New measures proposed on Wednesday by the Ontario Liberals would "restore the dream of homeownership" for the middle class, leader Bonnie Crombie said.
Under the "More Homes You Can Afford" plan, the Liberals would end development charges for new homes under 3,000 square feet; eliminate the provincial land transfer tax for first-time homebuyers, seniors and non-profit housing developers; and re-introduce rent control for all units.
"The policies we have generated are bold, progressive, and they are overdue," said Adil Shamji, the Liberal housing critic and the plan's architect.
Development charges have been singled out by builders and housing experts as a barrier to new housing. The fees are levied by municipalities and paid by developers on new units.
The charges have risen dramatically in recent years as cities have struggled to pay for increased political responsibilities and have avoided raising property taxes.
I know I've posted this before but I can't get over it. Just development charges, excluding all other charges and taxes, have increased by 6000% in the City of Toronto over the past 25 years. pic.twitter.com/QIDstmI0BH
— Dr. Mike P. Moffatt 🇨🇦🏅🏅 (@MikePMoffatt) December 2, 2024
Crombie called them "sneaky taxes."
Under her plan, development charges would still apply to homes over 3,000 square feet, and for infrastructure "directly tied to the project" — meaning if a developer builds a large home in the middle of nowhere, they'd have to pay — but not if they build a home in a city that can be hooked up to an existing wastewater plant, for example.
"I think it's very exciting to see a provincial party recognize the large negative impact that high development charges have on building new housing," Smart Prosperity Institute senior director Mike Moffatt said.
Moffatt said he was consulted on the Liberals' plan, but added that he speaks with multiple political parties and his door is open to everyone.
More reforms are needed — restrictive zoning and slow approvals are still issues across the province — but this would be a good start, he said.
“I’m pleasantly surprised at how bold this plan is," he said.
Plan would cost $3.6B, axe new infrastructure bank: Crombie
Crombie said the plan would cost $3.6 billion and would be paid for by cutting some provincial housing initiatives, like the Building Ontario Fund (BOF).
"There are quite a number of what we like to refer to as slush funds that currently exist," Crombie said.
The Ford government created the $3-billion Building Ontario Fund last year as a provincial infrastructure bank to encourage private investment in affordable housing and other major infrastructure projects.
Crombie said she would "fully compensate" municipalities for lost revenue through a new "Better Communities Fund." But they'll have to hit housing approval targets aimed at promoting higher-density housing and purpose-built rentals, the plan says.
Cutting the land transfer tax will save families thousands, Crombie said.
Homebuyers pay land transfer taxes when they move into a new home. The provincial land transfer tax brought in $3.88 billion this fiscal year, the Liberals noted, calling it an unfair burden on taxpayers.
Rent control would follow Manitoba's lead, the Liberals said. After a set period of time, landlords would be able to raise the rent by a set amount determined by the province. In Manitoba, that period is 12 months. Each successive rent increase must be 12 months apart.
Rents will still be allowed to be reset when units are vacated, the party said.
Early in its mandate, the Ford government ended rent control for homes first occupied on or after Nov. 15, 2018.
Crombie said she'd "aggressively" tackle the backlog at the Landlord and Tenant Board, which deals with disputes including evictions, by increasing the number of adjudicators, extending operational hours and offering in-person and online hearings, instead of the current online-by-default system.
The Ford government has doubled the number of adjudicators, but as of this summer, there were still just under 50,000 cases in the backlog.
Speeding up the LTB would give more people confidence in renting out spare units, unlocking "shadow inventory," Moffatt said.
The Liberals would also create a rent bank that would provide short-term, interest-free loans to people who have lost their housing or are at risk of being evicted.
Housing minister, opposition respond
Housing Minister Paul Calandra said Crombie's new plan doesn't match her record as mayor of Mississauga.
"Under her leadership, development charges went up 173 per cent, if I'm not mistaken," he said.
Land transfer tax breaks for first-time homebuyers are "already there," he said. Ontario allows people to apply for a reimbursement of some or all of the tax on their first home, with limits.
NDP housing critic Jessica Bell said her party has long been calling for development charge breaks for affordable housing.
"When we look at our housing crisis, what we're really lacking is the construction of affordable housing to meet the needs of people who are living in encampments right now, people who are low-income and moderate-income," she said, calling Crombie's proposed rent control "weak."
Reducing fees on new home construction is good, Green Leader Mike Schreiner said. But he criticized the Liberals and Progressive Conservatives for focusing too much on market housing, and the NDP for centring non-market homes.
Ontario needs "solutions to make market housing more affordable, and we need non-market, government-assisted, deeply affordable, non-profit, co-op and supported housing," he said.
