2019 time to act on housing supply and mortgages
The underlying issues affecting the supply of housing in the GTA — and, in turn, their effect on housing affordability, the cost of living, and broader societal issues — were significant in the 2018 public debate about the future of our region. Population growth combined with restrictive building regulations, bureaucratic red tape, fees and infrastructure challenges have created a generational challenge for our area. Now, as we look forward through 2019, there are opportunities to create positive change on these issues.
The new government of Ontario announced it would develop a Housing Supply Action Plan, rightly recognizing that strong demand has come up against a limited supply and is resulting in rapidly rising housing costs. In fast-growing regions such as the GTA, high housing costs and rents are squeezing families and individuals out of the market. Announced last November, the Housing Supply Action Plan will examine how to speed up the approvals process and allow new housing to be built at a faster pace; how to encourage the right housing mix to be built; and the impact that high land costs, fees and taxes have on housing prices. In addition, the plan will look at home rental and ownership — not simply one or the other.
While the issue of affordable housing is firmly on the provincial agenda, pressure is now growing on the federal government to consider the effects of its mandated mortgage stress test. The program was successful in cooling the hot 2017 real estate market. But it is having a disproportionate effect on young and first-time home buyers. The mortgage stress test, in effect, reduces the maximum amount of a mortgage that a home purchaser can secure by roughly 20 per cent. While young and first-time home buyers are the most likely to borrow close to their maximums, they also have the longest horizons for repayment and are often in the growth phase of their careers and earning potential.
A growing chorus of industry professionals are urging Ottawa to fine-tune the stress-test approach and, perhaps, consider the potential for a one-time, longer amortization period for first-time buyers that might provide some relief in 2019.
Lastly, municipalities can no longer ignore the role they must play as a partner to industry — and the other levels of government — in working to find meaningful solutions to make housing affordable. During last fall’s municipal elections, voters in the GTA ranked housing affordability as a top priority for new local governments.
As well, the need to increase the supply of housing as a key factor in solving the affordability crisis was supported by 9 out of 10 respondents to an IPSOS poll conducted on behalf of the building industry last fall. With new councils and mandates in place now is the time for new ideas.
This new year must be the year of action on this issue. With the arrival of 115,000 new residents to the GTA every year while we are already short in providing new housing, we cannot afford to wait.
（Toronto Star：https://www.thestar.com/life/homes/2019/01/05/2019-time-to-act-on-housing-supply-and-mortgages.html ）
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