The Fox In The Henhouse

My apologies for titling this post with a cliché, but it seems particularly apt given who is really behind the plan to degrade our greenspace and wetlands, also known as The Greenbelt Grab. 

No surprise: it is the developers and homebuilders.

In a rather telling article, David Wilkes ( President and CEO of the Building Industry and Land Development Association) lays bare, perhaps inadvertently, the influence he and his ilk have over the Ford government's decision-making process.

He begins by trying to provoke a sense of outrage in readers, especially the ones hoping to buy a new home. 

When a family buys a new home in the GTA, as much as a quarter of the price consists of fees, taxes and charges imposed by the three levels of government.

More than half of that amount is levied by the municipality in the form of charges intended to pay for growth-related infrastructure, additional local services and new parks.

What does that mean in dollars and cents?

Across the GTA, municipalities collect $116,000 per new housing unit, on average, in growth funding charges. These include development charges, community benefits charges and parkland cash-in-lieu. The rates for the most significant of these charges — development charges — are based on background studies that municipalities are required to produce every few years.

His dishonesty begins by implying that any savings made through his plan, which I will get to in a moment, will be passed on to the homebuyer. Apparently, the market forces we have been taught to believe in will be magically suspended, so great is the builders' desire to bring affordable housing to all.

His plan, which is also an admission of the great sway builders and developers have upon Doug Ford, is this:

Ensuring that residents get the infrastructure and services they need is important. Unfortunately, for more than a decade, GTA municipalities have been collecting far more in growth funding charges than they have been spending, accumulating an estimated $6 billion in reserves. This estimate is based on the financial information returns that municipalities file each year with the provincial Ministry of Municipal Affairs and Housing.

When challenged about the intended use of these large reserves, municipalities state that the funds are allocated. However, in most cases it is not clear whether the funds have been allocated for the new infrastructure and services for which they were ostensibly collected. Transparency and accountability are missing here. (Emphasis mine.)

The last sentence is especially rich, given that, in concert with the government, developers have operated in an atmosphere that can only be politely described as opaque. But the extent of their  influence is apparent in the following:

Given the accumulation of large reserves of growth funding charges by municipalities and the housing affordability crisis we are facing in the GTA, it makes sense that our industry — and the public — wants transparency and accountability around how these charges are collected and spent.

This is why the Ontario Home Builders’ Association (OHBA) last month called on the province to audit major municipalities’ collection and use of growth funding charges. (Emphasis mine.)

Like the obedient soldiers they are, the Ford government intends to do precisely that, at least in cities like Toronto and Mississauga. Recently, the Housing Minister, Steven Clark, promised to make Toronto whole if reduced or eliminated development fees compromise their finances.

Ontario Premier Doug Ford said Thursday that he does not believe that the loss of development charges entailed in a housing bill his government passed this week will hurt municipalities and said they can likely make up some of the shortfall by cutting waste.

While Clark promised to make the city whole, he also said Wednesday that the province would be launching a third-party audit of municipal reserve funds.

Ford evinced little but contempt for other municipalities objecting to the loss of development fees, including Mississauga's Mayor Crombie.

Ford said Mississauga has increased its fees on new homebuyers by nearly 30 per cent in the last two years and that makes it difficult for people to buy a home. He also accused Mississauga of not fully spending the development charge revenues it gets now, saying the city is sitting on millions of dollars in development charge reserves.

“I see that Mayor Crombie’s out there handing out flyers and doing this – all I say is get on board, stop being disingenuous, you know, with the people of Mississauga,” Ford said. “It’s just absolutely wrong.”

Crombie said development charges do go into reserves, but municipalities are not simply sitting on the money, rather they are treated like savings going toward future long-term projects, akin to a homeowner saving up for a new roof.

“We do not collect money we do not need, and we do not have unlimited chequing accounts,” Crombie wrote.

“In fact, the funds we collect are often not enough to support new growth – we are often short and have to use tax dollars to cover the gaps.”

The Ford government is wholly incapable of any kind of nuanced thinking; that is the limitation resulting from both inveterate, extreme Conservatives and Doug Ford's cognitive and educational shortcomings. 

And all Ontarians will bear the high cost of those failings.