THE HOUSING SUPPLY WORKING GROUP
REMOVING BARRIERS TO THE DEVELOPMENT OF AFFORDABLE HOUSING
Since 1995, the Ontario government has taken a number of
actions to promote the construction of rental housing in Ontario. For
example, it passed the Tenant Protection Act, enabling landlords
and builders to expect reasonable rates of return on investments, and
gave municipalities the power to tax rental properties fairly. It
streamlined the land use planning process, cut back the development
charges municipalities can load on to new housing, updated the
Building Code, and created the Provincial Sales Tax Grant
program.
As instrumental as these changes are, the province
recognized that more needed to be done.
In September 2000, the
provincial government created a Housing Supply Working Group, a joint
government-industry-labour group, to develop a comprehensive strategy to
get the private sector back into building new rental accommodation.
Mandate
To provide a high-level,
comprehensive perspective to the identification of rental housing supply
problems and solutions, with an emphasis on affordable housing.
To
identify home ownership, seniors housing, and supply-related issues
associated with other forms of tenure such as life leases, and to
recommend solutions.
Membership
The group is co-chaired by
Richard Lyall, President, Residential Construction Council of Central
Ontario, and Janet Mason, Assistant Deputy Minister, Ministry of
Municipal Affairs and Housing
Full-time members include:
Metropolitan Toronto Apartment Builders Association
Fair Rental
Policy Organization
Urban Development Institute
Ontario Home
Builders Association
Greater Toronto Home Builders Association
Board of Trade
Laborers' International Union of North America Local
183
Ministry of Municipal Affairs and Housing.
Part-time members
include representatives from:
municipal governments
provincial
ministries
the Ontario Non-Profit Housing Association
banking
and investment industries
Interim Report Conclusion summary:
Two key
conclusions emerged from the discussion in this interim paper:
The
market as a whole has to be working before governments develop
strategies to specifically promote development of affordable housing.
Otherwise the cost burden on government is too high.
There is a role
for all governments in addressing affordability in addition to
addressing the economics of purpose-built rental. The effect of a
government incentive or subsidy is to reduce the rent for the individual
who is renting the unit this can be done through subsidy to the
developer to offer reduced rent, or through a subsidy to the individual.
Subsidy programs can also "skew" developers' choices somewhat so that
more modest accommodation is built.
Recommendation Summary
The following
recommendations are interim recommendations only. They will be developed
further, and refined as necessary, in the Housing Supply Working Group's
final report.
The federal government should identify key
changes to the tax system and CMHC lending practices to stimulate rental
supply. If the federal government doesn't do anything to remove the
disincentives with CMHC mortgage insurance, the province should consider
doing it either directly or through underwriting CMHC mortgage
insurance.
The federal and provincial governments should
investigate U.S.-type tax incentive systems such as the Low Income
Housing Tax Credit and shelter subsidy programs to promote affordability
in a private market.
The province should provide
municipalities with authority to provide indefinitely favourable
property tax treatment for rental properties. This would replace the
current authority which provides for favourable property tax treatment
for a maximum of eight years.
The province should allow
municipalities to enter into agreements with the private sector which
would enable municipalities to provide a financial incentive to the
private sector for the development of affordable housing.
The
province should review the Development Charges Act, the Education
Development Charges Act and the Planning Act to ensure that development
charges, planning fees and municipal approvals processes do not
discourage the development of affordable housing. As well, the impact of
municipal impediments to affordability and measures to encourage zoning
and approval of rental housing should also be studied. The Social
Housing Reform Act gave the municipal service managers power to build,
manage or operate housing.
Municipalities should be encouraged
to adopt zoning that allows for accessory apartments (eg: basement
apartments), and to equalizing tax rates between ownership and rental
housing.
Click
here to obtain a copy of the Housing Supply Working Group
Interim Report in PDF format or call (416) 585-6001.
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