The Ontario Liberals promise to end development charges. There's a catch.
The new Liberal housing plan is very good...but something is missing.
Bonnie Crombie’s Ontario Liberal Party has announced the details of their new housing platform…and it’s pretty good! On balance, it feels like something that pro-housing advocates should be able to celebrate.
After all, the housing crisis in Ontario has reached ludicrously stupid extremes. The supply of housing has been artificially restricted by governments of all political stripes, universally beholden to the generation of wealthy homeowners, who invest in hoarding land as our new gentry.
But the point of housing has never been to be an investment vehicle; the point of housing is to give people homes.
So from the get-go, I have extremely little sympathy for anyone who plans their retirement around the value of housing; they know that any investment relies on demand outstripping supply, and in the housing market, that means homelessness needs to become worse for their asset to become more valuable.
Fuck that. My generation, and the politicians that claim to represent us, have no obligation to the landed gentry that prey upon us. Those in a position of privilege will always complain when we try to fix the inequalities of the world; it is our job to ignore them.
It is in that spirit by which I am pleased about most of the changes that Bonnie Crombie has proposed in this “Team Bonnie” housing plan. On first appearance, it does look like the YIMBY wing of Ontario Liberals, a group I consider myself aligned with, have been successful in lobbying Crombie to change her previous anti-housing stances.
Firstly, Crombie proposes to fully eliminate the Ontario Land Transfer Tax for first-time homebuyers, seniors downsizing to a smaller property, and non-profit builders. This is good policy, and it will also be simple for Ontario’s government to determine eligibility for all three categories; indeed, seniors already have a partial exemption under current law.
Next, the Liberals plan to “introduce” rent control…with a lot of asterisks. Comparing their plan to Manitoba, Oregon, and California, properties will only become rent controlled after a vague phase-in period, the duration of which Team Crombie has not specified. Further, landlords will retain the ability to increase rents after your eviction.
This is probably the weakest aspect on the surface of the housing plan. While I respect the YIMBY argument that rent control is a band-aid solution to supply shortages, sometimes people need a band-aid when they’re bleeding!
Supply may be the big picture solution, but normal people need rent control to keep them afloat until that long-term benefit arrives. As such, this weak proposal for “rent control” disappoints me; if landlords can still evict you to jack up rent for the next tenant, the “rent control” is worthless.
On a stronger note, Crombie’s proposal also claims that Ontario Liberals will increase funding to the Landlord and Tenant Board, both to clear the existing backlog of 53,000 disputes, and also guarantee that new disputes will be resolved within a two-month window. This is a good thing for all parties involved; Ontarians deserve access to an efficient and speedy legal system that can solve disputes in a reasonable time.
I am extremely glad to see a commitment to restore funding to legal aid services for tenants, which Doug Ford’s Conservatives cut after entering government. And the establishment of a provincial Rental Emergency Support for Tenants (REST) fund, modelled after existing funds at the municipal level, is a great progressive policy that will keep Ontarian families from being put on the street by a tough situation.
But there’s one big component to this plan that the YIMBYs will love, and on first appearance, I really liked it too:
Team Bonnie wil [sic] scrap Development Charges on new housing units under 3,000 sq.ft. in size, and replace lost municipal revenue with a permanent Better Communities Fund (BC Fund).
Development charges are essentially a direct tax on building new housing, which municipalities have adopted because they’re too cowardly to increase property taxes instead. It allows the landed gentry to sustain artificially low taxes by placing the entire burden on newcomers.
As the Crombie Liberal plan puts it plainly:
In Toronto, for example, Development Charges on a single-family home have increased from $60,739 in November 2018 to $137,846 today; an eye-popping 127% increase. The rate of inflation during that same period has only been about 21%.
While John Tory fought his hardest to keep property tax increases matching inflation, he boomed development charges far beyond the rate of inflation. This is systemic inequality in action; this is the landed gentry using their power and influence to make themselves richer and the poor even poorer.
But there’s a glaring ambiguity that stuck out to me with the development charges proposal. Let’s rewind back to the quote:
Team Bonnie wil [sic] scrap Development Charges on new housing units under 3,000 sq.ft. in size
Development charges are assessed as a tax to the developer of a property, not to the final resident of the unit, although costs are frequently passed along indirectly. What that means is that for a multi-unit dwelling, anywhere from a duplex to a high-rise condo, the development charges are a single fee to the builder of that entire property.
So how does this policy affect multi-unit dwellings? Is a building required to keep every individual unit in the building below 3,000 square feet? Is a building charged proportionally if some units go over while others don’t?
And most importantly: Does the waiver of development charges apply to multi-unit dwellings at all? Or will it only apply to single-family housing?
The Crombie housing plan claims, in a separate section from the developer charge policy, that they will “also fully exempt co-ops and purpose-built rental housing from other punitive taxes, such as Community Benefit Charges”.
Does “also” here mean that multi-unit dwellings are included, or does their presence in a separate section of the press backgrounder mean they aren’t? Overall, the entire backgrounder document is vague about what kinds of housing will be built; technically, a single-family home can be an apartment, if you’re renting it.
The concern here is obvious: If developers are given a six-figure financial incentive to only build single-family housing, while multi-unit dwellings are still assessed development charges, it will create a perverse market incentive to reduce density.
I reached out to the media relations contact at the Ontario Liberal Party, asking if further clarity could be provided on the wording in this press backgrounder and the ambiguity over the eligibility of multi-unit dwellings for waiver of development charges.
Unfortunately, the Ontario Liberal Party did not respond to my request for comment in time for the publication deadline. As such, the ambiguity remains, and thus large questions remain in the air about what this housing platform will actually accomplish, and for whom in our society it will benefit.
Ultimately, this is a weakness of the Liberal approach to increasing supply, versus the NDP approach. While the Liberal approach has a plethora of nuance and detail, it will always require more clarity, more nuance, and more fine-tuning.
Meanwhile, the NDP plan is simple: Create a public builder crown agency, fund it through tax revenue, and build large quantities of affordable housing on government-owned land. As a Liberal, the lack of consideration for public-owned housing in the Liberal plan does disappoint me.
Both the Liberals and the NDP have put forward good plans, mind you. While the Liberal Party has chosen a free-market, capitalist plan, and the NDP have chosen a planned-economy, socialist plan, there’s one thing that both have in common: both plans will work.
Both the capitalist and the socialist approaches will be successful in increasing supply, while acting on different levers under government control, and without any conflict between them. This is the true irony about the debate between Liberal and NDP partisans over each plan; we should be doing both policies.
If the housing crisis is a problem of supply, and we have multiple different solutions that we know are each effective at solving that supply issue, and we know that these solutions are not mutually exclusive…why would we quibble over which one we like better?
The Liberals and the NDP need not be adversarial about the housing crisis, and it certainly turns off the average progressive voter when the two parties insist on being publicly combative.
I like both the NDP and the Liberal housing plans. I hope both parties will steal more good ideas from each other, for the benefit of the Ontarian public.
Further, I hope that clarity will be provided by Team Bonnie on the Ontario Liberal plan, and that such clarity will relieve my fears around the exclusion of multi-unit dwellings, rather than confirm them.
But most of all? I’m glad that the YIMBY movement has finally forced politicians to talk about the issue seriously.
All I ask? This time, the promises of politicians actually mean something.