‘This is a poorly thought plan’: Bill 23 makes sustainable, complete communities nearly impossible
The Region of Peel made it clear in council chambers Thursday that it does not have the funds to support Doug Ford’s housing targets under Bill 23, which staff estimate will cost $20.4 billion by 2031 to cover the infrastructure required for 250,000 new homes.
Staff said it is unclear if the provincial government will provide necessary funding to help municipalities reach their mandated targets under a pledge they are supposed to submit to Queen’s Park in March.
“We can achieve the targets, but I don't know that we will have the funding to achieve the targets,” Mississauga Mayor Bonnie Crombie said Thursday.
Ford’s use of the pledge has been questioned by critics who liken it to someone being forced to apologize for something, even if they don’t mean it and will just ignore their fake contrition. The provincial government has no power to enforce the number of new homes it is designating for municipalities, has yet to commit the money for it, and has no way to make the private sector build the homes if developers don’t want to. Yet Ford is demanding the pledges be submitted next month.
In a visit to Mississauga earlier this year, Ford claimed the province would make municipalities “whole”, providing necessary financial support required for the infrastructure to service the 1.5 million homes that the PCs want constructed by 2031. But according to Antonietta Minichillo, director of the planning department and chief planner for Caledon, speaking to Town council Tuesday, the province has not provided any details on this funding.
“Unfortunately, we've got incomplete information,” Gary Kent, chief finance officer and commissioner of corporate services at the Region of Peel, said Thursday.
The Region has to provide necessary infrastructure in order to service homes with clean water, sewer systems and roads, money the Region does not have on hand.
Water, wastewater and roads are infrastructure that has traditionally been funded from development charges (DCs), meaning, in a perfect world, much of the $20.4 billion would come from the builders who profit from the housing growth. However, under Bill 23, development charges are under what Kent called an “extreme threat,” and the Region is unsure how these costs for sewer and water mains, roads and other required features needed prior to the construction of homes will be covered.
“I don't want council to think it's going to be easy just to raise $10 billion worth of debt,” Kent said.
“I'm not here to scare you about financing. I'm just here to underscore we really do have to know debt is not the answer in my view”.
At the lower-tier, cities and towns will only be able to collect development charges for five percent of units in a project built to provide affordable housing for residents. If municipalities want six or more percent of the units to be set aside for affordable housing they will have to cover the infrastructure costs for those units themself. Without these revenue streams, municipalities will be strapped for the necessary funds needed to provide crucial infrastructure which could lead to higher property tax costs, or the abandoning of expanded affordable housing plans that taxpayers, ultimately, would have to subsidize, instead of developers.
Under Bill 23, upper-tier municipalities like the Region of Peel will no longer be able to collect DCs. A previous report from staff estimated revenue shortfalls from the loss of DCs would be an estimated $2 billion and could be as high as $6 billion if the housing targets set out under Bill 23 are met.
(Region of Peel)
Provincial targets supported by the Bill include 120,000 units for Mississauga; 113,000 for Brampton; and 13,000 for Caledon. Peel had previously forecast 100,000 units for the region by 2031, but it will now have to build infrastructure for two-and-half-times more units. The provincial targets for 2031 are just shy of the number of units the Region had forecast to build by 2051.
“We are expected to advance 20 years of growth into the next eight years,” Janice Baker, CAO for the Region of Peel, said, describing the PC housing policy as a “poorly thought through plan.”
Regional staff made it clear that the two levels of municipal government do not build houses. They oversee planning, approve development applications, issue building permits and ensure the surrounding infrastructure is ready, then it is the developers who build the homes.
“Where are the developers on this? And how do we engage to try and understand,” Baker asked. “Because they're not going to build houses they can't sell. And this is the real dilemma that we are faced with: we are doing all of this, quite frankly, in a vacuum of what the market is doing.
“At the end of the day, the most important element for the success of this plan is an element we do not control.”
Municipalities have had contentious discussions for the past few months, since Bill 23 was first proposed in October, then enacted in December. The uncertainty surrounding the promises made by the provincial government to fund infrastructure and the feasibility of building 1.5 million homes in eight years led Brampton’s chair of planning to dub the legislation the “trainwreck Bill”.
During a planning meeting earlier this year, Brampton Councillor Michael Palleschi said he had spoken with building industry stakeholders in the city who told him they could not meet that target if they wanted to. One of the factors that could impact the ambitious goal is the delay in construction due to labour shortages in the sector.
More than one in five workers in the construction industry will reach retirement in the next ten years creating even greater shortages of skilled workers. It is estimated the industry will need approximately 110,000 workers by 2024 to replace those retiring and to satisfy growing demand, and this does not factor the turbo-charged housing numbers being pushed by Ford.
