Last month, the Ontario government introduced Bill 23, the More Homes Built Faster Act, which, if passed, will represent the most significant change in a generation to how the building of new homes is regulated in the province.
Residents and newcomers looking to buy a home -- and anyone concerned about the future livability and economic competitiveness of the GTA and Ontario -- should take heart that the government is putting in place the policies to address our province’s housing supply and affordability challenges.
Ontario’s Housing Affordability Task Force, in its February 2022 report, identified the factors limiting new housing supply and driving up housing costs across the province. It found that it simply takes too long to get building approvals, it is too difficult to add the gentle density needed in our cities, and too many fees and charges are layered on to new homes by municipalities.
Obtaining the necessary building approvals takes longer in the GTA and in Ontario than in any other jurisdiction in North America. In some GTA municipalities, it can take almost three years to approve new housing projects, which is well in excess of the timeframes mandated by provincial legislation. These delays do not only slow down the addition of much-needed new supply into the housing market, but also add direct and indirect costs to new homes in the form of additional carrying costs, taxes, labour, inflationary costs in material and labour (in 2021 inflation in construction costs was in excess of 20%). All of this adds a further $50,000 to $100,000 in costs to each new homeowner.
Government fees, taxes and charges layer on additional costs. On average, 25% of the cost of a new home in the GTA is composed of government charges. This can add as much as $250,000 to the cost of a typical single-family home and municipalities add more than half of that. The most significant of the municipal fees and charges -- development charges -- have increased between 250 and 800 per cent since the early 2000s.
The housing supply and affordability crisis in the GTA and Ontario arose over the course of a decade and a half as a result of policies that acted as barriers to meeting the housing needs of residents. Once Bill 23 passes, Ontario’s new housing plan will enable us to take big steps to address the crisis. The plan will increase accountability for municipalities for facilitating the housing supply the province needs, increase transparency on the funds collected on new homes, cap and freeze certain fees to the economic conditions of the day and remove roadblocks to adding gentle density.
Ontario’s government has delivered the regulatory framework to bring about necessary change. It has stood up for new and future homebuyers looking to live in our province and has brought forward measures to help preserve the livability and competitiveness of Canada’s economic engine. The new housing plan deserves the support of all Ontarians.