Experts say housing boost does little for middle

Ottawa’s $11.2B investment doesn’t address affordability for mid-income earners

The federal Liberals’ new national housing strategy won’t shelter middle-income residents from the increasingly unaffordable cost of owning or renting a home in the Toronto region, builders and landlords say.

The long-awaited policy, announced in Toronto on Wednesday, will invest $11.2 billion in federal funding over 11 years to help create 100,000 new housing units and repair another 300,000 homes across Canada.

But it doesn’t address the needs of middle-income residents in the To- ronto region making $50,000 to $70,000 a year, said Jim Murphy, CEO of the Federation of RentalHousing Providers of Ontario.

“We’re increasingly concerned that those in the middle, who probably wouldn’t qualify for most of these programs, are still facing hardship. They can’t afford to own with an average price of $1.3 million (for a detached resale house in Toronto in October),” he said.

“Increasingly, rent is becoming difficult, not only in terms of price but in terms of supply and finding a place.”

The government has not provided an HST break for developers who build rentals — something that would put more supply in the pipeline, said Murphy.

More action is needed to promote private investment in purpose-built rentals, said the Toronto Region Board of Trade (TRBOT).

At about $1,600 a month, the average rent for a one-bedroom apartment in Toronto makes saving for homeownership difficult, said Clinton Lee, 29, a financial analyst with a downtown bank.

“I’m hearing of these boomerang kids. I didn’t expect to be one,” he said of his recent move back to his mother’s home in Mississauga to save for a condo.

Lee, who earns $68,000 a year, says he makes a good living relative to what his mother made when she came to Canada from Hong Kong in 1989.

He had purchased a pre-construction condo last year in Toronto’s west end.

But the developer cancelled the building and now Lee says he is priced out of the market. He’s not alone. The TRBOT found 83 per cent of young professionals said the high cost of housing in the region is hindering their savings for retirement and debt repayment.

“My friends are all tapping into their own parents,” Lee said.

While some got into homeownership straight out of school, he said the majority of his friends are still renting.

Housing affordability declined the most in the Toronto region compared to the previous year, according to a September report from RBC Economics.

To own a home in the area, you need a six-figure income, it said. Re- cent census data shows homeownership is declining in the area.

Ottawa’s strategy acknowledges the value of homeownership and the role of market housing, but it doesn’t go far enough in addressing the lack of supply and homes that average people can afford, said Bryan Tuckey, CEO of the Building and Land Development Association (BILD).

“It may make it more difficult for young families and new Canadians to achieve a dream of owning their first home,” he said.

New-construction condo prices, considered the region’s affordable housing option, rose 36 per cent year over year in September to an average $661,188, according to BILD.

Condos accounted for 80 per cent of new-construction home sales this year.