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Developers claim they’re not hoarding vacant land, fearing use-it-or-lose-it policy

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Ontario’s construction industry is pushing back against claims that developers are sitting on thousands of approved building permits, as the Ford government develops new use-it-or-lose-it policies.

Amid sluggish housing construction starts in Ontario, the Progressive Conservative government has been weighing new policies that would target “land banking” and speed up development as the province looks to build 1.5 million homes by 2031.

Currently, according to the government housing tracker, the province has built 185,377 units since 2022 – 12 per cent of the overall goal.

While the Ford government has pointed the finger at municipalities for slow progress, cities have used a 2023 report claiming there were more than one million proposed housing units that were either approved or in the development pipeline to blame developers.

On Thursday, two construction industry advocacy groups published a study highlighting that developers are working at a “33-year high,” which, the groups maintain, is evidence that they’re not “sitting on supply” amidst a housing crisis.

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“With over 160,000 new homes under construction, you would have to go back to the late 1980s and early 1990s to find a similar level of residential construction in the province,” said Justin Sherwood, SVP communications and stakeholder relations at the Building Industry and Land Development Association (BILD).

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While BILD largely agrees that there are one million homes in the development pipeline or already greenlit, the industry association suggested shovel-ready projects would make a small dent in the province’s goal.

The study indicated construction could begin on 331,600 units almost immediately because the projects have received full planning approvals, building permits and servicing allocation from a variety of municipalities or regions.

“Based on the goal of achieving 150,000 units per year, this represents only 2.2 years of supply,” the report said.

The development industry also said those 300,000 are about five years away from “being occupied”

Another 731,000 units are still in the application pipeline, the study said, meaning they still require approvals, servicing allocations or municipal council decisions.

“Portraying these lots/units as ‘shovel ready’ is inaccurate, as they are not approved, do not have building permits or servicing allocation,” the study said.

“In many cases, these units had been previously refused by municipal councils, or appealed to the Ontario Land Tribunal,” the study added. “These lots/units are many steps and years away from being “shovel ready.”

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A spokesperson for the Ministry of Housing said work is well underway on a use-it-or-lose-it policy. They said consultations have taken place, including with BILD.

“Our new Housing Supply Action Plan will lay out the next steps of our plan to build the homes Ontario needs,” they said.

Frustrated with the pace of construction, the Ontario Big City Mayors group has asked the province to tie bonus funding to the number of building permits issued by a city, not how many houses begin construction.

The municipal lobby group argued that was fairer, saying it doesn’t control construction. The province has rejected that request but says it is working on plans to make sure land isn’t hoarded.

The need for a use-it-or-lose-it policy has been echoed by senior staff, councillors and mayors at many municipalities across the province.

BILD, the developer-lobby group, said it was aware the Ford government is considering a use-it-or-lose-it policy and was concerned it could exacerbate supply issues if “not properly structured.”

“I don’t think anyone has an objection to a use-it-or-lose-it policy if structured right, but the devil’s in the detail,” Sherwood said.

Housing Minister Paul Caladnra acknowledged the development industry has “expressed some concerns” and said he was working to make sure any new rule “does what it is supposed to do” in the housing sector.

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“If you can’t get shovels in the ground, and if it’s not the fault of the developer or the municipality, that’s a different story,” he said.

— with a file from The Canadian Press

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