Update on Housing Bill Leaves City of Barrie With Major Gaps in Financial Plan: Mayor
Ontario To Audit Municipal Funding Gap Due To Housing Law, Pledges To Cover Shortfall
CITY OF BARRIE’S FUNDING SHORTFALL IS AROUND $90 MILLION
Courtesy Barrie 360 and Canadian Press Published: Dec 1st, 2022
By Allison Jones in Toronto
Ontario is promising to make municipalities “whole,” if they can’t fund housing infrastructure and services due to a new provincial law.
Municipal Affairs and Housing Minister Steve Clark wrote to the Association of Municipalities of Ontario to say the province was launching a third-party audit of municipal finances in “select” communities, focused on reserve funds and the fees housing developers pay.
“It is critical that municipalities are able to fund and contract road, water, sewer, and other housing enabling infrastructure and services that our growing communities need,” Clark wrote.
“There should be no funding shortfall for housing enabling infrastructure as a result of Bill 23, provided municipalities achieve and exceed their housing pledge levels and growth targets.”
The government has not yet identified which municipalities would be subject to the audits but is pledging to work with the association and the Ontario Big City Mayors to come up with a list. Clark wrote separately to Toronto Mayor John Tory with the promise of an audit and keeping the city “whole.”
Ontario Big City Mayors, of which Barrie is a member, will be meeting on Friday.
Association president Colin Best said Clark’s commitment was a “welcome and very positive development.”
“AMO is very pleased with the government’s recognition of the need to ensure municipalities’ access to revenues to support the joint provincial-municipal goal of increasing housing supply and affordability,” he wrote in a statement.
The bill passed Monday would, in part, freeze, reduce and exempt fees developers pay on certain builds such as affordable housing.
Those fees go to municipalities and are then used to pay for services to support new homes, such as road and sewer infrastructure. Communities across the province have expressed concern that they will have to raise property taxes to fund those services.
When it introduced the bill last month, the Ford government identified 29 municipalities in which the bulk of new housing will need to be built in order to reach its goal of 1.5 million new homes in 10 years. Ontario will require them to develop “pledges” of how they will meet their assigned targets. Toronto, for example, will need 285,000 new homes. Barrie will need 23,000 new homes.
Mayor Alex Nuttall told Barrie 360 on Wednesday that the city will be left with a $90 million shortfall as a result of the changes.
“When you have a $240 million wastewater treatment facility upgrade required in order to protect Lake Simcoe, as well as service all of these new homes and jobs coming to Barrie, it creates quite a difficult situation for us,” stated Nuttall.
The association has said the changes to development charges will leave communities short $5 billion and see taxpayers footing the bill, either in the form of higher property taxes or service cuts.
But Clark has said municipalities have billions of development charge revenues in reserve and the additional costs on new homes must be “reined in.”
Clark said that since 2010, municipal fees and taxes on new homebuyers in Toronto have increased by close to 600 per cent.
He said he hopes municipalities and the province can work together on the audit.
“We are committing to ensuring municipalities are kept whole for any impact to their ability to fund housing enabling infrastructure because of Bill 23,” Clark wrote.
Clark also told Tory that Ontario would cover up to one-third of the city’s operating deficit for this year, which it estimates at $703 million.
“It is critical that you use this support and the time it provides to take action to address Toronto’s forward-looking operating pressures,” Clark wrote.
Tory said that the federal government now needs to commit funding.
“(We) need to have the government of Canada address its clear commitment to assist with what is an exclusively COVID-19 related shortfall being experienced in a more substantial way by Canada’s largest city, with Canada’s largest urban economy, Canada’s largest transit system by far, and the biggest regional challenge sheltering people, including refugees,” the mayor wrote in a statement.
ALEX NUTTALL SAYS STAFF ESTIMATE THE BILL WILL LEAVE THE CITY SHORT AROUND $90 MILLION
Courtesy Barrie 360: Ian MacLennan Published: Nov 30th, 2022
The housing bill passed by the Ford government this week could leave the City of Barrie with a $90 million gap.
