Of all the political U-turns B.C. Premier Christy Clark has undertaken in power, perhaps none was as jarring and unexpected as the one she performed on housing.
For most of 2015, and at least half of the following year, the Premier refused to do anything about rapidly escalating house prices in Metro Vancouver. She maintained that bringing in measures to cool the market might hurt the equity in people’s homes. She denied foreign investors had much to do with the fierce escalation in costs, relying on the faulty, self-serving data from a real-estate industry that wanted the sticker-shock insanity to continue.
And there was also the not-insignificant fact that the B.C. treasury was getting fattened on the provincial tax that exists on home sales – easy money that can become like crack to a government.
But then Ms. Clark and her cabinet came to an uncomfortable realization: The growing public outrage over the fact that the middle-class dreams of owning a home were evaporating by the day for many and might cost the government re-election. So the Premier did what she vowed she wouldn’t and brought in a 15-per-cent foreign buyer’s tax that did precisely what it was intended to – put the brakes on the absurd, and immoral, goings-on in the real estate industry.
Unfortunately, by the time she did, it was too late for thousands.
You would have thought that the worldwide attention Vancouver received over its housing emergency might have served as a cautionary tale for other jurisdictions, especially in Canada. But apparently politicians in Ontario, at least, missed the news.
What is happening in the Toronto housing market currently is almost a mirror image of how things played out in Vancouver, minus the citizen outrage. (Strangely.) You have: A real estate industry insisting there is no problem; a government holding that it doesn’t want to use policy tools that would hurt the equity in people’s homes; the same politicians contending they need more conclusive data before making any kind of move; foreign buyers moving in to park their money in real estate and many of those same purchasers leaving vacant houses behind. Oh yeah, and we shouldn’t forget: Governments (provincial and local) benefiting financially from tax revenue raised through house sales and ever-intensifying prices.
Watching it unfold from my perch here in Vancouver is, I must say, mind-boggling. Witnessing the home-buyer dreams of more and more young people going up in smoke every day is infuriating. Equally maddening is listening to members of the Ontario provincial government utter the same lame excuses for its fumbling as the Clark government did in B.C. before it was forced into action by a braying mob.
Either the Ontario government did not learn a thing from what happened in Vancouver, or is willfully ignoring the lessons left behind. The Globe and Mail recently revealed there is a big push under way in China from real estate agents there urging people to buy in Toronto, where, they insist, values are continuing to skyrocket. Let me be clear: This is not about nationality, or picking on any particular group – but rather, sounding a general alarm. Foreign investors did drive up prices in Vancouver; that is an undeniable fact. And many of those people who bought have zero interest in calling this country home. That is fine, I suppose, but if it also creates a circumstance in which young and middle-class Canadians are increasingly being shut out of the market, then I have a problem with it.
The situation in Toronto should be angering everyone, including people who already have homes and are seeing their personal worth multiply. (Your kids are screwed.) The city and metropolitan area is already the least affordable market in the country. The prices being asked for homes bear absolutely no relation to what people earn, or the annual raises they may be getting.
January delivered a 22-per-cent, year-over-year increase in property prices. The real estate association is suggesting they could go up as much as 16 per cent this year. More supply is not bringing prices down. The people who already have homes – which includes most politicians – seem content to sit idly by while this madness continues.
Political leaders in the province should be ashamed of themselves for having so little regard for those less fortunate than themselves. There is a crisis occurring in Toronto and to sit back and just watch it unfold is unconscionable.Report Typo/Error