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Residential builders warn Ontario rent control will stifle new construction

April 27, 2017  By Residential Council of Ontario

In response to skyrocketing housing prices in the Greater Toronto Area, the Ontario government has announced plans for a 15 per cent tax on foreign buyers and to bring back rent control, capping residential rent increases at the rate of inflation. Critics are warning that these measures may have the opposite of the desired effect as price controls and increased red tape cause landlords to leave the business and builders to avoid rental projects.

The Residential Council of Ontario released the following statement:

While intentions may be good, “Ontario’s Fair Housing Plan” does not do enough to increase the supply of housing in Ontario during the biggest housing crisis in the Greater Toronto and Hamilton Area (GTHA) for almost 30 years, says the president of the Residential Construction Council of Ontario (RESCON).

“We all want to see an improved situation for homeowners, new-home buyers and renters,” Lyall says. “But the Plan’s 16 initiatives will tighten the market for all forms of shelter, which will make finding a new home or rental even harder for buyers and renters.”


Here’s why:

1.  The Housing Plan will have a chilling effect on investment in purpose-built rentals.

Thousands of units now will not be built. The Wynne government’s new rental control will impede builders’ ability to construct purpose-built rentals – which means it will be harder to add to the housing supply in the coming years.

“We have already heard of purpose-built rental projects being shelved after last week’s announcement,” Lyall says. “And while the government’s $25-million-per-year development charge rebate will provide incentive to build rental properties, this figure requires perspective: for a rapidly growing province of 13.6 million people, this is just a drop in the bucket.” Lyall said well over $10 billion worth of all forms of shelter will be needed each year for 10 years.

2.  More red tape? It already causes three-year waits for Toronto condo owners.

One of the biggest problems that extends new-home buyers’ waiting times is a very slow approvals process, Lyall says. This keeps buyers out of newly purchased condo suites in Toronto, for example, for up to three years because of extended wait times for building and planning approvals, according to research by RESCON and the University of Toronto (due for May).

“Red tape makes a tangible impact on the lives of homebuyers, according to our research. The government should streamline the regulatory process so that we can increase the supply that’s desperately needed here.”

3.  Housing supply worsens as 100,000 people come to the GTHA every year.

“People are scrambling to find shelter,” Lyall says. “They need deep pockets to purchase a new home or pay for temporary shelter costs. Meanwhile, builders are running out of serviced land to build on, and the new housing inventory has fallen by about 50% since last year.

“We need the government’s proposed ‘Housing Supply Team’ to start work immediately or the market will hit fever pitch again this year.”


The Residential Construction Council of Ontario represents more than 200 of Ontario’s residential builders. Working with our labour partner, LiUNA Local 183, our members build world-class high-rise, mid-rise and low-rise homes, including rental apartments and social housing buildings.

For more information
Ontario Fair Housing Plan

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