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Housing should be a social cause, not a commercial one

Every day, traditional and modern social media is abuzz with alarm bells on the relentless rise of Canadian real estate and the affordability crisis. Judging from the inaction of the government and regulators, one is led to think this is only something that the common person is listening to.

According to various analysts, the Canadian housing market can expect current market dynamics like immigration (expected to be at 431,645 in 2022), higher building materials costs, labour shortages, property development charges, lack of supply, surging demand and other factors to feed into its sustained growth and robustness in price well into 2022 and beyond.

It is high time that regulators and government on all three levels step in, as clearly leaving it to market forces is not helping things. They must take fortuitous steps to ensure that the new generation of first-time home buyers can buy a decent-sized home to live in. Currently the surges in foreign and local investors, who are scooping up anywhere between 20 and 25 per cent of residences, are impeding them from doing so.

Many will be averse to government intervention but a recent study from Simon Fraser University showed that housing policy in Canada has shifted from welfare-oriented to a market-oriented policy over the past four decades, encouraging homeownership, deregulation and private consumption. It is time to reverse some of that to stop the runaway residential market.

Here are seven of many measures they should take.

  1. Temper the inflow of immigrants temporarily instead of increasing it.
  2. Ban assignment sales except in the case of death or proven inability of the buyer to complete the purchase.
  3. Ban foreign buyers from buying a home unless they live in it. A recent Bank of Montreal study showed that Canadian real estate grew faster than the population, suggesting that foreigners, investors and second-home buyers are in the game. In Ontario, slapping on an additional tax for purchase in the Golden Horseshoe area has indeed slowed down foreign investment to below 2016-2017 levels and now is below an acceptable five per cent, according to TRREB’s latest statistics. However, they can still buy outside the designated area. This should be stopped.
  4. Bring better oversight on mortgage approvals.
  5. Bring better oversight to suspicious money transactions. According to recent reports from FINTRAC (Financial Transactions and Reports Analysis Centre), such transactions have surged 270 per cent from 2016-2017 and sits at 468,079 in 2020-2021.With all the public fervor over real estate, one would think they must be focusing in that area. However, compliance audits in the field fell to just 53 in 2020-2021, down 63.7 per cent from a year ago. They must go all out on this and audit much higher numbers.
  6. Allow zoning changes to convert single-family homes to multi-residential homes. Allowing garden suites is a good step towards this direction as this would allow creation of extra housing.
  7. Increase the number of affordable home units all over Canada. Out of the 1.5 million homes projected for Ontario by the provincial government, a certain percentage should be allocated to an affordable homes section based on the median household income. Besides this, more affordable homes should be built in other provinces and territories where there is excessive demand.

There are many more options including the bold idea to pardon student loans for first-time home buyers so they can be in a better position for a mortgage approval.

Whatever the measures, there is an urgent need for government at all levels to work together in harmony for a healthy length of time, and not just during election periods, to ensure that regular Canadians can realize their dreams of owning a decent home and stop the increase of properties being held in the moneyed nexus of the few.

Owning a decent home should be a fundamental right for anyone who desires to own one and the government should, within reason, make it their top social priority to deliver on that.

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