Should municipalities be able to compel builders to use land?

DAVE WILKES IS PRESIDENT AND CEO OF THE BUILDING INDUSTRY AND LAND DEVELOPMENT ASSOCIATION (BILD), THE VOICE OF THE HOMEBUILDING, LAND DEVELOPMENT AND PROFESSIONAL RENOVATION INDUSTRY IN THE GTA. FOR THE LATEST INDUSTRY NEWS AND NEW HOME DATA, VISIT BILDGTA.CA

Some commentators have painted a picture, in recent years, that developers and builders are deliberately sitting on land and that Ontario’s housing supply has an abundance of fully approved shovelready lots. This is leading to the province considering new powers for municipalities to compel builders to build (commonly referred to as “Use it or Lose it” policies). A new study commissioned by BILD and the Ontario Home Builders’ Association (OHBA) reveals a starkly different reality.

It shows that the construction and development sector is operating at a 33-year high and that there are more than 160,000 new homes now under construction … and contrary to figures stated by some, there is only about two years supply of approved shovel-ready lots across the province.

The study, which was conducted by Keleher Planning & Economic Consulting Inc. (KPEC), finds a vast disparity between reported inventories and actual shovel-ready lots. The Regional Planning Commissioners of Ontario (RPCO) estimate of 1.25 million approved lots/ units overstates by as much as 70 per cent the approved land/units likely to be available in the shortterm to support housing, especially in the light of Ontario’s rapidly growing population and the provincial government’s housing target of building 1.5 million homes by 2031.

Specifically, when considering the breakdown out units within the 1.25 million approved lots/units by the RCPO, the study finds that only 331,600 of these units are genuinely ready for construction — the rest are stuck in various stages of approval processes, do not meet the criteria for immediate development and/or do not have servicing. Further, in many cases these remaining units had been previously refused by municipal councils or appealed to the Ontario Land Tribunal, meaning they are many steps and years away from being “shovel ready.”

The fact that 70 per cent of the inventory of lots/units included in municipal estimates are a significant overestimation of what is likely to actually be built is concerning. Our study shows that there are significant gaps and inconsistencies between municipalities and planners in how they track this data, leading to these inaccurate estimations.

The study also found that a number of municipalities in Ontario already have “Use it or Lose it” policies as it relates to servicing allocation and that Ontario’s Planning Act already provides municipalities with several “Use it or Lose it” powers for development and new housing.

Combined with the overestimated supply estimates, this shows that additional “Use it or Lose it” powers being contemplated by the province are not necessary and, if not carefully targeted in scope and application, they could have detrimental impacts to the future housing supply in the province.

The reality is that inflating approved lots/unit estimates and focusing on unnecessary “Use it or Lose it” policies deflects from addressing the actual underlying issues impacting housing supply — like land supply, approval timelines and infrastructure constraints. To meet the provincial housing targets, we need to see more comprehensive and consistent reporting from planners and municipalities to inform accurate policy changes. Only by embracing evidence-based approaches can we hope to meet the housing needs of Ontario’s rapidly growing population.

To meet the provincial housing targets, we need to see more comprehensive and consistent reporting from planners and municipalities to inform accurate policy changes