Evaluating the Federal Housing Promises | The Agenda

right out of the gate all of the parties knew that housing affordability would be a core election issue and that's why it's in all of their platforms let's get some analysis about those plans with in the leslieville area of the provincial capital john pasalas he's the founder president and broker of real osophy realty who crunches real estate data on the move smartly blog in don mills there's tim hudak ceo of the ontario real estate association and in the beach sabrina meadow a columnist with the national post and it's great to have john and tim back again sabrina you for the first time let me just before we talk about uh the subject at hand here i want to do a little in the interest of full disclosure uh urea tim hordak's organization is a sponsor of the agenda we are very pleased to have them as a sponsor because it suggests that they uh support what we're doing and we're glad about that but i should point out tim hudak was a guest on this program well before his sponsorship he will be a guest on this program well after his sponsorship ends we have him on the program because urea is a big player on this subject and i promise to treat tim uh with the same benevolent hostility i did when he was ontario pc party leader so everything will be as it once was uh that having been said let's just briefly go through uh the main platforms and then we'll get into some discussion about this so if you would sheldon let's bring up the graphics here the liberals promised to build preserve or repair 1.4 million homes over four years the conservatives promised to build a million homes in three years the ndp say they will build a half a million affordable homes in 10 years and the greens promised 300 000 units of affordable non-market co-op and non-profit housing over the next decade that's what the four main parties have to say on building homes how about on fighting speculation both the liberals and conservatives promised to ban foreign buyers for two years the liberals would also create an anti-flipping tax on properties owned for less than 12 months the ndp is pushing a 20 foreign buyers tax instead of a ban and the greens want a vacant homes tax on foreign corporate residential property owners let's do one more plank first time home buyers such a key demographic here new tax-free first home savings accounts come from the liberals the conservatives are offering to encourage a market for seven to ten-year mortgages which they say will offer more stability for first-time buyers and the ndp is offering to reintroduce 30-year mortgages on entry-level homes for first-time home buyers all right that's what the four major parties have on offer and i'm not asking you three to endorse any of the above platforms what i am asking though is what from what you've just heard do you like what will work what will be useful tim start us off um first proud of your sponsors uh steve thanks for saying that uh despite the fact he used to beat me up in in back in my politics days uh the agenda and your work the the top show in canada or please support this public affairs program uh look we we've worked very hard along with our national association the canadian real estate association to help create that next generation of canadian homeowners and that also includes improved rental units so we're really excited because housing affordability is a major plank in each of the major parties platforms and off the top steve the stuff around housing supply that is the core issue we have fallen far behind in creating enough supply to keep up with demand and homeownership is slipping out of reach for hard-working canadians as a result that's top of the list there is more of a focus as well from some of the platforms on rental housing the third i'll put out there is stopping dirty money coming from foreign corrupt officials or criminals snapping up real estate ontario realtors want to make sure that any piece of real estate any property in the home is available to canadians who play by the rules not somebody who's laundering money into canada all right understood uh sabrina why don't you go next and tell us what of what you've just heard you think we'll work well i agree with tim that i like what i'm hearing about bans on foreign ownership and addressing investors and speculators i'm highly skeptical of all of the plans and the reason for that is that they're still fueling demand and as long as you're fueling demand prices are going to increase and just become more unaffordable and whether that's through increased first-time homes buyers programs whether it's through um tax incentives whether it's through extending mortgage terms the end result is prices are going to go up and when it comes to the supply side of the equation we've heard this before i mean in 2017 the liberals instituted their national housing plan and they're far behind on where they should be they've built under half the number of homes they've promised so i'm not sure what's going to change this time around especially when i've yet to hear a political candidate acknowledge that we need to see a drop in house prices for houses to become affordable john your take uh i i mean i i agree both with uh i mean tim and sabrina on all of these issues i mean at the end of the day um you know the federal government's role on the supply side effectively uh is indirect i mean uh you know they they really are trying to introduce policies to try to stimulate more demand and you know they each party has different policies they're all decent some may be more effective than others i mean one important thing to note is that when we think about supply you know housing starts in canada at our 40-year high right now i mean we haven't seen uh housing starts like this since the 1970s so supply is coming on the market and when we look at the demand side policies i mean i agree with sabrina i mean a lot of the policies that are being put forward uh especially the pcs and the ndp are just gonna fuel more demand i mean extending amortizations allowing people to borrow more and take on more debt it's just go it seems like a good idea but it's gonna fuel demand and actually push prices up even higher all right in which case tim let me come back to you and i'm i'm sure you've looked at the party platforms in more depth than the simple bullet points that we put up there for simplicity's sake so by that account what do you think is missing from the party platforms that you wish had been in there detail uh look uh you use this expression yourself steve you campaign in poetry you govern in prose the realtors are thrilled that at least these highlights are part of the platform after the election campaign then you know we go to work to twist arms and make sure they carry through in those details to my colleagues comments i think we all agree that supply is the issue more inventory more choice across the spectrum it's a first-time home middle-class homes rentals and social housing as well for the most vulnerable no doubt about it pleases the aspects of that in all the programs i get what they're saying around demand so i totally get that but here's the issue right now the system is working for those that are connected if you are rich your mom and dad have an enormous bank