Promoting Affordable Housing ActSeptember 29, 2016
Mr. Ernie Hardeman: I’m pleased to rise today to speak to Bill 7 because Ontario is facing a housing crisis. The government has talked about the need to address affordable housing, but every year the problem gets worse.
Every year, the waiting list for affordable housing hits a new record high. It is now at 171,360 families. That’s an increase of 45,257 families since 2003. To put this in perspective, that increase is bigger than the number of people in any community in my riding. It’s about four times the size of Ingersoll. It’s three times the size of Tillsonburg. It’s more than twice the size of Huntsville. It’s almost three times the size of Thorold. It’s almost twice the size of Grimsby. It is more than the entire population of Timmins. Let me be clear: That’s just the increase of the waiting list.
Not only is the list bigger every year, but the wait times for every single category have increased. In 2003, seniors were waiting 2.5 years for affordable housing. Now that has almost doubled, to 4.4 years.
The government may not want to admit that there is a crisis any more than they want to admit that we are facing a hydro crisis. But those 171,000 families are telling them there is a problem. That parents are commuting three or four hours every day because they can’t afford a home near their job is a sign that there’s a problem. That many kids are still living at home in their twenties and thirties because they can’t afford any other options is a sign that there is a problem. Municipal politicians from across Ontario are telling this government that there is a problem.
When the new housing minister announced money for York region, regional chair Wayne Emmerson responded with, “Mr. Minister, we’re going to be asking for more.” So in this, my leadoff, I want to start talking about the current state of housing in Ontario, then inclusionary zoning generally, and finally point out some of the specific problems with Bill 7.
Before I do that, I want to take a moment to recognize the work of the member from Parkdale–High Park, who I don’t believe has been recognized yet during this debate of the bill. She has brought forward numerous bills on inclusionary zoning and persevered with the government. I don’t believe we would be having this debate today if it weren’t for her efforts and I want to commend her for them.
Affordable housing is an issue that has been raised repeatedly by the third party and our caucus over the last few years. We’ve all seen the media reports of the cost of housing in the GTA, Ottawa and Hamilton. In cities such as Barrie, Innisfil, and Bradford West Gwillimbury, there have been double-digit price increases.
The Toronto Real Estate Board recently reported that the average price of all homes sold in August was $710,410. To put that in perspective, the mortgage payments on that house would be $4,131.78 a month, or $49,581 a year. That’s more than a lot of people make. Even the average price of a condo is now $489,914, putting it out of reach for many people. Most people could never dream of being able to afford a detached home, which is now an average of $1.2 million.
The cost of housing isn’t just a Toronto problem. The average cost of a house in Hamilton and Burlington is almost $500,000, up 11.4% since last year. Across Ontario, housing prices increased 12.8% from May 2015 to May 2016, according to the Canadian Real Estate Association. That is higher than the increase in any other province except British Columbia.
As AMO said in their submission for the Long-Term Affordable Housing Strategy, “The cost of housing is taking a toll on families and communities across Ontario, pushing both personal debt and housing wait-lists to record levels.”
They are not the only organization that has rung alarm bells. The International Monetary Fund issued a warning about Canada’s overheated housing market and household debt levels.
Just recently, the head of the International Monetary Fund met with the Prime Minister and discussed housing. It was interesting that she made it clear that this is not a nationwide problem. It is a regional problem impacting areas like Toronto, Hamilton and other municipalities in the Golden Horseshoe. This is not solely an Ontario problem, but instead of implementing policies to make it better, this government is actually putting forward policies which make it worse. Bill 7 does nothing to change that.
The TD Economics report released on August 15, 2016, found that most of the price pressures in Canadian real estate continue to be driven by markets in Ontario and BC. Not including those two provinces, Canadian real estate prices were actually down 0.2% year over year. As the cost of housing has increased, more and more families who used to be able to afford housing on their own now require support.
Last week, I met with the Ontario Association of Food Banks, who found that the average food bank client spends over 70% of their monthly income on housing.
While there has been much discussion about the million-dollar homes in Toronto, the problem is not just with houses. Renters are facing affordability challenges too. The last estimate is that 42% of renters spend more than the recommended 30% of their income on rent.
Development charges, hydro costs and now inclusionary zoning are all costs that the landlord has to pay, which ultimately get passed on to the renter. These policies also discourage developers from building new rental units, limiting supply in the market. As these developers will tell you, they’re still building rental units; they’re just not building them in Ontario.
