Here’s what the 2018 Provincial Candidates Will Do to Toronto Real Estate
Over the next few days, the people of Ontario will be heading to the polls to vote in a new Premier. Right now, it’s looking like a really tight race between Doug Ford and Andrea Horwath leaving Kathleen Wynne to formally concede just this weekend.
This election has been the craziest in recent memory, with drama ranging from stolen data and promises of $1 beers to a recent Liberal ad campaign advocating a strategic vote for them as a majority spoiler. Pollsters are predicting that the NDP will take the popular vote, but due to the disbursement of seats, the PC’s will still win a majority. Sounds pretty familiar to that last big election down South, eh?
Here at the Spring Team, we’re not political theorists or talking head TV panelists, but we are kickass realtors so we’re going to zone in on one thing: what each candidate will mean for Ontario’s housing market. (Actually, let’s be real…we’re talking Toronto here.)
Now, I’ve said it before; housing affordability is not a problem that can be solved through legislation.
In fact, I don’t think it can be solved without setting the clock back 20 years and wiping out millions of folk’s net worth in the process. But enough about what I think. Let’s see what Wynne and the others have in store for us…
Let’s start with our current Premier, Kathleen Wynne. It goes without saying that during her time in office, Wynne was at the centre of a LOT of controversy and negativity. But that’s not what we’re here to talk about. We’re here to talk about her stance on housing and the issue of affordability.
Wynne has made efforts (albeit misguided) to tackle affordability – most notably the 15% foreign buyers tax.
Here are some quick facts on that:
- In a poll conducted by OREA, 81% of residents are in favour of the tax
- One month after being implemented, only 4.7% of transactions in the Greater Golden Horseshoe were made by non-residents.
Between August and November, that number dropped from 4.7% to 1.9%
- In December 2017, the average price of a GTA home was $735,021, which is 20% lower than it was when the Liberals announced the Fair Housing Plan. (This is GTA wide. The figures for Toronto’s urban communities are much less dramatic)
- While housing prices may have dropped (is mostly suburban areas), the average price of a condo has gone up 14% to $503,968 (Nearly 23% in urban areas like Leslieville)
Has this really helped with affordability, or are these numbers reflective of other things, like the stricter mortgage rules and higher interest rates? What are your thoughts?
Let’s look at what Kathleen has in store for us in the event that she’s re-elected…
Her plan is simple and has been made clear: she’s building on the Liberal’s Fair Housing Plan. In addition to the foreign buyer’s tax, we’ll see/have seen expanded rent control (so far all this as done is balloon rental rates across the board), along with a $125M program, encouraging the development of purpose-built rental buildings and opening up province-owned land for housing development in an effort to increase the supply of housing.
Any attempt to “control” the housing market may result in short term results for the Libs, but long term, affordably is not a problem that can be solved in Toronto. I’d prefer if the focus was solely on providing subsidized housing as part of all new developments but
allowing buildings to be bigger and taller to accommodate. This only works if developers are allowed to build higher, bigger buildings.
If you mandate the affordable/subsidized units but don’t allow increased density, then the at-market-rate homes will skyrocket…again. Not a good plan!
So, here’s what we think thing might look like under Wynne: We may see short-term stability in the market, should provincial lands be opened up to development – so that’s good. But her mandate for developers to sell 10% of units below market rate will just drive up the cost of the remaining 90% regularly priced units, and to us that’s just… dumb.
All in all, we see things slowing down a bit, but ultimately staying the same if not getting much worse for Tenants and Buyers.
Let’s talk about Doug Ford. Honestly, not a whole lot to say here because the man hasn’t really made definitive statements on any matters, one way or the other (other than bringing back buck-a-beer, of course). Calling the last minute garbage that was released on the PC site last week a “costed plan” is a joke.
Having said that, one thing he DID say (but ultimately reneged on) was regarding housing.
Now, before we get into things, I want to set the record straight: Despite the drama surrounding Ford and holding back any personal opinions of the man (it’s sooo hard for me to do this), he seems to get housing.
His diagnosis of the matter was on point: we’re currently facing an issue of exorbitant demand and an extreme lack of supply (ok so a 7yr old would have figured that out too).
