How the provincial election could impact the housing market

With Doug Ford looking like the frontrunner for premier in the upcoming provincial election, pundits are wondering what that might mean for the housing market.

Ford has mused about getting rid of the 15% non-resident real estate tax introduced last year, which could help further inflate the housing bubble legislators are trying to control.

“I just don’t like the government getting involved,” he told the Globe and Mail. “I believe in the market dictating.” In a note to clients, BMO chief economist Doug Porter called the statement “puzzling,” and it doesn’t seem like it would be terribly popular with voters, either.

An OREA poll conducted after the introduction of the tax last year found that 81% of respondents were in favour. And let’s not forget it was government involvement that kept us from following the U.S. into a financial crisis in 2008.

I’m a fan of the free market too, but in a socially responsible society, sometimes it has to be tempered. Ford’s preference to address affordability issues by building more is simplistic and doesn’t address housing shortages — particularly affordable housing shortages — in the downtown core.

The Conservatives have pointed to the Liberals’ restrictive growth plan as a hindrance to increasing housing supply, and said they would work with municipalities to make OMB appeals less likely, although the board is about to undergo reforms anyway.

The Conservatives had previously announced their “People’s Guarantee” under Patrick Brown, which is presumably under review, but one of the highlights was a promise to build $5 billion in subways in the GTA, with specific reference to the Yonge Relief Line and its extension to Richmond Hill. How they intended to pay for it was less clear.

They also promised to complete projects already underway such as LRT in Hamilton, Kitchener-Waterloo and Ottawa. Ford hasn’t historically been a fan of LRT, although he has called them “streetcars,” so maybe he’s not entirely clear on the subject.

Wynne’s Liberals have said they won’t let municipalities introduce road tolls, although it can be a good way to pay for infrastructure; she said at a town hall in Brampton recently that they had used proceeds from sales of assets like Hydro One to pay for infrastructure projects like the York Spadina subway extension, which was handed down from the previous McGuinty government.

The Liberals, of course, enacted a number of changes to curb soaring prices including the 15% non-resident tax last April, as well as rent controls for private units and incentives to encourage purpose-built rental buildings. They’re due to table their new budget on the 28th.

The NDP has said they will match public transit funding with municipalities 50/50, at a cost of more than $800 million annually, including more than $330 million in Toronto alone. They’ve also said they will continue to build GO rail and bus networks, including GO services into the Niagara Region.

When it comes to housing, they’ve said they will clamp down on speculation and flipping, as well as reforming condo legislation and encouraging the development of higher-density communities that fit in between detached homes and high-rises. They’re also fans of co-op housing.

Voter turnout has been embarrassingly low in provincial elections, with just over half of those eligible showing up at the polls in 2014. Let’s not let that happen again.

We owe it to ourselves to find out what the parties might have in store for the housing market and for the quality of life in the city. We’d have to be hopelessly naïve to believe they’d all do exactly what they said they would if elected, but that’s no excuse not to vote.