Housing: 1) Ontario bill aims to speed up stalled housing developments, boost student housing; 2) 76% of Canadians feel home ownership is out of reach for them: CIBC poll; 3) Ottawa to allow 30-year amortization for first-time buyers’ mortgages on new homes

1) Ontario bill aims to speed up stalled housing developments, boost student housing

April 10, 2024, Courtesy of Barrie360.com and Canadian Press

By Allison Jones

Ontario proposed Wednesday to allow municipalities to enact “use it or lose it” policies on developers, speed up the creation of student housing, and streamline approvals for standardized housing designs as it seeks new paths to reach its goal of building 1.5 million homes.

Municipal Affairs and Housing Minister Paul Calandra introduced an omnibus bill tackling so-called red tape across several ministries, but the largest sections deal with rules and regulations on housing that he said stand in the way of home construction.

“We have made a commitment to get at least 1.5 million homes built by 2031,” he said at a press conference.

“Municipalities know their communities best. They know where it makes sense to build homes and that’s why we’re supporting them with giving them the funding and the tools they need to build more homes and to build the infrastructure needed to support homes of all types.”

Calandra and Premier Doug Ford have repeated that sentiment often in recent days as fourplexes have become a flashpoint in Ontario politics and housing policy, with Ford rebuffing calls to automatically allow up to four units on a residential property anywhere in the province. 

Municipalities can build them if they want, but the province won’t force them, Ford has said. He has stood firm even as the federal government ties $5 billion in new funding for the provinces to implement a similar policy.

Green Party Leader Mike Schreiner said fourplexes are among the cheapest and fastest ways to increase housing supply, and the bill is notable for its absence of that measure and others he has urged.

“(The housing crisis) is a raging forest fire that the government has brought a garden hose to try to deal with,” he said.

Ontario’s spring budget shows the pace of new home construction is picking up in the province, with 88,000 housing starts projected in 2024, but is still far off the levels needed to get to the government’s target by 2031.

Calandra has previously indicated that Ontario needed to be building at least 125,000 homes this year, ramping up to at least 175,000 per year in the near future.

Calandra’s new bill does seek to remove barriers to building additional housing like garden and laneway suites, such as restrictions on the number of bedrooms per lot. It would also exempt standardized housing designs from certain planning rules to speed up approvals, which the government says could allow Ontario to partner with British Columbia and the federal government on a catalogue of pre-approved designs.

Universities would be exempt from planning rules so they could save time on approvals and avoid barriers to building higher density student residences. 

The “use it or lose it” provisions would allow municipalities to re-allocate water and wastewater servicing if a development sits inactive for a certain period of time. The government said seven municipalities have reported that 70,000 units have remained inactive for at least two years.

It would also eliminate a requirement to have a minimum amount of parking for developments near major transit stations, limit third-party appeals to the Ontario Land Tribunal, and allow municipalities to more quickly increase development charges that builders pay on market housing that doesn’t qualify as affordable housing.

The changes on development charges reverse previous rules the government enacted that saw municipalities complain they would be out billions in revenue. This bill keeps intact cuts to development charges builders pay for affordable homes.

Municipalities have long urged the government to make them “whole” for the previous slate of changes to their development charge revenues, which they use to fund housing-enabling infrastructure such as water and sewer lines. Calandra said Wednesday that the changes in this bill combined with about $3 billion the government is making available for municipalities for such infrastructure will make them whole.

“We have listened to our municipal partners and we’re moving forward in a way that I think is much more co-operative,” he said.

NDP Leader Marit Stiles said the legislation fails to present a real plan on housing since a large chunk of it is reversals.

“The bill makes clear that this government doesn’t want – or perhaps know how to – take seriously the urgency of this housing crisis,” she said.

“All told, this bill won’t make it easier for you to find a home that you can afford or protect you from illegal eviction.” 

The legislation covers a number of more minor regulatory changes, but also proposes to allow municipalities to provide incentives to certain businesses to help attract investment and enacts the government’s reversal of dissolving Peel Region.

This bill would amend the law that would have broken up the upper-tier region to instead task the transition board initially responsible for overseeing that municipal divorce with considering how to make Peel Region more efficient. 

The province has also launched a new process for how it receives and considers requests for Minister’s Zoning Orders, which allow the province to fast-track development and bypass normal planning processes.

2) 76% of Canadians feel home ownership is out of reach for them: CIBC poll

April 11, 2024, Courtesy of Barrie 360 and Canadian Press

Three in four Canadians who don’t own a property say buying a home feels out of reach, a poll shows. 

