In a bold effort to add supply and level the soaring cost of home ownership the Ford government has announced new legislation that has been heavily criticized for not doing enough.
In many ways it is unprecedented and full of creative solutions that have never been brought forth. We like it. Here’s why.
The removal of red tape is long over due. Toronto has fewer city planners than most regions per capita and on average takes 34.3 months for a site plan approval. (Up from 21 months in 2020). Developers are securing properties and carrying them for an incredibly lengthy amount of time. As lending cost increase, as do the cost of labour and material, this cost is becoming unbearable. If the developer can’t turn a profit they won’t start a project and since they are the only ones contributing to new housing, we need them and their projects.
Zoning limits on density are keeping supply well below demand. This is one of the biggest factors in rising prices, along with high taxes, development charges and levies. The average development cost on a new condo is roughly $100,000 per unit. Plus the average taxes and levies of $10,000 and the average land transfer tax of $30,000 paid on closing.
If Mayor John Tory is upset at the potential loss of revenue by exempting development charges for low income homes, he needs to give his head a shake. If the city won’t work together with developers to build inventory and developers stop developing, they will be loosing WAY more tax revenue. Keep in mind, only 5% of a building is ear-marked for inclusionary zoning ie low income units. Working together with developers is the cheapest way to build low income housing solutions. The developers are contributing and so should the city.
The Financial Post put it best, “Why zoning reform is needed is simple: artificial limits on what can be built keep the housing stock low, which in turn prevents supply from keeping pace with demand, thus putting upwards pressure on home prices and rents. Because of these zoning rules, Ontario has a terrible record for building new homes. Among G7 countries, Canada ranks dead last in population-adjusted housing units per 1,000 people with 424. Ontario, which has only 398 units per 1,000 people, is a major cause of the problem."
They are also proposing density increases on residentially zoned neighbourhoods. Allowing home owners to add up to 3 units is a solution that can be mutually beneficial. The rental income helps a purchaser absorb the increased lending cost and can help a new purchaser qualify with the soaring cost of homes. Not to mention it provides desperately needed rental inventory in neighbourhoods that differ from rental and condo towers. This is amazing for young families who are looking to rent in quieter, school friendly areas.
Other changes that are worth noting are:
- Up to three units will be allowed on a single residential lot without any bylaw amendments or municipal permissions. Municipalities will not be able to set minimum unit sizes or require more than one parking space per unit.
- Duplexes and triplexes will also be allowed on single residential lots
- Site plan reviews will be restricted to health and safety issues rather than landscaping or architectural details, meaning that exterior design will no longer be a matter subject to site plan control.
- Zoning changes to allow more near density near transit