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HomePolitics newsClark: Reducing municipal building fees helps make housing affordable

Clark: Reducing municipal building fees helps make housing affordable

Local governments will tell you they need this income to pay for infrastructure in their community, and we agree. But the rate at which these fees have increased is simply too much.

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Lately you might have heard from some that you need to choose between building more homes or paying higher property taxes. That’s not true.

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Here is the reality: Ontario is a growing province. In the last 10 years, Ontario’s population grew by more than 1.8 million, and over the next 10 years it’ll grow by another two million. This is a good thing. More people coming here means more growth, more people starting a family and more opportunity for future generations.

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But more growth also means Ontario’s housing supply situation is becoming more urgent by the day. We don’t have enough homes for the people who are already here, we’re not building new homes fast enough and the homes we do build have cost more than many Ontarians can afford.

In 2005, a typical Ontario home sold for $263,000. Last year, the average Ontario home sold for $932,000, a more than three-fold increase in just 17 years. A young family — even one making a decent middle-class income — simply can’t afford that same home anymore. We need to fix this.

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All Ontarians deserve to be able to afford a home. That’s why we’re acting. Our commitment has always been clear: build 1.5 million homes over the next 10 years. Getting there isn’t easy. If it were, we wouldn’t be in the situation we’re in now.

One step our government is taking right now is reining in the out-of-control municipal fees that add well over $100,000 to the cost of a home across much of Ontario.

Municipal governments will tell you they need this income to pay for infrastructure in their community, and we agree. But the rate at which these fees have increased — now reaching more than $150,000 per home in some cities — is simply too much. And if anyone tells you that ever-increasing fees don’t directly increase the cost of a house you buy, they’re wrong.

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Here’s what the Canadian Mortgage and Housing Corporation had to say about it: “Government charges can represent more than 20% of the cost of building a home in major Canadian cities … they add a direct cost to the production of housing.”

Even so, we aren’t stopping municipal governments from collecting those fees; we’re reducing them and limiting the rate at which they can be increased moving forward. We’ve also completely removed those fees from not-for-profit housing and plan to do the same for affordable units, following the lead of many cities and towns that already do just that.

Our changes only recently took effect, but they’re already getting thousands of new homes built in Ontario. In the last few weeks, we’ve heard of purpose-built rentals and non-profit housing for seniors moving forward thanks to the savings our government has delivered.

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In Oshawa, for instance, a 50-unit affordable housing project by Habitat for Humanity GTA in partnership with Durham Region Non-Profit Housing Corporation is now exempt from more than $500,000 in development charges. As Habitat CEO Ene Underwood put it, “By saving these substantial dollars now, we are better positioned to invest in even more affordable housing down the road.”

I want to be clear: No one government — municipal, provincial or federal — can solve the housing supply crisis alone. But we all need to be a part of the solution.

Much like ordinary Ontarians, municipal governments are facing record inflation and soaring interest rates and this, more than anything else, is what is putting budgets under pressure. But people need homes and Ontarians need their municipal leaders to get behind the construction of new homes.

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While we may occasionally disagree, I’m encouraged by my conversations with mayors, because so many of them recognize their responsibility to get more homes built. Indeed, many mayors have already taken the initiative to do so, cutting municipal fees without any provincial prodding.

After all, it makes good fiscal sense to build homes. More homes and growing communities mean more taxpayers — and with good city planning, municipalities can deliver better services at lower cost to those new residents. That is our goal as a province, and I hope our municipal partners feel the same.

Steve Clark is Ontario’s Minister of Municipal Affairs and Housing. He is the MPP for  Leeds—Grenville—Thousand Islands and Rideau Lakes.


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