With Toronto Council at odds with the province about the Housing Supply Action Plan, and talk of some serious money laundering through Toronto real estate, I wouldn’t blame you for being concerned. But, the Greater Toronto Area housing market is resilient and I think 2019 will continue to be a good year.
City Council doesn’t seem to believe that adding more supply will equate to more affordable housing. It’s a simple economic model: as long as demand outweighs supply, prices will remain high and keep rising. Council is concerned about their lack of tools to mandate the amount of affordable housing units being developed, and they’re also worried about the possibility of lower development charges.
This comes at a time when the provincial government is cutting funding to numerous Toronto services, including those that provide free breakfasts for children and subsidized daycare for thousands of low-income families. If service is to continue as planned in the City’s Budget, Toronto homeowners may be receiving a second property tax bill to cover the costs.
The Ford government doesn’t seem to be making any friends in Toronto, except among builders who have applauded the move to cut red tape and make it easier and more efficient to develop residential communities, especially near major transit nodes.
While Toronto and the province duke it out, there’s news about anonymous, private corporations moving billions of dollars through the high-end GTA real estate market, potentially concealing illegal activity. According to Transparency International Canada, private corporations have spent $28 billion on high-end GTA real estate since 2008, and nearly $10 billion of it was in cash.
I know many real estate investors who use Ontario Inc. numbered companies to purchase properties that they plan to rent out. It allows them to keep their finances in order when it comes time to paying taxes and managing their properties. This isn’t illegal. Lumping these hard working, smart investors into a category with potential criminals seems unfair to me.
The Canadian Real Estate Association suggests creating a public registry that has the ownership details of privately owned corporations investing in real estate. Some may argue this is an invasion of privacy, but I imagine those who don’t have anything to hide won’t mind their names being attached to a company that owns a property.
News of criminal activity in GTA real estate and headlines about Toronto being at odds with the province regarding housing and funding may seem like bad news for the housing market, but I don’t think it is.
While I think something should be done to prevent high-end GTA real estate from being an avenue for money laundering, I also think that the homes being purchased aren’t the ones first-time buyers and empty nesters are targeting.
And while Toronto Council doesn’t agree with the Housing Supply Action Plan, at least the discussion is moving forward. There’s clearly a need for more supply. Building near major transit nodes should be a priority. And once Toronto moves forward with an Inclusionary Zoning policy, they will have more control over the amount of units in a new residential development that should be designated as affordable. That said, Bill 108 may limit Inclusionary Zoning policy to new developments near major transit nodes.
It’s a turbulent time, but Toronto real estate is resilient, and there are so many other factors impacting the city’s liveability. Employment opportunities, quality of life, walkability, transit friendliness - it all adds up. The demand to live in and own a home in Toronto is strong, and it’s just a matter of the different levels of government figuring out how to accommodate the inevitable growth.