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Issue link: https://digital.canadianlawyermag.com/i/1544922
www.canadianlawyermag.com 41 LEGAL REPORT REAL ESTATE Property development lawyers say new funding announcements and tax reductions are helping spur housing, but more needs to be done The complexities of building more homes GOVERNMENTS IN Ottawa and provin- cial capitals insist they want to build faster and hit ambitious housing targets. But lawyers in real estate and infrastruc- ture say the legal framework still pushes in two directions at once, as local politics, entrenched fee structures, and overlap- ping rules often blunt the impact of new incentives and funding. "About a third of the cost of developing, building, and selling a house is taxes and fees," says William Liske, vice president and general counsel at Losani Group, which builds homes in Southern Ontario. "That has to change, because it's way too costly to manufacture, build, and sell a house when a third of what you're paying is government fees." For Liske, the central problem is who controls land use decisions and how much those decisions cost builders to navigate. Federal and provincial tweaks to HST and development charges have chipped away at the margins, he says, while leaving the most expensive and unpredictable layers intact at the municipal level. He breaks Ontario's tax regime into three pillars. First is the longstanding GST/HST new housing rebate. It was introduced when "homes were cheap, and the government never increased the threshold," he says, so it now maxes out far below current prices. Second is the rental housing framework, where development charge credits of 15 to 25 percent per unit offer some relief for purpose-built rental projects. Third is the new HST holiday for first-time buyers. "It's way too costly to manufacture, build, and sell a house when a third of what you're paying is government fees" William Liske, Losani Group