As Canada and other countries try to deal with their respective affordable housing challenges, a Dutch cabinet minister recently attempted to even the playing field and expand home ownership among the less wealthy.
Housing Minister Hugo de Jonge had proposed a law that would have allowed municipalities to force homeowners, whose homes were worth up to $355,000 Euros (about $517,000 Cdn) to put their property on the market only to low and middle-income earners.
That meant local governments could refuse to grant residency permits to wealthy potential buyers and keep them out of the market for homes up to that value
The problem the policy is trying to fix is one that’s particularly acute in Canada, said Jeremy Withers, the outreach co-ordinator for the University of Toronto’s School of Cities Affordable Housing Challenge Project.
“And that problem is that prospective first-time buyers are finding it increasingly difficult to compete in bidding wars for housing,” said Withers, who is also a PHD candidate in the department of Geography & Planning at the University of Toronto.
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Housing issues in Canada
Over the past decade, Withers said, a fast-growing share of housing has been bid up and acquired by higher income Canadians who already own their homes but are building up portfolios of investment properties.
For example, 45 per cent of Ontario condo apartments and 18 per cent of Ontario houses are not owner occupied, he said, citing Statistics Canada data.
“I think policies that aim at curtailing demand from kind of wealthy, high income bidders would likely help to mitigate continuing rise in prices and wealth inequality that’s really come to define Canada’s private housing system.”
De Jonge’s proposal, while initially looking like it might have support in parliament, was ultimately defeated, but not before stirring up controversy and opposition for infringing on the property rights of homeowners.
The proposal by Dutch Housing Minister Hugo De Jonge, seen speaking to media in The Hague in May 2022, was ultimately defeated, but not before stirring up controversy and opposition for infringing on the property rights of homeowners. (Lex Van Lieshout/AFP/Getty Images)
Still, Dutch proponents of the law echoed Withers’ comments, noting that much cheaper houses are now out of reach for people with an average salary.
“Now house seekers in a village are outbid by people from outside who have a lot of money to spend,” Christian Union party member Pieter Grinwis told the Netherlands’ AD newspaper.
Although Canada faces a similar issues, some housing experts here questioned whether such measures are the right approach.
“For the Canadian context, what we need more fluidity in the market, not more constraints,” said Mathieu Laberge, an government advisor at KPMG and former chief economist at the Canada Mortgage and Housing Corporation.
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‘Unforeseen negative consequences’
“When you look in the literature, coercive approaches, they’re well intentioned, but they tend to bring in unforeseen negative consequences,” Laberge said.
“I think it would set up a whole lot of disincentive. If you own a house in this spectrum and now you see a large portion of your potential buyers forbidden to buy, why would new home owners enter this market?
Paul Anglin professor of real estate at the University of Guelph, questioned some of the practical aspects of the Dutch proposal, and whether it would just cause housing prices to rise.
“If I were a seller, I would tend to choose a list price above the limit. Doing so would remove the constraint,” he said in an email.
“If the goal of the proposal is to improve the social goal of fairness, should the law account for the income of the seller also?”
Subsidies, building housing, co-ops
Anglin suggested that the responsibility for housing affordability is being dumped on the home owner.
“A solution which is administratively simpler than this proposal would be to use tax money to directly subsidize purchases by people who are deemed worthy,” he said.
Toronto city councillor Brad Bradford, who is also chair of the Planning & Housing Committee, said the solution to the housing affordability crisis isn’t more bureaucracy, or having the government decide who is allowed to buy someone’s house.
“The solution is to build more homes, so people have more options to rent or buy at different price points,” he said in a statement. “The city needs to streamline approvals and eliminate unnecessary rules and guidelines to get more housing built faster.”
Toronto city councillor Brad Bradford, who is also chair of the Planning & Housing Committee, said the solution to the housing affordability crisis isn’t more bureaucracy, but rather building more homes. (Nav Rahi/CBC)
Laberge believes there should be more focus on initiatives like co-ops — rental apartments where a collective of tenants are the owners of the building and where some people pay a higher rent to enable more affordable units for those who need them.
“We used to have a bunch of co-ops,” Laberge said. “Co-ops are successful worldwide in terms of providing affordable housing, but somehow Canada departed from co-ops in the early ’80s. That’s something we could revisit.”
Withers said that while he supports the Dutch idea of addressing the issue of demand and inequality, he was unclear how exactly the mechanics of the proposal would work.
Taxation on investors
He suggested that in Canada, a better way to open the housing market to less wealthy prospective buyers would be through taxation on investors.
That could include increasing the capital gains tax on money made when investors sell residences, or requiring an additional land transfer tax for buyers who already own multiple properties, he said.
LISTEN | Pinning housing hopes on a market crash:
Front Burner19:21Is a housing crash an affordability fix?
As some prospective home buyers watched prices climb to dozens of times their income during the pandemic, they pinned their hopes of ownership on a market crash. And for nearly a year starting last April, prices did fall – in Toronto, the average price of a home dropped about 18%. But now, for the last two months, prices have been on the rise again. So with houses still historically unaffordable, what would it take for Canada’s home prices to drop or crash toward affordability, and would the economic damage do more harm than low prices can help? Today, Canadian Center for Policy Alternatives senior economist Marc Lee explains the paths that remain to ownership for the low and middle class. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts
As well, Withers suggested that local investors who don’t plan to live in the homes they buy could be made to pay the same taxes that foreign investors face when purchasing units.
“And this would discourage them from outbidding prospective homeowners,” he said.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
