The reaction to the Ontario Government’s announcement of its intended reforms to the Ontario Municipal Board were swift and predictable. Leaders of citizen groups and municipal politicians welcomed the news while spokespeople for the development industry condemned it.
This is the news release from the government: https://news.ontario.ca/mma/en/2016/10/ontario-proposing-changes-to-ontario-municipal-board-to-improve-efficiency-and-accessibility.html
Star reporter Jennifer Pagliaro on Toronto City Hall reaction: https://www.thestar.com/news/city_hall/2017/05/16/omb-reform-praised-as-bold-boon-to-local-democracy.html
My reaction, for what it’s worth, is that this is to be welcomed because it strengthens citizen involvement in planning and enhances local control. It is a major development in participatory democracy in Ontario.
For too long developers have been able to use their financial ability to get what they want. The expense of OMB appeals has been a financial burden for municipalities. Developers have literally been able to outspend municipalities on legal and planning experts to get what and that means increasing profits.
But the real problem is that a small group of unelected, OMB officials have been able to overrule local politicians. Politicians are not perfect, as everyone knows, but at least they are accountable to the people.
This has led to inappropriate development all over the province, from high rise in downtown Toronto to urban sprawl in the suburbs. The OMB reforms will help to rebalance interests and strengthen citizen control of their communities.
Now that the French presidential election is over, and Macron, the pro-EU candidate won convincingly, it is time to look more deeply at what this means for politics, participation and democracy in the developed countries.
In the past electoral politics has been shaped along the left-right axis. Nowhere has this been so clear as it was in France and the United States, but in the recent election in France the candidates for the two major old line parties, Les Republicains and the Socialists, did not even make it into the final run off for president. In the United States Donald Trump, the Republican candidate, advocated policies that many Republicans rejected.
There is a realignment of political parties and priorities that is fundamentally changing politics in the developed world that reflects new concerns. The left-right polarization is fast fading. The new polarization is between nationalists and globalists.
The nationalists, politicians like Donald Trump, Marine le Pen and others, are anti-immigration, oppose free trade, advocate tariffs to protect local businesses and workers, and support a number of reactionary policies like being hard on crime, and the rejection of the liberalization of abortion and same sex laws.
The globalists are liberals. They also are pro-business, advocate free trade, international trade agreements, and low tariffs. In Europe and the U.S., they tend to favour a free movement of people. Diversity is a strong value for them.
Immigration is the area that most clearly demarks the difference between the nationalists and the globalists. In both Europe and the United States a significant percentage of the population sees immigrants as a threat to their jobs and security.
On the issue of immigration, the views of Canadians are quite different than virtually any of the other developed countries. Polling shows that about 80% of the people believe that immigrants are a benefit because they help to create new jobs and promote economic development. The ideal of ethnic and racial diversity is strongly supported. The majority of Canadians are clearly in the globalists political camp and that is why there is strong support for liberal politicians and political parties.
But much of this new political polarization designed to capitalize on the fears of people to gain votes. The truth is that immigration is an advantage because they bring young workers to rapidly aging countries in Europe, and globalization does bring risks to many workers and rewards to the economic elite.
The real question is how can people shape their government and create the type of country that reflects their views. The only way we can do this is by promoting a participatory democracy and participatory practices so the people can create the type of policies that that reflects their needs and not the demands of the elite.
Yesterday I traveled by GO bus to the Town of Uxbridge. I was going to an event at the Blue Heron Bookstore, with other writers, to meet readers and talk about books. The people were interesting and the bookstore, a small independent in the centre of town, had a varied stock of books. That is good news for a book writer like myself. The real interest for me, though, was the trip from downtown Toronto through the outer suburbs.
The suburbs are familiar territory for me, but the ones I traveled through yesterday were new to me. The GO bus went from Union Station in downtown Toronto, through Markham, communities in York Region and into Durham. We traveled along roads and through places that I had never seen before. Passengers were dropped off and others were picked as we went.
It is not all bad news. The newer suburbs in York Region are much higher density than the housing built prior to 2000. They are following the Ontario government “Places to Grow” policy that mandates intensification. Three story townhouses dominate. Along the main roads are some high-rise apartment buildings of ten to fifteen stories. Much of the new housing that I could see are built in green fields, but the new communities are contiguous with the old towns that have been there for a century or more. That should give them a sense of history and place.
