Housing crisis reaches ballot box

Prior to the last municipal election, affordable housing in Fort Frances and the district was a concern of many voters. Now in the 2021 Federal Election cycle, affordable housing has become a major issue with Canadian voters from coast to coast. The government’s definition of affordable housing includes a statement that affordable housing requires less than 30 per cent of the gross household income whether it is for owning or renting a property.

The pandemic has created a new surge in housing demand. Homeowners discovered that their homes were too small to work from home and began looking for larger accommodations. Seniors who normally would sell their homes and move into small homes, have chosen to remain in place. A shortage of homes whether detached, townhouses, condos, or rental properties has driven up prices, not only in large urban centres but in communities surrounding those urban centres. It has had a cascading impact as the new working norm allowed residents to move to smaller communities driving up prices there.

In the last 12 months, the costs of buying a home across Canada has reached an average of $712,000 – an increase of over 15 per cent. Fortunately, in this district, we are not seeing those price averages, but the costs of housing have risen considerably.

When Justin Trudeau announced the Liberal Housing Platform this past week, he stated “The deck is stacked against you”, as he spoke to first time home buyers.

All three parties have policies to build more units in Canada. The NDP promised to spend $50 billion in the next ten years to build an average of 50,000 new units a year in Canada. The Liberals promised to allow first time homeowners to save up to $40,000 tax free to go towards a new home. They also promised to reduce the stress test that they implemented to reduce home price inflation.

Giving Canadians extra cash to build homes is not a quick solution. The Harper government created opportunities to withdraw tax free funds from RRSP’s for new home buyers. The policy has never been rescinded. New supplies of homes must meet with demand to hold housing prices steady. Creating all those new homes will take years to accomplish. It will not happen in a single elected term. Communities, provinces, and the federal government collectively must all be involved in creating new housing spaces.

Already approximately 250,000 homes are built annually in Canada through private and government funded investments. The only way that we can expect to see housing become more affordable is with a great decline in the value of houses. None of the parties really wish to talk about that. In the recession of 2008, we watched in the US as many homeowners discovered that the values of their homes declined so much that homeowners simply walked away from their homes because the values were not what they had paid.

All three major federal political parties have put together a mishmash of housing policies. They all appear to agree to restrict or tax foreign ownership of housing and to tax vacant properties at a significant cost to owners. In Vancouver when such a tax was implemented the value of homes declined one per cent in a year and then rebounded. Another proposal would have all homeowners taxed on the capital gains of their homes when they are sold. It would not be popular with Canadian homeowners.

There are no easy answers to provide affordable housing, and the three major parties policies only strike at the tip of the iceberg.

Former Publisher
Fort Frances Time
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