“We can't control factors such as interest rates, labour shortages, supply chain shortages, or the market conditions,” Mayor Crombie said. “We have 36 cranes in Mississauga today. But how many new units that permits have been pulled for, will be built? We don't know the answer to that.
“We need to be able to tell the province that, you know, this is a collaboration with all stakeholder groups, and that there has to be some accountability on the development community as well, not just on us.”
The eight-year timeline was also questioned, and a large water main project to service central Mississauga, which took 11 years, was used as an example.
“Hanlan was a well planned and executed project,” Tara Buonpensiero, acting chief planner and director of planning and development services at the Region of Peel, said. “And we can anticipate that new infrastructure construction required to service growth will require similar timelines.”
The $20.4 billion estimate by the Region only includes costs of critical infrastructure such as water pipes and roads. But in order to develop complete communities that are centred around affordable housing, it is necessary to construct transit infrastructure, community centres, libraries, commercial features and a range of services for healthcare and other needs. Parkland for use by local residents also has to be incorporated.
“Yesterday we spoke about the fact that we're being asked to build a community the size of Whitby in Mississauga in the next 10 years,” Crombie said. “But in addition to that, where's the funding for public transit? …where's the money for parks and parkland?”
Mississauga staff previously reported the City stands to lose approximately $1 billion over the next 10 years in development fees which have traditionally paid for many of these essential community services and features.
The loss in revenue for municipalities could see residents pay as much as ten percent more for property taxes with large increases on their utility bills, Mississauga and Region of Peel staff have warned. The Association of Municipalities of Ontario estimates Bill 23 will cost cities and towns at least $5.1 billion by 2031 in lost development fees, most of which will be pushed onto taxpayers. This number does not include the billions that will be needed to create all the infrastructure to support millions of residents who will move into the 1.5 million new homes.
(Region of Peel)
The staff presentation Thursday outlined three scenarios for the coming growth. The first focusses development in the areas of the Region where staff have already planned for growth. Buonpensiero referred to these areas as being ready to grow right now. The second approach involves working with municipalities to identify where growth should be planned up to 2031. This includes situating new homes around identified urban growth corridors and major transit hubs. These are areas where complete communities will be easier to construct as they already contain much of the necessary infrastructure. The final approach looks at developing new infrastructure to reach homes that are built outside of these urban centres. This requires the most time and will be the most costly to complete.
“We need to put growth where the pipes are because we can't afford to put pipes where the growth is,” Baker said, pointing to the first two scenarios.
“I've always believed in following the pipes,” Caledon Mayor Annette Groves said. “Growth needs to follow the pipes.”
The opposite approach, which takes far longer and costs much, much more, is the one often followed by subdivision developers—who build homes in far flung places, then expect the pipes to follow the houses.
Nowhere will this be as difficult as in Caledon. The Town has already struggled with sprawl, with Mississauga taxpayers subsidizing much of the costs for its poor planning, including infrastructure that has to be run out to the middle of nowhere, to the isolated subdivisions approved after developers chose to buy former agricultural land that was not close to existing urban infrastructure. The majority of the development in the Town will be on greenfields, forcing new infrastructure to be built out to isolated, undeveloped areas, including valuable farmland, untouched greenspaces and even parts of the protected Greenbelt.
Groves promised the opposite when she successfully ran for mayor in the fall against her pro-sprawl opponent, Jennifer Innis, who has deep ties to the PC Party.
Groves has been working toward the creation of complete communities in and around Bolton, the largest urban area in Caledon, where she has supported smart growth.
Caledon’s chief planner told councillors Tuesday the Town is being flooded with development applications outside its existing settlement area. Many of these applications are not within existing timeframes for service construction, raising concern that Bill 23 will open greenspace for development applications in areas that are not prepared, or even zoned, to support residential and commercial growth.
“I do believe that rather than the leap frogging, we really need to look at what is most feasible when we're looking at development,” Groves said. “And I will reiterate, again, while we have developers that are willing to front end (to pay for infrastructure), we need to be cognizant that that money somehow needs to be repaid.”
There are early indications that Bill 23 will actually slow down the development process, expanding the time between when development proposals are submitted and when homes are actually built. The legislation removes the authority from conservation authorities to comment on development applications leaving the entire assessment process up to municipalities which do not have the staff to deal with the flood of applications. For example, the Town of Caledon has no environmental experts on staff (one position has been created under the 2023 budget). The lack of expert staff could lead to a backlog in development applications.
“That is a function that entire teams in the conservation authorities were dedicated to,” Minichillo said Tuesday.
There is also concern that the influx of development applications will lead to corners being cut, disregarding climate change planning, while a loss of coordination with external agencies such as Metrolinx and other stakeholders could have negative consequences down the road.
The councillors will have discussions with their respective lower-tier municipalities and return to the regional council chambers in two weeks to hammer out demands that need to be met if Ford and his PC colleagues want to reach their unprecedented housing targets.
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