But make no mistake; this is car dependent suburbia. Rarely did I see anyone walking on the streets, or kids playing ball hockey. Cars are everywhere. The parking lots are vast acres of vehicles surrounding industrial plants and enormous shopping malls.
Shopping malls are a true cultural expression of the suburbs. Everyone drives to the mall. They were designed to be the city centers of the suburbs where people could shop for everything from clothes, to appliances, and groceries. But even the shopping is a form of corporate driven consumption. The stores are chains that sell mass-produced products at high prices. The restaurants are McDonalds, Wendy’s, and Tim Hortons.
Malls across North America are in trouble. Thousands of them have closed, and the latest retail sales figures show that the newest threat is online shopping. Sales in the malls are down and that means there will be more closings. So what is going to happen in the suburbs when the malls close because there is nothing to replace them.
All this reflects a lack of authentic culture and that is the most distressing feature of the suburbs. There is culture out there. I saw libraries and the bookstore I visited in Uxbridge, but they are in the older communities not in the new suburban developments. Where is the culture in the new developments?
A prominent feature in the suburbs are banquet halls where people get married, corporate associations host functions, and ethnic groups hold fundraisers. The bus passed a community centre in Markham with a flashing sign standing by the highway advertising for people to join a choir, and judo classes. As we passed the sign flashed an ad for an event sponsored by the Coptic Church. It all felt manufactured by some nameless corporation, not the reflection of the people.
Before the advent of the suburbs, the churches, schools, and town halls were where people gathered in the small towns in these areas. There were baseball games and county fairs. Amateur theatre groups flourished. There was a viable culture that reflected the needs and interests of the people, but what is happening today?
Recently I saw a Netflicks film set in Uganda. A lot of the action of the movie was around a slum in Kampala. It showed a vibrant street life. People, women mostly, sat around and watched their children and talked to their neighbours. Kids played, danced on the street, and played soccer in the midst of the chaos. I’m sure there were huge problems in the slum, but the impression was that the street action was fun, and ever changing. It was the culture that engaged the people.
William Foote White wrote a book called Street Corner Society that describes the street life of a poor Boston neighbourhood in the 1930s. It was on the street where young, unemployed men hung out. They chased girls, engaged in politics, took part in petty crime, and did odd jobs when they could get the work. White’s description captures the rich social life of these young men and makes it sound fascinating.
I wonder about the street life in the suburbs today. Where do people socialize, meet their friends, flirt with someone who catches their eye? It’s not on the street. Is it in the malls? Some how I doubt it.
The good news that arrived in today’s newspapers was that Hamilton City Council voted to proceed with the LRT project by a vote of 10 to 5.
There are new provisions put on the project. The spur line that was to go down James Street North to the Waterfront has been cancelled, and Queen’s Park has agreed to study an extension of the 11 kilometer route by another 3 kilometers. It appears that the extension was what made the vote possible.
To me, that makes a lot of sense. The east terminus of the LRT was to be in the Eastgate Mall. It should extend to Stoney Creek. In the west, the end of the line was to be at McMaster University. It will be much better to have it extend to Dundas and help to get people out of their cars.
What is most exciting about the LRT line is that it will play no small part in revitalizing Hamilton’s downtown core. This has long been the dream of those of us who care about the city, but it was handled so badly by those who promoted the Urban Renewal in the 1960s that it hastened the evacuation and deterioration of the downtown to the point where it became virtually derelict.
Today cities across North America are revitalizing their downtowns. People are moving back into urban cores, bringing businesses, jobs, strengthening retail, promoting culture, street life and new vitality.
This has already started along James Street North and South. The new Waterfront will also play a part in bringing life back to the centre of the city. There are magnificent old buildings just waiting to be renovated and repurposed.
But there are still major problems. Downtown Hamilton has an excessive amount of vacant property in the form of acres and acres of underutilized parking lots. The city needs housing in its core, especially affordable housing that can attract young people who are fleeing the high prices of Toronto and the rest of the GTA.
