Some housing measures promised by the province Thursday were encouraging to market watchers in Hamilton, where prices have been rising by double digits for years.
"It's more than a good start, it's a willingness to engage on this issue substantively and not just on the margins," said Sara Mayo, who studies housing issues at the Social Planning and Research Council of Hamilton.
'Why is it worse that a Chinese buyer purchases a home in Hamilton than a Toronto investor doing the same thing?' - Richard Harris, McMaster University professor
Especially good news to Mayo was that the province was not just looking at the Greater Toronto Area, but including the Greater Golden Horseshoe in some of its efforts to slow down runaway housing prices.
"Just in terms that they're looking at the housing market broadly in terms of the region, that's most interesting," she said.
Premier Kathleen Wynne announced the measures Thursday morning. They include:
- Expanding rent control to buildings built after 1991
- A rebate to encourage developers to build rental housing
- A standardized lease document for all tenants
- A look at realtor practices like representing both buyer and seller on a deal
- New powers for cities to charge a tax on vacant homes
- A foreign-buyer tax of 15 per cent
Mayo was especially heartened to hear about the measures aimed to help tenants: standard lease and the rent control. She said she hoped Hamilton would ask for the powers to charge taxes on vacant houses.
Coun. Aidan Johnson said he hears regularly from millennials in his ward that "inaccessible" housing in Hamilton is prompting them to look to live elsewhere.
"It looks like excellent news from the province of Ontario," Johnson said. "We have a growing problem of insufficient housing. We know that millennials face very different challenges when it comes to housing and economic stability than what older people do."
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The foreign-buyers tax won't apply as directly to Hamilton, which sees less interest from global buyers than Toronto, but if it serves to lessen demand elsewhere in the Greater Golden Horseshoe, Hamilton may see some relief.
"Certainly in Hamilton I don't think there are foreign investors in Hamilton, unless you count Toronto," said Richard Harris, a professor at McMaster University who studies real estate and the Hamilton housing market. "There's certainly some investor speculation and that sort of thing."
Harris wondered at the effect of targeting only people who don't live in Canada.
"Why is it worse that a Chinese buyer purchases a home in Hamilton than a Toronto investor doing the same thing?" he said. "The issue should be whether the purchase is purely speculative, and the way to get at this would be to target people who buy and sell within a specific period without occupying the unit."
Harris also wondered whether the long-term impact of rent control might serve to make the rental market tighter.
He said the measures were a mixed bag but said seeing controls on the realtor practices and the implementation of a standard lease were positive moves. And he said some moves could have a positive effect on psychology – in lowering feelings of desperation around buying now or being priced out forever.
Wynne was asked how effective the measures will be when demand for homes continues to outstrip supply and bidding wars on downtown homes are commonplace.
"We are not interested in controlling the market," said Wynne. "That is not the aim. But we do believe that there is a need for interventions right now to calm what is going on, to put protections in place."