On December 16, Ontario\u2019s Progressive Conservative government announced that it would be pulling the $1 billion in funding that had been earmarked for Hamilton\u2019s much debated LRT system, swiftly putting an end to a project that had enjoyed growing support within the city.<\/p>\n
Astronomical cost overruns were blamed for the cancellation, but the $5.5 billion price tag affixed to the LRT by the PCs has been called into question, as it incorporates projected costs having little to do with the line\u2019s initial construction.<\/p>\n
\u201cThey\u2019re artificially inflated,\u201d says St. Jean Realty\u2019s Michael St. Jean of the government\u2019s figures. \u201cThey added in 30 years worth of operational costs on top [of the estimated building costs]. I don\u2019t think anyone believes that the reasons we were given for the cancellation were legitimate.\u201d<\/p>\n
Nevertheless, Hamilton has proven to be nothing if not a resilient city. While the LRT proved to be a major selling point for investors, it\u2019s cancellation should not be considered a red flag.<\/p>\n
\u201cThe fundamentals are very strong in Hamilton regardless of the LRT,\u201d says Rock Star Real Estate\u2019s Paul D\u2019Abruzzo. \u201cIt was more icing on the cake than anything.\u201d<\/p>\n
Both D\u2019Abruzzo and St. Jean feel that the only investors at risk of being hurt by the LRT\u2019s demise are speculators.<\/p>\n
\u201cOn a very micro level, if you were buying a home within a few blocks of that line specifically because you thought the LRT is coming, then definitely it\u2019s a little bit of a disappointment,\u201d St. Jean says. \u201cDo I think that investors are not going to invest in a massive Canadian city because of [that]? I don\u2019t. Hamilton was exploding prior to there even being any hopes of a single LRT line running from west to east in the downtown.\u201d<\/p>\n
Hamilton\u2019s market is still very much on the upswing. It\u2019s affordable, the city\u2019s professional class, driven by a robust healthcare sector, is diversifying, and its proximity to an overheated and painfully expensive GTA has made it an increasingly popular landing spot for new international arrivals who simply can\u2019t afford to start a new life while paying Toronto rents.<\/p>\n