Thank you, Mr. Chair.
I am very pleased to be here today to bring an Ontario perspective to the discussion, given our need to build over 1.5 million homes in Ontario by 2031 to address the housing shortage in this province.
As co-president of Wastell Homes, a family-owned builder-developer in London, Ontario, I am a current board member of the London Home Builders' Association, as well as its past president. I've been a board member of the Ontario Home Builders' Association and I am president of CHBA.
On that note, I'm pleased to see our mayor, Josh Morgan, appearing today.
In my roles with the association, I've always strived to develop workable policies to deal with housing affordability. This has always been a priority of all three levels of our association, and with my own children coming into adulthood, it's doubly important for me to ensure home ownership isn't out of reach for Canada's next generation.
As Kevin mentioned in his remarks, the current housing crisis is rooted in many issues that must be addressed, and at the top of that list is insufficient housing supply. In order to tackle this and thereby help address housing affordability, the OHBA has developed five priority action areas for Ontario. Given that this is a Government of Canada committee, I can tell you from my work with CHBA that they apply almost everywhere across the country.
The first priority area is to make homes more affordable by speeding up approval timelines and eliminating red tape. Most municipalities in Ontario experience delays in development approvals for building new homes long past reasonable regulated time frames. These delays can last years, and they add significant costs to the price of a new home. Every year that a municipality delays an approval decision in Ontario, it costs homebuyers an additional $36,000 for a typical low-rise home and an additional $26,000 for a high-rise apartment. More needs to be done to establish and enforce reasonable time frames for new home construction approvals.
To further address the issue of lengthy approval timelines that add to the cost of building housing, the OHBA is looking to the province to link municipal access to infrastructure funding to meet new housing start targets, just as we understand the federal government is looking to do. Municipal delays have forced many in the industry to appeal to the provincial agency that settles development disputes, the Ontario Land Tribunal. The magnitude of delays has created a substantial backlog which is also adding time and cost to the building of new homes.
The second priority area is to make new lands available to build housing. Housing supply and costs are dependent on land availability, and the supply of available lands designated for growth across municipalities is dwindling rapidly. Similarly, the addition of new housing within existing communities is severely restricted by municipal zoning and Nimbyism. This prevents the addition of supply and drives up costs. As a result, land values for service lots across the province have increased, and in some cases have tripled or quadrupled, adding hundreds of thousands of dollars to the cost of a new home.
The third area deals with development taxes. Development taxes are out of control, and now make up a significant portion of the cost of a new home. Recent studies by the Canadian Centre for Economic Analysis show government-imposed costs contribute over 30% to the cost of a new home in Ontario. All of these fees are passed on to the homebuyer. Through these fees and charges, municipalities have amassed large reported surpluses. For example, in the GTA alone, these surpluses are in excess of $5 billion.
The fourth area pertains to the need to lay the groundwork for future growth. The supply of housing is highly dependent on critical services and transportation infrastructure. Prolonged delays of infrastructure projects delay and threaten the delivery of much-needed housing. We need all levels of government to make funding and completing these projects a priority. The federal government is in an important position to ensure its funding investments go towards housing-supportive infrastructure—for example, for public transit and wastewater. Building homes is the easy part, but if we cannot connect to municipal services, we cannot create our much-needed housing supply.
The fifth and final priority area for OHBA is to take the local politics out of planning. Nimbyism plays a huge role in slowing or stopping much-needed housing supply. There is strong pressure for individual municipal councillors to get behind community opposition to growth and development because they are elected by existing residents, not future ones. We need to change municipal processes through measures like as-of-right zoning to get the politics out of planning. The federal government is in a position to support that message and also use its fiscal levers to enforce it.
The housing file is deeply complex, and it will take prolonged and concentrated efforts by all levels of government to address the crisis we face. Our industry is ready to play its part.
I thank you for the opportunity to appear as a witness today and I look forward to your questions.