It’s his prescription for the issue that’s questionable: Ford has suggested that we open the Greenbelt to development.
Then everyone freaked out, and rightfully so!
In my opinion, there is only one side to this coin. Get your hands off our Greenbelt, Ford!
I mean, just look at it!!!
We have too much underutilized property within our amazing City. Any effort to open up Greenbelt lands for real estate development MAY result in short term supply balance but would be right back where we started in a few short years and we would have wasted one of the jewels of Toronto.
Let’s look at the facts:
- The Places to Grow act, which protects the Greenbelt, was passed back when there
wasn’t a housing affordability crisis. And we have many many other solutions for ensuring everyone has a roof over their heads that we need not even revisit this idea ever again!
- One of the only solutions to increase affordability is to dramatically increase the supply (and we do that by building up up and up not out…especially not into our Greenbelt).
The fact of the matter is this: houses and condos are not affordable because there aren’t enough houses and condos. If that means allowing developers to build higher, allowing house owners to build second suites and laneway homes on their properties in order to make home-ownership more than a far off dream, doesn’t that seem like a worthwhile option? I’m not saying it is, or it isn’t – I’m just saying we need more houses.
So, here’s what we think things might look like under Ford:
We’re almost certain that he’ll repeal the foreign buyers tax implemented by Wynne. Whether this is a matter of him pushing for a free market, or a knee-jerk reaction to do the exact opposite of Wynne, remains to be seen. But we don’t see it having much impact.
With other measures, like the stricter mortgage rules and rising interest rates, pulling the tax might not be a horrible idea.
He will try to develop the Greenbelt. And will be shot down in a mad fury at Parliament and angry Torontonians will throw stones at him for the rest of eternity.
Once again though, we don’t see a whole lot changing. Toronto is a massive, thriving city, people will keep flocking here. No amount of supply will ever keep up with the demand of housing in our city. Now are you starting to understand that affordably is not a problem that can be solved?
Andrea, a frontrunner in the race, has probably been the most vocal and consistent on matters surrounding affordable housing. A big plus in our books has been Andrea’s proposal for the new Residents’ Rights Act, which would allow property owners to add granny flats, apartments and build laneway housing on their own accord. This is something Toronto City Council recently complicated – so it would be nice to see it imposed on a Provincial level instead of being massacred at the municipal level. Remember the Car2Go fiasco of last week?
Here’s what Andrea Horwath has outlined as her plan to keep housing attainable for middle-class Ontarians:
- 65,000 affordable homes to be built over the next decade
- Proposing a new Residents’ Rights Act so homeowners can develop their property as they wish.
- She’s made guarantees that rent will remain affordable for the long-term, but still encouraging investments in new, purpose-built rentals.
I gotta say, I’m totally for some parts of Andrea’s plan. Revising the Residents’ Rights Act? Fantastic.
Laneway housing, coupled with development in the yellowbelt would definitely alleviate some pressure by adding homes to the market. But the rest of her plan just seems so… unremarkable.
I mean, 65,000 affordable homes to be built over the next decade? Where? How? The issue I’m having is that the ideas are great, as is the sentiment, but this isn’t a truly actionable plan.
Here’s the thing about Andrea’s housing plan: we love it, but we also don’t like it. And it’s not so much that we don’t like it, rather, we just don’t really get how it’s going to playout.
First, the bad: Andrea’s lack of actionable promises leaves us wondering how she plans to achieve a lot of what she’s promising. For instance, where are the 65,000 affordable homes going to be built? How are you going to encourage investment while promoting strict rent control and stop what they call “reno-victions”? It’s not that we don’t think it’s a good plan, but we just don’t know how it’s all supposed to come together.
Now, the good: Opening up the Yellowbelt for development is a fantastic idea. Laneway housing? Brilliant. She obviously understands the issue and what’s required to fix it. We just want to know the “how” when someone tells us the “what”.
We’re not telling you who to vote for. We’re not endorsing any particular candidate in this election. We’re just laying out the facts, as we see them, and telling you what we think. We understand that issues go beyond housing, but housing is what we know best. Take what you will from this post, do some research and please, please make sure to get out there and vote!
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