This government has made decision after decision that drives up the price of housing and the cost of living in Ontario, and not once have they stopped to look at the cumulative impact on housing. Allowing development charges on more items, restrictive land use policies, a second land transfer tax, spiralling increases in the cost of hydro, and now inclusionary zoning—all of those are decisions that drive up the cost of homes and mean fewer people can afford housing without some form of assistance. Individually, some of these decisions, such as land use planning, have merit, but this government has never bothered to look at the total impact.
We cannot talk about housing affordability without talking about the impact of hydro increases on the cost of living. In just over a year, family budgets have been hit five times with hydro increases: On May 1, 2015, there was an increase that was estimated to cost the average family $68 a year. On November 1, 2015, there was another increase, this one estimated to cost $53 a year. Then, on January 1, the Ontario Electricity Support Program began, which cost the average family $11.16 a year. And the Ontario Clean Energy Benefit was repealed, costing families $153.60. Five months later, on May 1, there was another increase, this one costing families $37.56. Even subtracting the debt retirement charge, it adds up to $250 more that the average family is paying for hydro, compared to just over a year ago. Is it any wonder that people are having trouble affording housing? Is it any wonder that landlords who have to pay those costs are being forced to increase the rents? Is it any wonder that developers are looking at building in other jurisdictions, Mr. Speaker?
Over the last 10 years, the price of off-peak hydro has gone up two and a half times, to 8.7 cents. On-peak, it is now a whopping 18 cents a kilowatt hour. One person told me in an email last week, “Thanks to this Liberal government’s waste, cronyism and mismanagement, we are paying two mortgages, one to the bank and another one to the hydro company.” Another email said, “Opened my bill today and it was over $800! That’s almost a mortgage payment! I live within Ingersoll and my delivery was $150.”
Person after person told us that they are struggling to make ends meet because of the cost of hydro, and this government refuses to listen. If they believe that an 8% rebate is going to solve the problem, it’s clear they don’t understand how much hydro bills have increased in Ontario. If they think that stopping a future $2-a-month increase on an $800 bill is going to solve the problem, it’s clear they don’t understand the impact on family budgets. Energy poverty is a huge issue in Ontario and a huge affordability factor, but Bill 7, the affordable housing omnibus bill, does nothing to address it.
Bill 7 also failed to address the red tape that is adding to the cost of housing. “The president of the Ontario Association of Architects (OAA) says one of the biggest barriers to the development of more affordable housing in this province is the drawn-out site plan review process that adds thousands of dollars in unnecessary costs” and which over the years has become more “bogged down by bureaucratic red tape….
“In 2013, OAA completed an analysis of these added costs and found a 100-unit condo could lose between $400,000 and $500,000 due to higher costs and lost equity for every month of site plan review.” That is money that homeowners or renters have to pay that doesn’t benefit anyone.
The association president said, “If those kinds of delays are applied to affordable housing projects, they’re no longer economically viable.”
The residential construction association reported that, “It takes an average of 10 years to take a home-building project from concept to occupancy,” due in part to the 45 independent government bodies that play a role in the building process. I want to repeat that, Mr. Speaker: 45 separate government bodies, with no real oversight on their collective actions. Think of how much money could be saved simply by reviewing and cutting that red tape. Think of the impact it could have on reducing housing prices and encouraging the development of rental units. Yet, Bill 7 does nothing to address that problem.
Speaker, it isn’t just red tape that’s causing the challenges for new housing: Look at how the government allowed development charges to increase. Municipalities have been struggling to make ends meet as the government cuts the Ontario Municipal Partnership Fund grants and piles more and more costs on municipalities. Part of the government’s solution is to allow increased development charges, resulting in more of the municipal infrastructure costs going into the cost of housing and rentals. As an August CIBC economic report said, “A surge in government-related development costs has compounded the affordability issue.” According to a recent article by the Greater Ottawa Home Builders’ Association, “Over the past 25 years the tax bill on a new home has increased from 3% to about 25%.”
At the same time as the government is piling more cost on homeowners, they’re restricting supply, which is also forcing up the cost.
A study released this August by Ryerson University’s Centre for Urban Research and Land Development found that the majority of people in the GTA, particularly in the 905, prefer ground-related homes which have access to a backyard. I’m sure, Mr. Speaker, you would prefer that too.
However, reports show that the government of Ontario policies would result in these homes only being an option for “the very wealthy.” We’ve already seen some of the impacts of limited supply in places like Innisfil, where there are stories of people camping out for days to be in line when the first building lots are released. Economist and planner Russell Matthews said, “It’s pretty straightforward, land use restrictions constrain supply. If demand stays high, that drives prices up.”
Every decision has consequences. We support protecting agriculture and environmentally sensitive land, but the government needs to recognize that by doing so, supply is limited and the price of housing goes up. Add that to the government’s other decisions—increasing development charges, ignoring red tape and driving up the cost of hydro—and the results are our current housing crisis.
