More Homes for Everyone Act, 2022
April 5, 2022
On March 30, 2022, the Ontario Government tabled new legislation called the More Homes for Everyone Act, 2022, and published a technical briefing outlining the province’s plans to manage rising housing costs and to increase housing stock across the province. The briefing outlines the initial phases of the province’s strategy to address the housing crisis, taking into account the recent report drafted by the Ontario Housing Affordability Task Force, the input of municipalities who are responsible for community housing and the relevant infrastructure, and feedback from the public. The Task Force report provided 55 recommendations to aid in addressing the housing crisis, but there were significant concerns raised about the report, especially by municipalities. There was no representation on the Task Force from municipalities, and the Association of Municipalities Ontario felt the recommendations did not align with their position on housing. The More Homes for Everyone Act, 2022 is meant to provide a compromise between the aims of the Task Force, the capacity of municipalities, and the needs of the public.
The increasing focus on housing supply and affordability at all levels of government has led to the highest levels of housing and rental starts in over 30 years, with over 100,000 housing starts and over 13,000 rental starts in 2021. The More Homes for Everyone Act, 2022 aims to build on this progress, doubling annual housing starts to meet the 1.5 million new homes goal set by the Task Force. It should be noted, however, that while housing supply is increasing significantly, housing prices continue rising.
Increased Municipal Powers
Municipalities have been given a new Community Infrastructure and Housing Accelerator tool, which is meant to speed up approvals for the creation of needed local infrastructure, such as non-profit housing, hospitals, community centres, and long-term care homes. To use this tool, city councils are required to submit requests to the housing minister explaining their need for the project, what approvals are needed for the project, and details of the public consultations that have taken place. In addition to the Accelerator tool, the bill also institutes measures to streamline site plan approvals.
The Ontario government has made their position clear that they believe the largest barrier to creating more housing supply is the lengthy and bureaucratic process of municipal approvals. To this end, the More Homes for Everyone Act, 2022 creates an accountability mechanism for municipalities to approve plans within the legislated timelines. Should a municipality fail to make the necessary decisions within the prescribed timelines, they will be bound to refund site plan control application fees and zoning by-law amendment fees. This will ideally push municipalities to approve development plans faster to avoid losing revenue.
Investments in Ontario Tribunals
The Ontario government has committed to investing $19 million to provide additional resources to the Ontario Land Tribunal and the Landlord and Tenant Board to address backlogs and make the approval and adjudication processes more efficient. This funding will largely be used to hire additional adjudicators to handle the growing backlog of cases and approve development plans in a timelier manner.
Foreign Buyer Speculation
In addition to the More Homes for Everyone Act, 2022, the Ontario government also made changes to the non-resident speculation tax originally introduced in 2017, which had a notable impact in driving home prices down in 2018. The Ontario government has now increased this tax to 20% (instead of the former 15%). Other provincial parties are proposing additional speculation taxes, as well as a vacancy tax to discourage investors and house flippers from leaving homes empty for months at a time.
Limitations and Criticism
The More Homes for Everyone Act, 2022 demonstrates that the Ontario government believes that the key barriers to housing affordability are supply and municipal approval timelines. The theory behind the bill appears to be that reducing the red tape in the planning and building processes, and ultimately increasing the available homes across the province, will eventually lead to more affordable housing, as increased supply will meet demand and prices will cool. However, many critics have argued that simply increasing housing supply will not make housing more affordable. Other contributing factors that need to be examined and planned for are increasing housing density and not just overall supply, blind bidding driving prices up, and the need for transitional and supportive housing as well as houses for the “missing middle”, such as starter homes and options like duplexes and townhomes. The Act also does not address the Task Force’s recommendations concerning changing municipal zoning rules to allow more multiunit residential housing to be built.
The Ontario government has made clear that this Act is a first step, and more will be done to address the housing crisis in the coming years. The primary focus in the short term is on increasing housing supply as quickly as possible, and additional measures will be implemented as progress is made.
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