Prov­ince aims to cool hous­ing spec­u­la­tion

Wynne prom­ises mea­sures for home buy­ers and renters to calm real es­tate mar­ket


Real es­tate spec­u­la­tors — not or­di­nary buy­ers and sell­ers — will be a tar­get of the prov­ince’s ef­forts to calm the hous­ing mar­ket, says Fi­nance Min­is­ter Charles Sousa.

Sig­nalling that the Lib­eral gov­ern­ment would not take steps to stop bid­ding wars now tak­ing place, he ac­knowl­edged they are leav­ing buy­ers frus­trated.

Peo­ple are an­gry that they can’t win bid­ding wars, Sousa told re­porters Wed­nes­day at Queen’s Park hours be­fore Premier Kath­leen Wynne hud­dled with Greater Toronto and Hamilton Area may­ors and re­gional chairs to dis­cuss hous­ing af­ford­abil­ity. While Wynne was more tem­per­ate in her re­marks to mu­nic­i­pal lead­ers — in­clud­ing Toronto Mayor John Tory — she em­pha­sized the prov­ince would be tak­ing ac­tion with a suite of real es­tate and rental mea­sures.

“Whether you’re rent­ing or whether you’re look­ing to buy, the cost of hous­ing is putting peo­ple in very pre­car­i­ous sit­u­a­tions and it’s stress­ful. There’s a frenzy that’s go­ing on right now,” the premier said, in­di­cat­ing the gov­ern­ment would also help builders clear the hur­dles needed to ex­pe­dite con­struc­tion of new homes.

“I un­der­stand that there are sup­ply and de­mand pres­sures — this is not just one or the other,” Wynne told the may­ors and chairs.

“We’re look­ing at a num­ber of dif­fer­ent kinds of pol­icy in­stru­ments from land-use plan­ning to reg­u­la­tion to fi­nan­cial tools. There are many op­tions that are be­ing put for­ward,” she said.

“In or­der to deal with this over­heated mar­ket in the most ra­tio­nal way, we need to pro­tect the value in peo­ple’s homes, we need to work to in­crease the sup­ply of new units and we need to work in part­ner­ship with all of you.”

Wynne noted only 20 per cent of the land set aside for new de­vel­op­ment in the prov­ince’s 2006 growth plan for the re­gion has been built on.

“What’s go­ing on there? What is it that’s keep­ing that land from be­ing de­vel­oped? We have land — now we need to make it eas­ier and quicker to build on if we’re go­ing to deal with the sup­ply is­sue.”

Tory stressed the need for a bal­anced ap­proach that tack­les sup­ply.

“I’ve also in­di­cated a very strong and abid­ing com­mit­ment to ad­dress­ing the sup­ply prob­lem — es­pe­cially the sup­ply of af­ford­able rental hous­ing — but once again, we will need the part­ner­ship of the prov­ince of On­tario,” the mayor said.

Sousa cau­tioned that go­ing af­ter av­er­age fam­i­lies buy­ing and sell­ing homes or the sys­tem of real es­tate agents tak­ing bids is not the an­swer.

“We don’t want to in­ter­fere ter­ri­bly in these mat­ters . . . this is a free mar­ket af­ter all,” said the trea­surer, whose mea­sures will come in a bud­get ex­pected as early as April 27.

“The seller of a home has a right to max­i­mize their value in the sale of their home . . . how they achieve it, that’s some­thing that’s in the mar­ket. I do not want to put any­one in harm’s way.”

He said the root of the prob­lem is a short­age of hous­ing and high de­mand driven by a strong econ­omy and an in­flux of new res­i­dents, made worse by “scalpers” who snatch up mul­ti­ple homes in pro­posed new de­vel­op­ments to re­sell them later for big profits as prices con­tinue ris­ing sharply.

Bank of Canada gov­er­nor Stephen Poloz in a speech Wed­nes­day also blamed the rapid in­crease in house prices — as much as 33 per cent over the last 12 months — on spec­u­la­tors, warn­ing that is not sus­tain­able and that prices could fall from cur­rent lev­els.

On­tario Real Es­tate As­so­ci­a­tion CEO Tim Hu­dak urged the prov­ince to en­able more hous­ing to be built by al­low­ing mu­nic­i­pal­i­ties to speed up the per­mit ap­proval process for builders, putting more sup­ply on the mar­ket faster.

“It can take over 18 months to get mu­nic­i­pal ap­provals for stan­dard, sin­gle-fam­ily and mul­ti­ple-dwelling projects that may re­quire re­zon­ing,” he said.

Rents have also been soar­ing — with some condo ten­ants re­port­ing steep in­creases. To help, Hous­ing Min­is­ter Chris Bal­lard is sug­gest­ing rent con­trols could be ex­panded to in­clude build­ings con­structed af­ter 1991.

As well, Queen’s Park is con­sid­er­ing a Bri­tish Columbia-style for­eign buy­ers’ levy of around 15 per cent, and tax changes to dis­cour­age in­vestors and spec­u­la­tors from sit­ting on va­cant prop­er­ties.

Pro­gres­sive Con­ser­va­tive Leader Pa­trick Brown said “there’s no one sil­ver bul­let here, but in­creas­ing sup­ply, cut­ting back red tape are all pos­i­tive steps that the prov­ince can take.” New Demo­crat MPP Peter Tabuns (Toronto-Dan­forth), mean­while, is push­ing a pri­vate mem­ber’s bill to make all build­ings, not just those built be­fore 1991, sub­ject to rent con­trol im­me­di­ately. With files from Betsy Powell


Premier Kath­leen Wynne met with GTA and Hamilton-area lead­ers to dis­cuss hous­ing af­ford­abil­ity. “There’s a frenzy that’s go­ing on right now.”

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