As Richard Lyall, president of the Residential Construction Council of Central Ontario said, “The unfortunate reality is while government has remained adept at announcing new measures and ribbon cutting, it has yet failed to examine how their own existing system is driving up the cost of land and building. This is driving new housing further and further out of reach for an ever growing share of the population who are on average experiencing real declines in incomes.”
While the government has talked a lot about affordable housing, there isn’t much evidence that they have considered the impact of their decisions on affordable housing or taken much real action to address the problem. As I mentioned in my previous remarks on this bill, the government released a Long-Term Affordable Housing Strategy in 2010. Since then, we’ve seen the waiting list for affordable housing increase by nearly another 20,000 families.
In 2010, the strategy stated, “The success of the Long-Term Affordable Housing Strategy will be measured using performance indicators.” The Long-Term Affordable Housing Strategy committed to report annually on the social housing tenant satisfaction surveys, the Canada Mortgage and Housing Corporation’s annual rental affordability indicator, and the Ontario Housing Measure, which reports the percentage of households with children under 18 who have incomes below 40% of the median household income and are paying more than 40% of their income for housing. Six years later, we have not seen a single report.
I wrote the minister before the new Long-Term Affordable Housing Strategy was released and asked him to include these measures, or something equivalent. But there was still no performance indicator, just more nice words. So the only real way we have to measure the effectiveness of the six years of the Long-Term Affordable Housing Strategy is the wait-list, the additional 20,000 families who have been added since this strategy was launched.
Now the government has released an updated version of the Long-Term Affordable Housing Strategy, which resulted in this bill. Once again, it contains nice words. But, Mr. Speaker—Madam Speaker, or should we just say Speaker?—I have concerns that it doesn’t truly address our housing crisis.
We recognize that solving the housing problem isn’t an easy problem to solve. A two-by-four costs the same, whether it’s going into a million-dollar home or an affordable rental unit. Government can’t just build more cheaply to create affordable housing.
Solving our housing crisis is complex. The solution involves ensuring that there is social housing available for those who need support services, as well as access to affordable housing for all Ontarians. It involves policies that will encourage the building of more rental housing. It involves co-operative housing, where people not only have an affordable, suitable place to live; they have a pride of belonging and ownership. It involves rent supplements, to give people choice on where they want to live and use their housing money as effectively as possible. It involves making sure that the dream of home ownership isn’t out of reach for families. It means ensuring that the rapidly increasing cost of living isn’t forcing people out of their homes or forcing them to choose between heating that home and eating. In fact, a significant portion of the solution has to be addressed in the cost of housing for all families.
If we simply shift the burden for affordable housing on to other homes and apartments, then we increase the number of people who need assistance to afford a safe place to live.
To solve the problem, we need to consider the entire spectrum of housing—from homelessness to shelters to social housing to apartments and home ownership. When part of the system is broken, it impacts the whole spectrum. Simply shifting the cost from one type of housing to another won’t solve our problem.
I want to make it clear: We’re not against working with the private sector to find solutions to provide more affordable housing. We are against legislation that is not well researched and thought out. We’re against legislation which seems to be more about good photo ops than good policy. And we are against driving up the cost of housing for all Ontarians.
Madam Speaker, there are many different models of inclusionary zoning. Some jurisdictions in the United States make it mandatory while others encourage it with incentives. The required set-asides and the market rents vary widely. As a result, the studies and evidence of the impact of inclusionary zoning also vary widely. It makes it difficult to determine what the financial impact of this bill will be.
Ryerson University’s Centre for Urban Research and Land Development said, in a 2015 report, “The effectiveness of any inclusionary zoning policy depends on a jurisdiction’s specific housing market structure and conditions, regulatory context and the design of the policy itself.”
Look at the example of Denver, which offers developers a density bonus, reduced parking requirements, cash incentives and expedited processing in exchange for building affordable housing. Therefore, the amount of cost that has to be absorbed by the new homeowners or renters would be significantly less than under Bill 7, which provides municipalities with some options but does not require any of those incentives.
In New York, the inclusionary zoning program offers an optional floor area bonus in exchange for the creation or preservation of affordable housing. As it was voluntary, developers would likely not participate if the density bonus wasn’t enough to cover the cost, so again, the cost to homeowners and renters would be less than what is proposed in Bill 7.
Madam Speaker, there are two ways that inclusionary zoning can increase the cost of housing. The first is direct, with the cost of the affordable housing units being added to the cost of the other units, resulting in the other homeowners or renters paying more. The other is that it can discourage building, which further limits supply, forcing the cost up.
