In my previous post, I looked at some of the positive aspects of Doug Ford’s housing plan. This post will touch upon the proposals that don’t do enough as well as what’s missing.
The Bad
There’s a few aspects of this plan that sound great in theory, but will actually do little to nothing to keep housing prices under control.
Ford’s plan involves increasing the non-resident speculation tax from 15% to 20%. This tax applies to foreign corporations and individuals who aren’t Canadian citizens or permanent residents when buying real estate.
Many well-intentioned but misinformed housing advocates have blamed foreign real estate speculators on Ontario and Vancouver’s housing woes. This policy is an attempt to address these concerns.
But it’s not foreign speculators fuelling the demand for housing. Homes are overwhelmingly being bought by Canadians looking for places to live amid the sheer lack of supply in our cities. Imposing more taxes on foreign buyers will do little do affect housing affordability.
Many jurisdictions have tried to tackle high housing prices by imposing regulations and restrictions on foreign buying, with little to no success. For example, New Zealand implemented an outright ban on foreign buyers. Yet, New Zealand is one of the only countries where housing prices increased faster than Canada.
The Ugly
The Housing Affordability Task Force made it clear that single family zoning needs to go.
Yet, the Ford government’s plan does nothing to tackle what could be the single-biggest contributor to the runaway housing prices in Ontario. If you look at a map of Toronto, the vast majority of it is covered by what Gil Meslin in 2016 called the “yellow belt,” where only detached single-family housing can be built.
As Adam Zivo writes in the National Post, “Single-family zoning remains untouchable in Ontario, so house prices will keep soaring.”
For the multimillionaire homeowner class in the GTA, maintaining single family zoning helps keep lower income people out of near neighbourhoods while maintaining their sky-high home values. This is particularly true in the vote-rich suburbs, which are key battleground ridings crucial in the next provincial election.
Photo credit: Axel Drainville/Flickr/CC BY-NC 2.0
