An Oshawa city councillor yesterday issued a call to both the city and Doug Ford government to match Ottawa promise to waive its 6 per cent General Sales Tax (GST) for new rental housing projects.
Councillor Brian Nicholson said currently there is no incentive to build rental housing. In fact single family homes are being turned into condominiums forcing their prices up.
He urged the province to waive its 7 per cent Provincial Sales Tax (PST) on new rental projects. The Federal Government has announced that builders who create new rental housing will no longer have to pay GST on the project costs. This is will encourage more rental housing building and thus reduce the pressure on rental costs.
“It is great that this will encourage new rental housing but it should be extended to renovation costs on existing rental housing as well. We need landlords to maintain their buildings as well to aid current tenants,” said Nicholson.
“While this step is welcome, we now need Premier Ford to match this decision by removing PST from these costs as well. He claims he wants more housing built but it cannot just be purchased housing but rental housing as well. Mr. Ford, time for you to match this move,” urged the councillor.
Development Charges
He also asked the Oshawa City Council to suspend or waive its development charges, for new rental projects.
Currently Oshawa charges between $10,000 (1BR apartment) and $25,000 (2BR or plus apartment) in development charges for rental apartments, and more than $25,000 for townhouses, etc. For a development of 100 units, this means a charge of between $1,000,000 and $2.5 million or even more, explained Nicholson.
“These costs add to the overall cost of building rental housing. By removing these costs, the proposed development is less expensive to build and this will encourage more rental units in the Oshawa market,” he pointed out.
Nicholson said he has raised this proposal with staff on a number of occasions, and yesterday wrote to the city council.
“We all know the rising costs of rental housing and the lack of new rental construction in Oshawa. When we were faced with the lack of executive homes in Oshawa, we removed the development charges and new executive home construction exploded in numbers. We need to do the same for new rental housing construction, said the councillor. “We are currently reviewing our development charge bylaw so it is appropriate that this be considered as part of the mix. I hope you will support this approach,” he said.
Regulate new rentals
He also called for regulation of the new as well as old rental units. “New rentals are not regulated. There have been cases of paying tenants being evicted so landlords can bring in new ones at much higher rent. The government has to step in to regulate, otherwise there is chaos,” Nicholson pointed out.
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