Michael Lewis
Special to Ontario Construction News
Residential construction that keeps pace with Ontario’s population growth requires transformative policy change, technological innovation and greater collaboration among all levels of government and the private sector, RESCON’s third annual virtual housing summit heard last week.
“The housing supply and affordability crisis is very real and, at a time when we should be increasing the number of starts, they are trending in the wrong direction and the situation is getting worse,” said RESCON president Richard Lyall. He noted that the annual pace of national housing starts in July fell 10 per cent compared with June amid rising interest rates, labour shortages and inflation in construction and material costs — at a time when Ontario is experiencing record levels of immigration and population growth.
“We need to dramatically up the ante,” Lyall added. “The development approvals system is too slow, there are exorbitant taxes, fees and levies on new housing and government and the industry must come up with solutions quickly to avoid a catastrophe.”
The summit, a platform for participants in the housing sector to discuss potential ways to eliminate barriers to new home construction, featured speakers including Ontario Premier Doug Ford, Toronto Mayor Olivia Chow, Wilmot Township Mayor Natasha Salonen and Guelph Mayor Cam Guthrie. Marlon Bray of Altus Group, David Amborski of TMU, Paul Smetanin of CANCEA, Arash Shahi of AECO Innovation Lab, and Mike Moffatt of the Smart Prosperity Institute were among others who took part.
Presented under the theme Driving Solutions to the Crisis, Housing Summit 3.0 was hosted by residential builders’ association the Residential Construction Council of Ontario with media sponsor Storeys.
Discussions focused on ideas that would streamline the approvals process through modernizing and digitizing government systems, on tax changes to unlock purpose-built rentals, and on the latest construction innovations, technology, and productivity initiatives. Taken together the moves could help the province meet its target of 1.5 million new homes built in Ontario by 2031, which would require housing starts to nearly double from current levels.
“All kinds of policy changes are needed,” Moffatt told the summit. “Every order of government needs to raise its game right now.” He said one solution would be for Ottawa to expand the accelerated capital cost allowance that lowers the cost of capital for developers to include purpose built rental home construction. “We need to reform the tax system to lower taxes on the kind of housing that we need.”
Ontario mayors in a panel discussion offered another suggestion – arguing that government should get out the way. The mayors agreed the Ford administration’s attempts to update the province’s home building regime, with the government tabling five housing bills since 2019 with another new bill set for 2024, have had unintended consequences. Mayors say the steady stream of updates has served to distract municipal staff from the work of getting housing permits approved with shovels in the ground.
“One of the things I think the provincial government could do is make whatever changes they’re really looking at making and then please leave us alone,” said Guelph Mayor Guthrie.
“There have been so many changes that have come from the provincial government. That’s bogging down our staff from being focussed on planning approvals for actual developments and housing, to instead focus all their time on sending in consultation after consultation after consultation.
“Municipalities are looking for certainty so they can get going.”
Mayor Chow agreed, adding that she is waiting for the province to make good on its promise to reimburse municipalities for lost revenue from developer fees eliminated by provincial Bill 23 the Association of Municipalities of Ontario says will cost the municipalities $5.1 billion over nine years. Toronto staff calculate the move will cost Toronto $2.3 billion in lost revenue over 10 years.
She said the city is also working to fast track its home building approvals process by consolidating staff so that “there is one person in charge for providing approvals.”
Mayor Chow said Toronto’s priorities are to speed up building permit approvals, to create rules that allow more housing density, to free up land owned by all levels of government for housing and to provide financial incentives for construction of affordable rental units.
“We can do this, but we need to come together and work together,” she said suggesting that municipalities should be able to access new revenue tools to get housing built. “We can’t be spending all of our energy going to other levels of government and saying, ‘please help us.’”
Chow added that while Toronto intends to “build, build and build some more,” development must include green space, parks, access to transit, libraries and other amenities that give people “a sense of belonging” while responding to those who oppose densification and the use of land other than brownfields for housing development.
Speakers at the summit also cited the need for more stable and predictable infrastructure funding from the federal government, along the lines of formalized federal-provincial health care transfers. Smetanin, founder of research institute the Canadian Centre for Economic Analysis, said at least three times the current level of federal investment in housing infrastructure is needed to meet building targets.
He said the federal government’s investment in infrastructure has declined as public debt rises. And all levels of government are guilty of treating housing as a “piggy bank” with 31 per cent of the cost of building a new home taken up by taxes and fees which are ostensibly redirected to housing but which he said often end up in discretionary spending envelopes.
“The federal government needs to actually give back” … with infrastructure investment “in the right place at the right time.”