Studies of inclusionary zoning in California from 1988 to 2005 and Boston from 1987 to 2004 both found that inclusionary zoning resulted in an increase in the cost of houses. The Boston study also found that there was up to a 10% decline in housing starts.
Following the government’s announcement on inclusionary zoning, Brian Johnston, chief operating officer for Mattamy Homes, wrote a letter to the editor:
“On your average high-rise of 300 units, my back-of-the-envelope calculation indicates that the buyers not eligible for the affordable units will pay about $15,000 more per unit. The belief that developers will pay for affordable housing is a false one given financing requirements by banks and financial return criteria by investors.
“What planners and politicians fail to recognize is that this is just another tax on the first-time buyer/middle class. Surely this cannot be considered fair.
”It also prices some of these buyers out of the market, which will ultimately reduce the supply of badly needed housing in the greater Toronto area. Equally objectionable is a new bevy of red tape that will envelop this proposal, slowing approvals and creating more deadening bureaucracy for both developers and government.
“The answer to a lack of affordable housing lies in less red tape and more targeted government support programs. It is simply not realistic to assume that inclusionary zoning is a free ride for all.”
In a letter to the city of Toronto, BILD stated that, “Without proper as-of-right zoning in place, we will simply have another barrier to affordable market housing.”
They went on to say, “Inclusionary zoning simply shifts the burden of responsibility onto those that are trying to enter into home ownership for the first time.”
BILD held a round table on building affordable housing in the GTA with industry, government and non-government sector experts, during which concerns were raised that inclusionary zoning could be seen as the province downloading their responsibilities onto municipalities and the development industry. I think it’s obvious to everyone here that if that’s not so, it could at least appear so.
Concerns were also raised that inclusionary zoning would likely increase the cost of market housing units within a project unless there were financial incentives to offset the cost.
One of the other lessons from looking at the American example is that inclusionary zoning does not create huge numbers of units. As one stakeholder said to me this week, it’s a tool; it’s not the panacea for the affordable housing crisis.
Jennifer Keesmaat, chief planner for the city of Toronto, estimated that over the last five years, on average, it could have created 2,400 units a year. But since 2003, the waiting list for affordable housing has grown by an average of 2,600 families a year, 200 units more than the inclusionary zoning would have created. If inclusionary zoning increases the cost of housing for other families and decreases the number of housing units being built, that gap will grow even more.
Given that Ontario is already facing a housing crisis, the government can’t afford to get this legislation wrong. They can’t afford unintended consequences, but they seem to have once again charged ahead without doing the proper research and consultation.
We saw this in the ranked ballots, where they introduced the municipal elections legislation without being able to answer basic questions about how it would be implemented. In fact, the timing and the way that they handled it led 75% of municipal clerks surveyed to say that they did not think they would be prepared in time if their council decided to do ranked ballots in the next election.
Once again, the government can’t answer basic questions about how this legislation would be implemented. They can’t tell us if there would be exemptions for developments below a certain size.
The government hasn’t figured out how inclusionary zoning would work in condominium buildings. Would the tenants in the affordable housing units pay their share of the condo fees, or do the neighbours cover the cost of that service? Does it really make any sense to have someone who can’t afford a car pay their share of the valet parking, or have someone who is struggling to put food on the table pay for the concierge to carry their groceries up to their unit or make restaurant reservations for them? We know that’s not where they’re going. But if they aren’t paying for a share of the services, do they still get the same access to them as everyone else? Do they have the right to serve on the condo board? Is municipal social housing money used to pay the condo fees, even though that same amount might have provided housing for multiple families in another location? These are all questions that the government should have thought through before they introduced this legislation.
In fact, the summer after they first introduced the legislation as Bill 204, the Ministry of Housing conducted consultations that asked such basic questions as:
“Should there be provincial direction to further specify the target groups for inclusionary zoning, or should this be left to municipalities to determine?
“Should there be provincial direction on how price and rent would be determined in an inclusionary bylaw when inclusionary zoning units are sold or leased? If so, what approach would you recommend?
“Should minimum and/or maximum unit set-asides be specified province-wide or should this be left to each municipality to determine? If you think that a specified number or percentage of units should be applied province-wide, what would you recommend?”
Madam Speaker, this government put forward legislation that could have significantly impacted on the supply and cost of housing in Ontario, but they don’t answer any of the basic questions of who would be eligible for the affordable units, what price they would pay, whether developments below a certain size would be exempt, and what percentage of units would need to be affordable. They can’t tell developers whether this legislation would apply to planning applications that have already been submitted or whether those would be grandfathered. They haven’t even decided whether the province will be making those decisions or whether it be the municipalities.
