Ontario Tackles Red Tape to Accelerate Home Construction

The Government of Ontario recently introduced groundbreaking housing legislation designed to significantly accelerate home construction across the province. Titled the Cutting Red Tape to Build More Homes Act, this initiative represents a crucial step in the province’s ambitious commitment to deliver at least 1.5 million new homes by 2031. By streamlining processes and reducing bureaucratic obstacles, Ontario aims to foster a more dynamic and efficient housing development environment, addressing the persistent challenges of housing supply and affordability.

Paul Calandra, Ontario’s Minister of Municipal Affairs and Housing, underscored the transformative potential of the legislation, stating it will “keep cutting red tape and make it cheaper and easier for Ontario families, workers, and businesses when it comes to interacting with the Ontario government.” He highlighted that previous actions in this vein have already resulted in substantial savings, estimated at 1.5 billion hours and $1.2 billion annually for individuals and businesses across the province. This new act seeks to build upon that success, driving further efficiencies specifically within the housing sector.

Over $1.8 Billion in Funding to Boost Housing-Enabled Infrastructure

Recognizing that housing development extends beyond just building structures, the Ontario government is making substantial financial commitments to ensure that the necessary infrastructure is in place. Minister Calandra emphasized that municipalities possess the most intimate understanding of their communities, including optimal locations for new housing developments. This localized expertise is being supported through significant provincial investments.

The minister proudly announced, “Our government is providing over $1.8 billion to help build housing-enabled infrastructure across the province.” This substantial funding is critical for supporting homes of all types and sizes, ensuring that new communities are well-equipped with essential services like water, wastewater, and transportation networks. This investment complements the existing $1.2 billion Building Faster Fund, which incentivizes municipalities by rewarding them for successfully meeting their housing construction targets. Together, these financial initiatives aim to empower local governments to not only plan for growth but also to execute on their housing mandates effectively, fostering sustainable community development alongside increased housing supply.

Strategic Measures for Reducing Red Tape and Accelerating Home Building

The Cutting Red Tape to Build More Homes Act introduces a series of targeted measures designed to reduce development costs, shorten timelines, and remove common roadblocks. These strategic changes aim to make the entire process of home construction more predictable and efficient for builders and municipalities alike, ultimately benefiting homebuyers by increasing supply and potentially lowering costs:

• Optimizing Parking Space Requirements: The legislation grants homebuilders greater flexibility in determining the appropriate number of parking spaces for new residential developments, particularly those located near major transit hubs. This shift from rigid minimums allows for more efficient land use, reduces construction costs (as underground parking is expensive), and supports transit-oriented development by encouraging residents to utilize public transportation.
• Facilitating the Creation of Secondary Suites: To enhance housing density and provide more affordable options, the act simplifies the process of building new garden suites, laneway homes, and basement apartments. It achieves this by eliminating restrictive barriers such as maximum lot coverage limits and caps on the number of bedrooms allowed per lot. This measure encourages gentle intensification within existing neighborhoods, offering diverse housing types without requiring significant new infrastructure.
• Implementing a “Use It or Lose It” Policy for Housing Projects: To prevent approved housing projects from stalling indefinitely, the government is introducing a new “use it or lose it” process. This prioritizes infrastructure for ready-to-go housing developments and ensures that once builders receive their necessary approvals, they proceed with construction in a timely manner. This mechanism is crucial for translating planning approvals into actual homes.
• Streamlining Consultation and Limiting Third-Party Appeals: The legislation aims to improve the consultation process, providing municipalities and builders with greater certainty throughout the development cycle. A key component of this is limiting third-party appeals to the Ontario Land Tribunal. This measure is intended to significantly reduce delays caused by protracted appeals, allowing projects to move forward faster and more predictably, thus accelerating housing supply.
• Diversifying Housing Types and Encouraging Innovation: The act supports the construction of a wider variety of homes for more people by streamlining approval processes for student housing. It also promotes standardized designs to reduce delays and costs, particularly for modular and prefabricated homes. Furthermore, the legislation champions innovative construction methods, such as mass timber, which offer sustainable and efficient alternatives to traditional building materials.

Industry Perspectives: A Collective Push for Housing Solutions

The Ontario Real Estate Association (OREA) and various regional real estate boards have largely welcomed the new legislation, recognizing its alignment with many of their long-standing advocacy efforts to address the provincial housing crisis.

Tim Hudak, CEO of OREA, expressed the association’s satisfaction with the progress made on solutions outlined in its own housing supply report. He particularly lauded measures aimed at streamlining approvals and increasing the pace of home construction, especially those supporting modular construction. OREA’s key areas of support reflected in the bill include:

• Exploring innovative financing and governance models for critical infrastructure like water and wastewater, which could significantly reduce upfront costs for homebuyers, potentially by as much as $50,000.
• Developing clear business service standards for permit and license services to minimize regulatory delays.
• Eliminating parking minimums near transit corridors to facilitate greater density and transit-oriented development.
• Simplifying regulations to make it easier to construct more garden, laneway, and basement suites.
• Permitting mass timber structures up to 18 storeys, promoting sustainable and efficient building practices.
• Supporting standardized designs to decrease delays and costs associated with modular homes.

OREA also highlighted the importance of streamlining approvals for student housing, recognizing its role in addressing a specific segment of the housing market.

