Ontario's Fair Housing Plan introduced today.

Ontario Fair Housing Plan

Ontario’s Fair Housing Plan was announced today. I was prepared to write a long, point by point review, but; it doesn't actually do anything that needs deep analysis, so I'll just let you watch the news, and give you my take on the highlights.

I’ll give it a Solid B+.

Basically… all levels of government got together for tea and biscuits and agreed to get together for tea and biscuits to talk again…

They came up with a 16 point plan with a catchy name “Fair Housing Plan” and some made up villains “Property Scalpers” with solutions to solve problems that effect a very small percentage of real people.

So why do I give them an B+ and not an F?

They didn’t over-react for political gain, as many feared they might. They are doing a whole bunch of little things, some I agree with and some I don’t. 

They didn't do anything that will crash the market. They admit that they need more data to make better decisions. In short - they listened to all sides and admitted they don’t have an easy answer. For a politician to admit they don’t know is a really big deal.

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They announced it today and made parts effective today. We were already seeing Seller's rush to get on market before the April 27th budget, while at the same time seeing Buyer's take a "wait and see" approach.

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Today's announcement removes the uncertainty. That is good.

So what did they do?

Non-Resident Speculation Tax: Effective April 21st, any non-resident will face a 15% tax on top of the price of their property. There are a whole bunch of loop holes and rebates for people who become residents. They hope that this will slow down foreign investment on properties under 6 units. They didn’t tax Apartment Buildings. They admit that they don’t know what percentage of transactions are from foreign investors… so we don’t know if this will do anything. It seemed to have some effect in Vancouver, so hey, let’s do it here too.

Rent Control: Ontario has had rent control since around 1975. In the early 90’s Bob Rae lifted rent control on buildings built after 1991 to encourage rental units. It did not work as intended. It didn't increase purpose built units but we did see individual investors purchase homes and condos to rent out to tenants. Most people were actually totally unaware of this 1991 “loop hole” and I think it caught politicians by surprise when a condo developer doubled the rents to kick out tenants so they could sell off the units. This loop hole is closed, effective immediately, April 20th. Most landlords don’t double their rents, so I don’t know how many people this will actually effect. This may have a negative effect, of not getting individuals to invest in rental properties, specifically Condos where maintenance fees increase faster than CPI. We shall see.

Housing Supply: The government is going to sell off vacant land that they own for infill projects, and ideally affordable housing. It takes years to go from concept to move-in, but better now then never.

Review of REBBA: They are going to review the Real Estate and Business Broker’s Act of 2002. This is a good idea as a lot has changed in 15 years. As an active Real Estate Broker I see some of the negative things that happen in our industry. I personally agree that double-ending -  while currently legal - is unfair to the consumer as well as other Buyer agents, especially in Multiple Offers. The previous generation of agents get defensive, even mad at me, for saying that. It will be interesting to see what happens. 

I also support higher fines for the few Registrants that break our rules, more accountability, higher standards, better education, and any changes that help the Good Realtors(r) do business better.

The real reasons prices rise is Supply and Demand. Demand is caused by people moving in to the GTA, from all over the world, as well as from other provinces. A lack of Supply is caused by a Lake to our South, and a Green Belt on the other three sides. This has now been referred to as the “Manhattanization” of the GTA. The government isn’t going to build more land, they are not going to open up the Green Belt, and they aren’t going to prevent people from moving to the GTA.

THEREFORE PRICES WILL CONTINUE TO RISE.

If the Plan helps slow down the rate at which prices rise, that’s a good thing.

If the Plan makes the process more transparent and more fair for consumers, that’s a good thing.

If the Plan improves my industry and get’s rid of the few bad apples, that’s a good thing.

If you are looking to consider

- Buying

- Selling

- Investing

Let's talk.

Rob

Oh, by the way... I'm never too busy for your referrals.