where they can lend you money the system works okay but if you're a new canadian you're an entrepreneur you're somebody trying to get into the middle class and own a home that great canadian dream you're kind of shut out so we're happy to see in the conservative and new democrat platforms and some degree in the liberal platforms assistance for those who don't have the access to the big money the principal they're making sure that they are appropriately cautious but modernizing the stress test for example not making people renew their mortgage if they've already um sorry go to another stress test and renew their mortgage these are sensible policies that will keep the principle of being thoughtful and long-term investment but open up opportunities wherever you are in the financial spectrum sabrina what's not here that should be i'm more concerned about what is there unlike tim i'm more concerned about stoking demand and the issue for young canadians ones who don't have family money or who may be low income isn't that they can't access more credit and more debt it's that home prices are too high so putting in the programs that are going to make those prices higher and allow young people and first-time home buyers to take on more debt isn't helpful our housing debt is already at 2 trillion nationally and according to international organizations when household debt goes over 80 percent of the country's gdp you're in a danger zone canada is at over 112 right now so anything that increases the ability to take on more debt for longer is not a solution john what's missing yeah i think the one big thing that i would have liked to seen is you know when we're at a we're effectively a crossroads in our housing market in canada where it's unbelievably unaffordable and and i really think policymakers should have focused on policies that effectively make it harder for investors to be buying single-family homes um at the end of the day in canada one in five homes are bought by investors and the gta it's nearly one in four homes that are bought by investors and again i mean to tim's point i mean investors are the people who are benefiting i mean they're the ones that probably have their own homes have multiple properties um you know and if our policy makers wants to help people get on the ladder i mean i agree with him it's hard for people who don't have parents cutting them big checks but when you relax the stress test when you lack these policies for all you're not just helping uh people who don't have that that equity from their family or helping everybody so if they wanted to target one group i mean helping helping first-generation home buyers would have been smarter than relaxing credit and you know allowing all buyers to take on more debt well i keep hearing this recurring issue of encouraging demand and tim maybe i can get you to draw upon your political experience with this if if too many of these policy planks are encouraging even more demand in what is already a white hot real estate market why are they doing it it is a huge political issue i mean the canadian dream has been to own a home that's what my grandparents did when they came here from then chuckles back they bought a home they rented out part of it they worked hard saved every buck they wanted some security and some stability that remains a part of what many people want to do so steve we've done a lot of research through the ontario real estate association folks watching the agenda can go to urea.com to see it but you will see not only for millennials in the parents who love them dearly but want to see them get a place of the run and get out of the house this is a driver of an issue so if the sweet spot to win this election is going to be the greater toronto hamilton area and the lower mainland of vancouver then you cannot you cannot blame the parties to try to tap into that vote but it's also a theme that's very important and that is helping create that next generation who can get the keys to the home and say i got a place to call sabrina tim just in fact echoed what everybody assumes to be true which is that everybody wants to be a homeowner someday it is a great canadian dream i gather you're a tenant though is that right you rent yes i'm a renter so does that speak for you do you want to be a homeowner someday it does i'd love to be i'm it's a typical millennial where i was raised with the dream of homeownership and i was raised with the idea that if you work hard and you secure a certain type of job um you should be able to afford a home and you can't these days and quite frankly it's a struggle to afford rent in toronto because we've allowed our housing crisis to get to a point where it's not just an ownership crisis it's also a rental crisis um and young people are spending ever increasing amounts of their paycheck on housing and the problem with that is it doesn't just affect young people it affects the entire economy because we're diverting investment from other more productive areas especially coming out of cobaid we should be out spending our money at small businesses at restaurants instead all that is just going to our landlord's bank accounts or to the banks if we do have a mortgage and that's why it's important that we just don't allow access to more debt do you think any of the plans that we've talked about here so far and that you guys have analyzed will get you closer to eventually being able to afford that first time home as it stands i hate to say it but no how do you feel about that angry um and that's what you're seeing among many young people that's why cost of living is by far the top issue for voters under 40 in this election uh housing affordability is the top issue for voters in the gta and there's a lot of frustration out there and we're not seeing that echoed as far as i can tell by any politicians um instead we're seeing still a lot of pandering to homeowners we're seeing a lot of platitudes and vague promises um and we really need to see more this is a crisis this is a serious shortage and it doesn't seem like anyone in power is taking it seriously all right let me follow up with john on that all the parties i have on offer some kinds of ideas to help first-time home buyers get into the market but if you're helping more people get into an already white-hot market therefore increasing demand how exactly does that help with house prices john well i mean it's exactly the point i mean it doesn't it actually drives house prices further i mean you know the the all the parties are trying to sort of walk this tight tightrope they obviously don't want to do anything that's going to have a negative impact on the housing market because the majority of canadians are homeowners on the other hand they want to make it look like they're doing as much as possible to help first-time buyers get into the market but the more you do to help first-time hours the more money you give them the more debt you allow them to take on uh you know it might help that first round of buyers but ultimately it just pushes house prices up further and i think that's the the challenge that that we're in right now and i think that's why a lot of a lot of the younger people that we speak with who are looking at these policies are not optimistic that they're going to have any