At the beginning of the year, a lobby group representing Ontario’s developers released a comprehensive report laying out how the fees homebuilders have to pay have increased, making it harder to kickstart new homes that people can afford.
The Ontario Home Builders Association released its development charges study in January, advocating for a more uniform approach across the province to provide stability.
The 65-page document caught the attention of the Association of Municipalities of Ontario, a group which has often fought against suggestions by developers that the fees they pay to cities should be reduced.
The group viewed the latest report — on modernizing rather than scrapping development charges — as a chance to compromise.
“This was much more targeted and focused on improving the current regime and really recognizing the importance of the development charge,” Lindsay Jones, the AMO director of policy and government relations, told Global News.
The municipal group reached out to set a meeting with the homebuilders and, over the course of a few months, worked on a compromise.
After years of fighting over how the Ford government should solve Ontario’s worsening housing crisis, the two opposing groups sat down to try and work out some kind of common ground.
By the end of March, days after new Housing Minister Rob Flack was appointed to the portfolio, the groups had signed a joint letter. It contained a series of recommendations for how the government could tweak the fees developers pay.
“I think there were some people in the ministry that never thought they would see AMO and OHBA signatures on the same letter, saying, ‘We want the same thing,’” Ontario Home Builders Association CEO Scott Andison said.
“I think that gave the government the confidence that they could move forward.”
That sentiment was echoed by the Ministry of Municipal Affairs and Housing, which indicated the joint letter had allowed it to make changes that it may not otherwise have been able to consider.
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On Monday, Flack unveiled the housing bill, which included a number of wide-ranging changes to how developers and cities would work together.
Among the changes in the new bill, which came from work between AMO and OHBA, is work to create more universal and interchangeable definitions within the development charges framework, to delay when developers have to pay the fees to municipalities and to create rules around what costs can actually be recovered through the process.
When it proposed the bill, the government was at pains to point out many of the changes were enthusiastically supported — and even recommended by — municipalities.
“The legislation we’re tabling today responds to recommendations and requests from municipal leaders, and will help build the homes and infrastructure Ontario needs,” Flack said in a statement on Monday.
He presented the legislation at a news event attended by AMO and the mayors of both Mississauga and Vaughan. The latter pair were also mentioned in the Ford government’s recent speech from the throne.
The attendees were more than symbolic in the Ford government’s struggle to meet its goal of 1.5 million homes.
Over several rounds of legislation, successive housing ministers have attempted to speed up housing approvals, only to be met by fierce backlash.
Two bills presented under Steve Clark — Bill 23 and Bill 109 — were met with intense municipal opposition for limiting development charges; many of the changes were eventually walked back.
Andison conceded developers had seen the strength municipalities can mount, and realized working together could be more productive.
“I know what the power of municipalities is and the force that they are in terms of how they work with government,” he said.
On the other side, AMO had found itself confronted with several pieces of legislation it believed would bring municipalities to their knees financially. The organization decided to try and work on changes it could definitely support.
“This is not another Bill 23,” Jones said. “This is a bill that was developed with prior collaboration with both the municipal and development sectors. And it also takes quite a measured approach.”
While the two primary opponents of changes one way or the other in municipal development are on board with the latest changes, it remains to be seen if it can achieve the Ford government’s goal of boosting housing starts.
The province is still struggling to meet its goal of 1.5 million new homes by 2031.
The target was introduced after recommendations from an expert housing panel ahead of the 2022 provincial election and was a cornerstone of the government’s campaign.
Projections in last year’s budget showed it continuing to fall short.
The government’s expectations, based on private sector projections, show 87,900 housing starts in 2024, 90,000 starts in 2025 and 94,000 housing starts in 2026.
While the numbers represent an improvement, they would still see Ontario fall well short of its goal. Over those years, Ontario is projected to build 274,000 new homes; the province’s housing goals are set at 300,000.
Data published recently by the Canada Mortgage and Housing Corporation showed that housing starts in Ontario in March were down 46 per cent, year over year, for communities with 10,000 or more people.
The OHBA suggested spreading the cost of development charges out over several years — one of the tweaks in the bill — could help to spur construction. AMO, however, said the changes wouldn’t be the thing that fixes the housing crisis.
“I think that it’s important to improve the DC regime, but that is never going to be the silver bullet in terms of solving the housing crisis,” Jones said.
“We do think that there are contributions, that making the DC regime more standardized, more transparent can improve things. But we really need a much broader conversation on this question of how we are going to pay for all of the infrastructure that communities need to be able to accommodate growth in a way that’s sustainable.”
— with a file from The Canadian Press
