Angela Gismondi
Special to Ontario Construction News
The housing affordability crisis in Canada has reached unprecedented levels but there are solutions at the doorstep.
That was the message delivered by a panel of housing experts during a fire side chat at the Buildings Show, held at the Metro Toronto Convention Centre on Dec. 3.
David Amborski, founding director, Centre for Urban Research and Land Development, discussed the changes being proposed to improve the affordability of housing. Housing supply, he noted, is affected by a number of issues including cost factors, land, construction materials and costs, labour and the approvals process.
“Of particular concern on the cost side is the development charges (DCs),” said Amborski, adding DCS imposed on new housing development and are intended to pay for the capital costs of growth-related services.
“There has been a recent flashpoint on that because of the magnitude of the charges and how they have grown over time. It’s become a way for municipalities to pay for capital costs by this method rather than using property taxes or other opportunities.”
Many studies have been done to examine how to reduce the charges and governments have also introduced legislation such as Bill 60, the Fighting Delays, Building Faster Act 2025, which contains a number of recommendations.
One of the major concerns is that the three levels of government tackling the crisis, including 444 municipalities, and they are not all co-ordinated, said Scott Andison, CEO of the Ontario Home Builder’s Association (OHBA).
“You add on to that tarriffs, an economic downturn so it’s not surprising that the whole construction industry in Canada is in one of its worst periods that it’s ever been,” said Andison.
All three experts agreed there has been some movement at the local and regional level in the last few years in terms of DCs and some municipalities have put a freeze or implemented deferrals or rollbacks.
“This government at the provincial level… is actually, for the first time in decades, taking some pretty constructive steps,” Andison noted. “The other important thing to point out is these problems we’re facing today and are trying to fix have been decades in the making which means it can’t be a simple flip of the switch or one piece of legislation.”
Governments need to start by taking a hard look at what municipalities really should be responsible for compared to what they are responsible for, he added
“We have municipalities doing what they can fighting against their own pressures, we have the province thinking they can come in and do something with legislation …but we also have the federal government that are going around the edges, finding different ways, inserting themselves into things like development charges that are not actually within their scope of control or authority,” said Andison. “We have these overlaps, these disconnected messages that are being sent to builders to homeowners and that is a fundamental problem.”
Dave Wilkes, president and CEO, Building Industry and Land Development Association (BILD), said the narrative has changed over the last few years and there is a different question being asked.
“It’s not if we have a problem around affordability and are governments part of the solution, it’s when we will be solving it, said Wilkes.
“Twenty-five to 30 per cent of cost for a new home within the GTA and largely across the province are controlled by government and they are controlled through the taxes and approvals processes they have in place. HST is a huge issue. Expanding the current relief beyond first time buyers is a must do …that is a huge opportunity for cost relief.”
There are solutions at the doorstep, he stated.
“I really believe it’s the feds with money, the province with rules and municipalities ensuring that they’re following the rules and that the provinces move forward with really limiting the scope what DCs should pay for,” said Wilkes.
“I think because of the crisis that we’re in and the jobs that are being lost, the housing that is not going to be provided and the economic benefit that this industry provides is being lost, we’re at a unique time to solve these in a very structural way that we never had before and shame on us if we miss this opportunity.”
When asked about the changes coming forward in Bill 60 that will have the biggest impact on the cost side, Wilkes responded water and wastewater. One of the things that is being proposed is that new infrastructure shouldn’t all be paid by the new homeowner, but also by other owners down the line.
The idea is to shift the funding of water and wastewater infrastructure, often financed partly by upfront development charges, to a dedicated utility model.
“If you take water and wastewater out of the DC background studies and put them into a utility model as is being looked at, you can lower DCs by 30 to 40 per cent right off the top,” said Wilkes. “It’s an investment that has benefit over multiple years and should be amortized over multi years and paid for by the people that are using that sewer and water. To me if nothing else gets changed, changing the way water and wastewater is paid … that’s the number one thing.”
Andison said that would make a big difference to families in terms of whether or not they qualify for a mortgage.
“That would unlock a lot of new supply in terms of now builders can get back to building,” he pointed out. “It unlocks the ability to access homes that are sitting available for sale right now.
There is inventory sitting there…The issue is affordability. It’s almost like teasing families. Here is a home, it’s empty, it’s available for sale, but sorry, you can’t qualify for a mortgage… It’s far too families, far too many individuals not able to access home ownership and DCs have been one of the biggest barriers to do that.”
