The Government of Ontario is considering a new law called the Affordable Homes and Good Jobs Act, aimed at redefining affordable housing. If passed, this legislation would change how affordable housing is defined, potentially exempting more units from development charges.

Income to Be a Measure of Affordability

Under the proposed act, the definition of affordable housing would now consider income as a factor. This redefinition aims to better align with the Provincial Policy Statement. According to this proposed definition, a home is affordable if its purchase price is less than 30% of a low- or moderate-income household’s yearly income or at least 10% below the average price of a resale home. For rental units, affordability is defined as the cost being at or below the average market rent or not exceeding 30% of a low- or moderate-income household’s annual income.

Incentives for Affordable Housing

Homes meeting these affordability criteria would qualify for discounts and exemptions on development-related charges. These charges can significantly increase the cost of a single-family home, sometimes by over $100,000 in certain Ontario cities.

Ontario is already taking steps to exempt affordable housing units from development-related charges, as outlined in the 2022 More Homes Built Faster Act. The proposed redefinition will further solidify this exemption, making it easier for people to access affordable housing that suits their needs and budgets.

The government is currently seeking feedback and insights on this proposed change, recognizing the diverse housing markets across the province. Additionally, the province plans to initiate consultations on new regulations, establishing service standards and prioritizing housing-related cases at the Ontario Land Tribunal, particularly those that contribute most to housing availability.

Addressing Rising Living Costs

Ontario is determined to foster growth in the construction sector, making housing more affordable to tackle the rising cost of living. Discounts and exemptions on development-related fees are seen as a potential solution to lower the costs associated with building, purchasing, and renting affordable homes, benefiting Ontarians across the province.

As of August, the average home price in the Greater Toronto Area was $1,082,496, and the average monthly rent was $2,898. These figures emphasize the pressing need for more affordable housing options in the region.