On Monday, the provincial Conservative government passed Bill 23.
The bill, better known as the More Homes Built Faster Act, promises to, as the Conservatives say, cut red tape and build more homes.
But will the bill build more houses?
The wording of Bill 23 and the provincial government statements about the bill would lead you to believe so.
According to a government statement issued Monday afternoon, the bill “removes unnecessary costs and cuts through red tape and other bottlenecks that stand in the way of new homes being built.”
Some of those “bottlenecks” highlighted by the province include:
– freezing and reducing government fees to support the construction of new homes and reduce the costs of housing, particularly affordable and not-for-profit housing, inclusionary zoning units and purpose-built homes;
creating a new attainable housing program to drive the development of housing across all regions of Ontario;
– increased the Non-Resident Speculation Tax rate to 25 per cent – the highest level in Canada – effective Oct. 25; and
– protecting new home buyers by increasing consumer protection measures and consulting on ways to help more renters become homeowners.
Again, on paper, it all sounds good. Reducing fees and wait times to get things done will certainly help.
But I ask again, will it?
Some of those fees, such as development charges, help municipalities pay for services to support new homes, such as road and sewer infrastructure.
According to the Association of Municipalities of Ontario (AMO), these changes could cost municipalities around $5 billion. Where do municipalities make up that revenue if those fees disappear?
Property taxes.
Another argument that AMO makes – a valid argument in this writer’s opinion – is that just because the development charges and other fees added to a home are removed, it doesn’t mean the developer is going to lower their price by an equal amount.
Developers like money – heck, most humans like money – and if houses are still selling at high prices, developers are going to charge high prices.
What I am curious about is how Bill 23 plans to tackle inflation.
Sure, the bill can reduce the fees paid by developers, but what about material prices?
Concrete and steel have both doubled in price since the beginning of the COVID-19 pandemic, and lumber and copper prices are higher than they were a year ago. Essentially, if it goes in your home, it costs more.
And interest rates are on the rise.
Then there is the labour shortage.
It is one thing to say that you are going to build more homes, but it is another to actually make it happen.
The construction sector has the same problem as nearly every industry in Ontario at the moment – not enough skilled people to work the jobs available. Addressing that issue will take time, but will the education system produce trained workers fast enough?
I will give the provincial government credit: Bill 23 does have some good ideas, such as increasing the amount of housing near public transit, stating the government’s intentions to allow municipalities to require certain green standards to promote energy-efficient buildings, and streamlining the approvals process. But it lacks in other areas, such as making homes truly affordable for first-time homebuyers.
Bill 23 appears to contain more lofty goals and unattainable promises than it does solutions.
As I’ve said before in previous columns, there are only a few ways in which municipalities can make up the money lost when development charges and other fees are cut: raise taxes, cut programs or a higher level of government makes up the difference.
Either way, the taxpayer will end up paying. Who they pay is the only question left to answer.
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Mike Wilson is the editor of Midwestern Newspapers. Comments and feedback can be sent to mwilson@midwesternnewspapers.com.
