Steve Ezeude
“I always feel very secure and very safe with real estate. Real Estate always appreciates.” — Ivanka Trump.
The tail end of the Liberal Government under the leadership of Ms. Kathleen Wynne saw a tumultuous real estate market laden with unprecedented price hike and harsh mortgage changes. It’s no gain saying that the Wynne’s Liberal Government was unfortunately unpopular during its last days but the antecedents allude to why the hitherto Government that ruled the Province for 15 years suddenly became a nonentity and without being recognized any longer as a political party based on the June 6, 2018 election. When salt looses its saltiness, it belongs to the dust and this was what happened to the Liberals.
As the newly elected Ontario Premier, Doug Ford and his team assume office, Ontarians are talking about how the new Government will impact the real estate market knowing where we had been in the hands of the Liberals prior to the change of baton.
Realistically speaking, a humongous work needs to be done in the Province’s real estate market especially in the GTA. How will the new Government restore consumer confidence in the real estate market? Was the Liberal’s 16 Fair Housing plan put up horridly by the then Government to garner votes and acceptance or was it done in good faith? The reader’s guess is as good as mine.
Without delving into the details of the Fair Housing plan, Doug Ford should quickly revisit the following issues that formed part of the 16-point plan:
- Foreign buyer tax: The 15% Non-Resident Speculation Tax (NRST) that is applicable to non-citizens, non-permanent residents and foreign corporations should be scrapped. This is a hinderance to the development of the Province. The housing stock is still inadequate to take care of the influx of immigrants from within and outside of the country. It is expected that this obnoxious tax should be removed and rapid housing development achieved to fight housing shortage. The Government should study the growth of the State of Florida and see how foreign investors can help increase housing stock and bring down high cost of homes.
- Rent Control: Rent control on all private rental units in Ontario – although a welcome development when it was introduced, it has a lot of negative impact on the investors and landlords. The percentage of rent increase should be reviewed to align with the cost of development and financing conditions.
- Residential Tenancies Act: The legislation introduced under this Fair Housing Plan to strengthen the Residential Tenancies Act to protect tenants and ensure predictability of Landlords on rent increment resulted in putting a place a Standard lease effective June 1, 2018. This Standard Lease is very protection of tenants leaving the Landlords and Investors at the mercy of tenants. There should be a middle of the road solution where everyone wins to increase the housing supply.
- Utilization of surplus provincial land assets for housing development: This, though one of the PC Party’s campaign drive, should be vigorously pursued and implemented. The party proposed setting apart some portion of Greenbelt lands for housing development. This, if pursued will make more lands available and help reduce housing cost and increase housing supply.
- Purpose Built Rental Housing: The Liberals’ measure to encourage developers to build more new purpose built rental housing should be further pursued. The developers already selected by the Liberals should be supported and more land made available and incentives be provided.
- Development Charges: The Liberals targeted $125million, five year program for construction of new apartment buildings with rebate on development charges. Development charges should be reviewed downwards. Most developers blame high cost of buildings to high development charges. If Government wants to address the housing stock, a thorough review of development charges needs to be done.
- Barriers: The PC Party in its campaign manifesto promised to fight bureaucracy impeding housing development projects. It is expected that the Premier will work with his Government in addressing the existing barriers.
- Transit Development: With Premier, Doug Ford, being an ardent supporter of massive transportation and in line with his campaign promise, it is expected that the expansion of subway lines within and outside the GTA will help support the ‘places to grow’ project and decongest Toronto and move people to the suburbs. The impact of this on real estate cannot be overemphasized. When there is good transit network, people will move to suburbs where housing development is affordable and at the same time being connected with other commercial communities.
These expectations may be huge but if the new Government can take on these, we will see housing stock that will be affordable and available.
