Ontario’s New “More Homes Built Faster” Act: Overview

Earlier this week, the Ford government introduced Ontario’s new “More Homes Built Faster” Act. The plan, containing roughly 50 actions, promises to advance the province’s plan to address the housing crisis. 

The underlying goal is to construct 1.5 million homes in the next 10 years. 

Greater Mix of Housing Types

The measures proposed by the provincial government aim to enable the construction of a greater mix of housing types, while also encouraging the development of alternative housing types. A greater mix of housing types include single family homes, townhomes, and mid-rise apartments in Ontario’s cities, towns and rural communities. Alternative housing types include triplexes and garden suites, which act as a bridge in the gap between single-family homes and high-rise apartments. 

Less Red Tape 

The Ford government also made a commitment to cutting delays and red tape in the construction of homes by removing exclusionary zoning only permitting a single-detached home per lot. This allows property owners the right to build up to three units without lengthy approval processes and development charges. 

Changes to Property Tax Assessment 

Furthermore, the province is exploring potential refinements to property tax assessment methodologies with municipal governments. Currently, property tax assessments for affordable rental housing use the same basis as regular market rental properties. Alternatively, the Ford government hopes to refine the method of assessment for providers of affordable housing to better reflect reduced rents received. 

To read the full Act, visit: https://www.ontario.ca/page/more-homes-built-faster

Industry Insiders & Economic Analysts Maintain that Canada’s Market Fundamentals Should Reward Investors in the Longer Term

Housing affordability can be defined as the availability of homes to buy and/or rent for all price points. Housing affordability, by this definition, is tighter than ever across Canada. Rising interest rates and sluggish supply chains are posing additional challenges to the construction of new housing at a wide range of prices. CMHC (Canadian Mortgage and Housing Corporation) recently concluded that 3.5 million additional units are needed to meet Canada’s housing demand and relieve the market of soaring prices. This figure is roughly double the current annual housing starts across the country. 

Correcting the supply-demand imbalance is the best way to restore housing availability, and the private-sector has a crucial role in filling this gap. As it stands, the private-sector builds 95% of the housing available on the market. 

CMHC President & CEO, Romy Bowers, explained that investments in assets tackling housing affordability within the private-sector have great prospects for strong investment returns – particularly when projects are located in density and transit oriented development areas. The strong, continuing demand for housing in proximity to mixed-use, multi-family spaces is flourishing across the country. Bower notes this is especially the case in Montreal, Toronto and Vancouver. Further, Brian Rosen, President & CEO of Colliers Canada, predicts investors will continue to reap strong returns from mixed-use projects that package housing and retail within walkable or easy transit access to workspaces, other services and amenities.

There will be greater interest in “transitioning areas,” which include dead malls and land currently not in a state of highest-and-best-use. Investments in these “transitioning” growth areas will continue to propel forward because there is such a critical, deep need for housing across the country. Rosen suggests a multi-year investment in housing assets in “transitioning” areas will present real growth in returns for investors. 

What does this mean for Cacoeli investors? 

At Cacoeli, we’ve focused on investing in rental assets in density/transit-oriented growth markets in and around the GTA for nearly two decades. We ensure to steward our investor capital into markets that offer the most potential, and transform that potential into performance. As a result, we’ve had the privilege of sharing above-average returns on our rental real estate investments with our investors for nearly twenty years.

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