Remove the obstacles and the market will respond. That was the theory behind Ontario’s wave of housing legislation: municipalities were blocking housing through restrictive zoning, excessive development charges, and slow approvals. Fix those, and builders would build.
Two years after the More Homes Built Faster Act (Bill 23) and a string of follow-on legislation, housing starts in 2024 came in roughly 10 percent below the government’s own targets. GTA home prices near historic highs. Rental vacancy in major cities still near record lows. Every indicator, worse or flat. The market responded, just not the way anyone at Queen’s Park predicted.
Turns out, the obstacles were different than advertised.
What the Bills Actually Changed
Bill 23, passed in late 2022, was the centrepiece. Its main provisions:
Development charge reductions. Municipalities collect development charges from builders to fund the roads, sewers, transit, and parks that new housing requires. Bill 23 reduced or eliminated DCs for certain housing types: affordable units, purpose-built rentals, and smaller units were largely exempted. The theory was that lower building costs would make more projects viable.
$230 million annually. That is what Toronto alone estimated losing.
That’s a lot of unfunded sewers.
Zoning overrides near transit. Properties within defined distances of major transit stations could automatically be used for higher-density development, bypassing local zoning. The idea was to create development by right so that builders didn’t need to go through the Ontario Land Tribunal (OLT) every time. This was a real problem: OLT backlogs were severe, and appeals were routinely used by neighbours to block legitimate infill projects.
Conservation authority limits. Bill 23 reduced conservation authorities’ ability to object to development proposals on environmental grounds. The government called it cutting red tape (a phrase that should make everyone nervous).
Conservation authorities said they were there to prevent flooding and protect water quality, and that removing their input would create problems that cost more to fix later than to prevent.
Reduced parkland requirements. Developers could provide less parkland per unit because parkland levies added cost. Of course, more people in denser neighbourhoods would need more parks, not less. (Good luck finding green space in Liberty Village.)
Follow-on legislation in 2023 and 2024 extended and deepened some of these changes, particularly around the OLT appeals process and as-of-right density permissions.
What Happened to the Revenue
Toronto, Mississauga, Brampton, and other large municipalities reported major shortfalls in development charge revenue in 2023 and 2024. The province created a Housing-Enabling Water Systems Fund to partially compensate for infrastructure shortfalls, but it covered a fraction of the lost revenue and came with conditions.
Classic provincial-municipal relations: Queen’s Park downloads a policy priority, shrinks the municipal revenue base, then offers partial compensation through a grant program it controls and can cut at will.
Why Housing Starts Didn’t Follow
Interest rates. The Bank of Canada raised rates sharply in 2022 and 2023, and higher financing costs hit development hard: projects that pencilled at low rates did not at high ones. Largely outside provincial control, but it also meant the 2022-2024 window was probably the worst possible time to bet on supply-side deregulation producing results. The worst possible time.
Timing, it turns out, matters.
Labour. Ontario’s construction sector does not have enough skilled trades workers. Reducing regulatory obstacles does not help when you cannot find a crew. Everyone knew this before the legislation passed.
The nature of the obstacle. Some housing researchers argued before Bill 23 that the main barriers were never municipal DCs or zoning. Land costs. Construction costs. The risk calculus that determines whether large builders choose to build in Ontario versus elsewhere. The stuff that actually drives decisions.
The legislation did not touch any of that.
Developer behaviour. The government assumed reducing development charges would lower costs for buyers and renters. Developers pocketed the savings as margin instead. (Surprise.) Builders price to what the market will pay, not to what their costs happen to be. Anyone who has ever sold anything could have predicted this.
The Greenbelt Shadow
7,400 acres. That is how much the government pulled out of the Greenbelt in 2023, claiming it was necessary for housing supply.
The Auditor General found the selection process lacked transparency and appeared to benefit developers with ties to the PC Party.
The reversal came in September 2023 after sustained public pressure, but it didn’t get the housing legislation repealed. Those changes remained in force.
It did, however, destroy the government’s strongest political argument for aggressive provincial overrides.
Round Three
More housing legislation is coming in 2025, focused on the OLT process and “missing middle” density: townhouses, multiplexes, and small apartment buildings. Those building types are genuinely underbuilt, and the barriers to them are partly regulatory.
So maybe third time’s the charm.
But two rounds of housing legislation have already missed their targets. At some point, you have to move the numbers. Not just the rules.
Sources and verification: Bill 23 (More Homes Built Faster Act, 2022) is confirmed Ontario legislature legislation; its provisions are verifiable through Ontario Legislative Assembly records. The Toronto development charge revenue loss estimate (~$230M annually) is from City of Toronto budget analysis. Housing start figures relative to government targets are from CMHC and the Financial Accountability Office of Ontario (FAO) reports; verify current figures against CMHC’s Housing Market Data portal. The greenbelt removal acreage (~7,400 acres) and the Auditor General’s findings are from the AG’s November 2023 report. The developer margin-retention finding (DC savings not passed to buyers) is based on FAO and independent housing economist analysis published 2023-2024.
See how MPPs voted on every housing bill at Ontario Pulse.