Review of Ontario’s Fair Housing Plan
In the lead up to the 2017 provincial budget, the government of Ontario introduced a new Fair Housing Plan that included 16 measures aimed at cooling real estate markets, increasing rental housing supply and strengthening tenant protections. Several aspects of the Plan will have impacts for non-profit housing providers and local housing corporations and, since being introduced, many features have been clarified or expanded upon through other pieces of proposed legislation or government initiatives.
Read on for an update on the Plan’s current status and to learn about which aspects could have the greatest impacts for non-profit housing providers. ONPHA will continue to keep you updated as aspects of Ontario’s Fair Housing Plan develop.
The Pillars of Ontario’s Fair Housing Plan
Actions to Address Demand for Housing
Non-Resident Speculation Tax
As part of their plan, Ontario has introduced two new taxes as tools to prevent against foreign speculation and to limit the number of vacant properties. The first of these, the Non-Resident Speculation Tax, is a 15% tax that will be levied against home purchasers in the Greater Golden Horseshoe who are not citizens or permanent residents of Canada.
Expected Impact: This new provincial tax is unlikely to impact non-profit housing providers directly, but ONPHA believes that any housing related tax revenues should be reinvested back into the communities from which they were generated. In line with this, we will be advocating for revenues from this new tax to be earmarked for initiatives aimed at increasing and preserving housing affordability within the Greater Golden Horseshoe.
Status: This tax was adopted through amendments to the Land Transfer Tax Act and is retroactive to April 21, 2017 – the day after Ontario’s Fair Housing Plan was released.
Actions to Protect Renters
Expanded Rent Controls and Tenant Protections
Perhaps most significant for the day-to-day operations of housing providers, the Ontario government has passed legislation that will result in changes to the Residential Tenancies Act (RTA). These newly adopted changes include:
- The forthcoming introduction of a standard lease for certain classes of tenancies
- Technical amendments to certain Landlord and Tenant Board processes
- Expanded rent control rules for all rental buildings regardless of year of construction (the government has announced that they will cap rental increases at 1.8% for 2018)
Expected Impact: Many of the changes will have direct impacts on all housing providers while others, such as expanded rent controls, will result in changes for some housing providers and not others.
Status: These amendments were adopted with the Rental Fairness Act which passed in May 2017. Some of the changes are in effect immediately, and others will be introduced at dates yet to be determined. ONPHA recently advised our members about what they need to know now, and what they can expect in the coming months. You can read that full analysis here.
Actions to Increase Housing Supply
Surplus Provincial Land
The government has announced several initiatives aimed at incenting the development of new housing supply. One component of this is the commitment to strategically leverage surplus provincial lands to develop a mix of market and affordable housing across the province. In their 2017 Budget, the government identified that this program was created to address challenges, including limited capacity for construction in the non-profit housing sector, and identified that a key element would be the inclusion of support services to meet community needs. The province has committed to unlocking land worth between $70 and $100 million to develop up to 2,000 units and announced that the approach would be piloted at sites in the Greater Toronto and Hamilton Area.
Expected Impact: Non-profit housing providers and local housing corporations interested in new development could potentially benefit from this program.
Status: Following the release of the 2017 Budget, the Ontario government announced that pilot sites would include 27 Grosvenor Street and 26 Grenville Street in Toronto.
Vacant Homes Property Tax
Amendments to the Municipal Act and the City of Toronto Act will give municipalities the option of using a Vacant Homes Property Tax to encourage the sale or rental of vacant properties.
Expected Impact: This tax would increase property tax revenues in municipalities that choose to adopt it. Again, ONPHA believes that these revenues should be earmarked for housing affordability initiatives within these communities. Additionally, the Ministry of Finance has advised that this new tax would only apply to residential properties and not multi-residential buildings, but it is not clear whether single family homes owned by non-profit organizations or local housing corporations would be included in this. We encourage non-profit housing providers and local housing corporations to engage with municipal councils on these issues should such a tax be proposed in your region.
