POSITIVE ONTARIO HOUSING SUPPLY ACTION PLAN SEEKS TO INCREASE HOUSING SUPPLY AND AFFORDABILITY

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On May 2, 2019, the Ontario government announced proposed changes to address barriers getting in the way of new ownership and rental housing throughout the province. Recommendations of industry experts, including the Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA), influenced the government’s new policy. The recommendations are centered on themes of speed, cost, mix, rent, and innovation. Jameson Bouffard, BDO National Real Estate Industry Leader weighed in: “With the Ontario government’s announcement, we’re excited to see the steps proposed to enhance the supply side of housing. Our construction and development clients are going to see a positive impact with plans to accelerate approvals, reduce red tape, and reduce costs of building new homes.” Our real estate and construction team would like to highlight these five key areas and give clients an idea of what the recommended changes mean for their business.

Speed

Anyone who’s dealt with real estate development knows how common delays are. The first area of change addresses reducing time for clearing paperwork and red tape. Getting through development approvals quicker is key to a more seamless process. The Ontario government wants to improve this area by speeding up planning time, eliminating “planning by negotiation” wherever possible. On the rental housing provider side, they are also increasing adjudicators at the Landlord and Tenant Board to aid in the backlog of 2+ month wait times.

Cost

Added costs and permits have a tendency of popping up when you least expect them. Making costs more predictable to encourage building new housing is one of the proposed ways to help the planning process. As permits and approvals add to overall costs that heavily slow down building, developers want to be able to anticipate this and prepare accordingly. Additionally, the Ontario government wants to increase the authority of the local planning appeal tribunal. This is a committee that adjudicates land-use planning disputes between local governments, citizens, and property developers. For development charges in particular, proposed changes will allow for rates to be locked in at the time of complete site plans or zoning applications. Provisions that defer development charges for rental buildings until occupancy are also to be put in place; another policy change aimed at increasing rental housing supply.

Mix

From single-unit apartments, to semi-detached town homes, to larger fully-detached properties; the type of housing availability should ultimately be in line with the growing demographics that demand it. In recent years, for multiple reasons, new builds have been heavily focused on ownership properties, while there is still a demand for affordable rental units. The proposed changes are beginning to address this disconnect and focusing on making it easier to build different types of housing to ensure variety is available. To address this growing demand for rental unit availability, the proposed changes want to help in expanding development charge exemptions to include second units in new homes. Moreover, effort is going towards increasing the variety of housing in areas of Ontario that are least affordable.

Rent

Despite the greater demand to buy, protecting tenants and making it easier to build controlled rental housing will contribute towards bridging the affordability gap. Among making it easier for tenants is encouraging small-unit landlords to create new rental units, like basement apartments, by adding secondary suites to existing ones. This starts with helping all relevant parties navigate complex building code approval processes. Many of these changes are in favour of building new rental housing. Now builders pay development charges up front; home developers and/or condo builders can offset these charges by preselling units. A developer who builds a rental can’t do this. So by postponing development charges until buildings are rented, developers are encouraged to start building rental housing again.

Innovation

When it comes to physically building new units, developers are becoming more and more creative. The Ontario government’s proposed changes are in favour of innovating existing processes without the government standing in the way. This means more creative designs, architecture, materials that promote sustainability, and nurturing green spaces. Moreover, there’s a heightened effort to protect environmentally sensitive land like cultural heritage sites, Ontario’s Greenbelt, and agricultural areas. To improve accessibility, there will also be a focus on building new housing developments close to transit lines.

Positive outlook

While the changes in the Ontario Housing Supply Action Plan have been proposed, the final definitive details of legislation are still pending. Overall, these are positive changes as seen by developers, as well as real estate investors. George Dube, Real Estate Industry Leader for Central Canada comments, “Real estate investors are a large segment of our clients. We’ve seen in the last number of years that many of our developers and investors have gotten out of the rental market, or reduced their intended portfolio expansion, and into condo development or non-rental sales of new or rehabilitated properties or vacation properties. This is because of the costs and difficulty of regulation, rent control, the myriad of fees associated with building a rental unit, annual municipal levies on rental properties, and the perceived imbalance of rules and decisions at the Landlord and Tenant Board which are almost universally seen by rental housing providers as favouring ‘bad’ tenants. This plan has the potential to begin to reverse that trend.” The plan’s intention is to boost housing supply while increasing affordability and accessibility. If these changes are, indeed, put in place, the results could be game-changing.   Source: bdo.ca

Category: Starion Blog

POSITIVE ONTARIO HOUSING SUPPLY ACTION PLAN SEEKS TO INCREASE HOUSING SUPPLY AND AFFORDABILITY

Screen Shot 2019-06-18 at 1.14.39 AM

On May 2, 2019, the Ontario government announced proposed changes to address barriers getting in the way of new ownership and rental housing throughout the province. Recommendations of industry experts, including the Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA), influenced the government’s new policy. The recommendations are centered on themes of speed, cost, mix, rent, and innovation.

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The government on Monday released details of a program announced during the last federal budget, an initiative that could see Canada’s housing agency contribute up to 10 per cent of the price of a buyer’s first home if certain conditions are met.