As staff in Sudbury said in a report to council, “Much of the detail of these proposed legislative changes are proposed by the province to be worked out in regulation that will be published after”—this is relating to the previous incarnation of this bill—“Bill 204 comes into effect. In many respects, it is too early to know the full effect of these proposed changes.”
Madam Speaker, I just want to point out here that all of these questions were asked between the introduction of the two bills. In the briefing I had this morning I was told that the bill that was introduced after all this consultation is word-for-word identical to the one that was introduced before the consultation, so either no one said anything or the government didn’t listen to anything they were saying.
It’s difficult for anyone to evaluate this legislation when there are so many unanswered questions. It’s even more frustrating for the municipalities, developers and organizers that after the consultation this summer, the government chose to reintroduce the same flawed bill. Despite all the time and effort that the stakeholders put into preparing the submissions and attending meetings, the government hasn’t changed a single word. It appears they weren’t listening.
Well, I can assure all the groups that we are listening. I want to thank everyone who took time to meet with us or share copies of their submission and to assure them that we’ve heard their concerns. Both the people who support inclusionary zoning and the people who are against agree on one thing: There are always ways that we can make this better.
Madam Speaker, as the opposition critic, it’s my job to point out when the government’s proposed legislation is missing the mark. As I mentioned, there is very little that actually specifies how inclusionary zoning would work in this bill. In fact, two of the only things specified are that affordable housing cannot be built on an alternate site, and that the developer cannot provide cash in lieu of units. We’ll get back to that, Madam Speaker, but that’s a very important situation.
Both of these restrictions are well-intentioned, but stakeholders have already pointed out that they make it difficult to implement inclusionary zoning. Having a few affordable units in each building of a subdivision may not be the most cost-effective way of providing housing.
I already pointed out the example of a high condo fee that might be enough to house several families. Just a few blocks from here is the Charles Hasting co-op, which was created when a developer provided the land as part of their agreement to develop another site. Those are 91 units close to downtown and transit that wouldn’t be there if this bill had been in place, because they could not move it from one site to the other.
Madam Speaker, as you know, I’m a big supporter of co-operatives, including housing co-ops. I think it is a model that works, because the tenant has the pride of ownership. Under the government’s current legislation it’s difficult to see how it would result in any new affordable co-op housing.
Other jurisdictions have found ways to provide flexibility while still maintaining mixed-income communities. New York and San Francisco require that affordable housing units be built within a distance of a project. Denver allows more flexibility, as long as the affordable units are built within half a mile of a commuter rail station.
These problems become more significant when you look at housing developments. In fact, over the last 10 years Toronto Community Housing has sold many of their stand-alone houses to reinvest the money into multi-unit buildings. As it said in a report to Toronto city council, “Single-family homes are not as cost-effective for TCHC to operate and manage as their larger multi-unit properties. Unless there is some geographical concentration or a co-location with a larger multi-unit property, operational staffing and support can be a challenge.”
The government doesn’t seem to have thought through how inclusionary zoning would work in a subdivision of million-dollar homes with large lots. The first question that comes to mind is, who is the lucky person who gets to purchase the million-dollar home at a fraction of the cost? Because they have to build it. But it may turn out that they’re not really the lucky one. This family that needed affordable housing would then be stuck with paying the property taxes, maintenance, heating and other utilities on the large home—and just imagine the hydro costs.
The people who get the right to purchase a house at rates well below market may feel like they won a dream home in the Princess Margaret lottery, but unless there is thought on how they will manage the expenses of the home, they end up just like the lottery winners: forced to sell it because they can’t afford to live there. Instead of having one family struggling to make ends meet with that large house, the million dollars could build four or five units that are cost-effective to maintain. They could have repaired 20 of Toronto’s community housing units that are currently boarded up because they need so much maintenance, or it could have provided rent supplements that would have housed 130 families.
The way that this legislation is written, it applies to all developments, even those with two or three houses. That means that in a development of two houses, one would have to be affordable housing and the other house would have that entire cost added to their home. That isn’t fair, nor is it practical.
If someone was proposing an infill development where there is only space for two or three units, it might not be economically feasible to have one of those units of affordable housing, but the money may be able to contribute to affordable housing in other areas. There are a number of options to solve this problem. The Ontario Professional Planners Institute recommended that the section of the bill which prohibits cash-in-lieu be removed and that it be allowed for small developments. It would follow the examples of American cities such as Denver, which exempts developments under 30 units from the mandatory inclusionary zoning but offers incentives to those developers to encourage them to include affordable units.