real impact on house prices uh in the near term all right tim let me try steve sorry yeah go ahead tim a lot of cynicism here and i and i get it right but this is the most we've ever seen in a federal um campaign ever when it comes to housing affordabilities and i congratulate the leaders on on doing all that thrill summer ideas are on the table i would take a little bit of upward pressure on prices if you can level the playing field and allow those who are new canadians entrepreneurs people who don't have access to bank mum and dad access to the market but fundamentally let's not forget it is around supply we are seeing one million homes is the goal of the conservatives we need about 80 000 new homes a year in ontario so it's a pretty good number 1.4 million to liberals which is new homes and refurbished 500 000 the ndp that is the core issue the last planet home ownership not only is it part of the dream aspirational but we can demonstrate quite clearly that homeowners tend to give back to their community their volunteerism levels are higher the kids do better in school and get better jobs health outcomes are stronger there is an enormous spin-off of social benefit from home ownership as well and that's reason enough to try to get as many people as possible into homes i guess agreed okay uh all right while you've got the floor let me follow up with uh with you tim on this the liberals are pitching something called a home buyer's bill of rights part of which would ban blind bidding as part of that bill of rights what do you think of that so we don't like that let me tell you why i mean part of our job is to highlight the positive aspects of their platform when it comes to affordability of homes we've done that but also to warn people of ideas that are going to actually drive prices uh higher so if you don't have the traditional offer process which protects privacy it becomes an auction in australia and new zealand auctions are not mandated but they're pretty common and the reason why is homeowners like them because auction fever develops people want to beat the person next to them and they over bid for homes uh certain new zealanders are facing similar price appreciation as we are in canada the core issue is not enough supply there just like here but i don't think changing the way that you do musical chairs is going to address the problem it's the lack of chairs of people to find you need to concentrate on supply this we worry will actually drive prices higher in the marketplace sabrina what's your take on the banning of blind bidding i support it fully um we do have similar issues to australia and new zealand but that comes to things like the speculation in the market it comes down to foreign speculation in particular and when it comes to blind bidding as far as i can tell prices would only go down there's no other item that you buy and you can't tell what other people are trying to purchase it for um and ultimately when we're seeing bids come in you know hundreds of thousands of dollars more over the next competing bid that's raising that one homes price higher which then raises the values of all the homes around it and we get caught in the cycle where the values are just spiraling ever higher and that's exactly what we need to stop john i wonder if you know all of the well-intentioned good faith efforts by all of the political parties and all of the special interest groups around this issue just just are not nearly up to the task of dealing with a supercharged overheated um white hot real estate market i mean is that seems to be the case tell me i'm wrong no i i mean i think you are a hundred percent right and and i think the challenge is that you know at the federal level i mean historically most of the levers that federal policy makers used to to pull uh were on the demand side you know when we look at the supply side you know most of the constraints on supply are at the municipal and provincial level so everything that the federal policy makers are trying to do on the supply side these are very very long games you know these might stimulate supply five to ten years from now they're not going to have an immediate impact whereas the demand side policies have an immediate impact and i think that's the challenge right now and especially in canada when you know our population is growing at a much faster rate than our ability to build homes that's just going to fuel higher house prices in the future well again tim i'm going to follow up on that raising the issue of how much control and or influence can any federal government truly have over the market conditions we find ourselves in third place right most impact is going to be the provincial level followed by municipalities nationally will have the least impact on supply but they can still make an effort i'll give you a couple of examples so some of the platforms talk about investing in infrastructure particularly transportation infrastructure but as a carrot approach they'll say to municipalities if you increase density around transit stations for example a great policy for affordable living then you'll be higher on the list for this infrastructure so they can make a difference there the conservative party platform has a rollover so if you invest in rental housing and you sell it you won't pay the capital gains tax if you reinvest in new and enhanced rental housing great the new democrat platform talks about waiving the gst or the hst on new rental housing so they can have an impact in that area steve even though it's third it's still worth pushing all right let's go back to first then and in that res in that regard sabrina i'm going to quote steve clark the ontario minister of housing tim hudak says number one the province is number one when it comes to the influence over housing uh here's the quote from his article writing in the toronto sun toronto consistently under zones for density where they need it and councilors continue to call for increased affordability but they often don't support more density at least not in their wards if toronto is serious about tackling housing affordability they need to champion the construction of new housing and support opportunities for densification where possible uh okay you've looked at this sabrina is the minister on to something there absolutely um the federal government can't address this alone it has to be addressed by all levels of government and especially municipalities because that quote is exactly right we have a lot of zoning issues especially in toronto where we have huge swaths of land that have single-family detached homes i live in one of those neighborhoods the beach um it's it looks like you're in a suburb but you're really in what should be the downtown core and anytime there's a new proposal for a condo even if that condo's only six seven stories there is just so much activism that comes out against it so if people want affordable housing they have to support it being built in their neighborhoods and we need to really see municipal politicians pushing for that and explaining to their constituents why it's so important well tim that would take a level of political courage and i'm not taking a swipe at them here but you're you're essentially you know putting a target on your back um against the people