In the face of Toronto’s growing housing affordability crisis, families are depending on evlected leaders focused on policy solutions that work. For City Council, that means shifting away from tinkering with housing taxes, which are not a sustainable revenue option, and instead must focus on boosting housing supply, improving affordability and making it easier to afford a home in the city.

MORE HELP FOR FIRST-TIME HOMEBUYERS

Since 2017, governments in Canada have been introducing measures on housing to curb demand. In Toronto, Council tripled the home vacancy tax and increased the Toronto Municipal Land Transfer Tax (MLTT) for homes priced at $3 million or more.

Fees such as the MLTT should not be relied upon as a major source of revenue for the City. Raising property taxes as a form of revenue can be justified, and the Toronto Regional Real Estate Board (TRREB) supports the city’s decision to develop a multi-year approach when recommending rates. Toronto needs to bring property taxes more in line with surrounding GTA municipalities.

City staff is reviewing the feasibility of an increase to the land transfer tax (LTT) for buyers of residential resale property where the purchaser owns more than one property. Small-scale property owners have been responsible for bringing rental units onto the market in the last couple of decades. The additional LTT on these properties will deter those purchases or simply lead to higher rents, worsening the unaffordability crisis in the rental market.

Toronto must do more to make housing affordable for those looking to call our city home. Given the current year-to-date average price of $1.2 million for all housing types and $750,000 for condos in Toronto, the effectiveness of the MLTT rebate for first-time homebuyers, which exempted them up to a $400,000 home, has become insufficient. Most first-time buyers pay the upfront MLTT of $20,000 on the average priced home. TRREB is calling on the City to increase the current MLTT rebate threshold from $400,000 to $750,000 to match the average price of a condo in the city.

BUILDING MORE HOMES

Toronto and surrounding municipalities should focus on supporting increasing density around transit stations and building more “missing middle” housing. The Expanding Housing Options in Neighbourhoods (EHON) initiative is one such opportunity to prove Council has the willingness to change existing policy tools, like showing greater ambition on “as of right” zoning on mid-sized apartment buildings on major neighbourhood streets, to encourage more housing to be built.

The City should permit more storeys to proposed developments and have the additional units earmarked as affordable units for low and middle-income households. This will help the City meet its pledge to build 65,000 affordable rental units.

Working with innovative building solutions, such as modular and pre-fabricated homes, creates the potential to drastically reduce construction costs and time, and allow cities like Toronto to scale up housing projects in the numbers we need.

PROVINCIAL & FEDERAL COLLABORATION

Earlier this fall, TRREB Members, in partnership with the Canadian Real Estate Association, met with federal MPs to stress critical policy directions that all levels of government can work towards together. There is an opportunity for the federal government and the province of Ontario to make use of their respective infrastructure banks to invest directly in building the housing we need. They must also work through immigration and education to address the skilled labour shortage in construction.

TRREB applauds the federal government for recently removing the stress test requirements for insured mortgage renewals when borrowers switch lenders, and we are calling on the Office of the Superintendent of Financial Institutions (OSFI) to do the same with uninsured mortgage renewals which represent the majority of mortgages in Canada. This could allow homeowners access to better terms, preserving affordability. As it stands, the system disincentivizes competition and traps borrowers at high interest rates with their current lenders.

Toronto is the largest social housing provider in Canada, yet it is facing additional pressures on its shelter system, partially due to the increased proportion of refugees and asylum seekers. About $1.1 billion of Toronto’s tax base is invested in areas of shared jurisdiction, such as housing, health and social services. The City and the province should continue the close collaboration that the “new deal” working group has allowed and ensure the longer-term sustainability of Toronto’s finances continue to be addressed through the planned Toronto-Ontario targeted review in the coming years.

The federal government must meet the requests from the “new deal” and match the provincial funding for Toronto that are conditional on Ottawa’s support. If Toronto can exceed its housing targets by 25 per cent, an additional $340 million has been promised to the City by the province.

Ambitious policy change is necessary to allow the conditions for cities to reach the housing supply targets required to restore housing affordability.