By OHBA Staff
The past 15 years of Liberal housing policy have impacted every aspect of the new residential, land development and renovation industry—some of it contentious. That was evident in our “Passing Grades” feature edition of OHB magazine, which garnered a lot of attention and some controversy. In that story we combined some industry and non-industry commentary with OHBA grading based on the legislations’ policy intentions. For example, did the Greenbelt Act protect 1 million acres of land from development? Did the Growth Plan change the housing and planning structure from growing out to growing up—from low-rise to high-rise? The grading was not an OHBA endorsement of the policy or the actions of the government—OHBA continues to be a non-partisan association, with a mandate to promote housing affordability and choice.
But how do those who served in the trenches as volunteer association leaders advocating for industry concerns to government feel about the past 15 years of legislation under the Liberal reign? With Ontarians voting on June 7, 2018, OHB polled OHBA presidents who served the association over those years, asking them to respond to the housing and economic indicators chart we ran in the 2018 Winter issue (see here), and to share their informed views on where we are after the Greenbelt Act, Growth Plan, Ontario Building Code and the Planning Act.
Here are some responses from Pierre Dufresne (2017-18, Tartan Homes, Ottawa); Vince Molinaro (2014-15, Molinaro Group, Burlington); Doug Tarry (2011-12, Doug Tarry Homes, St. Thomas); Bob Finnigan (2010-11, Heathwood Homes, Toronto); Brian Johnston (2006-07, Mattamy Homes, Toronto); and Peter Saturno (2003-04, Midhaven Homes, Oshawa).
Q: How would you respond to the “Ontario Housing & Economic Indicators” chart provided in the Winter issue, which layers a series of provincial legislation and policy alongside the indisputable economic facts—price, sales and starts?
Pierre Dufresne: It’s very evident that as government mobilized on all these policy issues and took action, there’s been a correlation with the price of housing. You can see that the increase in housing prices has been disproportionate in the past several years, as policy has become more and more intense. It’s simple.
Brian Johnston: The provincial Liberal policies regarding planning and development were the catalyst to an unsustainable rise in the market. There is no disputing that the demand for housing is real. Ontario is a preferred destination for immigrants, and restricting supply has created an enormous problem for consumers.
Bob Finnigan: After 2000, you can see there has been a lot more housing policy activity. Beginning with the Moraine Act, and then the one-two punch of the Greenbelt Act and the Growth Plan, these started the run-up in new-home pricing.
Doug Tarry: I do see that there’s a direct correlation with increasing government oversight. The more polices we get, the greater the impact it has on affordability. Not that there shouldn’t be government oversight—it’s important they have some. But the concern is that this government is so much more involved that it is becoming increasingly complicated and expensive to build, and I have to wonder, ‘Will my daughter ever be able to afford a home?’
Q: How has the Greenbelt influenced your community development planning and business?
Pierre: In Ottawa, we had a Greenbelt before the province created one in the GTHA. Other than the Greenbelt, there is resistance to having any type of urban boundary expansion to accommodate ground-oriented residential development. Instead, government policy has mandated ‘growing up and not out.’ The end result was the limiting of both land and housing supply. Developable land prices went up exponentially, and that all falls back into the price of housing. Suddenly, the “controlled growth” in suburbs is being replaced by sprawl in the villages beyond the city of Ottawa boundary. What we see in Ottawa, and this is clearly happening in the GTHA, is that consumers start to drive to qualify, and they end up in the villages outside the city of Ottawa boundary, where they can afford the housing they want.
Bob: We all understood the Greenbelt. The province said, ‘Let’s set aside lands that are no-go in order to protect them for generations: naturalized areas and geological and geographic features deemed key to the GTA’s environmental interests.’ There were grumblings about borders—where and how they were established, etc. But the industry was told we couldn’t develop in those areas. The principles were hard to fight against, (but) the execution was not done well. This, of course, immediately started raising the price of lands outside the Greenbelt—which is the normal reaction—and suddenly we had a very limited supply of developable land.
Doug: In recent years, there (has been) a significant amount of spillover happening from the GTA. As those consumers push into the Guelph and KW markets, it’s marching up the 401. Lot prices have basically doubled in the last seven years, as there’s been a shortage and it’s pushing up prices everywhere. Now, with more restrictions, it’s just going to continue to push prices up. While we do have to protect the Greenbelt spaces, I think there are other ways to do it. I also believe that we have the largest land mass in the world. And we’re instead going to be into multigenerational mortgages for families to be able to afford homes.
Peter Saturno: The Liberal Government Greenbelt legislation has choked land availability, caused uncertainly in the development marketplace, put unprecedented pressure on raw land values and confused development planning. As a company, we are looking even further away from our historic building areas, looking for more affordable raw land, which will result in more affordable housing offerings. This will inevitably add to hours of peoples’ commuting times if they work in Toronto, as there is a lack of any real mass transit. The urban sprawl that the Greenbelt was planning to curb as part of its mandate is just causing that sprawl to shift farther out from Queen’s Park.
Q: How has the Growth Plan influenced your community development planning and business?
