Building Faster Fund: housing target tracker

In November 2022, the Government of Ontario’s More Homes Built Faster set a goal of building at least 1.5 million homes by 2031 after the province’s Housing Affordability Task Force recommended a large volume of housing construction to meet the expected demand.

Since then, the province has pointed to municipal “red tape” and long approval processes as limiting housing starts, assigning housing targets to 50 municipalities, 46 of which have committed to their target and been granted Strong Mayor powers in return.

The $1.2B Building Faster Fund ($400M per year for 3 years) rewards municipalities that reach at least 80% of their annual target (bonuses if targets are exceeded).

Ontario housing target tracker

Enter your municipality to see how your community is doing. If you think they could do better, or you think they’re doing great – contact your local council members and let them know. If your municipality declined strong mayors powers, contact them to ask why.

Data last updated: February 22, 2024 Latest results here

• Source: Tracking housing supply progress – Government of Ontario
• 2031 Municipal Housing Targets
• 2031 Municipal Housing Targets – Phase 2 Updates

This housing numbers above include:

• New home construction starts in municipalities. This makes sense.
• Additional residential units (ARUs) such as laneway, garden and basement suites added to existing homes. These count I guess
• New and upgraded beds in long-term care homes. Why would these be included in the count?

Data from:

• Canada Mortgage and Housing Corporation
• Long-term care bed data from the Ministry of Long-Term Care

Ontario has supported the creation of ARUs, which help increase density in existing neighbourhoods, through a variety of measures, including the removal of development-related fees from ARUs. Ontario is also building and redeveloping more than 58,000 long-term care beds by 2028 to provide the modern, safe and comfortable homes our seniors deserve.

How much can a municipality receive from the Building Faster Fund?

The $1.2B Building Faster Fund ($400M per year for 3 years) rewards municipalities that reach at least 80% of their annual target (bonuses if targets are exceeded).

Each municipality’s portion of the annual $400 million is determined based on their share of the greater provincial housing supply goal.

For example, if a municipality’s target represents 10% of the province-wide target, that municipality will be eligible for 10 per cent of funding through the Building Faster Fund.

For example, if a municipality’s target represents 10% (150,000 homes) of the province-wide target by 2031 of 1.5 million homes, this makes them eligible for 10% ($40 million) of funding the annual funding through the Building Faster Fund, plus any bonus.

This amount is then adjusted based on how close they got to their annual housing target. If they reach:

• 80% of their annual target, they receive $40 million x 80% = $32 million
• 90% of their annual target, they receive $40 million x 90% = $36 million
• 105% per cent of their annual target, they receive $40 million x 100% + (5% x 2 = 10%) = $44 million
• 110% of their annual target, they receive $40 million x 100% + (10% x 2 = 20%) = $48 million

The Building Faster Fund provides double the funding for every 1% above 100% of a municipality’s target.

The funding can be used for housing-enabling infrastructure and other related costs that support community growth. Eligible expenses will be determined following consultations between the province, the Association of Municipalities of Ontario, the City of Toronto and the Housing Supply Action Plan Implementation Team.

Housing Affordability Task Force recommends 55 changes

In February 2022, the Housing Affordability Task Force’s report commissioned by the Province of Ontario contained 55 recommendations to accelerate progress in closing the housing supply gap.

Recommendations 1 and 2 urge Ontario to set a bold goal of adding 1.5 million homes over the next 10 years and update planning guidance to make this a priority.

Housing starts used to measure municipal performance

Municipal performance under the Building Faster Fund is evaluated based on the municipality’s number of housing starts and not municipal approvals.

The CMHC defines a housing start as the:

beginning of construction work on a building. This is usually when the concrete has been poured for the whole of the footing around the structure or an equivalent stage where a basement will not be part of the structure.

CMHC Starts and Completions Survey Methodology

Municipalities do not control housing starts

Municipalities want province to count building permits instead of housing starts

Ontario’s Big City Mayors and others have asked the province to count municipal approvals issued instead of “shovels in the ground” (housing starts) as they are under the direct control of municipalities, while housing starts are controlled primarily by developers and can be impacted by external factors such as financing, supply chain issues and labour shortages.

Cities could lose out on millions of dollars in provincial funding for housing-related infrastructure due to factors beyond their control, including market demand, interest rates, labour shortages and construction costs.

You can guarantee that they’re gonna come back and say, well we gave strong mayor powers to all these individual mayors and it was their responsibility to see it done. And then they used the flawed tracking system to see that the totals aren’t there. The blame is going to be on all of us by accepting this pledge.

Councillor Paul Carr

Housing starts expected to slow due to interest rates

A January 2024 policy report by the Ontario Real Estate Association (OREA) warned of a slowdown in housing starts due to factors such as high interest rates and construction financing:

Ontario has seen 285,377 housing starts since Premier Doug Ford set the ambitious 10-year goal in 2021. However, a yearly breakdown of housing starts – which is a metric that indicates when construction work on a building or unit begins – shows construction slipping.

However, starts have slipped since then: the province saw 96,000 housing starts in 2022, and early estimates for 2023 come in at 90,000 units.

A shortage of builders, tradespeople, and land is compounded by red tape and a widespread bias against development.

OREA, January 2024

At the current rate, the annual pace of construction would need to increase by roughly 66% to 150,000 by 2025 to come close to achieving the ambitious goal.

In Belleville, there has been a decline in housing starts by the private residential building sector in 2023, despite record approvals by the City of Belleville. This is the case in many municipalities across the province.