Ontario passed a housing bill Monday intended to spur development, but critics say it will lead to higher property taxes, weaken conservation authority powers, and not actually make homes more affordable.
The $90 million is the estimating staff have presented to Mayor Alex Nuttall, and he doesn’t see that number being reduced, in fact, he sees that number increasing.
One of the most controversial aspects of the bill that passed Monday is freezing, reducing and exempting fees developers pay to build affordable housing, non-profit housing and inclusionary zoning units – meaning affordable housing in new developments – as well as some rental units.
Those fees go to municipalities and are then used to pay for services to support new homes, such as road and sewer infrastructure and community centres.
The Association of Municipalities of Ontario (AMO) has said the changes could leave municipalities short $5 billion and see taxpayers footing the bill – either in the form of higher property taxes or service cuts – and there is nothing in the bill that would guarantee improved housing affordability.
Premier Doug Ford’s housing push comes as the government attempts to get 1.5 million homes built in 10 years, while high inflation and interest rates force the province to revise projections for housing starts downward. Ontario expects to build fewer than 80,000 new homes a year in the next couple of years.
The province has identified 29 municipalities in which the bulk of the new housing will need to be built in order to reach that goal, and will require them to develop “pledges” of how they will meet their assigned targets.
Barrie will need 23,000 new homes.
Housing affordability was a major issue in Barrie says Nuttall, when he was at the doors throughout the municipal election campaign, and he says that in May he announced he would support waiving development charges on affordable housing, something the province did not allow at that point.
“At the same time, some of the other changes in Bill 23 have gone a lot further, and they create that hole we are talking about.”
He says the fees collected through development charges pay for things like the wastewater treatment facility, new rec centres and services the city needs, as well as hard infrastructure like roads and sewers.
“And that makes things challenging, especially when you consider the changing economy that we are seeing in terms of higher interest rates and a predicated slowdown,” says Nuttall.
Municipal Affairs and Housing Minister Steve Clark said Ontario is facing a “severe” housing crisis and it requires bold solutions.
“If we are truly going to build affordable housing in this province, if all the mayors and councillors who said during their municipal election they want to incent more housing opportunity in their communities, this is a way that the government has very clearly said we wanted to investigate,” Clark said Monday after the bill’s passage.
AMO and other critics say that reducing or eliminating those fees does not guarantee developers will pass the savings on to buyers.
Clark said he is working with the federal government to secure support for municipalities to pay for critical infrastructure.
Nuttall says the changes mean the city will have to find other ways to fund certain infrastructure or find ways to reduce the amount of infrastructure that is going to be built.
“When you have a $240 million wastewater treatment facility upgrade required in order to protect Lake Simcoe, as well as service all of these new homes and jobs coming to Barrie, it creates quite a difficult situation for us.”
The mayor has exchanged letters with the premier’s office, as well as the office of the minister of housing.
“We look forward to a more in-depth conversation over the coming weeks to figure out how to repair the hole in this without having to go back to the taxpayer.”
Patricia is the Business Mentor and owner of Grow Vantage and a Past President of the Barrie Chamber of Commerce. She applies over 30 years of business experience (from start-up to corporate) to mentor entrepreneurs. Since 2011, she has held over 6,500 coaching and training sessions in-person and online. Through Ask For Directions Training, her entrepreneurial training program (and parent company Grow Vantage), and as a business coach, she works with start-ups who are new (or who have lost traction) to design, launch and grow their businesses. Along with 20 other expert instructors she teaches strategies in marketing, sales, communications, and finance, as well as practical techniques to increase productivity, and manage their businesses. In other words, everything entrepreneurs need to learn to grow and run their businesses successfully, and avoid the costly mistakes they can't even see coming - that lead to delays in growth and getting stuck.