Ontario’s new measures in real estate
Worried that too many Ontarians are getting priced out by fast-rising rents and surging home prices, Ontario Kathleen Wynne unveiled sweeping measures Thursday aimed at cooling red-hot markets she admits have become “a problem.”
Wynne said it’s hoped the 16 measures — most of which will be contained in legislation that must first pass before they proceed — will curb housing costs that are rising “way faster than people’s paycheques.”
“When young people can’t afford their own apartment or can’t imagine ever owning their own home, we know we have a problem,” she said. “And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.”
Many of the measures were reported earlier today by CBC’s Queen’s Park reporter, Mike Crawley, before they were outlined by Wynne.
- A 15 per cent tax on home purchases by non-resident foreigners in Toronto and the Greater Golden Horseshoe. Wynne said the tax would not apply to new immigrants who plan to live here, but are instead aimed at speculators who will “never set foot in Ontario.” The proposed tax would apply to transfers of land that contain at least one and not more than six single-family residences, including semi-detached homes, townhomes and condos. It would not apply to transfers of other types of land including multi-residential rental apartment buildings, agricultural land or commercial/industrial land. A rebate would be available for those who later become citizens or permanent residents, as a well as foreign nationals working in Ontario and international students.
- A move to expand rent control to all private rental units in Ontario, including those built after 1991, which are currently excluded. CBC Toronto first broke the news when Housing Minister Chris Ballard said the government would move to remove the 1991 rule after residents complained of massive rent spikes. The issue that was highlighted in a CBC Toronto series of stories called “No Fixed Address.” The rent controls must come through approved legislation, but will take effect today, April 20. Annual rent increase for an existing tenant can be no higher than the rate of inflation. Rent increases will be capped at 2.5 per cent, even if the rate of inflation is higher.
- A rebate of development cost charges to encourage building of more rental housing.
- A standardized lease document for all tenants.
- A plan to look at practices that may be contributing to tax avoidance and excessive speculation in the housing market, such as “paper flipping” — a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
- New powers for Toronto and other municipalities to introduce a tax on vacant homes to encourage owners to sell or rent unoccupied units.
- A move to identify provincially owned surplus lands that could be used for affordable and rental housing development. in Toronto the areas identified include the West Don Lands and 27 Grosvenor St. and 26 Grenville St.
- A $125-million, five-year program to encourage the construction of new purpose-built rental apartment buildings by rebating a portion of development charges.
- A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions. A government backgrounder on the measures announced today specifically mentions the practice of double-ending, when one agent represents more than one party in a transaction.
Toronto Mayor John Tory has been calling for a tax on vacant homes, and Wynne says Ontario will give Toronto and other interested municipalities the power to impose such a tax to encourage owners to sell or rent such spaces.
The moves come as Ontario residents — particularly those in larger cities — find themselves struggling to keep up with rents and home prices that have far outpaced wage increases.
The average price of detached houses in the Greater Toronto Area rose to $1.21 million last month, up 33.4 per cent from a year ago. The news is no better in the Toronto rental market where some tenants are facing massive and sudden rent increases. Earlier this month, CBC Toronto reported about a tenant in a two-bedroom condo in Liberty Village — the same neighbourhood where Wynne made Thursday’s announcement — jump from $1,660 to $3,320.
Wynne was asked how effective the measures will be when demand for homes continues to outstrip supply and bidding wars on downtown homes are commonplace.
“We are not interested in controlling the market,” said Wynne. “That is not the aim. But we do believe that there is a need for interventions right now to calm what is going on, to put protections in place.”
Wynne said she would not rule out other measures if she sees the need.
“Right now we believe these are the measures needed to help people find a place to live that they can afford,” she said.
Article thanks to CBC News.