Toronto is undergoing a serious housing crisis — everyone is saying so! Experts, real estate agents, the media, and even politicians admit openly the cost of housing is getting out of control. And yet, even after months of knowing this fact, no one is doing anything about it.
Sure, the government is enacting rent control and a non-resident speculation tax. But this same government, whether municipal, provincial, or federal, hasn’t done what experts are claiming is the easiest and most effective thing they can do for the housing market: build!
“The only reason why prices rise is because there are more buyers than sellers,” explained Jon Love, CEO of KingSett Capital. “Prices rise for no other reason.”
Thursday, new statistics became available through the census that said Toronto has 5,000 fewer detached homes homes in 2016 compared to 2011. It’s what Love calls simple economics. When there are three people interested in purchasing one home, the problem isn’t foreigners or lack of regulation; it’s demand and supply. It means there aren’t enough homes for everyone.
Sure, we have lots of high-rise buildings popping up throughout the downtown core, but a family with three children most likely won’t want to live in an apartment building. Without diversity in housing, there will always be people left without.
It seems so simple; why is this so hard to understand? What is preventing people from building more family-friendly homes in Toronto and throughout the Golden Horseshoe?
Most people blame the NIMBYs — the people who claim they don’t want condos built in their back yard — or the bureaucratic red tape of development agencies. But Love says everyone is to blame. At the end of the day, he asks, “do we want to be Chicago, or Detroit?” A world-class city needs housing, daycare, parks, and transit — so, how do we get it?
First of all, the government needs to intensely invest in transit and open up surrounding geographies for development. If people who work in Toronto have the option of living in places like Hamilton, Barrie and Oshawa — with the possibility of commuting on an express train — many people will do so! An hour commute is not unreasonable if it means saving money on a home. This would also free up homes within the city for those who want or need it.
Why not take it even further and build on top of the rail, Love asks. The purpose of expanding the Golden Horseshoe through transit is to connect people and create communities and neighbourhoods along these hubs. This can’t be done if people have to walk for 30 minutes just to get to the bus.
Second of all, the city needs to encourage development zoning and encourage the building of low and mid-rise condominiums. “People are terrified of 60-story buildings,” Love said. “But mid-rise is fine! I would pre-zone areas to allow for that density.”
This type of variety in housing is necessary not only in order to accommodate the many types of people looking for homes in the GTHA., but also to allow for the immediate development of land in neighbourhoods that are against the building of tall condominiums. Pre-zoning would also reduce the number of complaints and bureaucratic tape that surrounds development. Instead of a developer purchasing land and then deciding what to do with it, the community would actually have a say in what kind of buildings or homes will be put in their neighbourhoods.
Finally, allowing a second kitchen within a home to be used as a secondary apartment, within designated areas, would be a short-term solution that would allow homeowners to rent our basements and provide housing for short-term occupancy.
These short and long term solutions were all suggested with the clear understanding that prices go up because there are more buyers than sellers, a concept Love says won’t be accepted until there is a significant change in public opinion.
The biggest problem is that NIMBY-ism and the fear of immigrants taking our land, jobs, and homes, are much more attractive for both the media and government agencies. Rather than stand with the experts, public servants are focusing on issues that will bring them votes, things like free prescription and lower electricity bills. Things only ever get done when the government is scared of losing power. If the public told governments to build, to increase the supply so that more people could purchase homes, it would have to do so. Until then, they will continue to blame tax foreigners and claim to help cool the market while families are left homeless.
It’s time the government consulted experts and remembered their university or college introduction to economics course — prices rise when the demand is higher than the supply. And here in the Golden Horseshoe, we have about as much demand as you can get.