Ontario builders press governments for action to make homebuilding more affordable
Vaughan, Ont., Sept. 25, 2024 (GLOBE NEWSWIRE) — The Residential Construction Council of Ontario (RESCON) is encouraging all levels of government to push for immediate action to lower taxes, fees, levies and development charges on new housing and speed-up approval times for developments.
RESCON president Richard Lyall, along with senior staff and board members from the association, met with Ontario Municipal Affairs and Housing Minister Paul Calandra today to discuss a variety of challenges facing the homebuilding sector, including exorbitant taxes and extremely slow approval times which are impacting higher prices for new homes and seriously affecting housing supply.
“We appreciate the actions that Minister Calandra and the provincial government have taken to date to encourage more homebuilding, which includes eliminating the HST on new purpose-built rentals, however we continue to face a perfect storm of high taxes, endless bureaucracy, particularly at the municipal level of government, and an approvals system that is slow, dysfunctional and killing the housing market, especially for first-time buyers,” says Lyall. “We have a devastating housing affordability and supply crisis yet are still in the dark ages across many municipalities when it comes to residential development approvals. We can and must do better.
“We always welcome the opportunity to meet with Minister Calandra to discuss these important issues and we are urging the minister to drive changes at the federal level to lower taxes on new housing and encourage municipalities to lower development charges as they have jacked up the fees that are impacting our ability to build new homes. Federal taxes are too high and municipal development charges are like a runaway train. Costs to consumers for new housing are too high and most first-time buyers and renters can’t afford the cost. Why is it that development charges on a new home in Vaughan are $192,000 while they are $22,000 in Calgary?”
At the meeting, RESCON officials noted that new home sales are lacklusture, and the homebuilding industry is facing serious financial challenges. New development application submissions have slumped and starts for 2025 are sparse. The financial realities of the new housing market are not workable and regulations and policies are only adding to the inability to build.
Taxes on new housing in the Greater Toronto Area, for example, are the highest in North America and have combined with other factors to eliminate homebuyers – especially first-timers – from the market. In Toronto, development charges alone for single detached homes have increased nearly 2,000 per cent in 20 years.
The situation is urgent. Recent figures show the construction of new homes is not keeping pace with population growth and housing affordability continues to get worse. A report by the Canadian Centre for Economic Analysis found that 31 per cent of the cost of a new home is due to taxes, fees and levies, with the federal government accounting for the largest chunk of the taxes.
In the City of Toronto, it presently takes far too long to get a housing project approved. Red tape and bureaucracy are increasing, making it difficult for builders to build homes that people can afford. The present economics for new builders are not working. Meanwhile, other regulatory issues are standing in the way of new housing being built, such as municipalities pressing ahead with unrealistic green building standards beyond what is prescribed in the Ontario Building Code.
“Immediate action is needed to lower taxes and fees, speed up the approvals process and create conditions conducive to building homes,” adds Lyall. “Development charges, in particular, have become a cash cow that municipal governments now rely on to fund infrastructure and other amenities. While municipalities rely on the levies, a big chunk is not being spent. Instead, it is going into reserve funds. The levies must be reduced to a more manageable level so the savings can be passed on to homebuyers.”
RESCON is the province’s leading association of residential builders committed to providing leadership and fostering innovation in the industry.
CONTACT: Grant Cameron RESCON 905-638-1706 cameron@rescon.com
