Affordability crisis suggestions

The Canadian government has come out and said it plans on tackling Canada's housing affordability issues. How that will be done remains to be seen, but one association has a few ideas.

What can the federal government do to tackle the housing affordability crisis in Canada?

A lot, according to the Canadian Home Builders’ Association.

Bob Finnigan, president of the CHBA, spoke with CREW about housing affordability in Canada. It’s one of the major issues currently plaguing the industry, according to Finnigan, who shared the association’s recommendations for addressing affordability the CHBA sent to the federal government.

In the document, entitled Continuing the conversation about homes, communities and Canadians, the CHBA provided a number of suggestions for just improving the housing situation in Canada.

It recommended increasing the minimum amortization to 30 years, which would create 80,000 potential family buyers who are well qualified, according to the association.

The CHBA also recommended the government provide 50% of funding for infrastructure to help relieve the tax burden currently placed on buyers of new homes.

A refundable home renovation tax credit for first-time buyers is another initiative the association argues will help provide some relief.

Other suggestions include; focusing federal research on bringing better built homes to market, harmonizing codes, standards, trades and qualifications, and opening training support to Canadians pursuing jobs as skilled workers, while also boosting employer-led training and immigration programs.

Affordability is an issue for many potential homebuyers – especially in the country’s larger markets – and the government officially launched a conversation about impriving affordability this year.

The Canadian government has unveiled its housing strategy plans, following months of consultation with Canadians and industry stakeholders.

“Affordable housing can connect individuals with the facilities and services they need to build secure, productive and meaningful lives for themselves.

Living close to jobs, public transportation and childcare enables people to participate fully in society and the economy,” Jean-Yves Duclos, minister of families, children and social development, said in the report, entitled What we heard: Shaping Canada’s national housing strategy. “A National Housing Strategy will align the efforts and resources of all players – governments, stakeholders in the private and non-profit sectors and others – toward improving housing outcomes for all Canadians.”

The housing plan has a ways to go before actual policy is implemented, however.

“The hard work continues. Needless to say, broad consultations indulge peoples’ expectations, as they should,” the report said. “However, policy makers must balance these against fiscal constraints. Our objective will be to develop an NHS that employs finite government funds to maximum effect, yielding the best outcomes.”

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COMMENTS

  • by Kris Kooblall 2016-11-23 2:31:18 PM

    This is a national housing crisis with specific areas of intense interest in Vancouver and Toronto and other impacted areas of the nation. It is also fair to remark that while the signs have been with us for several years, the solution to this crisis requires consistent effort across all levels of government.

    The Federal Government of Canada has responded with sweeping moves that are mostly designed to mitigate the risks posed to the national economy with regard to regional imbalances in affordability for Canadian families to purchase homes in which to live. The provinces and municipalities also need to address this issue frontally and with consistent planning and co-ordinated effort, good will come and this crisis will dissipate eventually.

    In the important province of Ontario, it took the provincial and municipal government in excess of a year in which to recognise the dire nature of the housing crisis especially in Toronto, the nation's business hub. The Ontario Provincial and Municipal Governments took a seemingly low keyed approach to fighting and meeting this housing crisis head on. There was a complete absence of real leadership in this arena and when the solutions were advanced, it appears to have completely missed the mark.

    Time will determine the effectiveness of these quasi-measures adopted in the province of Ontario in the housing crisis.

  • by Landlords unite 2016-11-24 12:31:18 AM

    As a Realestate investor and landlord for over 25 years in the bc west coast market I find it increasingly challenging to provide the "affordable" housing that some renters and government agencies are going on about.
    With yearly large increases to property taxes and utility taxes, increased costs to trades and materials for maintenance and or renovations it's hard to break even.
    Then there's the enormous costs of delinquent renters who a landlord is forced to chase through the red tape of the rental board rules and regulations, most of which are in favour of the tenant, providing opportunities for dishonest tenants to avoid and even get way with not paying rent, utilities nor damages all the while still maintaining possession of your rental property.
    It costs thousands to enforce an rtb order and to get possession of your own property back via Supreme Court and bailiffs and months of rental time lost during the due process.
    And once a tenant does leave, a landlord is out of luck trying to collect any monies due since the tenant refuses to give an address for service.
    There needs to be a massive reform to the current rtb rules to equal the rights and enforceable responsibilities of BOTH tenants and landlords.
    Landlords need to be able to hold tenants responsible and protect themselves from being scammed and ripped off by these system sanctioned rules in place at this time.
    An eviction notice needs to be enforceable by the rcmp, immediately.
    No pay no stay policy is needed especially in circumstances where a tenant deliberately cancels a last months rent cheque to avoid paying utilities or damages etc.
    there should be a fine imposed on such tactics and compensation to the landlord for all the expenses incurred to collect and rental loss incurred.
    Make investing and landlording affordable and result will be more affordable housing in bc. And more investors and homeowners willing to offer housing options. After all they are the ones making the investment and taking the risks.

