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The Ontario Real Estate Association is leading the charge to remedy the unaffordability crisis that’s gripped the province, and especially its largest city, just in time for the provincial election June 7.
Unaffordability has become especially acute among millennials aged 25 to 34, and OREA believes several of its proposals are the panacea they need.
“Housing has one of the highest taxes after alcohol and tobacco, so lower the tax burden on first-time homebuyers,” said OREA’s CEO Tim Hudak. “The second suggestion is to increase the supply, particularly for starter homes, and put more and more options into the market. The third is to focus on the missing middle – these are often stacked townhouses or mid-rises in our cities. Too often, outdated municipal zoning bylaws restrict them, but they’re a perfect solution for millennials looking for their first homes, and also for empty nester parents who want to stay near their grandkids but can’t find a place.”
Missing middle housing could free up homes and succour mobility – and, in the process, lower prices. However, inefficiencies must first be addressed.
“To their credit, the government is putting a lot of money into subway expansion and LRTs, but it makes no sense to limit development around them to two or three storeys. They would be the perfect location for mid-rise housing. A lot of Canadians would love to live above a subway or GO station, given our weather patterns.”
The Ontario Real Estate Association has launched an initiative called Keep the Dream Alive in which citizens can lobby their MPPs with open letters elucidating their concerns.
Hudak, a former leader of the Ontario Progressive Conservative Party, says that homeownership is a priority for all three political parties, but an accumulation of policies has resulted in soaring price points.
“Over time, there’s been an accumulation of government actions that have made finding a home more expensive and more difficult, or even getting a mortgage more challenging for young people,” he said. “That has accelerated in the last two years. Affordability is always a concern, but it was nowhere near as high on the priority list as a political issue as it is today. That comes from a lot more demand, millennials coming of age, more immigration, a stronger economy, and sustained low mortgage rates combined with lack of supply. There are a lot more people chasing fewer homes.”
A poll commissioned by OREA found 83% of millennials aged 25 to 34 still believe in homeownership but lament its unaffordability. The poll also revealed housing affordability ranks highly with environmental degradation.
“For the first time in 130 years, the dominant form of housing for millennials aged 25 to 34 is still with mom and dad,” continued Hudak. “The old homesteading days have come back. Again, I’m not talking people just out of college; these are people with careers and who are thinking of getting married and having kids.”
Royal LePage has studied ‘peak millennials’ (aged 25 to 30) at length and one of the findings was that 61% of them were willing to relocate and change jobs to own a home.
“What I believe we will see happen, because people desire homeownership so greatly, is some migration of people to other areas other than our biggest cities,” said Phil Soper, CEO of Royal LePage. “We will see migration of young families from Vancouver and Toronto to, say, Kelowna and London, ON. That’s going to happen. Moving to Oshawa or Burlington doesn’t change the cost dynamics enough for a lot of people.”
Soper added that people have already become tolerant of longer commute times, and that it will continue into the future.
“They live farther than the city cores in order to own a home,” he said. “They’re allocating personal time to commuting.”
As expensive as housing has become, Hudak does not believe the point of no return has passed.
“The provincial election is June 7 and municipal elections are in October,” he said. “It’s the perfect time for millennials, and their baby boomer parents who love them dearly but want them out of the house, to push for commitments at a political level.”
by Neil Sharma, reproduced with permission. May 4, 2018