The new LRT line and all day service to the West Harbour GO Station will make a major contribution bringing people, jobs and businesses to the downtown.
This is good news for what used to be called Steeltown.
Today, the Globe and Mail’s Report on Business (ROB), to their credit, has a major spread on the Ontario Government’s effort to cool the housing bubble in the Toronto region. (Globe and Mail, ROB, April 22, 2017) Their conclusion is that this is a political fix that will do very little to reduce the price of housing.
It is Barrie McKenna, the ROB feature writer, who says that the government’s response was political, but that is not the point. The rising prices of homes are making it virtually impossible for new buyers to purchase housing, and that is a serious political issue. Governments should respond to this crisis. The real question is, will the new government policy work?
For that we have to turn to another ROB reporter, Janet McFarland, who spent her time over the last couple of days talking to realtors who have first hand knowledge about buyers and sellers. Their opinions are consistent. The policy will have a marginal impact at best and maybe no impact at all.
The 15% foreign buyer’s tax is the major policy change designed to take some of the air out of the housing bubble. Realtors selling to foreign buyers told McFarland that the new tax will make very little difference. These buyers are wealthy people trying to get their money into a safe haven such as Canada. The Canadian dollar is low, this country is stable politically, and is seen as an ideal place for a secure investment. One real estate agent told her that the exemptions to the tax will mean that only about 20% of foreign buyers will have to pay the tax and it will not be a disincentive at all for them.
The conclusion of those with first hand knowledge of the industry is that it will not work. There may be some psychological benefit, but that will be marginal and short term. The only thing that might work is some form of tax on speculators who buy property and flip it for a profit. A tax like that would apply to everyone and would be very hard to administer. Governments are reluctant to use such a blunt instrument to deal with such a complicated problem.
We are left, then, with what economists call “market forces” to dampen the housing bubble. McFarland quotes agents who say the high prices are attracting more listings. That increase of supply could help to dampen prices, but as long as demand remains high the tendency will be for house prices to drift upwards.
I am not surprised by any of this. To put the crisis baldly, middle and low income families and individuals have been priced out of the market, and there is very little the government can do about it. I am coming to the conclusion that this is not a housing bubble; the market has established a new price plateau, and it is likely that prices will continue to rise.
If the Ontario Government policy is not going to work, then what should we do? I believe we need a new government led program that will provide decent housing for middle and low income families because they are the ones suffering from the high cost of housing.
This does not mean that the government should build public housing, and create ghettos for the poor, like they did in the past. There is another model of co-op and non-profit housing. In this program, government provides start-up funding to agencies like the Co-operative Housing Federation of Toronto, churches, unions, community associations, ethnic groups and so on. They then raise a mortgage using a government guarantee, build the housing and manage it over the life of the building.
These types of projects are low risk for the government. It is a form of investment where the pubic recoups its money as the mortgage is paid off. These projects provide good housing and strong communities for hundreds of thousands of people. At the same time a comprehensive housing program such as this will tend to dampen the housing market and stabilize prices. That will benefit first time buyers who want to own their own house or condo.
If we don’t provide a comprehensive housing program that helps middle and low income people get decent housing that meets their needs, we will pay a terrible price. Living standards will deteriorate for a large number of people in our cities and that will bring any number of serious social problems and costs.
Providing good affordable housing is political. It is a legitimate role for government to provide good housing because it is an essential for a decent life. Let’s stop band-aids and get on with a program that will benefit all Canadians.
Finally, the provincial government has acted to cool the overheated housing market in the Toronto region from Niagara to Peterborough and as far north as Lake Simcoe. But will it work?
These are the three important elements of Kathleen Wynne’s plan.
There are some smaller but important elements of the plan that could have an impact on the market. These include providing additional powers to municipalities to tax vacant properties, tax fairness for rental properties, and reviewing real estate industry practices.
Recently Mayor John Tory pointed out that realtors are “aggravating the market mayhem” by tactics like bidding wars, and agents who represent both buyers and sellers. (Toronto Star, April 20, 2017) It is essential that these problems be addressed, but you can be sure that the vested interests in the real estate industry will fight reforms like these.
