Ontario’s initiative to build new affordable housing faces significant challenges as developers criticize the province’s pricing model. The Ford government recently released affordable housing price definitions for each municipality, setting specific price points for homes to qualify for tax and fee rebates. For instance, in Toronto, a detached house must be sold at $366,500 to be considered affordable.
Richard Lyall, president of the Residential Construction Council of Ontario, argues that it is “impossible” for developers to sell homes at these prices without incurring losses, even with waived fees.
A Ministry of Municipal Affairs and Housing spokesperson said the pricing definitions were designed to reflect market conditions and income factors, following extensive consultations.
Cost Analysis and Developer Concerns
A case study by the Building and Industry and Land Development Association (BILD) shows that selling a detached house at the government’s affordable rate in Vaughan would result in significant losses for developers. The average cost of building a single-family home in Vaughan is over $1.3 million, while the affordable price is set at $531,000.
Political and Industry Reactions
Ontario NDP housing critic Jessica Bell criticized the government’s definitions, suggesting they are impractical and will not lead to the construction of needed affordable units. She proposed following British Columbia’s example by building affordable housing on government land and providing grants and cheap financing.
Both Lyall and Justin Sherwood, BILD’s SVP of communications, research and stakeholder relations, agree that reducing land costs could make the plan more viable. Sherwood added that increasing housing density with midrise and highrise developments could help spread costs across more units.
The Ministry of Municipal Affairs and Housing stated it would monitor the implementation of the new pricing model and update it annually based on feedback from industry and municipal experts.
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