Affording your home as an Owner or Renter

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by Jim Bertram

For decades now, one of the definitions of ‘middle class’ has been home ownership. Owning one’s home has not only been a marker of personal accomplishment and pride to Canadians, it is also the main economic asset of most Canadians whose economic status places them in that vast middle grouping. Home ownership is a major aspiration of those who are young and still getting their adult lives launched.

The importance of home ownership to Canadians, and its historical accessibility to Canadian citizens, is reflected in the fact that over 65% of Canadian adults own their own homes. The set of social and economic conditions which have generally prevailed in Canada as it has grown as a country have encouraged the strong presence of home ownership as a strong characteristic of modern Canadian society.

Yet, there are clouds on the horizon which threaten to make having one’s own home much more difficult in future. Among other things, aspects of provincial regulation tend to make homes increasingly more expensive. The dependence of municipal taxation on MPAC aggravates the weight of municipal taxation. Taxation and new regulatory costs, now and in future, will be a block to new owners who are deterred by high municipal property taxes and fees. They will also cause those in lower income categories to dispose of their properties, owing to unbearable tax pressure. At the federal level, the policy of “stress tests”, introduced in January, 2018, has, according to Mortgage Professionals Canada, already prevented no fewer that 100,000 aspiring Canadian homeowners from buying a home.

Last year, our friendly federal government increased mortgage insurance premiums charged by CMHC, in spite of significant profits already posted by that organisation. Shortly after the imposed premium hike, the federal government, for the first time in history, imposed payment by CMHC of a special “dividend” or fee/tax of $4billion to the federal government over two years, in addition to a separate, regular, quarterly dividend payment of $145,000,000.00.

Guess where the money to pay these extra premiums and this special dividend comes from? Correct. It comes from the pocket of poor, unsuspecting Canadians who have the temerity to aspire to home ownership. Question: Why not return this “dividend” to Canadians in the form of lower fees or taxes?

As time goes on, those who are currently blocked from home ownership, or driven from that status by a growing welter of thoughtless and uncoordinated policies by our governments, will only grow in number. But at least they’ll be able to join those who already rent their homes, and rent a decent home at a cost not exceeding the recommended 30% of gross family income. Right? Not really, and here’s why.

Our provincial government has created a hodge‑podge of policies relating to rent control and landlord tenant relations which has killed the massive amounts of private investment necessary to fund the growth in rental housing supply which is needed to meet current demand. Rent costs are spiralling in some categories, and stagnating in controlled categories of housing.

Government writ large is bungling the housing policy area by making ownership more difficult AND by ensuring inadequate rental housing supply. At the same time, the federal and provincial governments hypocritically voice concern on the subject of Affordable Housing. To make housing affordable for both renters and owners, a few things at least have to happen:

Governments must, as a matter of urgency, work to revise ALL policies and mechanisms whose impact is in the area of housing, with a view to reduction of cost to the homeowner or the renter in all areas.

Governments must realize, in a practical sense, that they do not have the financial resources to solve the problem of a lack of supply of affordable good quality housing. Therefore, governments must remove barriers to private investment in the housing sector. Refusing to do so is, at once, a denial of basic economic reality, and a slap in the face to Canadians who require intelligent, selfless and successful resolution of the wide-ranging problems in the area of housing in Ontario and Canada writ large.

Citizens must be active in requiring practical, non‑doctrinaire solutions to the government imposed, and growing, morass of housing policy. They must be aware of, and be critical of, pseudo solutions meant to provide cover to politicians and parties of all stripes at all levels of government, solutions which are only too often meant to cover over the problem until the next election, as opposed to presenting a real solution.

In conclusion, the broad area of housing needs to be addressed in a serious and comprehensive manner. We need comprehensive policies to broaden the municipal tax base, increase private investment, eliminate opportunistic and hidden taxes, and a host of other measures seriously intended to provide a coordinated, transparent and fair housing policy environment. It’s time for government to get serious about representing the interests of Canadians, as opposed to the interests of those who seek only to win the next election. As a starter, readers may wish to communicate with your MPP, Steve Clark, who is in charge of the housing portfolio in Ontario, and our MP, Michael Barrett, as well as every member of North Grenville Council. I believe YOUR VOICE COUNTS! If you do too, let it be heard. It can, after all, only count when it IS heard.

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