We could add flexibility by allowing cash-in-lieu where it isn’t practical to include affordable housing. There are a number of examples where cash-in-lieu would be more effective and help more families: the high-end condo building, where the cost of paying for the share of the building’s services would be enough to help multiple families find suitable housing; the subdivision, where the cost of maintaining the house makes it unaffordable no matter what the purchase price, or where the location far from transit and services make it impractical.
Boston, Chicago, Denver and San Francisco have all recognized the need to have flexibility by allowing cash-in-lieu.
In some cases, it is restricted or set at such a level that it provides a financial incentive to build the affordable housing units instead, but it still provides the flexibility for municipalities and developers when including affordable housing in a development doesn’t make sense. As the Ontario Non-Profit Housing Association said in their submission on Bill 204, “Given the diversity of development projects under way in Ontario, cash in lieu of units is an important option for municipalities.”
Cornerstone Partnership studied the impact of the in-lieu fees collected in Seattle between 2002 and 2013 and found that the city was able to leverage these funds to create far more units than if they had simply been built on the original developments. This has to be part of the recognition that there are certain residential buildings where inclusionary zoning isn’t appropriate. For instance, if a university builds a new residence, currently they would be required to provide a percentage of the units as affordable housing. Boston, Burlington and Chicago have provided specific exemptions for dormitories.
Currently, Bill 7 could apply to a seasonal development in which there is no winter access. Since there is no exemption for this type of development and no ability to build off-site or for municipalities to accept cash-in-lieu, we could create beautiful affordable housing that leaves people stranded all winter. We need to address affordability and the housing crisis, but we need to be smart about how we do it.
One of the recommendations from the Ontario Municipal Social Services Association was that government create policies that encourage and promote the development of affordable rental units. Bill 7 does exactly the opposite.
Last year, the Federation of Rental-housing Providers of Ontario provided a research paper to the government on removing barriers to new rental housing in Ontario. They recognized that the number of rental units being built in Ontario each year is well below the increase in demand, and we all know that low vacancy rates lead to less choice and higher rents.
They made a number of recommendations that the government ignored. They clearly told the government, “Unlike condominium construction, private rental housing is a long-term investment; FRPO reminds the government that uncertainty related to future government policy contributes to an unfriendly business environment and does not attract investment to Ontario.”
Less than a year later, the government introduced this bill which would add significant new cost to rental projects which are already in the application stages. In fact, in the consultation that they launched after they introduced this bill, they asked, “Do you think that planning applications commenced prior to the enactment of the proposed legislative process should be grandfathered?” In their submission, the Ontario Professional Planners Institute, the Federal of Rental-housing Providers of Ontario and others clearly recommended that these applications commenced prior to the enactment should be exempt.
Some people make the argument that inclusionary zoning leads to developers simply paying less for land. These developers didn’t get that opportunity. They bought the land and invested money in the application process based on the current rules, and they should have the right to continue to operate under those rules.
Before putting in the application, development companies look at the profitability of the project. If the government is going to send the message that they can make changes to the rules partway through and make the project unprofitable, the developers aren’t going to invest. Instead, they will choose to go to jurisdictions where the costs are predictable, they don’t have the same red tape and their operating costs—like hydro—won’t increase exponentially.
Developers aren’t the only ones who are dealing with government unpredictability. The government claims that they are not going to force inclusionary zoning on municipalities, but—and it’s a big “but”—they have included a section in the bill that allows them to do just that. If there is no hidden agenda and they are not planning to impose inclusionary zoning on municipalities that do not want it, why does Bill 7 say that municipalities prescribed by the province are required to have inclusionary zoning policies? They’re not designated yet, but the government is going to have the power to designate them, which of course would then make it mandatory for those municipalities.
We believe that municipalities are a mature order of government. We believe that they should be respected and we believe that municipalities should have the right to decide that inclusionary zoning does not work in certain areas or in their municipality as a whole. That is what municipalities and AMO are asking for, and I believe we should respect that.
Municipalities are also pointing out that this bill once again includes downloading by stealth. It increases costs for municipalities in three ways: first, the new requirement to enumerate homeless people; second, the new responsibility for enforcing property maintenance standards under the Residential Tenancies Act; and third, operating the inclusionary zoning program itself.
This legislation requires housing service providers to conduct an enumeration of all homeless people in their area. In some cases, the service provider is the municipality. In other cases, the service provider is funded by multiple municipalities and provides services across the jurisdiction, which means that this new responsibility is an added cost for municipalities. It is impossible to know how much this will cost because the government will provide the details on enumeration, including how often and how it will be conducted, at a later date.
