Kitchener and Waterloo mayors welcome new housing funds from province, but await full details

Local mayors say they're pleased with a new $1.2-billion program to help municipalities deliver on housing, but they're also waiting for full details from the Ontario government on how exactly the fund will work.

Premier Doug Ford announced the Building Faster Fund during a speech at the annual conference for the Association of Municipalities of Ontario (AMO) this week in London.

Ford said Monday the fund will give municipalities "the tools they need to build more homes faster to tackle the affordability crisis that's pricing too many people, especially young families and newcomers, out of the dream of homeownership."

The provincial government asked some municipalities to sign housing pledges to meet specific targets to build a certain number of new homes by 2031.

Speaking during a break at the AMO conference, Kitchener Mayor Berry Vrbanovic said Ford's message was well received because most municipalities have signed housing pledges.

Kitchener, for example, has pledged to build 35,000 homes by 2031.

"Part of the challenge, obviously, is making sure that we have the necessary dollars to support infrastructure investments," Vrbanovic told CBC News.

The funding "certainly is a step in the right direction and I think speaks to part of the commitment that the province made around ensuring that municipalities remain whole with some of the changes through Bill 23."

Bill 23, the More Homes Built Faster Act, froze, reduced or exempted developers from paying development fees on some types of housing, which municipalities have argued leaves them at a financial disadvantage.

Many municipalities have asked the province to ensure they're "made whole" — or financially compensated — for that lost revenue, which is used to build infrastructure including roads, water, sewer, parks and community facilities.

Waterloo Mayor Dorothy McCabe said she's pleased the government appears to have received the "clear message" from municipalities "that we do need financial support."

"But you know there's a lot of details that were not included that we will need to understand so we actually know how this works," she said.

Hardy Bromberg, Cambridge's deputy city manager of community development, said in an email that he, too, looks forward to knowing exactly how the program will work.

"Every level of government has an important role to play to create new housing opportunities, so we welcome any support from the provincial government to help get shovels in the ground and reach our housing targets," Bromberg said in an email.

Full details to come

The province said Monday the fund will provide $400 million in new, annual funding for three years to municipalities that "are on target to meet provincial housing targets by 2031."

"Municipalities that reach 80 per cent of their annual target each year will become eligible for funding based on their share of the overall goal of 1.5 million homes. Municipalities that exceed their target will receive a bonus on top of their allocation," the provincial news release said.

McCabe said she has some concerns about the fund, saying it appears municipalities will need to pay for the infrastructure up front, then ask to be reimbursed by the province.

"That's a challenging funding model," McCabe said, noting a housing development that came before council earlier this year would have required $68 million for infrastructure for it to move ahead. 

She also said "$68 million is a lot of money for the municipality to put up front and then to hope to be reimbursed.

"We're also concerned that this appears to pit municipalities against each other for resources and labour and even funding."

When asked if the funding could be used for roads or sewers for new developments, Vrbanovic said he didn't know those details yet and that Ford had told the conference that provincial staff will work with municipalities to consult on how the program should be structured. 

Need developers to build, mayors say

Vrbanovic said part of his message when he's spoken to provincial and federal politicians is that the city is prepared to do its part.

"And we've been doing that even in terms of being a leader around our development approvals and meeting the timelines that the province has set, but we know that there's going to need to be efforts made to ensure that beyond the approvals, the actual construction starts," he said.

"In Kitchener's case, we know, for example, that we have already met 27 per cent of our housing pledge with the approvals that we've made since signing the pledge back in March. That's in terms of planning approvals..

"We know where the challenge lies right now, quite frankly, is on builders and developers actually starting the construction."

He said that means the provincial and federal governments need to look at how they can address the crisis, including whether there should be a reduction in the HST to help keep costs down for developers.

McCabe echoed Vrbanovic, saying her message to Minister of Municipal Affairs and Housing Steve Clark is there needs to be legislation that "actually compels developers to build."

"There's nothing yet in legislation that says once municipalities have done all our due diligence and when council has approved projects that compels the developer to put shovels in the ground," McCabe said.