How much is Ontario’s land-use policy causing the housing supply shortage and pricing issue? And what is the government doing about it?
President and CEO
Building Industry and Land Development Association (BILD)
YPNextHome: Ontario’s land-use policy and its impact is something BILD and its members have been very outspoken about over the last couple years. What, if anything, has been the response from the provincial government to these concerns?
Tuckey: BILD has been at the table along with our provincial association to discuss a number of key issues such as the Growth Plan, Greenbelt, Ontario Municipal Board reform and Inclusionary Zoning. We look forward to continuing these discussions on behalf of the industry and new-home buyers across the region.
YPNextHome: A recent report from BMO seems to counter the industry’s contention that there’s not enough land available to build new lowrise homes on. What’s your take on this?
Tuckey: The big issue is that we are not building the supply of ground-related homes like detached, semi-detached and townhomes to satisfy the needs of our growing population. Demand is far outpacing supply, particularly for single-family homes which sell out as soon as they come to market. When there aren’t enough homes to satisfy demand, prices increase.
Ontario Real Estate Association
YPNextHome: Your comments in OREA’s recent release that “provincial and municipal governments must focus on increasing housing supply” echo what builders and other parties have been saying. How active has the OREA been in relaying this message to these governments, and what has been the response?
Hudak: We’ve seen the Ontario government double the Land Transfer Tax (LTT) rebate to $4,000 for first-time homebuyers. The new rebate, which came into effect on Jan. 1, 2017, means buyers will not have to pay any tax on the first $368,000 of the home price. This increase will help more young families achieve their dreams of homeownership.
YPNextHome: What, realistically, can the Ontario government do to change the path it’s on, in this context? Some experts have said there’s zero chance Ontario will divert from its existing land use policies…
Hudak: One way is to increase housing stock. We need new homes to be built and build more “missing middle” type homes, like townhomes, duplexes and stacked townhomes. Increasing the housing stock is necessary to give buyers more options at affordable levels and live in areas that make sense for them to be in.
In a pre-budget consultation with the provincial government in February, the OREA recommended the creation of an Affordable Home Ownership Task Force to determine how the Ontario government can improve housing supply and expand consumer choice. We need industry leaders to come together on this issue before the supply problem gets any worse.
YPNextHome: If provincial and municipal governments do nothing to address these issues, what can future prospective homebuyers in Ontario expect? The future doesn’t look at that bright for them…
Hudak: Basic economic principle is when supply can’t meet demand, prices go up. The disparity is not only driving up prices but its reducing choice for consumers. Owning a home is the Canadian dream. Our research consistently shows that Ontarians value homeownership. We know it boosts education performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency.”
With a home purchase comes the pride of ownership, a sense of accomplishment and the sense of belonging in a community where one has a financial stake in the neighbourhood.
YPNextHome: How much is your background in politics helping the cause? Presumably, you would have pre-existing relationships and knowledge of how government works that could be advantages for OREA…
Hudak: It helps a lot. It’s a path I’d recommend for many people who serve in public life. Even if you would occasionally have heated debates in the legislature, I always tried to maintain respectful and productive relationships and that has paid off.
Coming from Queen’s Park, you understand the process of political decision making that can often be murky to people on the outside. You instinctively understand the complex number of variables a politician has to consider before they will embrace a policy.
Senior Communications Advisor
Minister of Municipal Affairs
YPNextHome: How are the messages from the housing industry being received by the Ontario government? What, if anything, is being done in response to these concerns?
Cripps: We recognize that housing affordability in the GTHA is a concern. The housing market is complex. Cost and affordability are influenced by many factors, such as location, proximity to transit, low interest rates, demographic trends, and infrastructure and construction costs. That’s why we have doubled the maximum refund on the Land Transfer Tax for first-time homebuyers from $2,000 to $4,000. This will help them get the home that is right for them.
YPNextHome: What chances are there that Ontario will revisit these policies, given the unintended consequences that seem to be resulting?
Cripps: The Growth Plan for the Greater Golden Horseshoe is currently being reviewed as part of the Co-ordinated Land Use Planning Review. Our proposed changes were informed by extensive consultation with Ontarians, municipalities and stakeholders. The Growth Plan’s aim is to reduce sprawl, protect valuable natural and agricultural resources, and plan for more complete, transit supportive communities. It is also intended to promote a mix of housing options to accommodate people at different ages and stages of life. This will mean that families have more choice in where they live, not less. Importantly, under the Growth Plan, municipalities are required to plan for a range and mix of housing to accommodate the population growth forecasted for their municipality all the way to 2031 and beyond.
The Provincial Policy Statement requires municipalities across the province to maintain a three-year supply of residential land with servicing capacity. Municipalities assess serviceable land needs based on the mix of housing types – semis, rows, singles and apartments – that are needed to accommodate the expected growth and density targets over time.
We know that municipalities have already approved plans that will see ground-related homes lead the majority of new construction in the Greater Golden Horseshoe. This means homes like single-detached, row house and semi-detached with direct access to a street, will dominate all new inventory built. The Growth Plan will continue to support ground related housing so that people can choose the right home to suit their needs. It will also promote complete communities that make day-to-day living more convenient by providing access to a mix of jobs, local services, transit options and a full range of housing.
Of the land set aside to accommodate growth within the GTHA, less than 20 per cent has been built on to date, leaving 45,660 hectares left to be developed – this is enough area to build two cities approximately the size of Mississauga.