Municipalities say developers are sitting on building permits

Inventory of Ontario’s unbuilt housing supply by the Regional Planning Commissioners of Ontario (RPCO) provided data showing there are already over 1 million approved and proposed housing units in the development approval process:

• Development Ready (Registered and Draft Approved): 331,632
• Under Application or Proposed: 731,129
• Ministerial Zoning Order: 64,199
• As-of-right units (proxy): 150,000
• Total housing unit inventory now (year 2 of 10): 1,276,960
• Provincial Target by end 2031 (year 10): 1,500,000

We don’t say no to zoning applications for new development. We don’t object to any of that. We’re batting 1,000 in terms of agreeing to it

The problem is, we have a lot of developments here where there is no building occurring,

So if the private sector doesn’t build, we don’t get that counted towards us in order to be eligible for the money.

Councillor Paul Carr

A very prominent address is 40 Yeomans Street, the old Ben Bleaker property at the North End. Originally we zoned the north half of that as one block in November 2021. Nothing happened, I’ve heard that the property has sold and then has now been repurchased and the north half has now been rezoned into two blocks in February 2023. There’s no site plan application to date, so that land sits.

In 2019, a capital budget item was walked on in the amount of $1.8 million dollars, adding the Avenue Road Sanitary Sewer Extension Project and it was funded from the Sanitary Sewer Reserve fund at $1.8 million and I know Councillor Thompson brings up water and wastewater all the time and you know this is a significant amount of money that goes towards the Village of Avonlea. The Village of Avonlea was approved for zoning for 750 homes. Right now, with the sanitary sewer leading that way, and the rezoning, that property is now up for sale, you can look on the listings locally, for $29 million dollars. So is that building or is that land speculation? It sits.

Another one is 660 Sidney St, two apartment buildings just near Battlefield. Building permits were actually requested pre-COVID and then were suggested or were asked to put on hold, and and now they’ve just been issued as of July 28th, and let me tell you as of this date that ground is as flat as flat can be. There is no development.

While builders have said – and I’ve got a long list here and I won’t go into it – they say they’re building, but yet we can point to examples where we’ve done what we have to do, or we’ve done what we can do, to the point where there’s nothing coming forward from a developer or a builder to move those approvals on, that’s a concern.

… So when I cite examples where we’re approving things, but yet it sits, that’s a problem in terms of the permits. In essence, we are getting evaluated, if you will, based on what’s being done in the private sector to get it to a building permit. That’s a concern. We should be evaluated on what we can control, not what others can control.

The next thing that needs to happen quite frankly and it’s not in this motion, but I think it’s important to say, is that the senior levels of government need to invest considerably in affordable housing.

Councillor Paul Carr

Developers say they’re not sitting on building permits

Use It: Optimizing Municipal Development Pipelines (2024) commissioned by developer-lobby groups Building Industry and Land Development Association (BILD) and Ontario Home Builders’ Association (OHBA) identified that the residential development construction industry in Ontario is working at a 33 year high, as evidence that the residential development construction industry in Ontario not “sitting on supply”.

With over 160,000 new homes under construction, you would have to go back to the late 1980s and early 1990s to find a similar level of residential construction.

They say that instead of the 1.25 million claimed by the Regional Planning Commissioners of Ontario (RPCO), there are:

• “shovel ready” lots/units: 331,600
• lots/units are still in the application process, need additional approvals, servicing allocation or are awaiting a decision from municipal council: 731,000

The study also found that a number of municipalities in Ontario, including several in the GTA, already have “Use it or Lose it”’ (UIOLI) policies under Ontario’s Planning Act and Building Code Act, and that Ontario’s Planning Act already provides municipalities with several UIOLI powers for development and new housing.

Municipalities advise province to change the Building Faster Fund to separate the responsibilities of the municipality and the builders, create “Use it or Lose it” provincial zoning policies

Municipal lobby group Ontario Big City Mayors has suggested the province:

• Tie bonus funding to the number of building permits issued by a city, not how many houses begin construction.
• Add a sunset clause on housing projects, allowing municipalities to revoke planning approvals if construction hasn’t begun within a specified time period.
• Allow municipalities to increase development charges if a developer delays construction post-approval. 

If you don’t pull permits, you have to start at ground zero and pay the fees again, and make sure your development is still relevant

Burlington Mayor Marianne Meed Ward

Recommendation #43 of the Housing Affordability Task Force report recommended a ‘use-it-or-lose-it’ policy:

Enable municipalities, subject to adverse external economic events, to withdraw infrastructure allocations from any permitted projects where construction has not been initiated within three years of building permits being issued.

In Belleville, a motion was passed requesting similar changes:

Ontario government has not taken any specific actions through regulations to make developers develop and builders build.

there has been a decline in housing starts by the private residential building sector in 2023 despite record approvals by the City of Belleville.

the City of Belleville request that the Building Faster Fund be corrected so that municipal performance be based on housing start approvals for which the municipality has direct control, and that the Ontario government create “Use it or Lose it” provincial zoning policies so that it prevents land speculation, creating unnecessary delays in the development of land for residential housing

Motion of Proposed Changes to Building Faster Fund, Belleville City Council

Ministry of Housing working on Use it or Lose it policy

Housing Minister Paul Calandra first promised to review the Minister’s Zoning Orders (MZOs) in September through a “use it or lose it” approach, and in December 2023 the government announced they were consulting on a new “use it or lose it” approach to support improved municipal planning and resourcing while holding builders to account.

In February 2024, a spokesperson for the Ministry of Housing said work is well underway on a use-it-or-lose-it policy.