But what we do know is that when the federal government worked with designated municipalities across Canada to enumerate the homeless, it provided each municipality $1 million. In comparison, Ontario has announced only $2.5 million over three years for evidence and research. Does it mean, just like the first version of the Long-Term Affordable Housing Strategy, that there won’t be any meaningful measurement so that government won’t be held accountable? Or does it mean that municipalities will be on the hook for the rest of the cost?
Under Bill 7, municipalities will also be on the hook for inspecting and enforcing property maintenance standards in rental properties under the Residential Tenancies Act. Currently, if there is no municipal property standards bylaw, the minister is responsible for having rental units inspected if a complaint is received regarding maintenance standards. Under Bill 7, the responsibility for these inspections as well as follow-up work orders, if required, will be downloaded onto the municipalities. This is an additional cost on municipalities that are already stretched. By one estimate, 30% of municipalities do not currently have a municipal property standards bylaw. Many of these are smaller municipalities with limited resources. As the mayor of Greater Madawaska township said, “This is a prime example of further downloading onto the small rural municipalities who are struggling with the effects of ever-increasing police costs and fewer and fewer grants.” I look forward to hearing from AMO at the committee about the cost of this download to municipalities.
We also heard from municipalities about their concern with the cost of inclusionary zoning. In fact, under Bill 7 the cost for any incentives such as waiving development charges to encourage inclusionary zoning would be paid by the municipality, not by the province. As a report from the township of Springwater council stated, “Therefore, funds that would normally be set aside for works such as road and infrastructure improvements would have to be found elsewhere within the municipal budget.”
Municipal staff have also raised concerns about the reliability and the consistency of the data used to determine what is “affordable.” That is in addition to the fact that units created under inclusionary zoning may be more spread out and less cost-efficient than other affordable housing units.
Madam Speaker, I understand the importance of trying to make affordable housing cost-efficient, so that limited dollars can help as many families as possible. Over the last few years, I’ve asked question after question about the waste and misuse of social housing money at the Housing Services Corp. I brought forward a private member’s bill to try to stop this misuse and save housing providers money on their purchases of natural gas and insurance. When the government stalled my bill, I brought forward a motion encouraging them to move it forward. When they killed the bill by proroguing, I reintroduced it. And yet, despite all that, the government still refuses to implement these small changes that could add accountability and save housing providers money. Bill 7 amends the Housing Services Act, but it fails to make the changes required in the act for housing providers who purchase their natural gas and insurance through the Housing Services Corp.
The Housing Services Corp. was created by legislation to facilitate group-buying of natural gas and insurance for housing providers, so that everyone could benefit from volume discounts. But over the years, the Housing Services Corp. has grown, and now overcharges housing providers to fund their own pet projects and world travel.
Toronto Community Housing calculated that purchasing through the Housing Services Corp. cost them $6.3 million in a single year. To put that in perspective, it would have built more than 25 new affordable housing units, it would have repaired more than 125 of the units that are currently boarded up because they are uninhabitable or it would have provided rent supplements to house almost 820 families.
Toronto Community Housing is not the only one who is being overcharged by the Housing Services Corp. Hamilton Social Housing found that they could save over a million dollars in a single year if they weren’t forced to purchase from the HSC. In Hastings county, purchasing through the HSC added $40,000 to the cost of natural gas in a year. A report in Peel region found that purchasing directly could have saved them $182,000. Thunder Bay estimated that they had paid an additional $750,000. A report from Stratford found that they could have saved $40,000 in a single year.
This is an interesting one, Madam Speaker: Waterloo region pays about $10,000 each year just to be allowed to opt out of purchasing their insurance from the housing authority. They buy it from a private provider and still save money.
A report from Niagara region said, “While rates fluctuate, when comparing rates alone, on balance the HSC program has been more expensive than either Union Gas or Enbridge.”
Oxford county has estimated that if they were allowed to opt out of the Housing Services Corp., they would save about $100,000 a year. That is public money that was intended to provide housing in a local community that is being wasted because this government refuses to allow housing providers to simply purchase natural gas and insurance at the best price.
We will be putting forward an amendment to the bill to allow housing providers to opt out of the Housing Services Corp. and purchase natural gas and insurance at the best price.
If Housing Services Corp. can provide it at the best price, then housing providers will stay with them. AMO’s Local Authority Services has shown that it is possible to pool these purchases and save money if your operations are cost-effective.
The government would have people believe that they have fixed the problem at the Housing Services Corp. Well, let me share what “fixed” looks like. It is almost October, but HSC has only posted expenses for the first three months of this year, and then only for five staff members. Among the expenses posted are two trips to England, including hundreds of dollars for preferred seat selection. There is a trip to Montreal and a trip to Santa Barbara, California, which have the purpose blacked out.