Under the fine print for the First Time Home Buyer Incentive program, which was announced in March and will officially launch in September, a first-time homebuyer who earns less than $120,000 can qualify. The Canada Mortgage and Housing Corporation would kick it up to 10 per cent of the purchase price of the home, providing the borrower comes up with the minimum amount for an insured mortgage, which is now at five per cent.

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This Is How Much Rent Cost Across Canada In 2019

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If you were hoping the cost of rent dropped in Toronto this month, we’re sorry to say it hasn’t. The good news is, it also hasn’t risen.

According to Padmapper, the ranking for Canada’s top five priciest markets remained unchanged despite some minor drops in month-over-month prices.

The priciest Canadain city for rent continues to be Toronto with the average one bedroom unit costing approximately $2,270. Two bedrooms in Toronto average $2,850.

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Despite affordability concerns, Millennials are surprisingly optimistic about the GTA housing market

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It’s no secret that housing affordability remains a top concern for Millennials living in the GTA, as home prices continue to sit well above their 10-year average. But according to a new poll, the generation is surprisingly optimistic about the future of the market.

Up to 41 per cent of Millennials said they believe that the GTA is well prepared to provide housing for the number of new residents that settle there every year, according to Ipsos poll data released today by the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB).

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A permanent generation of middle-class renters?

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This week’s housing newsletter was written by HuffPost Canada senior business editor Daniel Tencer.
To no one’s surprise, Canada’s mortgage industry really, really doesn’t like federal regulators’ new mortgage stress tests. Its principal industry association, Mortgage Professionals Canada, released a report a few weeks ago on the impact of the tests that is almost apocalyptic in tone. It blames the stress tests for this year’s housing market slowdown, estimating that the reduced real estate activity will mean Canada will create 200,000 fewer jobs over the next three years than it otherwise would have. Continue reading ..

Canada’s sudden population ‘boomlet’ boosts housing

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This week’s housing newsletter was written by HuffPost Canada senior business editor Daniel Tencer, who’s a little worried about what strong population growth means for Canada’s clogged freeways. Many Canadian homebuyers are sitting on the sidelines these days, wondering if the slowdown in home sales this year is a sign of lower prices ahead.
Don’t bet on it, is the message coming from Bank of Montreal economists. Canada’s population growth has accelerated, and that means upward pressure on the housing market, and potentially higher-than-expected interest rates as well. In an analysis issued Thursday, economists Doug Porter and Robert Kavcic noted that Canada’s population passed the 37 million mark in the second quarter of this year, having grown by about 506,000 over the past year. It’s the fastest percentage growth Canada has seen since 1991, making it the fastest-growing country in the G7.

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CMHC makes favourable announcement regarding self-employed borrowers

CMHC is giving lenders more guidance and flexibility on determining whether a self-employed person qualifies for a mortgage

 

Unknown-1OTTAWA — Canada Mortgage and Housing Corp. is making changes intended to make it easier for the self-employed to qualify for a mortgage.

The national housing agency says it’s giving lenders more guidance and flexibility to help self-employed borrowers.

Self-employed Canadians may have a harder time qualifying for a mortgage as their incomes may vary or be less predictable.
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Pickering to open Huge Casino, Retail District, Hotel and Waterpark called DurhamLive

More than 10,000 jobs are expected to be created in Pickering after the Durham Live site was chosen for a casino and waterpark to open in 2019.DL1

Great Canadian Gaming, the company selected to operate casinos in the Greater Toronto Area, made the announcement.

That means Casino Ajax, the facility that’s been operating since 2006, will close.

Ontario Gaming GTA LP, a partnership between Great Canadian Gaming and Brookfield Business Partners, will operate the Pickering casino, which will be built at Church and Bayly streets.

The Durham Live proposal includes hotels, convention space, an indoor water park and film studios, along with the casino. Ontario Gaming GTA LP says the site would create more than 10,000 jobs.

The casino itself would have about 2,000 employees, including 1,700 new jobs. Continue reading ..

Which factors could influence Ontario’s housing market this spring? Experts give their take

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You’ve probably heard plenty about how a new mortgage stress test and an interest rate hike are affecting the Ontario housing market. But these are only some of the factors that could affect the market in coming months.

A provincial election, slippery debt levels, and surge of homebuyer demand could all play a role in where the market ends up this spring.

BuzzBuzzNews has rounded up the latest commentary from industry experts to make sense of the many elements that could affect the market in the spring.

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Canadian jobs market ‘on fire’ | Unemployment falls to 41-year low

 

Job creation in 2017 reached a pace not seen in a calendar year since 2002, reduced the unemployment rate to its lowest mark in more than 40 years — and surely came as a profound relief to Canada’s embattled federal finance minister.

Statistics Canada’s job numbers Friday offered a year-end look at a healthy 2017 performance. The surprisingly strong run was capped off by a December report that led some forecasters to cement, or even move up, their predictions that the Bank of Canada would raise its benchmark interest rate, possibly as early as this month. Continue reading ..