The provincial government has announced that it will allow more municipalities to apply for funding to build infrastructure that supports housing development. The move comes after many municipalities complained that the eligibility criteria for the $1.2-billion Building Faster Fund were too restrictive and unfair.
Building Faster Fund rewards high-performing municipalities
The Building Faster Fund was introduced in August 2023 as part of the province’s Housing Supply Action Plan. The fund provides up to $1.2 billion over three years to municipalities that meet or exceed their housing targets, which are assigned by the province based on population growth and demand.
The fund is intended to help municipalities build infrastructure such as roads, sewers, water, and transit that are needed to enable housing construction. The province says the fund will help create up to 50,000 new homes and support economic recovery from the COVID-19 pandemic.
However, the fund has been criticized by many municipalities that say they are excluded from accessing the money because of the way the province measures their housing performance. The province uses housing starts, which are the number of homes that begin construction, as the main indicator of meeting the targets. But many municipalities argue that housing starts are influenced by factors beyond their control, such as market conditions, interest rates, supply-chain issues, and labour shortages.
They say a more fair and accurate measure would be building permits, which are the number of homes that are approved for construction by the municipality. Building permits reflect the municipality’s efforts to plan, zone, and approve housing development, which are within their control.
Province responds to municipal concerns
In late 2023, Municipal Affairs and Housing Minister Paul Calandra rejected the municipalities’ request to change the eligibility criteria for the Building Faster Fund. He said the province was committed to using housing starts as the measure of success, and that the fund was designed to reward the municipalities that were delivering on their housing targets.
However, on January 22, 2024, Premier Doug Ford announced a change of course at the Rural Ontario Municipal Association conference. He said the province will open up the fund to more municipalities by creating a new stream of funding for housing-enabling infrastructure. The new stream will use any money that is unspent through the Building Faster Fund, which could amount to hundreds of millions of dollars.
Ford said the new stream will be available to all municipalities, regardless of their housing performance, and that the province will announce the details and application process soon. He said the new approach will continue to reward the high-performing municipalities, while also supporting the infrastructure needs of other communities.
“This is a win-win for everyone,” Ford said. “We’re listening to our municipal partners, and we’re delivering on our promise to make housing more affordable and accessible for the people of Ontario.”
Municipalities welcome the announcement
The announcement was welcomed by many municipal leaders, who said they were pleased that the province listened to their concerns and responded with a more flexible and inclusive funding program.
“We appreciate the province’s recognition that municipalities need more support to build the infrastructure that enables housing development,” said Jamie McGarvey, president of the Association of Municipalities of Ontario. “This is a positive step that will help us address the housing challenges and opportunities in our communities.”
McGarvey said he hopes the province will also consider using building permits as a measure of housing performance in the future, as it would better reflect the municipal role and responsibility in planning and approving housing.
“We look forward to working with the province on the details of the new funding stream, and we hope to see a fair and transparent allocation process that respects the diversity and needs of all municipalities,” he said.