Housing Services Corp. listed the employees with the biggest expenses, but there are no details on what they spent the tens of thousands of dollars on. They list the total expenses of the board members, but again, there are no receipts and no details. It wasn’t that long ago that a board member was caught expensing a luxury seven-day vacation.
Last year, when the government said this problem was supposed to be cleaned up, social housing money still went to send multiple people to Manchester, England; Chicago, Illinois; Charlottetown, Prince Edward Island; and Winnipeg—all of this for an organization whose sole purpose for existing is to provide services to Ontario housing providers. While 171,000 families are on the wait-list for social housing, staff at Housing Services Corp. are expensing $4.50 for coffee and over $200 to rent an SUV for a day to drive to meetings. They’re still trying to build an empire at the expense of people who are waiting for housing today, and there is nothing in Bill 7 that would stop them from doing so.
Madam Speaker, you may remember some of the stories I shared with this Legislature about subsidiaries that the HSC created. There was a solar panel company that received over $1 million in public money intended to provide housing for families in need. Year after year, the HSC made large loans to the solar panel company and then wrote off the loans in the same year.
There was a subsidiary in Manchester, England, called HS 497 Ltd. It never operated and the only address was for a lawyer’s office that had a history of setting up numbered companies. Unless we call the auditor, we will likely never know why Housing Services Corp. chose to put public housing money into that shell corporation, or what happened to the portion we didn’t get back, but there is nothing in this bill that will allow the auditor to investigate that.
Madam Speaker, I want to point out another thing that isn’t in this bill that would have contributed to increased affordability for housing in Ontario. There is nothing to deal with the so-called professional tenants who have figured out how to use the system to get months and months of free rent. These bad tenants discourage people from renting second units in their home—the very units that are often more affordable and that the government claims they are trying to promote—but there is nothing in this bill to address the loopholes that these tenants are using. In fact, even the government consulted on ways to help small landlords five months ago, and the minister’s mandate letter says there is no action due on these problems until next year. How many more landlords will be taken advantage of by professional tenants in that time? How many potential landlords will look at that risk and decide not to invest in creating a secondary unit?
Madam Speaker, we know that solving the housing affordability problem is complex, but like the hydro problem, the first step is to stop digging. The government needs to stop implementing policies that drive up the cost of living for the people of Ontario. They need to considerate the total impact of their policy decisions on housing. They need to be aware of the reality of family budgets. And they need to do proper research and planning on their legislation to ensure there aren’t unintended consequences.
I want to ask the minister to take the time to do the financial models to see what the real impact of inclusionary zoning will be on housing prices in Ontario, to determine the cost to municipalities if they provide incentives, and the cost to homeowners or renters if they don’t. I want to ask the minister to share that information with this Legislature or with the committee when the bill goes there. Housing is too important an issue to get this wrong.
Every day we hear from someone who is struggling with affordability in Ontario, whether it is someone who has been told they have to wait years for social housing or someone struggling to pay their hydro bill. Those people deserve a government that is looking at real solutions to make living more affordable for all Ontarians, a government that will end the waste and misuse of social housing money so we can provide housing and services for people who need them.
I hope that the minister will do the research and planning to ensure that we have a solution to the housing crisis that will make life better for those 171,000 families on a waiting list, and for all the Ontarians who are struggling every day to make ends meet.
Thank you very much, Madam Speaker, for allowing me a few moments to put our position forward. I do want to end by saying that we will be supporting this, as we believe it is a start to looking at the whole picture of affordable housing and putting it all together. But unless there are significant amendments put forward in committee—we will be introducing some of them—we would not be able to support it, because without amendments it would not be taking us anywhere except more bureaucracy and not helping out people who need the housing. So we will be putting forward the amendments.
I was really pleased to hear the minister, in his remarks yesterday, saying that he was looking forward to the opposition bringing forward amendments of how we thought it would make the bill better. As you can tell from my presentation, we have a few areas where we believe we could make improvements. We will be putting them forward.
I hope that there’s more to the words this time than there was to the last bill that went through municipal affairs, when we were told a similar thing. We went to committee and not a single amendment that we put forward was accepted by the government to improve the bill. They put a few of their own that they passed, but they refused to look at a single amendment from the official opposition. They actually spoke to some of them in a positive way, but when it came time to vote, they said no.
I can tell you, if we put amendments forward, it will be to improve the bill so we can vote for it. But unless we can get some changes in it, we wouldn’t. But at this point we will be supporting the bill.