There are other changes to the development industry that are in the works. In October 2016, the government announced that they would reform the Ontario Municipal Board. OMB appeals have added to the costs and unpredictability of the planning system. We still do not know what the government plans to do with the OMB, but it will be necessary if they are serious about improving the speed of the approvals process and reducing costs.
Taken as a whole, this package of reforms and new programs will have an impact on the housing sector across the Toronto centered region. I confess it is much broader than I predicted. But is it enough? Will it cool the housing market so that prices become more affordable, and encourage new construction of affordable housing? The signs are mixed and only time will tell the story.
The biggest concern of late is the spike in the price of houses and condos. Clearly this is driven by speculation. This is difficult to control and the government has done about the only politically acceptable thing they can do by putting a 15% tax on foreign house buyers. (As I pointed out before, this is easy for Queen’s Park. Foreigners cannot vote in Ontario.)
Last year the B.C. government put a 15% tax on foreign buyers and the average price dropped by about one-fifth. But it appears that Vancouver house prices this spring have bounced back up to near pre-tax levels. Foreign buyers have not had the same impact on prices in the Toronto area. It is likely that the tax will have some effect, but I predict it will not make much of a difference on skyrocketing prices here.
The real criticism that has emerged of the Ontario initiative is around rent control. There have been news accounts of major rent increases in Toronto of 30%. (Globe and Mail, January 27, 2017) A 2.5% rent increase cap will help renters. In my view that is good. It will help keep some rental units affordable.
Others believe the rent cap will discourage developers from building new rental accommodation and in the long run that will increase the problem because there are fewer affordable units available. There have been a number of recent announcements of new construction of rental buildings in Toronto in recent months. Will this provision lead to a halt of construction? We don’t know.
But the problems are even broader than controlling speculation and rents. We have a planning system in Ontario that is helping to push up prices. I call it, “let’s make a deal planning.” (See my book, The New Urban Agenda) Everything is up to negotiation between the developer and the municipality and deals are struck using Section 37 of the Ontario Planning Act. If the developers don’t get their way they appeal to the OMB. There are armies of lawyers in Ontario that do nothing but help developers steer through the system. All this leads to unpredictability and drives up costs.
In virtually every other jurisdiction in North America planning regimes provide predictability. Official plans are drawn up, and zoning is put in place. The developers are forced to follow those rules. No appeals are allowed. That helps to make an orderly system. But not in Ontario. Reform of the OMB will help but what we need is a new planning act.
But there is even a deeper crisis than this. We are not building the type of housing we need at a price that people can afford. The overheated market has led to more housing being built, and more is in the pipeline, but it is expensive. Many people are spending over 50% of their incomes just to put a roof over their heads. The reasons include the things we have been talking about: speculators drive up prices, the OMB, lawyers, the price of land, and developers and real estate agents taking excessive profits. But it is also because we do not have a rational government housing policy. Let’s look at the basics.
By the time a developer buys the land, gets plans drawn up, goes through the approvals process, buys the materials, builds the building, and pays for things like marketing and real estate agents, the unit costs are unaffordable to any but the affluent. Incidentally this is not an apology for the developers. I have spent my time in the trenches fighting them in the past. It is the reality of the development system in Ontario and across North America.
We can solve this problem by increasing the incomes of middle and working class Canadians. I would be in favour of that, but that will not happen easily. The only alternative is to bring down the costs of the housing so that it is affordable.
Affordable housing programs have been a fact of life in Canada, Europe, and even in the United States since the Second World War. The housing crisis in Canada between 1945 and 1950 was much worse than it is today, and it was solved by massive public subsidies. Billions and billions of dollars were spent on subsidized mortgages through CMHC, sewers, water, roads, expressways, and so on.
At that time there was a recognition by government that the free market system could not provide good housing for people at affordable prices, and the government needed to subsidize the market. Those subsidies went to people of all incomes and in all regions of the country. It had a huge effect on Canada and played an important part in raising the living standards that many of us continue to enjoy today.
Perhaps the most enlightened housing program in the developed world happened in Canada with the co-op and non-profit program developed in the ‘70s and early ‘80s. That program put together mixed income, affordable housing for individuals and families, and developed a system of co-operative management that encouraged community. Hundreds of thousands of people still live in those buildings.
