Amid sluggish housing construction starts in Ontario, the Progressive Conservative government is working on a use-it-or-lose-it policy that would force developers in the province to act on building permits that have been green-lit by municipalities.
The policy was first proposed by Premier Doug Ford in late August as a counter-offensive strategy during the government’s Greenbelt scandal response, but is now being formalized by his new Housing Minister Paul Calandra.
Representatives for Calandra told Global News the policy “is being worked on” but could not provide a timeline, citing the complexity of the housing file and the focus on implementing the recommendations from the province’s housing affordability task force report.
In August, Ford said the idea for the use-it-or-lose-it policy came directly from mayors who suggested municipalities need enforcement mechanisms to compel developers to act on construction permits once they’ve been approved.
“I’m talking to the mayors saying so many builders have permits and they aren’t building, that’s unacceptable,” Ford told reporters on Aug. 25. “I’m drawing a line in sand.”
Municipalities have increasingly stepped up their calls for developers to be held accountable, especially as the province experiences a flattening of new housing construction.
The latest data from the Canada Mortgage and Housing Corporation shows there have been 57,827 housing starts in 2023, far below the yearly average of 150,000 homes the province requires to meet its 1.5 million home goal by 2031.
Burlington Mayor Marianne Meed Ward, who served as the chair of the Ontario Big City Mayors, told Global News developers have cited current economic factors as the primary reason for the construction slowdown.
“We’re hearing from the industry directly that they have put projects on ice,” Meed Ward said.
She pointed to interest rates as a significant barrier for both builders and buyers to get adequate financing to make the projects viable.
“They’re not pulling permits, they’re not coming in to build right now because the economic climate is what it is,” Meed Ward said. “As long as that gaming of the system is going to happen, we’re not going to get to where we need to go.”
What’s unclear is how many permits have been approved but not yet acted on.
According to a report from the Regional Planning Commissioners of Ontario, published in March, there were more than 330,000 projects that have already been approved by municipalities, with another 700,000 in the approvals pipeline.
While Ford suggested he was frustrated by builders who are “land banking,” it’s unclear what measures his government will take to force developers to pick up green-lit permits.
During the 2022 election, for example, the Ontario Liberals pledged to implement a new “use it or lose it” speculator tax that would force builders to start projects immediately.
Meed Ward suggested a sunset clause on permits might convince developers to act quickly or risk having to return to square one.
“If you don’t pull permits, you have to start at ground zero and pay the fees again, and make sure your development is still relevant,” Meed Ward said. “Every player in the system has to be held accountable.”
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