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Saturday, February 22, 2020
Our View

Talk of affordable housing is just that while growth continues

Woolwich councillors aren’t wrong when they say there’s a lack of housing options, particularly affordable ones, in the township.

Nor is the township wrong in noting it can do little on its own to change the situation.

In fact, there is only one way to ensure housing prices fall and become more accessible: degrowth that reduces the number of people in the area, thus reducing demand. Of course, a massive recession or economic collapse such as we saw in the U.S. a decade ago would also do the trick, at least temporarily, but that’s not something to wish for, and it remains as beyond the pale as halting growth to those making the decisions that contradict their talking points about affordable housing.

Whether by easing planning restrictions or allowing people to more readily add rental spaces to their homes, the current pace of growth and immigration in a ring around Toronto and the GTA ensures that supply will never catch up with demand.

Sure, municipalities can cut some red tape and even lower or eliminate the multitude of fees and costs, development charges chief among them, that add tens of thousands of dollars to the cost of a new home, but the market would only end up replacing those costs as profits. (Which is not to argue that municipalities shouldn’t work towards eliminating fees and associated expenditures in their own budgets, only that such moves would not have much of an impact on housing costs.)

Rental options are very limited in the townships, but even where more abundant, as in the region’s cities, there’s very little in the way of affordability. Rental costs have skyrocketed in most cities across the country, making it difficult for even those who aren’t earning simply minimum wage to commit less than 30 per cent of their earnings on rent, which is Canada Mortgage and Housing Corporation’s income threshold for spending on core housing needs.

This at a time when more and more Canadians are getting used to the idea that they may never own a home, limited to becoming permanent renters whether or not that’s their prefence.

The rising cost of buying a home is ultimately reflected in higher rental rates – the issues are linked. Not by any stretch of the imagination could it be said that buying a house in this area is affordable, particularly for first-timers. The crunch gets even larger the closer one gets to the GTA.

Housing prices have been over-inflated largely by easy credit, a situation the federal government has moved on, but prices continue to rise. There has been some movement on creating more affordable house – rent-geared-to-income projects, for instance – but demand far outstrips supply.

Ontario’s Ford government has targeted planning and growth restrictions imposed by its predecessor as a culprit. Opening up more land to development and easing restrictions on developers would increase supply and, thus, lower costs over time. It’s a dubious assumption, particularly in the GTA where the influx of newcomers will undoubtedly outpace new construction.

Even leaving aside the environmental concerns and the benefits of axing sweeping policy restrictions imposed on all municipalities, regardless of whether or not they made sense locally, there’s still a real fear that Ford’s moves will favour a handful of supporters at the broader public’s expanse – sprawl, congestion, changed neighbourhoods – and still do nothing to make more housing available, particularly the affordable kind.

There’s a gap between increasing housing prices and stagnating wages at the heart of affordability crisis. Nothing will be resolved until population easing dramatically reduces demands and wages grow to close the gap. Everything else is so much talk.

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