Reports about the provincial government’s recent updates to how development-related costs will be funded — the community benefit charge — offered a narrow, one-sided perspective.
But prospective new home buyers and renters deserve to know all the facts and issues, given the current housing crisis in the GTA.
Housing affordability issues across the region are being driven by a market imbalance. Namely, that the GTA’s housing supply is not keeping pace with demand. Attempts to expand housing supply is being frustrated by cumbersome processes, approvals and requirements that slow new development, even as our population and demand continue to grow.
This imbalance, the slowed pace of new development and escalating costs added by all three layers of government are putting inflationary pressure on housing prices. The City of Toronto has already reached the population targets for 2031 as set out by the previous Ontario government’s 2006 growth plan. Yet, housing has not kept up. These are the factors behind the unfolding housing crisis.
To combat this, the provincial government has come forward with supply-oriented policies to try and correct a quagmire that has been a decade or more in the making. The proposed changes announced last week were a step in trying to restore balance to the GTA housing market.
Let’s consider some of the facts about the province’s proposed community benefit charge.
First, the changes tabled are a step in the right direction to address red-tape, layers of bureaucracy and the piling-on of costs on new homes that limit much-needed housing supply and drive the affordability issue.
Second, the proposals attempt to balance the funding needs of municipalities and the cost to add new housing — a cost that is ultimately born by the residents looking to become homeowners or renters. Already, fees, taxes and charges from all levels of government add nearly 22 per cent to the cost of a new single family home in Toronto and a similar rate for new apartments. The City of Toronto’s portion of these charges — the largest portion when all municipal fees and levies are considered — has escalated at a mind-bending rate, increasing on average 86 per cent since 2018, and well over 1,000 per cent since 2004.
Lastly, we know from some municipalities’ own submissions to the Ministry of Municipal Affairs and Housing that they’re collecting more funds than they use. For example, between 2006 and December 31, 2017, the City of Toronto amassed an impressive $ 674 million dollars in their parkland reserve fund. These funds for parks were collected on the backs of new homebuyers, but parks were not provided.
The building and land development industry supports the prinicple that growth pays for growth. With a housing shortage in the GTA, and a region growing by more than 115,000 people per year, the path to addressing the current crisis is to add more housing, control rapidly escalating added costs and speed up much-needed supply.
Attempts to enable this through regulatory change should be applauded, not denounced.
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