who currently live in the neighborhood in the hopes of helping those who don't live in the neighborhood what politicians going to do that not too many like yeah i get the incentive for municipal politicians you phrased it well they're more concerned with voters who live there today than voters who are going to move in that they don't know yet and therefore don't vote so you do need the province to take again a carrot and stick approach here i think rewarding municipalities that will encourage affordable home ownership and rentals by moving further up the list when it comes to infrastructure funding every provincial every federal budget will have infrastructure funding reward those who are bringing homes people can afford to market ultimately you also need sticks if they're not doing so if they're not keeping up with provincial standards you do need tools like ministerial zoning orders to push those matters they should be last resort but unless we have that carrot and stick approach we're going to be spinning our wheels we recently did a study at area that showed that almost half of canadians 45 and under are considering moving to another province just because of home affordability so i'd encourage the province to use the approach i just laid out all right to that end john tell me whether you think the unusually historically low interest rates that we've been i guess quote unquote enjoying for the last many years what part does that play in what we're talking about tonight you know it's it's quite interesting i mean it definitely plays a a significant role not not as much as you would think because at the end of the day you know home buyers are qualifying at this stress test rate which we've talked about which is significantly higher than the interest rate they're paying so in terms of their ability to take on much more debt you know it's not they're not actually benefiting from the low interest rate they benefit it once they bought the home and their rates are lower i'd say the people who are probably um you know driving the the sort of the low interest game a lot are probably investors who uh who are really benefiting from low rates and the cash flow on their properties and can kind of benefit uh on the profit i think those investors probably are really driving a lot of demand in some markets and benefiting from ultra low interest rates right now in which case do you think the finance minister whoever that is after election day ought to try to convince the governor of the bank of canada to raise interest rates well no i don't think so because i mean at the end of the day the bank of canada is concerned about the entire economy and you know the way they tried to mitigate uh and offset sort of the ultra low rates and not you know not encouraging higher household debt is through the stress test so we don't necessarily need that i mean we have the stress test which ultimately uh is putting a cap on how much homeowners and even investors can actually can borrow today sabrina would higher interest rates cool off the housing market i believe it would the low rates are just encouraging the financialization of the housing market and it's benefiting people who already have assets who already have capital for example either investors or current homeowners who are taking advantage to leverage that and take on a second home perhaps or an investment property or maybe many more investment properties the problem for first-time homeboy buyers is we can't come up with the down payment to begin with so the interest rates when they're low don't help us they just make affordability more out of reach tim what's the industry's view on the advisability of raising interest rates um it's not going to help new homeowners get into the market that is around supply and affordability um yeah you're right you could put the housing market to a huge halt but who's going to have the greater ability or sort of the greatest challenge of higher interest rates it's going to be first-time home buyers steve can i throw one more thing on the table in terms of innovative ideas and platforms around supply please so the the liberal party has a really good idea to convert commercial space into housing so it's already built we think we'll see a downsizing of that footprint because of covet and work from home so the policies help convert some of that to housing it's already built you can move quickly there similarly the conservative party is a platform commitment of 15 of federal land that they have that's under utilized to put towards housing the new democrats want to change mortgage rules to allow uh co-ownership of homes so all three have some new ideas that can actually make an impact pretty quickly in the housing market for first-time buyers okay in our remaining moments here let me just put one final overarching issue on the table here which is and i think our numbers are right about this about two-thirds of the families in this country maybe a little more live in a home that they own or that the bank owns maybe but you get my drift the parties all say during this election campaign that they want to make homes more affordable how does a politician campaign for that when it effectively goes against the financial interests of two-thirds of canadians sabrina you first i'd argue it doesn't go against their financial interests in the long run short-term perhaps but ultimately our economy is at stake here there's only so far you can push the housing bubble up before it bursts and eventually everyone has to pay for it um also like i've mentioned before we're diverting money from more productive sectors of the economy which impacts everyone and you know there's a lot of conversation around young people but what about parents and grandparents who are seeing their children have to move hours away or out of the province or even out of the country um that takes a social toll on families as well so i would say there's a lot at stake even for people who own own homes currently a minute to go let me give 30 seconds to john 30 seconds to tim go ahead john i mean really i mean the best thing that the government can do and we could expect for is at least then try to attempt to stall this rapid appreciation in house prices to allow supply to catch up to allow incomes to catch up you know no government wants to see house prices fall but at least they need to ease up on demand and population growth to allow you know supply and incomes to catch up to these prices last word to tim yeah third world canadian politics you touch housing the biggest savings for the middle class and that is radioactive it really is i think steve adding enough supply to control the increase of housing prices and make sure that incomes can catch up and the home ownership rate will increase but not driving prices down for those who currently have homes well as all things in life and politics we shall see i want to thank tim hudak john pasalis sabrina medeaux for joining us on the agenda tonight be well everybody and remember as they say in cook county chicago on monday vote early vote often thanks for joining us tonight thank you thank you thank you the agenda with steve pakin is made possible through generous philanthropic contributions from viewers like you thank you for supporting tvo's journalism