Regional real estate boards echoed these sentiments. Curtis Fillier, President of the Ottawa Real Estate Board (OREB), emphasized that Ottawa’s housing crisis, like many others across Ontario, stems from a chronic lack of supply. OREB is encouraged by the government’s focus on accelerating home construction, noting that measures such as eliminating parking minimums near transit and simplifying the creation of secondary suites will be instrumental in driving progress.

Similarly, the Chatham-Kent Association of Realtors (CKAR) commended the Ontario government for its efforts to reduce red tape and acknowledge the barriers hindering increased housing supply. CKAR specifically believes that the “use it or lose it” strategy for builders can significantly accelerate new home construction, boost overall supply, reduce bureaucratic hurdles, and encourage the development of more affordable housing options.

Jennifer Pearce, President of the Toronto Regional Real Estate Board (TRREB), confirmed that the new legislation incorporates several vital measures that GTA realtors have actively collaborated on with the government and industry partners over the past year. She highlighted the proposal to limit third-party appeals of official plans, amendments, and zoning by-laws as a significant policy change. Pearce believes this change “could speed up the necessary approvals to get shovels in the ground faster on new housing,” aligning with TRREB’s ongoing advocacy for expedited housing approvals.

TRREB also acknowledged the critical impact of removing minimum parking space requirements for developments near most major transit stations. This change is expected to save thousands of dollars in construction costs per parking space, thereby making units more affordable for homebuyers and making a greater number of projects financially viable in high-density urban areas.

Lingering Challenges and Calls for Further Bold Action

While the industry largely applauds the government’s efforts, leaders also pointed out that there is still more work to be done to fully address the housing crisis.

Tim Hudak of OREA cautioned that “Any changes to the Ontario Land Tribunal should be focused on preventing abuse and eliminating backlog. Similarly, any changes to how municipalities collect and spend development charges cannot increase costs for future homebuyers.” He expressed OREA’s disappointment that two key recommendations from the Province’s Housing Affordability Task Force – strongly supported by Ontario realtors – were not included in the new bill.

The Imperative of Eliminating Exclusionary Zoning

One of the most significant recommendations not yet adopted, and a critical point of advocacy for real estate associations, is the elimination of exclusionary zoning. This refers to zoning laws that restrict housing types, often limiting development solely to detached single-family homes, even in areas with ample infrastructure or near transit.

Hudak passionately stressed, “We need to build more homes on existing properties and allow upzoning along major transit corridors if we’re going to address the housing affordability and supply crisis in our province. The Province is making significant investments in transit and passenger rail, and building more homes along those lines is common sense. Eliminating exclusionary zoning and allowing four units, as-of-right, province-wide, is an essential key to unlocking affordable homeownership.” He argues that by allowing a greater diversity of housing types, such as duplexes, triplexes, and fourplexes, on lots currently zoned for single-family homes, Ontario can significantly increase its housing supply without relying solely on large-scale greenfield developments.

Curtis Fillier of OREB wholeheartedly concurred, stating, “If Ontario is going to achieve its goal of 1.5 million new homes by 2031, we need direct solutions to build up our communities — including building more homes on existing properties and allowing upzoning along major transit corridors.” He reiterated OREB’s unwavering advocacy for eliminating exclusionary zoning and enabling “as of right” zoning for four units per lot. Fillier believes this measure is crucial for developing “middle housing” – a diverse range of housing types that are currently sorely lacking in many markets. Without such changes, he warned, many Ontarians will continue to be priced out of the housing market due to an insufficient supply of suitable and affordable housing options.

The Need for Standardized Housing Metrics

Looking ahead, Jennifer Pearce of TRREB highlighted the importance of consistent and transparent data reporting. She urged the province to commit to standardized and widely accepted definitions for housing starts and completions as it tracks progress towards the 1.5 million home target.

Pearce emphasized, “Ontario was the first province in Canada to report on its housing supply progress, and it’s crucial that we continue to present a consistent picture of the progress towards our goal.” Standardized metrics would ensure that all stakeholders have a clear, accurate, and comparable understanding of the housing market’s performance and the effectiveness of the government’s policies.

Amber Pinsonneault, Chair of the CKAR Government Relations Committee, added that allowing for “building more types of homes for more people” empowers smaller municipalities to explore affordable and cost-effective construction solutions tailored to their community’s diverse needs.

Conclusion: A Stepping Stone Towards Housing Abundance

The introduction of the Cutting Red Tape to Build More Homes Act is a commendable stride towards addressing Ontario’s critical housing challenges. Industry leaders like Jennifer Pearce commend Minister Calandra and Premier Ford for introducing legislation that encourages all Members of Provincial Parliament (MPPs) to support a bill aimed at delivering more homes that Ontario families can afford. The collaborative efforts between the government and real estate industry stakeholders have clearly influenced many of the positive measures within the act.

While celebrating these advancements, Tim Hudak’s sentiment resonates strongly: “We commend Premier Ford and Minister Calandra for the actions put forward in this piece of legislation, but we hope to see them go further. The government needs to keep its foot on the gas with bold action if we’re going to accomplish the goal of building 1.5 million new homes by 2031.” The current legislation represents a significant stepping stone, but the broader consensus indicates that sustained, bold, and comprehensive action, particularly regarding exclusionary zoning, will be necessary to truly unlock Ontario’s full housing potential and ensure a future where all residents have access to affordable and suitable housing.