Status: The amendments give municipalities the ability to introduce this tax through by-law, and also give authority to the Minister of Finance to set out regulations as necessary.
Multi-Residential Apartment Buildings Property Tax
The Ontario government had previously committed to reviewing the property taxation of multi-residential apartment buildings due to concerns about these buildings being taxed at a much higher rate than residential properties in some jurisdictions. The government has addressed this within their new Plan by passing legislation that will allow for regulations establishing a mandatory property tax assessment class for new multi-residential apartment buildings. The government’s intent is to ensure that new buildings are charged at similar rates as other residential properties, and to encourage increased purpose-built rental construction.
Expected Impact: This initiative could have impacts for non-profit housing providers engaging in new development. There will be no changes to the taxation of any existing multi-residential buildings.
Status: This initiative will be introduced through regulation.
Development Charges Rebate for New Rental Apartment Buildings
Ontario has also committed to introducing a five-year, $125 million program that will rebate development charges for new rental construction. The government has indicated that they would target projects in communities facing the greatest need for new, purpose-built rental housing, and the Ministry of Finance has advised that the program will prioritize middle-end of market and family oriented units.
Expected Impact: This could potentially be beneficial for organizations considering affordable development.
Status: Unknown at this time.
Property Tax Tools for Municipal Governments
Newly passed legislation will allow for regulations aimed at giving municipalities the flexibility to use property tax tools to promote development. For example, the government has indicated that such tools could potentially be used to impose higher taxes on vacant land that has been approved for new housing.
Expected Impact: This could have positive impacts for increased development, which could potentially lead to opportunities for those organizations considering new development.
Status: This initiative will be introduced through regulation.
Housing Supply Team
The province has committed to creating a provincially staffed Housing Supply Team tasked with identifying development barriers, as well as opportunities to streamline approval processes.
Expected Impact: The work of this new team could have impacts for those engaging in new development, and could also be an avenue for advocacy about the barriers that non-profit housing providers face when considering development.
Status: Unknown at this time.
Other Actions to Protect Homebuyers and Increase Information Sharing
The provincial government has also introduced Bill 109, Reliable Elevators Act, 2017. This legislation would increase landlord requirements related to elevator reliability by establishing expectations around elevator capacity in new buildings that are taller than seven stories, and requirements around elevator maintenance timelines. It would also make elevator maintenance contracts subject to protections ensured by the Consumer Protection Act.
Expected Impact: If passed, this legislation would introduce new requirements for those operating existing buildings, as well as those providers considering new development. Increased protections around elevator maintenance contracts could be beneficial for housing providers.
Status: This proposed legislation was referred to the Standing Committee on Regulations and Private Bills in April 2017.
The Plan also introduces several other initiatives that include:
- Provincial work to understand and address practices contributing to tax avoidance and speculation in the housing market
- Increased real estate protections and education for consumers
- Improved reporting requirements related to the purchase and sale of real estate
- The development of an external Housing Advisory Group that will provide advice about Ontario’s housing market and the impact of government policy
- An updated Growth Plan for the Greater Golden Horseshoe that encompasses new requirements around diversity in household sizes and incomes, and promotes greater development around transit hubs
Next Steps for ONPHA
ONPHA broadly supports the measures introduced in Ontario’s Fair Housing Plan, but we believe that they do not go nearly far enough to ensure widespread affordability or to provide relief for the province’s most vulnerable residents.
Over the coming months, ONPHA will be undertaking several advocacy initiatives aimed at promoting the valuable role that the non-profit housing sector can play in the creation and sustainment of a housing system that meets the needs of all Ontarians.
We’ve also started to think about the 2018 provincial election which is less than a year away. ONPHA will be reaching out to each of the political parties to talk about housing affordability issues as they develop their platforms, and we will be sharing information and resources to help our members and their tenants effectively engage with local candidates during the election.
Stay tuned for updates about these initiatives.