Mortgage Broker

8 | summer 2016 cmba-achc.ca CMB MAGAZINE WE HAVE BEEN TALKING ABOUT housing- affordability challenges in some of the globe's largest metropolitan cities – such as London, New York, Sydney and Hong Kong – for some time now. While house prices have escalated in Canada's urban centres over the past decade, we could always peg affordability in this country to those international cities where a new-home buyer might only be able to afford a shoebox apartment, such as Manhattan's 78-square-foot mini-studios or the 25-metre units in the heart of Paris's Le Bank. However, urban centres in Canada – namely, Toronto and Vancouver – have recently distinguished themselves by making it to the top of many international least-affordable-cities lists. A cool million or two will no longer buy a palatial luxury abode in those places; rather, just an average – perhaps even basic – sin- gle-family home. (Check out the infographic on page 40, which highlights some Vancouver housing statistics.) e daily media is now replete with com- mentary from economists, housing experts, politicians and other analysts offering their views on the problem (that is, if they believe there is a problem) and potential solutions. ere is no consensus as to whether we are in a housing bubble or the extent to which wealthy foreign buyers (particularly from China) are impacting housing prices. In addition to the generally accepted goals of increasing density and improving public transit, proposed solutions focus on new taxes; the proposed solutions include a speculation tax on property flippers, a new property purchase tax on foreign buyers and an annual tax on owners of vacant homes. e Prime Minister, the premier of British Columbia and the mayor of Vancou- ver are now discussing housing-affordability solutions. As of July, the Premier has given the mayor the green light to proceed with a plan to tax the owners of vacant homes. One B.C. commentator 1 , real-estate market- er Bob Rennie, has cautioned that we don't need just the optics of a solution – we need a real solution. While a speculation tax could ease pressure at the lower end of the market, a foreign-ownership tax would not impact the demand or supply of housing and, ultimately, would have no impact on affordability. In the end, he argues, a foreign-ownership tax will only lead to racially charged conversations, and we must also recognize our need and depen- dence on foreign investment. For example, foreign students contribute to 26 per cent of the University of British Columbia's revenue and as much as 41 per cent of the revenue for the Emily Carr University of Art and Design. In Ontario, meanwhile, the Minister of Training, Colleges and Universities has acknowledged that "Each international student contributes about $35,000 to our economy" and concluded that "$35,000 is creating a job." 2 We must also ask ourselves whether Cana- dians have a right to affordable housing and what the metrics of affordable housing look like. (We know that no one is trying to solve the housing-affordability challenge in affluent neighbourhoods like Toronto's Rosedale, Montreal's Westmount or Halifax's South End.) We also need to ask whether people have a right to live in single-family housing in a city's core, in all neighbourhoods or in close proximity to where they work. Rennie suggests we need to redefine our concepts of affordability and livability – both require moving out of the city centre into outlying areas, and out of single-family homes and into condos and townhouses. City planners can assist here by ensuring that growth into surrounding suburban areas is supported by efficient public transit systems, transportation infrastructure and appropriate zoning to accommodate population expansion. However, our municipalities must get a failing grade on the housing affordability issue; the Fraser Institute has recently reviewed the red tape imposed by municipalities and concluded that it adds significant and unnecessary costs to housing construction, which are ultimately Before politicians try to solve our problems with yet another tax for which there is no empirical evidence to support, perhaps they ought to look in their own backyard. Municipalities need to stop trying to ease housing demand by increasing obstacles. Instead, they should increase the supply of housing by cutting red tape BY SAMANTHA GALE, CMBA EXECUTIVE DIRECTOR Helter Shelter

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