  • by Mr. Bigglesworth 2016-11-24 10:46:03 PM

    Hey, Landlords Unite !!......well said, Sir.

    It has become increasingly the case that Landlords are held up as being greedy, unethical land-barons, and for being one of the primary reasons that Canada's big cities are experiencing housing difficulties. While there are a very few individuals that actually DO fit this description, the VAST majority of Canadian Landlords are extremely fair, taking our responsibilities seriously. Leaving the bad Landlords aside, (as they are a non-representative minority), we are left with a large group of stakeholders that are being not just UNDER REPRESENTED by various levels of government, but indeed VILIFIED as being in some mysterious way responsible for today's state of the industry.
    Well, let's just take a little look, shall we, at exactly how LANDLORDS have caused/are perpetrating this problem,.. and also lets have a look at what TENANTS AND GOVERNMENTS have/are doing to alleviate it.
    Let's focus on condos/apartments, (rather than detached houses), as these properties represent the bulk of rental stock in Canadian cities. Across Canada, out of every four condo's, three are occupied by the owner(s). Thus, non-resident owners represent about 25% of the national condo stock. Given that the average size of households is 2.2 people in a given dwelling unit, (source:CMHC), and indeed single-person households represent about 40% of all households (StatsCan 2011 census), ..(you Harperidiots know who to blame for lack of more recent data), then we can probably agree the most acute segment of the housing crunch is in metropolitan studios, 1, and 2 bedroom apartments. For the most part, these dwellings are occupied by what I might refer to as transient tenants...in my 25 years of landlording, I'm averaging somewhere between 2and 3 years between tenant changes...although with Vancouver's current availability problem, that number seems to be getting bigger. So then, landlords provide housing for those itinerant renters that either cannot, or prefer not to, buy a condo for themselves. Given the FACT that the big cities do not provide a competitive alternative, I'd say landlords are providing a service that governments have failed to deliver.
    To fairly assess the benefits that landlords provide let's consider a condo, new, or used, that gets listed on the MLS. ....
    Fact: owner-occupiers have EVERY ability to buy it as a landlord does....and in fact, they have greater opportunity to buy, given various government incentives such as the favourable terms of cashing out an rrsp to purchase an owner-occupied home, and other provincial/federal incentives for homeowners, (home owner grant, smaller down payment requirements, and others), that investors don't have access to.... So in fact, landlords are at a statistical DISadvantage at the buying stage, as it's actually more expensive for us to aquire these properties, than owner-occupiers.
    FACT: leaving aside the notion that owner occupiers will in all likelihood SELL their condo several years down the road, WITHOUT EVER HAVING MADE IT AVAILABLE FOR RENTAL STOCK, AS LANDLORDS WOULD HAVE DONE, FOR THE ENTIRE PERIOD, and they will shelter the capital gain when they do so, ( landlords can't do that), and rest assured these up-grading owner-Occupants will be every bit as culpable as landlords are, for pricing their condo's as high as they can, and in buying their next, larger, more expensive home, they are participating in the "demand" side of the equation, not the " supply" side, as the Landlords are, as landlords seldom " upgrade" their rental stock...(doesn't make sense)....had the Landlord bought the property, however, there would have been one more rental unit on the market, ( versus the owner-occupier never supplying that unit), it would have remained in the rental pool far, far longer, more taxes would have been paid to government coffers, ( rental income tax, municipal taxes, ( non-HOG-reduced), full capital gains tax, and a host of other smaller items..)... Further, we would have made the home available for, in most cases, vastly less money per month than an owner-occupier would have been paying....the renter enjoys either a short stay, or years of dependable occupancy, at cheaper than owner-occupied prices, and never has to fix a dishwasher or replace a fridge, pay municipal taxes, or a host of other costs that all owners have to contend with. No commitments, no obligations; as a renter, you can walk away with 30 days notice. True, renters done build equity, but how much equity would they truly be building every month, at $3/ month per square foot?...not much. So they loose out on the equity/wealth building, but they gain cash flow freedom, commitment-freedom, and flexibility....for years... ( what's THAT worth!?). Lastly on this topic...:entitlement: many millenials, unskilled labourers, single mums, or those simply unwilling to advance their skill set, feel entitled to live on the Westside of Vancouver...and/or to own their own homes. I'll leave it to the reader to ponder the reasonableness of that expectation: a high school dropout or a career waiter, expecting to live alongside white-collar professionals, academics, skilled tradesmen, businessmen, and the like. So then, renters typically don't "put in" too much, but many of them sure have some big expectations about what they should be " getting out". Uninformed, they will tell you their landlord is making out like a bandit....some simple calculations prove this highly unlikely: 1- bedroom downtown: $500k, less 25% down payment = 400k mortgage, ($2000/mo /-), strata fees, (typ .40c/sq'=~ $200/mo), taxes:$1500/yr=100 /mo....so far, carrying costs on this rental apartment are at 2,300, and that hasn't addressed the down payment, the maintenance budget, insurance, special assessments, the landlords time and efforts administering the property, and on the back end, capital gains tax......and yet, most renters would lament having to pay $2,500/mo, for a one-bedroom apartment.....but bearing in mind the above figures, this landlord would most definitely NOT be making those obscene profits that we are assumed to be making. It takes YEARS, of chipping away at that mortgage, building equity slowly, and more as a response to entirely unpredictable market conditions, than by greedily fleecing disadvantaged tenants...
    If we can agree that the supply-side of the equation has not kept up with the demand-side, let's see if we can spot the truly negligent party here..in October of 1994, in Vancouver, there were 55,987 purpose-built rental units, condos and TH's.......October of 2015, TWENTY-ONE YEARS LATER, that number had barely budged: 56,518 (source: CMHC)....an increase of about 0.01%. wow. Now, for those of you not familiar with our embarrassment of a Mayor, Gregor Robertson was elected to office in 2008 with his "Vision Vancouver" cast of cartoon characters, and has presided over this utterly pathetic lack of "vision", regarding the entirely predictable population growth in the area. Now hopelessly behind the curve, mr.Robertson is desperately grasping at straws, implementing daft policy such as taxing homeowners who leave their property unoccupied. ( all about optics, not metrics)....so during the reign of those crack social "visionaries" at City hall, ( and recall that in 2008, home prices in Vancouver had yet to achieve escape velocity..)( so MrG has indeed presided over this whole unaffordability sh*t-show),...city hall has effectively done NOTHING to anticipate, plan for, or deliver, common-sense infrastructure projects...and now we have vacancy rates of approximately zero. Who to blame??....hmm...yeah!!, :LANDLORDS!!!!!....THEY did it!!....so in an entirely predictable projection of blame AWAY from the real architects of this mess, the Robertson's, and Herbert's of this world employ divide and conquer tactics, such as painting all landlords with the same brush, all of them doubling rents overnight, evicting little old ladies, and presiding over vast tracts of slum.
    So, once again, political ineptitude causes systemic crisis....politicians finger free enterprise, "THE RICH !! ", and enact policy to placate the vocal lower and middle class....(gee, where else have we seen recent examples of this...Trump, anybody?).

