Ford government was warned it has 'limited options' to enforce municipal housing targets

Just days before it announced sweeping housing legislation, Ontario civil servants warned Premier Doug Ford's government it has "limited options" to force municipalities to comply with a key part of its new plan. 

Provincial bureaucrats provided the advice last month in a draft document, which was obtained by CBC Toronto.

They took issue with the government's plan to impose targets on municipalities for the number of homes they'll build, saying if local governments balk at the arrangement or fall short of the targets, there may be little the province can do.

"As the pledge is not enforced by legislation or regulation, there would be limited options to ensure municipal compliance," the civil servants say in the report.

The slide deck was written ahead of the launch of the province's Building More Homes Faster Act, which was tabled last week. It dissects the proposed policy and multiple possible regulatory changes. 

CBC Toronto reached out to the Ministry of Municipal Affairs and Housing for reaction Monday, but so far the ministry has not responded.

In a bid to build 1.5 million homes over the next decade, Ontario's minister of municipal affairs and housing has assigned 29 communities specific home building targets. They'll be asked through a ministerial letter to submit a "housing pledge" that outlines the goal and actions they'll take to get there by March 1, 2023. Municipalities would be required to report annually on their progress, the report notes.

Ford announced his government's new plan and set ambitious targets for municipalities to ensure that the province achieves its overall new home building goal. The legislation has not yet been passed and has proven controversial with a number of groups, including municipal leaders who worry they'll be stuck with the bill to implement Ontario's plan.

The government has pledged to freeze or waive development charges to encourage developers to build new homes and affordable housing. That could cost cities and towns across Ontario hundreds of millions of dollars at a time when many are struggling with increasing costs and few revenue streams to maintain services. 

The province has said it could use a $2-billion federal fund to make cities whole, but the municipalities have argued that the funding may not materialize and want further assurances their costs will be covered by the province.

'Municipalities may react negatively,' report says

In the report, the civil servants warned the Ford government that municipal leaders would likely be upset with a number of aspects of the plan, including the housing targets.

"Municipalities may react negatively to being assigned housing targets without consultation, or if the targets do not align with recent updates to provincial population forecasts," they note.

The bureaucrats also take a hard look at the timeline to build the 1.5 million homes itself and note it will take years to gain traction and demonstrate results.

"Because of the timelines for planning and development, the impact of policy changes (once in effect) will take a few years to be realized through increased housing starts," they warn.

Some analysis included in the document suggests that new home starts will remain around, or below, the approximate 90,000 starts in 2022. That would need to jump to 150,000 starts by the fourth year and then average around 225,000 starts per year for the remainder of the decade to reach the 1.5 million goal.

But the report acknowledges that the just over 100,000 new home starts in 2021 is the highest total since 1987. 

"We will need to more than double housing starts beyond current projections in years 4-10 to achieve the goal," the report notes. 

Municipal Affairs Minister Steve Clark has said that there won't be penalties for communities, and stressed last week that he wants to start on a "good foot" with every municipality.

"We hope that every community will join us," he said. 

Clark's office did not immediately respond to a request for comment.

Matti Siemiatycki, a professor of geography and planning at the University of Toronto, said he thinks the province will use a carrot-and-stick approach to get municipalities to reach their housing pledge targets.

"The carrots will be putting funding on the table [to hire] more planners and to help accelerate the legislation," he said.

"And my guess is the sticks will be around funding for other programs like infrastructure and transit, and other parts of the agenda that municipalities could use," he added. 

"In that way, even if they're not technically able to legislate they can provide incentives and support to do it."

Siemiatycki said the province's overall goal of building 1.5 million homes in 10 years is an ambitious target that might not be able to reach. So much of the work to build the homes lies in the hands of municipalities and developers and is subject more broadly to market conditions.

"It's good to set those goals and it kind of mobilizes everyone," he said. "There's a lot of pieces that have to fit together in order to meet it."

NDP housing critic Jessica Bell said the documents, and the legislation itself, show the Ford government is passing on the cost and responsibility to build more housing to municipalities.

"What I'm concerned about is the Ontario government is very interested in laying blame at municipalities and blaming them for the housing affordability crisis," she said.

"I hope the government looks to itself and introduces amendments to this bill, to address the housing affordability crisis, and uses its provincial powers to do so."