A CIBC survey shows 76 per cent of Canadians who haven’t yet entered the housing market feel homeownership is a far−off dream, but more than half of them are holding on to their goal of one day owning a home. 

At least 70 per cent of non−homeowners said they were priced out of the market, while 63 per cent said it is hard to save for a down payment, the survey shows.

The survey comes on the same day the federal government announced longer amortization periods for certain first−time homebuyers.

The federal government will allow 30−year amortization periods on insured mortgages for first−time homebuyers who purchase new builds, Finance Minister Chrystia Freeland announced Thursday.

Freeland also said the government will nearly double the amount first−time homebuyers can withdraw from RRSPs to buy a home to $60,000. That’s up from $35,000, to take effect April 16, the day the federal budget is set to be released.

3) Ottawa to allow 30-year amortization for first-time buyers’ mortgages on new homes

Courtesy of Barrie360.com and Canadian Press

By Sammy Hudes

Some advocates are praising Ottawa’s move to lengthen the amortization period on insured mortgages for certain homebuyers, but say expanding the policy to all Canadians would help make home ownership more affordable.

Speaking in Toronto on Thursday, Finance Minister Chrystia Freeland announced the federal government will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing newly built homes.

The change will take effect Aug. 1.

Under the current rules, if a down payment is less than 20 per cent of the home price, the longest allowable amortization — the length of time a homeowner has to repay their mortgage — is 25 years.

“Faced with a shortage of housing options and increasingly high rent and home prices, younger Canadians understandably feel like the deck is stacked against them,” Freeland said in a news release.

“By extending amortization, monthly mortgage payments will be more affordable for young Canadians who want that first home of their own.”

Mortgage Professionals Canada CEO Lauren van den Berg called it a “step in the right direction” and said extending the amortization period “will help level the playing field for first-time homebuyers.”

“We know that this is going to allow greater opportunities for home ownership and will ultimately contribute to economic revival and economic recovery,” she said in an interview.

“But more still needs to be done for all Canadians to have that dream of home ownership within sight.”

Van den Berg said the government should expand the option to all Canadians purchasing a home, regardless of whether it is a new build or a pre-existing home.

“There are a lot of areas, particularly in the Greater Vancouver area and in the Greater Toronto Area, where you have no choice but to build up, so the possibility for new builds are not the same across the country.”

Ratesdotca mortgage and real estate specialist Victor Tran also raised concerns about how effective the change would be based on the eligibility criteria.

“While it’s currently possible to get an insured mortgage with a new build, it’s rare,” he said in a statement.

Tran also pointed out many properties in Vancouver and Toronto are priced at more than $1 million, which typically means buyers have to take uninsured mortgages. 

But Canadian Home Builders’ Association CEO Kevin Lee said the announcement would be a “game changer.” The group has also been in favour of longer amortization periods, saying five more years would help with affordability and spur more construction.

“This measure will also go a long way to enable our sector to respond to the government’s goal of getting 5.8 million new homes built over the next decade,” he said in a statement.

“This measure is needed now to help turn the market around, and will be needed for many years to come if we are to work towards doubling housing starts.”

He said the rental market should see some relief too, as the move could enable some Canadians to stop renting and become homeowners. 

As part of the announcement, Freeland also said the government will raise the amount first-time homebuyers can withdraw from their RRSPs — to $60,000 from $35,000 — to buy a home. That will take effect April 16, the day the federal budget is set to be released.

The government said the change reflects the reality that the size of a down payment and the amount of time needed to save up for one are much larger than they used to be.

People who have made or will make withdrawals between Jan. 1, 2022, and Dec. 31, 2025, are also getting more time to begin repayment — up to five years in total rather than two.

Ottawa said those changes are meant to work in tandem with the First Home Savings Account, which it launched last year. The rules governing that program allow prospective homebuyers to start saving for up to 15 years once they open an account, with an annual $8,000 deposit cap and a lifetime contribution limit of $40,000.

Freeland said more than 750,000 Canadians have opened an FHSA to date. While the program came online April 1 of last year, most Canadian financial institutions only began offering the account as of last summer or fall.

Ottawa also announced changes to the Canadian Mortgage Charter that will include an expectation that financial institutions offer permanent amortization relief to protect existing homeowners who meet certain eligibility criteria.

That would allow eligible homeowners to reduce their monthly mortgage payment to a number they can afford for as long as needed.

Patricia Dent

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