Channel: The Agenda with Steve Paikin

Views: 2,764

Rating: 4.6266665 out of 5

Keywords: The Agenda with Steve Paikin, current affairs, analysis, debate, politics, policy, housing crisis in Ontario, affordable housing, election 2021, rent to own, real estate market, foreign ownership of real estate

Id: 5EOXmpNDUMQ

Length: 27min 10sec (1630 seconds)

Published: Tue Sep 14 2021

Reddit Comments

[u/needsMoreGoodstuff]

Ah was just about to post this, it was a great segment. The takes of all the panelists were super reasonable, I wish points and arguments like theirs could have been broadcasted in the debate.

[u/meowman3000]

Its all pretty standard stuff, parties proposing longer loans and home buyer incentives are driving up prices, the issue is purely supply and zoning. Summary:

Cost of living is the number one issue for people under 40. We are seeing platitudes to homeowners and no parties are taking it seriously.

The NDP's plan to extend mortgage and provide rent subsidies increases demand, which will only increase the price of houses.

Liberals built less than half the homes they promised in the last election.

When household debt is over 80% of GDP your economy is in a danger zone, Canada is at over 112%.

Debt is taking away from the economy causing a slowdown, so we should not allow access to more debt.

Blind bidding could potentially drive prices up because it becomes an auction. It wont address the problem of supply. They dont agree on this though.

Conservatives are talking about encouraging rezoning near transit, which will lower housing prices. Municipals will never vote to rezone for density, a carrot approach is the only way to encourage it, such as rezoning around transit.

Low interest rates benefit people who established income, and not first time home buyers. It generally sees more use from people buying multiple homes.

NDP want co-ownership, Conservatives want to provide more federal land to build.

[u/RubenPanza]

RemindMe! 1 week