    LAST POINT: to my colleagues in the landlording industry...please pay attention to where the industry in Canada is heading: Spencer Herbert, Gregor Robertson, and their ilk would like nothing better than to confiscate your revenue property and put it in the City's rental pool, ( they look like heroes, you're s.o.l.). The Residential Tenancy Board continues to represent those stakeholders who have put in the least, assume no risk, and have the least standards of conduct, but yet who want you to lower their rent, ( without having a CLUE as to your financials), despite your costs increasing, ( as your mortgage interest diminishes your tax deductions, taxes increase to fund those jackasses at Translink, and inflation marches on)....and if they refuse to pay the rent, those same RTB charlatans will do you ABSOLUTELY NO GOOD WHATSOEVER.
    ITS TIME TO DUMP THE RTB IN ITS CURRENT INCARNATION. WE NEED TO FIRE EVERY ONE OF THEM, AND PUT IN PLACE A NEUTRAL, EVEN-HANDED NON GOVERNMENTAL BODY THAT ADMINISTERS UNBIASED JUSTICE OVER THE INDUSTRY. TALK IT UP WITH YOUR COLLEGUES, CONSIDER ALTERNATIVES, WRITE YOUR REPRESENTATIVES AT THE PROVINCIAL LEVEL, SPEAK YOUR MIND ONLINE AND IN PUBLIC, JOIN CANADIAN LANDLORD ASSOCIATIONS, ANT TELL THE RTB TO GET THEIR ACT TOGETHER OR FACE THE INEVITABLE FATE OF ALL INEPT BEAUROCRATIC VESTIGES: DISMANTLEMENT.


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