Will Ontario’s housing affordability actions backfire?

Will Ontario’s housing affordability actions backfire?The Ontario real estate market is in a complicated state of transition, making real estate lawyers’ work more important than ever. In the weeks leading up to the Government of Ontario’s introduction of sweeping new housing regulations in April 2017, advocacy groups and the press called on the province to take action on housing affordability.
“When young people can’t afford their own apartment or can’t imagine ever owning their own home, we know we have a problem,” Premier Kathleen Wynne said. “And when the rising cost of housing is making more and more people insecure about their future and about their quality of life in Ontario, we know we have to act.”
Several weeks following the passing of the province’s new legislative scheme, another chorus of voices is wondering whether these housing affordability measures may make the situation worse.
“The new government measures, to be implemented in the latter part of this year, will touch almost every aspect of the development industry, with the potential to be highly destabilizing,” wrote RealStrategies Inc. president, George Carras, in a recent column for the Toronto Star.
Carras believes that the increasing complexity of the Greater Toronto Area real estate market will deeply impact the region’s development industry and could lead to destabilization and growing housing scarcity, a concern no-doubt shared by many real estate lawyers.
“Paradoxically,” he writes, “efforts to solve the affordable housing problem could end up creating housing affordability issues.”
Carras identifies a number of concerns with the province’s housing affordability actions. First, he points out that while both the “Growth Plan for the Greater Golden Horseshoe” and the “Greenbelt Plan” demand increased high-density and decreased low-density development, changes to the Ontario Municipal Board will simultaneously eliminate an important approval channel that facilitated the GTA’s decade-long surge in high-density housing development.
He also echoes a common concern among developers and investors: new rent control measures will dampen the existing appetite for investment in rental housing construction. If developers are unable to attract investors due to the Province’s Rental Fairness Act, he argues, rental development may grind to a halt and ultimately contribute to the existing lack of affordable housing supplies.
Carras also believes that ‘inclusionary zoning,’ which requires developers to reserve a percentage of newly-built units for low- and moderate-income families, will “impact project economics, with the costs borne in large part by new-home buyers.”
“The growing complexity of the GTA’s housing market,” Carras concludes, “will impact developers and homebuyers in much the same way: with rising risks, longer timelines, higher costs and likely fewer players.”
The concerns illustrated in Carras’s column are shared by numerous stakeholders, particularly on the development end of Ontario’s real estate industry. However, it must be stated that many advocacy groups, real estate lawyers, and lawmakers have also argued that the Liberal Government’s actions on housing affordability were entirely necessary and will lead to a more inclusive market.
If you are considering buying or selling your home in the Greater Toronto Area, contact the real estate lawyers at Nanda & Associate Lawyers today. Our team of experienced and helpful representatives can help you navigate the increasingly complex Ontario real estate market.

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