Developer Fees are Adding to Toronto’s Housing Crisis

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Can you find affordable housing in Toronto when there is a hike in developer fees by a whopping 46%?

The city says this will allow for greater investments in infrastructure, transit and other items necessary to facilitate the increase in people, goods and services as a result of more housing. 

The hike in fees however, has the power to stunt future projects altogether, which is what led Richard Lyall to speak up about it. Let’s understand the mechanics of the housing crisis directly from the President of the Residential Construction Council of Ontario (RESCON). 

Affordable Housing in Toronto: The Factors Affecting The Real Estate Crisis

A condo with two bedrooms now costs developers $78,000, up from $35,000 previously. If they want to construct an apartment with two bedrooms, developers will pay $55,000, which is over double the previous rate of $25,000. 

The city council is running off the assumption the developers can pay for it. The truth is, these levies are counted in the total charge the new homeowner has to pay. It can be summed up as a potential 25% tax the buyers have to pay. 

Even those earning $100k per year would not be able to afford housing under these conditions. 

Now, if we think of those who are at the bottom of the earning bracket, we’re taking away their dream of ever owning a home or even renting an apartment. 

Homeowners and developers both stand to see an equal loss due to:

  • Inflation raising the price of building materials.
  • Labour shortage 
  • Systematic failure from the government. 

The developers do not have the resources to solve the housing crisis alone. The city has also implemented unreasonable zoning laws and taxation, which leads to project cancellations. 

Of course, there are people who do not have the income to pay for housing. This is where the government should offer social assistance. What the council is doing is pushing them to need it in the first place. 

The inclusionary zoning policy was adopted in November, 2021, which Richard Lyall believes should be there. However, he does not agree with the city’s framing of it. 

For example, if a developer builds a 100-unit building, 10% should remain in the affordable bracket for the next 100 years or so. Yet, you can not build more units over it to make up the cost or get a bonus for the density. 

Sounds like a good plan for buyers on paper, except, it would raise the cost significantly for all the other units. 

What can we do differently to make affordable housing in Toronto a reality? 

Richard Lyall thinks the leadership style has to be changed from the top if we want to make housing affordable in Toronto. Examples like Germany and Japan are best case studies for cities like Toronto to examine. These countries do not seek to put governments and developers in adversarial roles. Instead, the system works with the industry to craft policy together.

The Toronto government also slows down projects due to their long approval processes. This is counterproductive, as the government is in charge of skilled experts in the field.

Engineers and technicians peer-reviewing each other’s work would streamline the process instead. Which also brings us to the matter of the skilled labour shortage in Canada. 

Affordable Housing in Toronto: Canada Losing Skilled Trade Workers

Three things happened simultaneously after the war in Canada:

  • Massive immigration
  • Huge progress in science and technology
  • Wealth explosion

People who went to universities from the 60s to the 70s had well-rounded education, giving vocational training equal importance. Once the 80s came, the public education sector revised its syllabus to phase out skilled crafts. 

It didn’t matter much, since immigration workers were in droves. 

Then, people’s income level changed, and pursuing anything which didn’t get you an office job seemed risky. Aristocracy affected this to some level too, as skilled traders got less respect. 

In reality, skilled workers make good money and often become project managers and CEOs. 

How Can Canada Increase Skilled Trade Workers?

The entire schooling system has to be uprooted to increase Canada’s skilled worker numbers. 

Children as young as those in sixth or seven grade have to be introduced to skilled trades. 

At present, the public education system is nowhere near nimble. The age-old belief is one should get a good degree and aim for an office position. 

These beliefs are perpetuated further by school councillors who are teachers, with the prejudice that the path of college degree they took is the one. 

Schools also do not account for visual learners, who would shine in skilled trade but seem to fall behind in studies. Aptitude testing is vital and can be made faster with AR helmets and other new technologies. 

Schools do not have enough funding for this at present. Even introducing a side vocational curriculum is difficult. The colleges fail to have a connection to local industries too. 

We have to take students to the factories and construction buildings and create workshops where they can learn. We also need former or present skilled traders as teachers. 

Other careers have a clear path. The same has to be done for vocational work. 

Affordable Housing in Toronto: Final Thoughts

Richard Lyall also talks about why the Toronto city council raised the fees and if it’s because they’re the ones who need the money. He’s also appreciative of the Ontario Minister introducing reforms to make housing affordable in Ontario. 

Canada, at large, has to change its attitude towards developers if there is any hope of solving the housing crisis.