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Thursday , 23 March 2017
Building industry a major driver of GTA economy

Building industry a major driver of GTA economy

The Building Industry and Land Development Association (BILD) has released a series of fact sheets outlining the economics of the building and renovating industries in the GTA. BILD’s reason for releasing the material is educational, said president and CEO Bryan Tuckey. “From building homes and businesses that people can afford, to creating thousands of jobs in construction and related fields, these booklets will help educate people on the economic impact of our industry.”

We learn that the home building industry was worth $22.6 billion to the GTA economy in 2013, with 34,719 new homes built, supporting 207,400 jobs with $9.7 billion paid in wages. Professional renovation contributed a further $13 billion (in 2012) with 99,900 workers earning $5.3 billion.

Being “fact sheets,” the booklets are heavy with numbers, and it isn’t always easy to appreciate the significance. There is no interpretation or context. For example, we’re told that “government charges and fees” account for 19.7 per cent or $64,000 of the average price of a new high-rise home and 22.6 per cent of the average price of a low-rise home. Is this in line with other municipalities? Higher? Lower? A 2013 study by Altus Group shows that Toronto has the lowest development charges of the five municipalities included (Oakville/Halton, Markham/York, Brampton/Peel, Ajax/Durham, Toronto). Toronto development charges on a single detached home in 2013 were just under $20,000, while in Brampton and Markham they were over $60,000, and in Oakville just under that amount.

Calling it an “unfair tax burden,” the BILD sheet says that $1 billion in development charges is paid by new home buyers each year to fund infrastructure such as bridges, sewers and libraries. A graphic shows that development charges have grown much faster than the prices of new homes. Without knowing why the charges grew so rapidly, it’s hard to reach an informed conclusion about whether this is fair or “unfair.”

Development-Charge-housing-industry-BILD-building-renovation-economy-GTA-Toronto-Condo.ca

Source: BILD

Section 37

One of the “key industry issues” identified in the BILD booklets is the contentious Section 37. This refers to the section of the Ontario Planning Act that deals with increases to height and density in return for community benefits. Under Section 37, a builder may negotiate to put up a taller building than permitted by local by-laws in exchange for including a park or some other benefit on the site. A recent report on Section 37 (Section 37 Review, 2014) for the city of Toronto says that it has brought the city half a billion dollars in cash benefits and payments since amalgamation (1998), as well as significant “un-qualified in-kind benefits” that may be worth even more than the cash. Other Section 37 benefits could include streetscape and parks improvements, community and cultural facilities, and the inclusion of affordable housing.

There was an overwhelming sentiment by participants consulted in this review that a standardized approach towards calculating the value of the contribution towards community benefits would be preferable to the current case-by case negotiation process.

Section 37 Review Final Report

The report concludes that Section 37 has been an “important planning tool,” while acknowledging that there are issues of consistency and transparency. The purpose of the study was to find recommendations for improving that transparency in implementing Section 37.

An example of Section 37 benefits given is that of the Spire condominium building at Church and Lombard Street. Under Section 37, $3.2 million was “generated” for revitalizing the Parish House of St. James Cathedral and creating a public space on Lombard Street.

The Altus Group study referred to above found that “there is no publicly available formula or method for how these are calculated and/or arrived at.”

BILD goes even further, saying that implementation of Section 37 provisions can be “a highly political process.” BILD says that Section 37 should apply only to developments that are not in conformity with the Provincial Growth Plan. Only those municipalities that have a development permit section in place or an updated zoning code should be allowed to access Section 37.

On the question of local appeals in matters of minor variance applications, BILD would like to see the existing Committee of Adjustment and the Ontario Municipal Board do the job rather than adding a Local Appeals Body which, BILD claims, would be subject to political interference and costly to taxpayers.

About Josephine Nolan

Josephine Nolan is the chief editor of Condo.ca—Canada's Condominium Magazine. You can reach Josephine via our contact form. She reads all her mail.

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