In the latest unveiling of Ontario's 2024 budget, housing has taken center stage with a slew of initiatives aimed at tackling the ongoing supply crisis. With a deficit projection of $9.8 billion, nearly double its initial estimate, the budget signals a significant investment in addressing housing issues, but the question remains: Are these measures enough?
Key Highlights:
Building Faster Fund: A $1.2 billion fund over three years has been allocated to incentivize municipalities that meet or exceed housing construction targets. The aim is to expedite the construction process, easing the strain on housing supply in Ontario.
Municipal Housing Infrastructure Program: A hefty $1 billion investment has been earmarked for core infrastructure projects, supporting the foundational needs for residential construction and enabling more homes to be built.
Increased Funding for Housing-Enabling Water Systems: With an increase to $825 million, this fund targets municipal water infrastructure projects, crucial for new housing developments.
Additional Initiatives:
Vacant Home Taxes: Extension of authority for municipalities to impose taxes on vacant homes, aiming to increase supply and affordability, with a focus on foreign-owned vacant properties.
Non-Resident Speculation Tax (NRST): Amendments to NRST to deter speculative buying by foreign entities and ensure more homes are available for Ontario residents.
Lowering Taxes on Purpose-Built Rental Properties: Removal of HST for new purpose-built rentals and municipal tax flexibility for rentals to encourage development and address affordability.
Investing in Modular Construction: Implementation of an "attainable housing program" focusing on modular construction and innovative building methods to quicken development and improve affordability.
Reactions and Concerns:
While the government's housing initiatives have been welcomed by industry associations, concerns linger regarding their efficacy. With only around 89,000 housing starts in 2023 against a target of 125,000, and a goal of 175,000 annual starts by 2026, doubts persist about meeting the target of building 1.5 million new homes by 2031.
Mortgage Professionals Canada advocates for further policies to increase supply and lower costs, including installment payment options for Property Transfer Tax and revising the provincial HST New Housing Rebate.
The Ontario Real Estate Association acknowledges the investments but emphasizes the need for bold action to achieve housing targets, highlighting initiatives undertaken by certain municipalities as examples to follow.
Conclusion:
Ontario's 2024 budget showcases a concerted effort to address the housing crisis through various measures targeting supply and affordability. While applauded by industry stakeholders, the effectiveness of these initiatives remains to be seen, with continued advocacy for further action to ensure the realization of housing goals in the province.
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