Toronto

It's a date: All 3 levels of government to meet over Toronto's hot housing market

Housing experts weigh in on what could be on the table at the upcoming meeting of the federal minister of finance, the Ontario finance minister and Toronto's mayor.

Housing experts weigh in on what could be on the table at upcoming meeting

What can be done - if anything - to cool Toronto's insanely hot housing market? (Mark Blinch/Canadian Press)

When the federal and provincial finance ministers sit down with Toronto's mayor to try to figure out ways to cool down the sizzling housing market in Canada's largest city, there's no telling what proposals they might come up with.

But experts aren't hesitating to tell the three politicians what they should be considering, and frustrated would-be buyers and renters are anxious to hear the results.

After weeks of shocking stories about the city's increasingly unaffordable rental and real estate markets told  as part of CBC Toronto's investigative series, No Fixed Address, federal Finance Minister Bill Morneau has called on his provincial counterpart Ontario Finance Minister Charles Sousa and Mayor John Tory — to talk.

Toronto Mayor John Tory, federal Minister of Finance Bill Morneau and Ontario Finance Minister Charles Sousa will meet in the coming weeks to discuss Toronto's surging real-estate market. (CBC: Justin Tang/The Canadian Press)

And there is plenty to talk about.

A recent report pegged Ontario's economy as the country's second-worst for young people, suggesting a housing affordability crisis is affecting quality of life and causing young people to put off important milestones.

Rebecca Rosenberg, 33, is eager to hear what will come of the meeting.

After she told CBC Toronto about potentially co-purchasing a home with her best friend, several online commenters suggested they should move out of the GTA altogether.

"People think we're snobs for trying to live in Toronto — it's just where my life is," said Rosenberg, who works as a senior project manager for a graphic design firm.

"I wouldn't want to make my life choices simply based on the housing market. If I wanted a different lifestyle or change of pace that makes sense -- moving because I've been priced out is kind of a sad reality."

"I just want to live close-ish to where I work, in a normal-ish house. That's it nothing crazy," she adds.

Rebecca Rosenberg is considering co-purchasing a home with her best friend, Kim Wolfe.

Morneau echoed some of that sentiment in his letter to Sousa, saying he's worried home ownership will become out of reach for all but the wealthy, adding he wants all three levels of government to come together "so we can collectively make progress to ensure that housing in the GTA is both affordable and accessible for the long term."

Almost everyone seems to agree there is no silver bullet.

Undesired consequences

Lu Han, a professor of Business Economics at the University of Toronto, says all three governments should be aware of potential "undesired consequences."

Lu Han is a Petro-Canada Associate Professor of Business Economics. She says government should be "very cautious" about any policies it may adopt. (Ousama Farag/ CBC Toronto)

"Every policy is a signal to the public, " said Han.

For example, she says, rising interest rates could reduce housing demand, but also discourage business activities.

"How much they are going to react to policy actions is something the government wants to think about," said Han.

Potentially on the table, could be a foreign investment tax and a vacancy tax — something Mayor Tory recently said he supported.

But again, Han suggested caution, saying what may have worked in Vancouver and other cities around the world may not necessarily stick in Toronto.

"I think we don't have enough statistics to jump to conclusions yet," she said.

Speaking of taxes

The founder of the housing lobby group Generation Squeeze, Dr. Paul Kershaw, wants governments to tackle taxes, but not just for foreign and domestic investors.

"Incomes aren't growing as much as we'd like, but governments rely heavily on income taxes to raise revenue," explained Kershaw.

"Housing prices are growing faster than is good, but provincial and federal governments don't tax housing wealth much at all.  It would make more sense to begin taxing housing wealth more, so we can reduce other taxes and in the process cool down home prices."

Paul Kershaw of the University of B.C. says a combination of real estate prices and biological clocks are driving people in their 30s and 40s out of Vancouver. (Lauren Pelley/CBC)

Something that doesn't involve taxes is adding to the supply of housing. Generation Squeeze suggests municipalities in the GTA could change some of their zoning to encourage density.

That's an idea urban planner Sean Galbraith recently pitched in an interview with CBC Toronto.

"I think we need more Parkdale in North York," Galbraith said.

He says about 40 per cent of the city's zoning only allows for single detached homes.

"If we could change that to allow for triplexes, quadplexes, and little walk-up apartment buildings like you have in Parkdale and old Toronto, that would be amazing," he said.

"It would provide a more diverse range of houses instead of just small pockets downtown."






 

About the Author

Shannon Martin

Reporter, CBC Toronto

Shannon is an award-winning reporter with CBC Toronto. She was part of the core team that launched "No Fixed Address", a hugely popular series on millenials renting and buying in Toronto. In 2016, Shannon hosted a special live broadcast on-air and on Facebook simultaneously from Toronto Pride, which won top honours in the Digital category at the RTDNA awards. Contact Shannon: shannon.martin@cbc.ca or find her on Instagram at @ShannonMartinTV.

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