On Friday Gen Squeeze participated in a roundtable discussion about the Fair Housing Plan announcement with Ontario Minister of Finance Charles Sousa. Photo by Peter Maragos.
Generation Squeeze congratulates the Government of Ontario for its new Fair Housing Plan. It shows that the government is addressing the #CodeRed concerns of younger generations who know that the economy fails us so long as skyrocketing home prices leave our earnings behind. Guided by our “Homes First, Investments Second” principle, we called for new policy measures to level the playing field between renters and owners, tax housing wealth fairly, and encourage density to increase supply, especially purpose-built rental. (For more info, see http://bit.ly/GS_ON2ndworstecon). Premier Wynne's team has boldly started down this path.
1. We called for the Ontario government to level the playing field between renters and owners, including by closing the 1991 rent loophole. The Wynne government has closed it. Limitless rent increases are now illegal, and renters have predictability that their rents generally won’t increase more than around 2.5 per cent a year.
In addition, the Wynne government is adapting the Residential Tenancies Act to include a standard lease, and will limit the opportunities for landlord-initiated evictions. We’ll monitor what this means as the details become public.
2. We called for the Ontario government to encourage foreign and local investors to invest in purpose-built rental or innovative models of shared equity, rather than single-detached homes and condos. The Wynne government responded.
- As we recommended, it introduced a Non-Resident Speculation Tax of 15 per cent in the Golden Horseshoe region (from which investments in purpose built rental accommodation will be exempted).
- As we recommended, the Wynne government has also given municipalities the authority to implement an Empty homes tax that will incentivize people who own empty units as investment commodities to sell them or rent them out so they become homes.
- As we recommended, the Wynne government has committed to combat the shady practice of “paper flipping” by which some speculators evade taxation as they buy a unit and then assign it to another purchaser before the deal closes.
3. We called on the Ontario government to encourage the supply of new homes. The Wynne government partially responded.
- The government will lower property taxes for developers who build purpose-built rental units.
- It will rebate a portion of development charges that companies incur when they construct apartment buildings over the next five years.
- It will establish a program to leverage the value of surplus provincial land assets across Ontario to develop a mix of market housing and new, permanent, sustainable and affordable housing supply.
- The government will create a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions to create new supply more efficiently.
Despite these important policy changes announced today, the evidence shows that high home prices will remain for young renters and aspiring owners by comparison with the past. So further policy changes are required to support younger generations to cope with the #CodeRed affordability challenges that continue throughout Ontario.
- Generation Squeeze recommended that the provincial government incentivize municipalities, especially in the GTHA, to add density urgently in areas zoned for single homes. Otherwise, single-detached zoning squeezes us out by limiting the supply of suitable homes that are in reach for what we earn. So far, this recommendation has not yet been acted on fully.
- Given the wealth gains that some have achieved in the housing market as a result of the rise in home prices which have harmed younger generations, we called on the Ontario government to slow the escalation in home values, and raise revenue fairly for public services, by introducing a new annual, progressive tax on housing wealth based on values identified by the Municipal Property Assessment Corporation. This would then permit the government to cut income taxes. It’s an example of taxing more what we don’t want – rising home prices – while taxing less what we do want – rising earnings. The government did not yet act on this recommendation.
- We called on the Ontario government to add a portable housing benefit for residents under age 40 that allow them to credit a portion of their rent or mortgage interest against taxes owed with the goal of saving young people ~$1,000/year. The government should still consider this recommendation.
- Since home prices for renters and owners remain much higher than in the past, in part to protect the equity of our aging parents and grandparents in retirement, we urged the Ontario government to reduce other mortgage-sized costs facing young people – like child care and transit – so that we are better able to cope with the new reality of higher home prices. We will continue to push for such changes, and look for such investments in the Ontario 2017 budget that will be tabled on April 27th.
In sum, while more work remains, today was a great day for younger generations. With partners throughout Ontario, the many people contributing to GenSqueeze’s #CodeRed campaign achieved important policy victories that start to recalibrate the provincial economy to work once again for all generations.
We showed that politics responds to those who organize and show up. Thanks to the many thousands who have organized with us to win these policy changes that help to ease the housing squeeze. Onwards.
More information about the Ontario government’s new housing policy can be found here.
For further comment, please contact Dr. Paul Kershaw: 604-761-4583, email@example.com
Code Red GTA campaigner Fatin Chowdhury was on hand to take this picture at the announcement this morning with Premier Wynne and members of her government.