2021 federal election shines light on housing affordability

Housing affordability is rightly an important issue in the upcoming federal election, as the dream of homeownership is slipping out of reach for first-time buyers and young families.

“If the last election was about jobs, jobs, jobs, this election is about homes, homes, homes,” says Ontario Real Estate Association (OREA) President David Oikle. “Ontario’s realtors are thrilled to see housing affordability is a top election issue with voters. All three major federal parties – the Liberal Party of Canada, the Conservative Party of Canada, and the New Democratic Party of Canada – have put ideas on the table to make the Canadian dream of homeownership more affordable.”

Various party plans

• Liberals: Promise to build, preserve or repair 1.4 million homes over four years; convert empty office spaces into housing with $300 million in new funding; create the Multigenerational Home Renovation Tax Credit to support secondary suites in homes; create a Housing Accelerator Fund worth $4 billion to help cities build homes faster.

• Conservatives: Build one million homes in the next three years; release 15 per cent of federal real estate for housing; encourage developers to invest in rental housing by extending the ability to defer capital gains tax when selling a rental and reinvesting in rental housing.

• NDP: Set up a dedicated fast start fund to streamline the application process; mobilize federal resources for co-op, social and non-profit housing by repurposing unused and under-used properties; spur the construction of affordable homes by waiving the federal portion of the GST/HST on the construction of new affordable rental units.

Support for first-time buyers

It is not a surprise that first-time home buyers are facing the greatest challenge when it comes to Ontario’s real estate market, OREA says. Millennials and young families want to own homes, but it has never been tougher to achieve, due to rising home prices pushing homeownership out of reach. The major parties plan the following to support first-time buyers:

• Liberals: Introduce a tax-free First Home Savings Account to allow Canadians under 40 to save up to $40,000 for a home; make the First-Time Home Buyer (FTHB) incentive more flexible to give Canadians the option of a deferred mortgage loan as an alternative to the current shared equity model; double the FTHB Tax Credit.

• Conservatives: Encourage a new market in seven- to 10-year mortgages to provide stability for first-time buyers and lenders; increase the limit on eligibility for mortgage insurance and index it to home price inflation to allow those in high-priced real estate markets with less than a 20 per cent down payment an opportunity at homeownership.

• NDP: Double the FTHB tax Credit; re-introduce 30-year terms on CMHC insured mortgages on entry-level homes for FTHB.
Both the Liberals and NDP have promised to double the first-time homebuyer tax credit (taking it from $5,000 to $10,000), which will save the average buyer roughly $1,500 at closing.

Housing affordability

To help with the cost of homeownership, the major party plans include:

• Liberals: Reduce monthly mortgage costs by reducing the price charged by the CMHC on mortgage insurance by 25 per cent.

• Conservatives: Fix the stress test to stop discriminating against small business owners, contractors, non-permanent employees and casual workers; remove the stress test requirement on mortgage renewals.

• NDP: Provide resources to facilitate co-housing (co-ownership agreements) and ease access to financing by offering CMHC-backed co-ownership mortgages.

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