Sousa set to unveil 10 measures targeting housing affordability

Ontario’s plan will include rent controls and a new tax on speculators, and will be revealed ahead of next week’s budget.

Thestar.com
April 18, 2017
By Robert Benzie

Finance Minister Charles Sousa is set to unveil a “suite” of some 10 different measures to tackle housing affordability, ranging from rent controls to a new tax on real estate speculators.

Sources told the Star that Sousa will release his plan as early as Thursday - a week before he tables the first balanced budget in Ontario since 2008.

Sousa, who met with federal Finance Minister Bill Morneau and Toronto Mayor John Tory on Tuesday to discuss housing issues, is to expand rent controls to include apartment units built after 1991.

It’s expected rent hikes on newer buildings would be limited to about 1.5 per cent above the inflation rate, which sat at 2 per cent in February.

A 3.5 per cent annual rent increase would be far more manageable for tenants than the doubling of rates that have been seen in some Toronto condos this year.

Queen’s Park will also impose a new levy on housing speculators, including foreign buyers, and is working with the city of Toronto on a vacancy tax to discourage investors from leaving properties empty.

“The matter is urgent. People are expecting action - it’s needed now,” Sousa told reporters at Artscape Wychwood Barns after a “productive” hour-long meeting with Morneau and Tory, the first of what will now be quarterly meetings on housing.

“So in the coming week the Ontario government will announce a suite of measures designed to increase supply and address demand,” he said, mindful that house prices have skyrocketed in Greater Toronto by 33 per cent year over year, which the Bank of Canada governor has warned is unsustainable.

“We’ve developed a comprehensive action plan to help stabilize the housing market, informed today by my colleagues. It’s a ‘made in Ontario’ solution that’s unique to Ontario.”

Sousa emphasized that his moves would not have “unintended consequences because we also recognize the value of these properties for families.”

But he indicated he plans to do something to boost the transparency surrounding the bidding process to protect both buyers and sellers.

“We’ve heard the frustrations by many who get caught in bidding wars and lose out and it’s infuriating for many people . . . so all of those things are being addressed and they’re coming out soon,” the finance minister said.

“Listen, investing in real estate is OK. Buying and renovating and providing more rental stock to the marketplace is a good thing.”

Morneau said he was hopeful that all of the political talk about the Greater Toronto and Hamilton Area’s white-hot real estate market could actually cool things down.

“We know that having a meeting and displaying our collective goals of ensuring that the market stays stable is going to have an impact on speculative behaviour. We think it’ll have an impact on reducing speculative behaviour because we’re saying that we’re serious,” said the federal minister.

“We’re serious today and we’re serious over the long-term of ensuring that we have the data to get to policy responses that will ensure we can keep this market stable.”

Tory, who has been pushing the federal and provincial government for more funding of affordable housing units, stressed that “the situation didn’t happen overnight and it won’t be fixed overnight.”

“Today’s meeting is the beginning of what I hope will be a co-ordinated response by all levels of government to keep the market stable,” the mayor said.

“The real estate industry has to have a look at itself - perhaps encouraged by their provincial regulator - and they don’t even reject the notion that some of the practices that have ended up evolving over time in terms of how people buy houses may be contributing to the frothiness of this market.”

Ontario Real Estate Association CEO Tim Hudak said while it’s a good sign that all three levels of government are talking, “it’s critical that we do not lose sight of the underlying supply problem affecting home affordability.”

“Ultimately, the best solution to rapidly rising home prices is increasing the supply of listings and new homes in hot markets across Ontario like the GTA,” said Hudak, who was at Queen’s Park on Tuesday meeting with officials.