Pierre: In Ottawa, the “build up, not out” policies accelerated through the past 15 years. Years ago, ground-oriented townhouses were affordable, but now they are a ‘move-up’ product, with the only choice of an entry-level purchaser being the condo market. With Ottawa’s transit plans, they have created some positive development areas to support the ‘build up’ approach, but the price is really driving the first-time homebuyer into the condo option. It’s a dubious success story—doing what we’re supposed to do in “growing up, not out,” and making efficient use of infrastructure, etc. But we’re impacting people’s ability to purchase the type of housing that they really want.
Vince Molinaro: Our company has always specialized in multi-unit residential high-rise development, and that means we are always “going up.” We build in Hamilton-Burlington area and there aren’t obvious vast tracts of buildable land, so we have to be creative or assemble properties—sometimes you’re looking at these things three or four years out just to get that key piece of serviceable land.
In some cases, it works well—our Paradigm project is near the Burlington GO Station. Five or 10 years ago, it’s land that we wouldn’t have looked at because of its proximity to the train tracks. But now with the Growth Plan and Big Move, it works. Nobody was building beside GO trains before, but we saw this as the way the province was building and developing—up, not out, transit-oriented, all the buzz words. You just need to be progressive and see the writing on the wall. I will add that this is a seven-year project, so you have to be prepared for multiple sales and construction cycles, which makes it expensive and does impact the housing price.
Bob: The Growth Plan is—and will be—the number-one issue affecting our company and our Industry, followed closely by the recent OMB reform. In principle, it sounded reasonable, but the execution has been abysmal by any standards.
The lands designated as growth areas were substantial, but most didn’t and still don’t have access to the infrastructure needed for development and are still a long way from being brought into urban boundaries. And this is a dozen years after the Act. What should have been a two-year process to get municipal conformity took almost six years, meaning that no new land came into the pipeline for future housing. It’s the perfect storm of no new supply, with existing supply tied up in process, and this all impacts the price of housing.
To add insult to injury, the densities prescribed—the building up, not out—were for the most part untested in terms of housing types being offered in the 905 regions, and most recently these densities have been increased tremendously. The end is almost here for single-family housing.
The industry is in an era of great uncertainty, where we don’t know how long it takes to get an approval in an approved growth area, or what the restrictions will be on it, or what the final housing mix will be. The result has been per-acre land price increases of hundreds of percent over the past decade, driving the ability to buy land into fewer hands and further tightening the supply, and driving housing prices up. Like many other builders, we are looking further for opportunities across the GGH and beyond.
Q: In the new Local Planning Appeal Tribunal (LPAT) model, where the LPAT decision must be consistent with local official plans and zoning, do you believe that Council will make good planning decisions or fall victim to NIMBY-ism opposition, thereby limiting housing supply and choice in your community?
Pierre: The reforms really fall short. The province stated that they are tired of the Ontario Municipal Board being a scapegoat for councillors who don’t want to make the tough planning decisions. But I don’t see how the LPAT makes them more accountable. At the end of the day, we must go back to why we are in this whole situation. There is all this criticism coming from the community associations and municipalities that OMB decisions were governing how their communities are being run, but refusing to acknowledge that OMB decisions are based on provincial planning policies. The whole exercise has been politicized right from the beginning. With the LPAT, local planning is about to be more political now.
Vince: I think Councils are going to be surprised at how they’re going to have to change their thinking with a development application. They can’t just dump it and blame the OMB for being in the developer’s pocket. I think they will have to be directly accountable for what they do now. I’m against the LPAT, but I think Council got what they wished for. Watch what you wish for! I think they’re going to have to change the way they treat their planning decisions. Brian: Only a blind optimist would believe that councillors will not be biased by local planning dissent. The province should consider moving away from local councillors, similar to Vancouver, to avoid poor decision making.
Peter: The probability of local councils now making good planning decisions is possible, but when you weigh calls and complaints from their constituents against the “future neighbours,” I would say that there is a better chance of Elon Musk’s space roadster being car-jacked by aliens. The OMB was a sober second look, with facts against the wants of voters who often believe that bad planning is “the next house built after I move in.” The new process will only bottleneck development and further choke supply and choice.
Q: The current government has amended the Ontario Building Code two times, and each time they have increased the energy efficiency and “green” requirements. How have these OBC changes impacted your home building program and business?
Vince: I think going green and sustainable is a good thing. Our company has decided three or four buildings ago that we’re going to build LEED-certified. Obviously, the changes will mean more cost, but I think that over time, these costs come down with economies of scale. Ultimately, it’s all worth it because you’re building a better quality, better built home that’s better for the environment. And we now know that in 2030, Net Zero becomes the standard. We have to continue to challenge ourselves. Use the building code as the minimum but we like to stand out as a company and offer a product that is different and better-value and sustainable.
Doug: When it comes to responsible development of the code on energy efficiency specifically, I really do believe that we have the right model when we have the industry lead it first. Give us the benchmark and stay the heck out of the way. Let us find out how to get there. Once we’ve created a capacity for it, then you can move the code up. What’s happening now is that this next code change is jumping past industry capacity, and it’s going to be a real problem.