The Ford government introduced a new bill to speed up homebuilding as the province struggles with sluggish housing starts.
The Trillium first revealed the details of the bill in an exclusive report on Wednesday morning.
The bill combines some measures that will increase the cost of building homes, including backtracking on freezing development charges, with others that will make construction cheaper, such as axing minimum parking requirements near major transit stations.
“This legislation is … a chance to cut red tape in an area where it’s desperately needed and that's building homes,” Housing and Municipal Affairs Minister Calandra said on Wednesday.
The government doesn’t have any projections on how many homes the changes will help build. Ontario needs at least 150,000 housing starts per year to meet the 2031 target of 1.5 million homes by 2031. Calandra recently started counting university dorms and long-term care homes toward the target.
In 2023, the province built just under 90,000 homes. Those numbers are expected to dip over the next few years, according to projections in the 2024 provincial budget.
One major change is another walk-back.
The Ford government is eliminating the development charge phase-in period introduced in Bill 23, the Tories’ major housing bill from 2022.
That bill cut the fees municipalities levy on development over a five-year period, which caused an uproar from cities across the province. Municipalities rely on those fees to fund infrastructure projects but they also dramatically increase the cost of building homes.
Under Bill 23, municipalities had to discount their development charges by 20 per cent in 2022 if they passed a new development charge by-law that year or in subsequent years. The discount would decrease by five per cent each year for five years, until the full rate could be charged. It did not affect every municipality because some didn’t pass new development charge by-laws from 2022 onwards.
Calandra said he reversed course because municipalities couldn’t fund infrastructure — like water and wastewater plants — needed to support homes.
“That it was the number one obstacle to getting a shovel in the ground,” Calandra said.
Eliminating the phase-in period “will absolutely increase costs,” said Mike Moffatt, founding director of the Place Centre.
If the province kept going with the phase-in, municipalities would’ve had to be “made whole” in some way, Moffatt said, but it comes at the expense of development charges going “up quite a lot” in the Greater Toronto Area.
If some of the massive development charge increases contemplated in places like Toronto and Burlington now go forward, “affordability is going to get much worse.”
“That’s probably the most problematic of all” the changes, Moffatt said.
Another development charge-related change is eliminating the charges on affordable housing units, two years after it promised to do so.
One change that will help reduce costs is eliminating mandatory minimum parking requirements around major transit station areas like GO train stops, subways, and LRT stations, said Asquith Allen, director of policy at the Federation of Rental Housing Providers.
“That is a significant benefit to homebuilders in those areas,” Calandra said.
Mandatory minimums can add anywhere from $20,000 to $100,000 per space to a project’s cost, Allen said.
The government is also giving universities full control over planning decisions, meaning they won’t need municipal approval to build housing. The legislation provides a broad exemption, but Calandra retains the power to regulate how schools use the newly-granted power.
Schools have struggled to build new student housing to keep up with rising demand because “they’re getting tied up in the same sort of municipal red tape as everyone else,” Moffat said.
“Every new dorm that we build is a new apartment that becomes available in the community,” Calandra said.
“Exempting Ontario’s universities from provisions in the Planning Act and removing zoning barriers will help expedite the development and construction of much-needed campus housing projects, as well as help ensure student success,” said Steve Orsini, president and CEO of the Council of Ontario Universities.
The province will limit third-party appeals of official plans, official plan amendments, zoning by-laws, and zoning bylaw amendments, which the Ford government initially tried doing in Bill 23 but backed down during the committee process after fierce opposition.
Limiting appeals could expedite housing approvals and help dramatically reduce the Ontario Land Tribunal’s massive backlog.
The Ford government-appointed housing affordability task force recommended limiting third-party appeals, but only for projects with at least 30 per cent affordable housing units that are guaranteed for 40 years.
“There is a huge danger now that municipalities that don't want to grow have the tools and ability to block housing,” said Alex Beheshti, a senior consultant at the Altus Group, a construction and real estate consulting firm.
The bill makes good on a long-teased promise to introduce a “use it or lose it” policy, which is geared towards forcing developers to get moving on already-approved land.
Municipalities now have the power to reallocate servicing from projects that haven’t made enough progress to those that are further along.
Two recent reports questioned the wisdom of such policies and warned they often backfire.
The province is also moving ahead with a revamped policy for Minister’s zoning orders (MZOs), a controversial tool that gives the housing minister the power to override all existing planning laws.
MZOs got the Tories in hot water on several occasions as they were accused of using the tool to favour PC-connected developers. Before the Ford government’s election in 2018, only 18 MZOs were issued. Since 2018, they’ve given out over 100. The PCs gave more MZOs to guests at the premier’s daughter's wedding than the Liberals handed out during their 15-year reign.
Calandra developed a more transparent framework that sets strict rules on what types of requests the ministry will consider, from whom, and how the process will play out.
Other changes include launching consultations on allowing single-staircase exists for buildings up to four storeys, which can reduce construction costs but is fiercely opposed by firefighters.
