Another reason foreign tax is not the answer in GTA
While the debate continues on whether Ontario should follow BC with a tax on foreign ownership of homes in the GTA, a report highlights another issue which is driving up home prices.
With land supply already restricting the options for builders and its scarcity increasing the cost of lots, the Fraser Institute says that red tape is costing builders disproportionately more in Toronto than in other cities such as Hamilton, adding to the cost of homes.
The study found that builders pay typical compliance costs of $20,961 per unit in Hamilton while in Toronto the cost is more than double at $46,569. In the Oakville builders spend more than $60k on compliance.
“Costly and confusing regulations, long approval times, rezoning delays, and overall uncertainty for developers both increases the costs and impedes new homes from being built throughout the Golden Horseshoe,” said Kenneth Green, a senior research director at the Fraser Institute and co-author of the study.
Waiting for rezoning is a drawn-out process in Toronto, the study found, with an average of 7 months taken to complete; the average for the region is 4 months.
“If city councils in the Golden Horseshoe really want to increase the supply of housing and lower prices, they should consider more sound regulatory regimes that encourage, not stifle, residential development,” Green said.
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