Recent polls suggest that many renters believe they’ll never own their own home due to lack of affordability. High home prices and interest rates are the main barriers.
We need big ideas and solutions to help prospective homeowners, especially first-time buyers.
Here’s an idea I think could help, however, I’m proposing it only as an example of how we need to think “out-of-the-box” to move the needle.
How about if every first-time home buyer was allowed to choose to claim their mortgage interest payments as a tax deduction (thereby reducing their income tax burden and increasing their after-tax cash flow) in exchange for being obligated to pay capital gains tax in the future, if applicable, on any appreciation in the value of their property upon disposition (thereby reducing their net proceeds)? This is the practice in the U.S. In effect, this would mean paying tax in the future in exchange for a tax break during ownership.
First-time home buyers who are not interested could follow the current practice of not deducting their mortgage interest payments and not paying capital gains on their home’s appreciation.
Seems to me there is no shortage of ideas and possible solutions. In my opinion, there is a shortage of political and societal will and understanding.
Builders and developers are not the cause of our housing crisis. We are forever accusing them of greedily filling their own pockets at society’s expense, so we restrict their ability to deliver housing and society pays the price through lower supply and higher prices. How ironic.
What are your thoughts? I’d love to hear! Leave a comment or connect with me on LinkedIn to join the discussion.
Everyone has an opinion about the housing crisis we are facing in the GTA, in Ontario, and throughout most of Canada.
Recommendations run the gamut, from increased taxation, to inclusionary zoning, to freezing immigration.
Very few solutions focus on increasing supply, which is the most practical and sustainable means of addressing the demand/supply imbalance. Canada has the lowest amount of housing per capita of the G7 countries. (Source: Scotiabank, May 2021)
I believe that what we need most is a reframing of the planning process. Let the planning staff have more authority and greatly reduce the public’s power. Why should homeowners be able to impede/thwart a housing project that the planning staff supports? The public does not get to adversely affect other types of construction/development in their communities. Imagine residents being able to delay infrastructure development such as roads, antenna towers, transit, or anything other than housing which could affect their home values or their personal experiences…
Dare I say that socialism is partly to blame? Sure, it’s politically popular to let the public weigh in on the merits of development, but how likely is it that residents will support what is best for their community as opposed to what is best for them personally?
Is it not ironic that we support the creation of new housing when we aspire to it, but we fight against it once we have it for ourselves? Why is the public allowed to weigh in on what happens in their community, when it is clear that they are protecting their own interests, but not the interests of those who have the same aspirations? Why do homeowners have greater power to delay/thwart new developments more than aspiring homeowners get to support them?
It is high time that our leaders stepped up to make the difficult decisions needed to address this worsening crisis. Anything less is an abrogation of their responsibilities.
2019 building levels in the GTA are comparable to 1990s levels – it’s astonishing. Let’s hope that the current/upcoming recession/depression/immigration decrease/foreign investment decrease aren’t how we solve this longstanding supply problem.
Building boom? I think not!
One of the benefits of aging is having a longer history of experiences. I remember the housing recession in the early 1990s – it’s when I lost my job and my house. This was a period of housing stagflation (persistent high inflation combined with high unemployment and stagnant demand) in the GTA. 1995 was the worst year for housing completions in the 1990s.
The total amount of square footage built in 2019 is comparable to what was being built annually in the early 1990s.
The number of bedrooms built in 2019 is the lowest in the past 22 years, and is comparable to 1990s levels.
The main cause of the GTA housing problem has not changed in decades! We are simply not building enough homes. Supply is sorely lacking. All levels of government are contributing to this problem, and none have been able to make any meaningful improvements.
We can expect this situation to deteriorate before it improves, if past performance is any indication.
The most likely thing to ease the problem is a total collapse in demand as a result of (take your pick(s)) recession/depression/immigration decrease/foreign investment decrease. All of these reductions in demand have significant adverse impacts on the economy. Let’s hope this isn’t how we solve the supply problem. I would love to see policy changes from all levels of government. That is the solution.
I’d love to hear your take on this issue. Comment below or find me on Facebook or LinkedIn to join the conversation.
Airbnb is blamed for the low affordability and availability of GTA rental units, but the real issue lies with Ontario’s Landlord and Tenant Board and the Residential Tenancies Act – and of course the fact that we just aren’t building enough.
Now that I’ve retired and am often home during the daytime, I’m seeing things I never noticed before. One of them is how many of my neighbours in Little Italy, Toronto are renting out their lower units on Airbnb instead of as apartments, even though 750 sq. ft. lower level units like ours can fetch as much as $2,500/month.
I’m wondering if Airbnb isn’t entirely to blame, but instead, if our Landlord and Tenant Board’s Residential Tenancies Act is also at fault.
The Landlord and Tenant Board (LTB) has been around since 2006, and the Residential Tenancies Act came into effect on January 31, 2007. It was created to help establish and enforce the rights and responsibilities of both tenants and landlords. Its aim is to resolve landlord-tenant disputes and eviction cases.
As any renter or landlord in Ontario can tell you, it hasn’t gone very well.
The LTB’s budget received cutbacks (2012 to 2014 budget vs. 2017 to 2019 budget) which resulted in a shortage of adjudicators, and the result was delays – a lot of delays. The LTB is unable to effectively and efficiently address issues. For example, bad tenants can notoriously go for 6 to 12 months without paying rent, leaving landlords in a bad spot. The system is broken.
