Great News for Ontario Developers – Condominium Deposit Interest and Other Changes

The week is ending on an extremely positive note for the Ontario home building industry, which in the long-run, will benefit all home buyers.  Three very positive things have or are expected to occur over the next few days:

Condominium Deposit Interest

It is anticipated that the government will shortly be enacting a regulation which leaves the previous interest rate of BOC rate minus 2% in effect when calculating interest on deposits payable on interim closing.  The full BOC policy rate (0.25% below the BOC rate) without reduction of 2%, would apply only to deposits which are being returned by builders because of cancellation of the purchase agreement by either the vendor or the purchaser as a result of the outside occupancy date not having been met.  This will save projects launched after January 1, 2023, significant costs, which in turn will benefit consumers.  If all goes well, watch out for an announcement from BILD and OHBA.

HCRA/TARION Joint Applications

The introduction of a second regulatory authority for the residential building industry, HCRA, has caused significant delays in getting builders licensed by HCRA and projects approved by TARION.  Until recently, TARION was unable to process a project application until the builder was licensed with HCRA which is experiencing significant delays.

On Monday, October 24, 2022, HCRA and TARION will be announcing that sometime in November 2022, builders will be able to apply for both their license with HCRA and for the project to be approved with TARION concurrently.  This should hopefully result in significant reductions in delays of final approvals from both organizations and an even better sharing of information between them.

Proposed Legislation Streamlining Development Approvals

Finally, as disclosed by the Toronto Star today ( https://tinyurl.com/bdfm7z6m ), the Ford government is being true to its word to implement many of the proposals in the Ontario Housing Affordability Task Force Report that came out in December 2021.  The need to cut through development red tape at the municipal and provincial levels is dire in the Province of Ontario.  Toronto recently ranked near the bottom of 25 cities in North America in terms of the speed of development approvals.  Many other Ontario cities fared pretty badly as well too.

The Toronto Star revealed that when the legislature reconvenes on Tuesday, the Minister of Housing, Steve Clark, will be introducing legislation flowing from the Report.  These are purported to include:

1. ability to increase the number of units in a residential single family building as long as the square footage does not increase;
2. reducing the scope of the authority of Conservation Authorities to “commenting agencies, focussed on preventing floods and other natural hazards, rather than turning into panels for residents to slow down the approval process.”The delays in getting approvals from Conservation Authorities has been a real sore point with the industry;
3. waiver of site plan control for smaller developments;
4. reduction of public meetings;
5. reduction or elimination of development charges for projects required to provide inclusionary zoning affordable units;
6. elimination of development charges for homeowners adding rental units; and
7. removing planning approvals for upper tier municipalities like Peel, York, Durham, Halton, Waterloo and Niagara.

Tuesday will be quite a day for developers and consumers alike.  If these and other changes can be implemented that can reduce the cost and the length of time it takes to get land and projects developed, more houses can be built at lower prices.  Isn’t that what we are all seeking to achieve?

Have a great weekend everyone.