{"id":14250,"date":"2023-03-16T08:07:13","date_gmt":"2023-03-16T15:07:13","guid":{"rendered":"https:\/\/essential.construction\/news\/ontario-municipalities-feel-impacts-of-housing-law-worry-over-little-audit-progress\/"},"modified":"2023-03-16T08:07:13","modified_gmt":"2023-03-16T15:07:13","slug":"ontario-municipalities-feel-impacts-of-housing-law-worry-over-little-audit-progress","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/ontario-municipalities-feel-impacts-of-housing-law-worry-over-little-audit-progress\/","title":{"rendered":"Ontario municipalities feel impacts of housing law, worry over little audit progress"},"content":{"rendered":"

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It has been more than three months since Ontario promised to make municipalities \u201cwhole\u201d on a loss of development charge revenue due to a new provincial law, and they say they\u2019re concerned they\u2019ve seen little to no movement.<\/p>\n

One large city says it is already feeling the impacts of the law financially, another is delaying a\u00a0housing-related project due to the uncertainty, and municipalities across the province are passing budgets on the assumption they will be made \u201cwhole\u201d with a dollar-for-dollar replacement.<\/p>\n

Municipalities have been sounding the alarm for months about a\u00a0housing\u00a0law, that, in part, freezes, reduces and exempts fees developers pay on certain builds such as affordable\u00a0housing.\u00a0Those fees go into municipal coffers to pay for services to support new homes, such as road and sewer infrastructure, and the changes will leave them $5 billion short, they say.<\/p>\n

Municipal Affairs and\u00a0Housing\u00a0Minister Steve Clark has expressed some skepticism about the impacts, saying the municipalities hold billions in development charge reserves.<\/p>\n

In late November he announced a third-party audit of \u201cselect\u201d municipalities \u201cto get a factual understanding of their finances.\u201d<\/p>\n

\u201cTogether, we can use this process to get the facts, make improvements, and better serve taxpayers by exploring alternative tools for growth to appropriately pay for growth rather than continuing to raise development fees on new homebuyers,\u201d Clark wrote to the Association of Municipalities of Ontario.<\/p>\n

\u201cWe are committing to ensuring municipalities are kept whole for any impact to their ability to fund\u00a0housing\u00a0enabling infrastructure because of Bill 23.\u201d<\/p>\n

But since then, a list of \u201cselect\u201d municipalities has not been finalized, auditors have not been appointed, and communities have received few updates, if any. Toronto has been in discussions with the province on the terms of reference for an audit, but that is the only municipality to report progress so far, and the city says it is awaiting a response from the province.<\/p>\n

The Association of Municipalities of Ontario says there has been radio silence.<\/p>\n

\u201cWe are in wait-and-see mode,\u201d said Brian Rosborough, AMO\u2019s executive director.<\/p>\n

\u201cWe\u2019re eager to find out what the province meant by its November 30th letter. We\u2019ve followed up, we\u2019ve asked, we\u2019ve mentioned it in our pre-budget submission. We have been relentlessly asking the question, \u2018What is meant by offsetting the costs of development charges?\u2019 And we are waiting to hear.\u201d<\/p>\n

Mississauga Mayor Bonnie Crombie, who is also the chair of the Ontario\u2019s Big City Mayors group, said she is concerned the audits haven\u2019t started yet. She is also concerned that language in Clark\u2019s letter suggests the promise to make municipalities whole is contingent on them meeting\u00a0housing\u00a0targets set out by the province in the law \u2013 120,000 homes for Mississauga, for example.<\/p>\n

The letter says there should be no funding shortfall for\u00a0housing-enabling infrastructure as a result of the law, \u201cprovided municipalities achieve and exceed their\u00a0housing\u00a0pledge levels and growth targets.\u201d<\/p>\n

Crombie wonders what happens if Mississauga falls short because developers are hampered by labour shortages, supply chain issues, or financing challenges.<\/p>\n

\u201cI can ensure 120,000 \u2013 12,000 per year \u2013 permits are given to the developers who are requesting them,\u201d she said in an interview. \u201cHowever, we\u2019re not the ones who actually put shovels in the ground.\u201d<\/p>\n

Crombie said she has received signals from the government that it will follow through on the promise to compensate for development charge revenue loss, but in the meantime the city is already feeling the law\u2019s impacts.<\/p>\n

\u201cThere have been development applications and we\u2019re looking at site approvals on major projects,\u201d she said.<\/p>\n

\u201cSo this is the time when development charges would be paid to the city and this is when we\u2019re going to start facing real losses.\u201d<\/p>\n

In Waterloo, Ont., council voted to delay for at least one year a $68-million reconstruction project for infrastructure to support 800 new homes because of uncertainty over how the city will pay for it.<\/p>\n

\u201cWe certainly share the same goal as the province, that we want to see additional\u00a0housing\u00a0units being constructed, but we need to know how we can afford to pay for that,\u201d Coun. Diane Freeman said in an interview.<\/p>\n

\u201cI can\u2019t ask the current taxpayers, the current tax base in Waterloo, to front the capital for a development that I don\u2019t know if we\u2019re going to be able to recoup development charges on.\u201d<\/p>\n

A spokesperson for Clark said the government will engage municipalities through the audit process.<\/p>\n

\u201cTo be clear: Municipalities will still be able to collect development charge revenues on most new market\u00a0housing\u00a0projects,\u201d Victoria Podbielski said in a statement.<\/p>\n

\u201cOur changes simply ensure that rates will rise in future at a reasonable and predictable rate.\u201d<\/p>\n

Development charges have been rising too quickly in some municipalities, putting home ownership out of reach for many Ontarians, she said.<\/p>\n

However, Crombie noted that there is nothing in the law that requires developers to pass those savings along.<\/p>\n

\u201cWe think it\u2019s really important that if they\u2019re going to take away revenue from the cities, to incentivize the development community, that somewhere in the legislation there\u2019s a guarantee that the savings be passed on to the homebuyer,\u201d she said.<\/p>\n

\u201cWe truly feel that we shouldn\u2019t be the ones penalized, because at the end of the day, we have to continue to build infrastructure and build cities.\u201d<\/p>\n<\/p><\/div>\n