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New Ontario greenbelt plan will impact land supply and prices

W.D. Lighthall

The provincial government and the homebuilding industry remain divided over the merits of a plan to create a permanent greenbelt across the top of the Greater Golden Horseshoe.

Homebuilders warn Gerretsen:

DCN Correspondent

The provincial government and the homebuilding industry remain divided over the merits of a plan to create a permanent greenbelt across the top of the Greater Golden Horseshoe.

The Ontario government has announced its Greenbelt Protection Plan, which will permanently protect about 400,000 hectares of land within the Greater Golden Horseshoe from urban development, will be in place by early February 2005. (The Greater Golden Horseshoe extends from Peterborough to Barrie to Kitchener-Waterloo to Niagara Falls.)

The new greenbelt is in addition to the approximately 320,000 hectares of land already protected from urban development on the Niagara Escarpment and the Oak Ridges Moraine.

The Greater Toronto Home Builders’ Association last week held a half-day conference on the greenbelt and its expected impact on the homebuilding market.

At the conference, representatives from the homebuilding industry warned that removing 400,000 hectares (about 1 million acres) from the supply of land available for development will mean land shortages, rising new home prices and reduced consumer choice in the marketplace.

On the other hand, by the year 2031 the Greater Golden Horseshoe is expected to grow by four million people, to a total 11 million, and add another two million jobs.

Given this growth, the provincial government maintains creating the greenbelt is necessary to reduce urban sprawl and to protect watersheds, agricultural lands, natural features and environmentally sensitive areas.

“We are moving forward concurrently on planning reform, long-term growth planning and a permanent greenbelt across the Greater Golden Horseshoe,” John Gerretsen, minister of Municipal Affairs and Housing, told the conference.

Gerretsen said the province plans to pass its Greenbelt Act in mid-December.

However, to allow time for more consultations, and to correct earlier mapping errors with the greenbelt’s boundaries, Gerretsen said there will be a stipulation in the legislation postponing actual implementation of the Greenbelt Protection Plan for 45 days.

Gerretsen made it clear that despite the concerns expressed by the homebuilding industry, the Liberal government has made a commitment to the people of Ontario to establish a greenbelt in the Greater Golden Horseshoe and intends to keep that commitment.

“It is critically important that we curb the urban sprawl that has been gobbling up our rural lands at a furious pace. Without a growth plan, it’s conceivable that we’d convert another 1,000 square kilometres of land, an area nearly twice the size of the City of Toronto, from rural to urban over the next three decades,” Gerretsen said.

The growth plan referred to by Gerretsen is a report called Places to Grow: Better Choices, Brighter Future, which outlines the provincial government’s thinking on how best to manage the growth expected in south-central Ontario over the next 25 years.

The report envisions accommodating future growth through intensification—higher density forms of housing in existing urban areas—as well as directing residential and employment growth, and supporting infrastructure, to designated areas within the Greater Golden Horseshoe.

Mark Parsons, president of the Greater Toronto Home Builders’ Association, said it doesn’t make sense that the government would create the greenbelt before the growth-management plan is ready to be implemented.

“Have we not got the cart before the horse?” Parsons asked Gerretsen.

“As of today, we do not have the actual growth plan . . . that will tell our industry and municipalities where and what type of growth can occur.”

Until the growth plan is finalized, Parsons added, there’s no way of knowing if the size of the greenbelt will leave enough land available to accommodate the anticipated population growth.

Gerretsen said it’s his understanding that in most of the GTA, there currently exists a three-to-five year supply of developable land.

Furthermore, “From everything I’ve seen, I reject the notion that we haven’t got enough developable land available to take care of the population expansion that will take place over the next 30 years,” Gerretsen said.

Andrew Brethour, president of PMA Brethour Group, which provides marketing and consulting services to the homebuilding industry, pointed out that the existing three-year supply of land in most areas within the GTA represents a “very tight market,” given that land development is a lengthy process.

There is a need to make land available for development quickly, Brethour said.

“In your first year in office, having taken a million acres out of the system, will you make the necessary commitment to (building) the infrastructure—to water, sewers, roads—to assist this industry, which is clamouring for land supply?” Brethour asked Gerretsen.

Brethour also questioned the degree to which the homebuying public will accept policies aimed at getting more people into higher density forms of housing.

Traditional, ground-level housing styles currently make up 70 per cent of the homebuilding market in all of the GTA, Bret- hour said.

Joanne Davies, assistant deputy minister to Gerretsen, told the conference that to accommodate population growth the greenbelt’s boundaries have been kept a substantial distance away from existing urban centres.

“There is a range of 150,000 to 180,000 acres of land left south of the Oak Ridges Moraine which we do not propose to include in the greenbelt,” Davies said.

Frank Clayton, president of Clayton Research Associates Ltd., said the effects of government decisions that restrict land supply is usually to increase housing costs.

Clayton said the provincial government’s plan to create the greenbelt, combined with the strong homebuilding market of the last nine years, means the supply of land now readily available for development in the GTA is running out and needs to be replenished.

“With these policies, it’s a question of house prices rising, but I don’t know by how much. The historical evidence, what has occurred in other places and is now happening in the Toronto area, is that there is going to be rising home prices and there is going to be undesirable social and economic consequences,” Clayton said.

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