This is why I’m hearing from my neighbours (and wife) that they don’t want to rent out their lower level units. They don’t want the risk of a bad tenant.
The LTB is now acknowledging the extreme service delays that have plagued it and is working to address this issue and to improve its services. But the damage has been done. Landlords can’t count on this system to protect them, and so they’re pulling out of the rental market and turning to avenues such as Airbnb, which offer protections that the LTB doesn’t.
Having potential landlords turn away from the local rental market and to Airbnb instead hurts everyone. Rentals in Toronto are scarce, and highly-priced. If we want to increase the supply of rental housing, one way to do so is to better utilize what already exists, and that’s not happening because many landlords find the risks of renting too high.
The main issue is that we just aren’t building enough new rental units, but Airbnb has been getting a lot of blame in the media lately. It’s easy to blame Airbnb, but it’s also our own (broken) LTB and its Act that are pushing landlords to choose alternative, more secure options for renting out the existing available spaces.
If we want more housing options and especially more affordable options available, Ontario’s LTB needs to do things differently.
Here are some of my thoughts:
The LTB needs to enforce its own rules if it is to have legitimacy and efficacy. It was created to enforce (and protect) the rights and responsibilities of both tenants and landlords, but right now that’s not happening.
Bad tenants should have repercussions, and the LTB needs a way to enforce these repercussions. If a tenant damages a place, there should be a quick mechanism to address it. If they don’t pay and they skip on the rent, it should be easier to go after the tenant.
Good tenants should be rewarded. Landlords should be able to access tenants’ records (rental history), just like lenders and sellers on credit (cars on lease, etc.) can check credit ratings. Landlords need more security and stability – more protection. If the costs of being a landlord could be lowered (for example, by not having to budget for tenants who won’t pay rent), then that would lower rental costs for all. And if a good tenant were allowed to better differentiate themselves from a bad tenant, it could help them secure better places. I’m all for this.
As it stands, landlords are encouraged to lie to other potential landlords when their tenants want a reference… just to get them out of their place!
What we need instead is a more effective system, where good tenants are rewarded, bad tenants have repercussions that are actually enforced, and landlords are better protected.
Further, due to the tight rental supply we currently have in the GTA and many other parts of Ontario, we should be not only protecting landlords but also providing incentives for them. We need more people to put their available spaces on the market (like my neighbours with their 750 sq. ft. lower level units), and to build more rental units, like laneway suites or finishing a basement to turn it into a suite. We also need to encourage and provide incentives for more construction.
What are your thoughts on this topic? Comment below or find me on Facebook or LinkedIn to join the conversation!
Improving the energy efficiency of housing is a critical strategy in the fight against climate change. I’m proud to be working with an organization – EnerQuality – that knows how to do it. And now we’re tackling the biggest growth area of Canadian homeownership – multifamily and high-rise buildings.
EnerQuality is the #1 certifier of energy efficient housing in Canada and the market leader in residential green building programs. Founded in 1998 by the Ontario Home Builders’ Association (OHBA) and the Canadian Energy Efficiency Alliance, they’ve been part of the growing residential energy-efficiency industry for over 20 years now. EnerQuality creates voluntary, market-based programs that support builders and accelerate innovation in construction. They partner with governments, manufacturers, utilities, energy advisors, architects and engineers to bring their programs to market. To date, 110,000+ homes have been certified.
EnerQuality was the driving force behind the construction of thousands of ENERGY STAR homes in Canada. In 2005, the organization joined forces with Natural Resources Canada (NRCan) to develop ENERGY STAR® for New Homes. This turned out to be the most successful energy-efficiency program in Canadian housing.
Across Canada, builders look to ENERGY STAR to improve the quality of their buildings while lowering their occupants’ energy bills and carbon footprint. With a name that 90% of consumers recognize, ENERGY STAR has become the trusted symbol for builders who value sustainability and quality.
ENERGY STAR’s New Multifamily High-Rise Program
In 2018, thanks to funding from the IESO and Enbridge, EnerQuality and NRCan teamed up again and developed ENERGY STAR® Multifamily. Now in market, it’s changing how we build mid/high-rise housing. The same simple and affordable ENERGY STAR program we all know and love is now available for builders to certify their mid/high-rise multifamily buildings.
As a Chair (Audit & Risk Committee) of EnerQuality’s Board of Directors, I’m proud and excited to be part of this latest initiative.
ENERGY STAR Multifamily is helping Canadian builders produce better built multifamily and high-rise homes for this growing segment of people. It’s about time that we extended this program beyond low-rise homes and into the fastest-growing sector of Canadian residences.
The program requirements include:
Exceeding the energy target (15% better than the 2017 Ontario Building Code)
Conducting air tightness testing and mechanical commissioning
Installing ENERGY STAR appliances
Registering in ENERGY STAR Portfolio Manager
This amazing new program is working to reduce consumers’ energy costs, contribute to Canada’s 2030 greenhouse gas emissions reduction targets and create healthy communities. I couldn’t be more proud to be helping to move the needle on these essential issues.
What are your thoughts? Comment below or find me on Facebook or LinkedIn to join the conversation!
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