Mortgage Broker

8 | fall 2018 cmba-achc.ca CMB MAGAZINE editorialsummary Causes and Solutions Are Easy to See C anadians, particularly those in major urban centres, have been immersed in a debate about housing affordability woes for over two years now. However Canada, by many accounts, is a newcomer to this issue. is discussion is old news in places like Tokyo, Hong Kong, New York, England and many parts of Europe. London has actually been grappling with housing affordability solutions dating back over a century. Even though housing prices in London have fallen steadily over the past four months, new London residents still face an uphill battle getting a mortgage application approved which will sufficiently qualify them to buy a home. e British Office for National Statistics recently reported that "Prospective first- time home buyers in London in 2017 could expect to spend 13 times their earnings on property." Housing analysts in Britain routinely bemoan the lack of skilled labour, stonewalling on development approvals by local governments and the challenges with enticing developers to build less lucrative, more affordable housing. e London discussion sounds eerily familiar to some of us in Toronto, Vancouver and other Canadian urban centres. We know here in Canada that government regulation slows down the building of housing, adds to building costs and limits densification, but three expert reports have been released in recent months which add some colour and texture to these problems. One report, issued by the C.D. Howe Institute in May of this year, yields some truly alarming results. e authors found that housing prices are being driven upward because of excessive government regulation. e top eight cities with the most rigorous regulation (Vancouver, Abbotsford, Victoria, Kelowna, Regina, Calgary, Toronto and Ottawa-Gatineau) paid "an extra $230,000 on top of construction costs per new single- detached house between 2007 and 2016." In many Ontario municipalities, local government rules were found to add over $100,000 to the price of a single detached home. e good news is that the C.D. Howe authors' empirical review of data determined that a modest increase in available land for housing development coupled with a reduction of development and zoning costs "would reduce the price of housing by more than $70,000 in Toronto and the Peel and Durham regions, $90,000 in Halton Region, more than $100,000 in Hamilton and nearly $125,000 in York Region." Vancouver without doubt wins top spot for being the most regulation-heavy building jurisdiction in Canada. When looking at the West Coast, the authors found that compliance with municipal regulations adds an astounding "50 per cent of the cost of housing in the Vancouver area." In dollar amounts, zoning rules, taxes, fees Canada's cities are not the first to suffer housing affordability woes. Why can't we adopt the successful strategies used around the world? By Samantha Gale

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