Ford’s new housing plan could lead to local tax hikes, provincial civic leaders warn | Rare Techy

Ontario’s move to accelerate the construction of new homes over the next decade has city leaders across the province worried that local taxpayers could be left footing the bill for the provincial government’s housing plan.

The Association of Municipalities of Ontario (AMO), which represents the leaders of 444 municipalities, is warning of the potential financial fallout from sweeping changes proposed by the Ford government.

AMO said it is concerned that the province’s promise to freeze or waive development fees for homebuilders could be missing out on communities. With few opportunities to raise revenue, many may need to raise property taxes at a time when people are struggling, said association president Colin Best.

“I’m getting a lot of feedback from mayors and councilors that we can’t afford it,” Best told CBC Toronto.

“Our taxpayers already have enough to pay through inflation and food and gas bills because they have huge tax increases and it’s not working for us,” he said.

On Tuesday, Premier Doug Ford announced a new plan to build more housing in Ontario. He has set ambitious targets for municipalities to ensure the province meets its overall goal of building 1.5 million new homes over ten years.

Part of the plan is to streamline the development process and cut fees to encourage builders. But Best said the reduction in development fees means funds used to pay for roads, sewers and transit around new housing will run out.

“We’re pushing for the province to fund this infrastructure work … If they come to the table, we could work on it,” he said.

A spokesman for Municipal Affairs Minister Steve Clark said the government is delaying the plan because of the urgent need to build more housing in the province.

“Reducing these fees for certain types of homes, such as nonprofits and affordable, accessible and rental apartments,” would encourage an increase in the supply of those units, Chris Poulos said in a statement.

He added that some cities have raised the fees for new housing and built them into reserves.

“We’re also working with the federal government to ensure municipalities continue to receive support for the critical infrastructure they need to handle growth, such as new roads, water and transit, including through the new Housing Acceleration Fund,” Poulos said.

It’s best to say that while the province points to these federal funds, there’s no guarantee how long the funding will be available.

“We have to build roads, bridges, water and sewage systems for the municipalities,” he said. “If we don’t have that money, the existing taxpayers will have to foot the bill,” he said.

University of Toronto professor Matti Siemiatycki, who focuses on urban issues, said municipalities are under a lot of financial pressure, and that has only increased during the pandemic. They have had to offer more services and have faced dramatically reduced revenue, which has worsened a difficult funding situation, he said.

“They’re under pressure and at the same time anything that cuts into their revenue starts to reverberate through the system and that money has to be made up somewhere,” he said.

Siemiatycki said that while municipalities are facing this increased pressure, they have also raised development fees at rates higher than property taxes. He added that they have used these funds to pay for a large number of services and to keep property taxes low.

“We’re really at a point in the reckoning right now where something has to give,” he said.

“Either they have to find revenue elsewhere or they have to cut services. And neither of those are very attractive.”