The ‘More Homes’ act was introduced in May. Since then, Toronto housing applications have dipped

Thestar.com
July 19, 2019
Jennifer Pagliaro

Just one new housing development of more than 10 units has been proposed in much of downtown and midtown since Premier Doug Ford’s government introduced legislation said to increase the supply of housing, an analysis of city data shows.

Although the government said it was introducing the More Homes, More Choice Act in May to create more certainty and cut red tape at city hall in order to boost the amount of new housing, in the immediate wake of the bill’s introduction the opposite has happened -- a lull in the supply of new housing applied for in four of the city’s development hot spots.

Critics of the changes say developers may be shying away from submitting new applications with ongoing uncertainty over what they will owe the city in fees and benefits under the new system, while the development industry says there is no holding back on developments as it welcomes the new process.

The analysis of city records was done by the office of Councillor Josh Matlow, who represents the densest part of the Yonge-Eglinton area and other neighbourhoods in midtown Toronto, and confirmed by the Star. It shows just 50 new units have been proposed since May 2 when Bill 108 was tabled in the Ontario legislature.

The difference in the number of proposed units compared to the same period in previous years is stark.

On average, the same almost 80-day period has seen about 3,700 units proposed each year from 2016 to 2018 in Ward 10 (Spadina-Fort York), Ward 11 (University-Rosedale), Ward 12 (Toronto-St. Paul’s) and Ward 13 (Toronto Centre).

The numbers exclude non-residential applications and could be missing additional applications for earlier years that are now completed and therefore no longer reflected in the city’s database. If applications were submitted by developers this week, they may not yet be reflected.

The city’s chief planner Gregg Lintern did not specifically review the numbers that the Star did, but confirmed a dip based on other metrics, confirming that the dollar amount from application fees is down on an annualized basis and that application numbers are down year-over-year.

Lintern expressed caution in speculating about what caused the downturn. “It’s too early to tell and I can’t draw any conclusions yet,” he said.

However, a key component of the changes levelled by the province as part of the new development process remains undefined, and could impact what developers pay if they choose to wait to submit their application under the new system.

A new “community benefits charge” remakes how developers would compensate communities and the city for growth, including the parkland that must be dedicated on site and cash in lieu of community benefits like child care and other amenities, previously known as section 37 funds.

Those details are to be worked out through provincial regulations, including a cap on the amount to be paid by developers on each site. The province is currently accepting comments on the regulations.

“Developers are now clearly waiting for the province to release the more limited benefits requirements in the hopes of contributing less money for child care, parks, recreation centres and other supports for communities they profit from,” Matlow said.

“The sudden reduction in new applications demonstrates the Ford government’s planning changes were always about increasing developers’ profit margins rather than affordable housing supply.”

Lintern said the city has pushed for any changes to the community benefits system to be revenue neutral for cities, and that the province has indicated it will consider that.

“If anyone’s banking on this being different from a cost point of view, I think they should think otherwise,” Lintern warned.

Still, the uncertainty created by the lack of specifics may have caused some pause.

“Without question, right now as the government prepares the regulation that goes with the legislation, there is a degree of uncertainty which has to be managed,” Lintern said. “We’re doing what we do at the municipality and I would imagine applicants or landowners are also trying to evaluate their options.”

Dave Wilkes, president and CEO of the Building Industry and Land Development Association (BILD), said it has not heard anything about its members holding back on developments, noting not much time has passed since Bill 108’s introduction.

“‘No’ would be the short answer,” Wilkes said. He could not point to any other obvious reason for the decrease in applications, saying that would require more research.

Wilkes, like many industry stakeholders, continues to praise Ford’s government.

“What Bill 108 does is it provides more certainty and predictability for the building industry as a whole, which should translate into better affordability for the consumers,” he said.

Wilkes also insisted the development industry is not anticipating paying less under the new system. “Our industry has always and continues to support the premise that growth should pay for growth,” he said.

When Municipal Affairs and Housing Minister Steve Clark introduced Bill 108, critics warned there was no evidence to support the government’s claim that the legislation would increase the supply of affordable housing and argued it would only hurt cities.

In a statement to the Star, Clark said the legislation was introduced “to help build the right types of homes in the right places, to make housing more affordable and help taxpayers keep more of their hard-earned dollars.

“While Councillor Matlow continues to provide comment without having any context or facts to back it up, we look forward to continuing our work with our municipal partners to increase the housing supply in Ontario,” he wrote. “It would be premature to speculate or draw any conclusions about development activity in the absence of information.”

In June, the province also announced hundreds of heavy-handed amendments to the city’s plans governing development in both the downtown core and midtown. Those changes introduce more uncertainty, a city staff report before council this week says.

“Both secondary plans introduced clear and predictable policy frameworks to guide and shape growth in the respective secondary plan areas and to address context-specific issues each area was experiencing,” the report says. “For the most part, the impact of the minister’s modifications is the removal of the specificity, such as numeric standards, included in a number of policy directions in both plans and the use of less prescriptive terminology.”

On Thursday morning, those representing the downtown core -- Councillors Joe Cressy, Mike Layton and Kristyn Wong-Tam -- sent a warning signal to developers that they planned to “red light” any developments that didn’t conform with the city’s original TOcore plan, saying they’d use tools available to councillors to delay construction if available community infrastructure and other standards aren’t met.

“Developers that are not interested in building family-friendly, sustainable communities with us and the local residents who live downtown ... we can de-prioritize their particular applications in our office,” Wong-Tam said. By the same principle, for those developers who are willing to meet those criteria, the councillors vowed to ensure their applications moved quickly and smoothly through the city hall process.

Layton said he wouldn’t be surprised if many developers have shied away from putting new applications in.

“Because why would they?” he asked. “They’re going to see huge windfalls if they wait and they might not have to pay for the infrastructure that the developers that we’ve been working with have had to.”

In the long-term, Lintern said the number of units approved across the each year varies but that the city is looking to stay in a “healthy range” of supplying the housing pipeline with 15,000 to 20,000 units approved annually.