape and the outdated regulations that have stalled development times for new housing. In some cases, it can take up to a decade to get the necessary approvals to build housing. These barriers slow new housing supply and increase the price.
Price is further increased by the fees, taxes and charges added to new housing by all layers of government, negatively impacting affordability.
Practical steps can be taken to help fix the supply problem and improve affordability. Things like making sure the right infrastructure is in place that will support the development of new housing, modernizing outdated bylaws and cutting red tape. These forward steps will allow new projects to move forward at a faster pace.
Make your voice heard this municipal election by supporting municipal candidates who will make housing affordability and increasing housing supply a priority. Please take our pledge or send a letter to your local candidate.
Municipalities can make a difference to housing affordability. Together we can build better cities.
Send a message to candidates in the municipal election—City Councils must address issues of affordability and housing choice in the GTA.
If we want to build more houses, faster, to increase affordability and availability, we should look at what can be done at the local level. Compared to all other layers of government, municipalities have the most direct influence over where new housing will go, what type it will be and the number of homes built.
We need local leaders who will ensure our neighbourhoods can reach their full potential and remain affordable, comfortable places to call home.
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THE FINANCIAL POST – July 10, 2018Real estate experts predict a return to normal for slumping GTA housing prices
THE STAR – July 10, 2018Let’s build our way to affordable housing with the ‘missing middle’
THE STAR – July 6, 2018Housing affordability at ‘crisis level’ in Canada’s most expensive market, say economists
CBC – July 3, 2018Tight housing supply market a growing problem in the GTA
THE STAR – June 30, 2018Keep some perspective about urban and suburban growth
THE STAR – June 23, 2018Millennials and housing: ‘The kettle is close to boiling’
THE GLOBE AND MAIL – June 19, 2018Ontario’s policy for reducing urban sprawl has come with pricey setbacks
THE STAR – June 16, 2018How can Doug Ford fix Toronto-area housing?
THE STAR – June 15, 2018Decline in Ontario home prices unlikely to persist: CMHC
THE GLOBE AND MAIL – June 14, 2018Haunted by housing: Millennials let rip about their home ownership frustrations
THE GLOBE AND MAIL – June 12, 2018Approval of laneway housing plan a small step toward addressing Toronto’s massive housing needs
THE STAR – June 10, 2018Toronto drop drives Canadian housing starts to lowest in a year
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