The Ontario government with initiatives to cool housing market in and around its largest city, announced 16 new measures including a 15 per cent tax on foreign buyers and expanded rent control rules.
The rent control measures, which apply province-wide, were immediately met with critics and threats from developers to cancel projects in the Greater Toronto Area, an outcome that could ultimately lead to an even tighter market for rental accommodation.
Jim Murphy, president of The Federation of Rental Housing Providers of Ontario said, “Our message is this is going to have a devastating effect on purpose-built rental supply. This is coming at a time when we have renewed interest in building rental (properties). We had a 50 per cent increase (in construction) last year.”
One of the changes from the province deals with buildings constructed after 1991, which were previously not covered by rent control rules, allowing landlords to demand any rent they wanted once a lease was up. Reports showed that landlords were doubling rents in some cases.
Premier Kathleen Wynne said the Ontario’s Fair Housing Plan had been in the works for weeks after months of consultation.
“The skyrocketing cost of renting or buying in Ontario and the Greater Golden Horseshoe in particular is the unwanted consequence of a strong economy with a promising future,” Wynne said at a press conference at which speculators and landlords were also blamed for rising housing prices and gouging renters. “When young people can’t afford their own apartment or can’t even imagine owning their own home, we know we have a problem.”
The Toronto Real Estate Board said this month that March prices across the region were up 33 per cent from a year ago while condo research firm Urbanation Inc. said condominium rents rose 8.3 per cent in the first quarter from a year ago.
Main Proposed Measures
- 1. The 15 per cent foreign buyers’ tax won’t apply to refugees and immigrant nominees, and a rebate could be available for those who get citizenship later.
- 2. Increase in rents is capped at 2.5 per cent, with some exceptions.
- 3. Government to amend the Residential Tenancies Act to clarify text of leases and compensate evicted tenants.
- 4. Identify surplus provincially owned land that could be used to build affordable housing.
- 5. Tax vacant homes to push owners to sell unoccupied units or rent them out.
- 6. Align property tax for new multi-residential apartment buildings with other residential properties.
- 7. .Municipalities could be allowed flexibility to use property tax as a policy tool to influence development.