The rise of right wing ideologies and governments led to the cancellation of affordable housing programs in Canada. It was the Chretien Liberal government in Ottawa that cancelled the federal housing program in the early 1990s, and the Mike Harris Conservative government ended the program in Ontario in 1995. Today, Canada is the only developed country in the world that does not have an affordable housing program.
As part of the recent Ontario government plans, Kathleen Wynne announced a five year $125 million program to encourage construction of new housing. That is $25 million a year; not enough to built one small multi-unit housing complex.
It is distressing. In 1945 Canadians had just fought a World War, government debt was much higher per-capita than today, and yet they created a housing program that transformed this country and improved the lives of millions of people. What we lack is not only a comprehensive housing policy; we lack the political will to make it happen.
Let’s stop the politics. Let’s build environmentally sustainable housing for families and individuals, and create strong, stable neighbourhoods. The benefits will be enormous.
The big news in Toronto and the rest of the GTA is the housing bubble and what to do about it. Like many others, I am not optimistic. Understanding the details of the problem shows why.
The average price for a detached house in the GTA in February 2017 was $!.21 million, 32.5% more than a year earlier. For all types of residential housing the average price was $875,983, up nearly 28% from the year earlier. (Toronto Star, March 3, 2017)
There is little doubt that this is a price bubble, driven by speculation, and the cost is being paid by first time home buyers. If you own a home in the GTA you can sell into this hot market, pay no capital gains tax if it is your principle residence, and buy a new one. But the high cost to buy a house is almost an impossible barrier for all those not in the market. That means young people just starting out.
Let’s say you want to purchase a home for one million dollars. First you will need 20% down. That is $200,000. Closing costs will range between $15,000 and $40,000. You will still have to raise a mortgage of $800,000. Then there are taxes, heating, repairs and all the rest. It is estimated that you will need a combined yearly household income of at least $190,000 just to qualify for the mortgage, and even then, paying the monthly costs of owning a house will be a real burden.
Check out this website on the affordability of housing. “Can I afford a million dollar home?” https://www.ratehub.ca/blog/can-i-afford-a-million-dollar-home/ It shows how difficult it will be for people to get into the housing market. Yes, some individuals and couples have yearly incomes in the $200,000 range. Others have access to family money, but on average the price of housing is making home ownership an impossibility for most.
There are strong hints that the provincial government will act to try and deflate the housing bubble as early as next week with the provincial budget. It is likely that it will be a tax on foreign buyers. They can’t vote so they are an easy target. In Vancouver a 15% tax was put on all foreign buyers and that did depress prices by nearly one-fifth. http://www.huffingtonpost.ca/2017/02/15/vancouver-average-house-price-january-2017_n_14775268.html
Similar moves in Ontario will help deflate the bubble, but my guess is that it will not have as dramatic an effect as in Vancouver. The GTA does not have the same proportion of foreign buyers bidding up the price of houses. Ontario needs to do more to reign in the rising prices, but they are reluctant to act too aggressively. The fear is it could lead to a rapid downward spiral that depresses prices across the province. And don’t forget that there are millions of middle class and upper class homeowners in Ontario who have benefited enormously from the price inflation. They will not be happy to see their net worth dramatically decrease.
My prediction is that the Wynne government will tinker a little, but it will do very little to reduce the cost of housing. This is a strategy of dampening demand. If we are ever to going to deal with the problem of housing, it is essential to work on the supply side by providing more affordable housing, especially affordable housing for families.
And that is why I am not very optimistic about controlling the cost of housing. We lack the political will to solve the problem. Our governments, both federal and provincial, are not willing to develop a comprehensive housing policy that controls speculation and provides good homes for people of all incomes. We are a very wealthy country but we are failing those with middle and low incomes who cannot get into the housing market.
Just look at John Tory’s record on issues and you can see what a failed political leader he has become. Mayors are expected to provide leadership, and great mayors rise to the occasion to provide inspired leadership on contentious, difficult issues. Tory fails on all accounts.
In the 2014 election candidate John Tory presented himself as a successful but cautious businessman, a good administrator, and a savvy politician. He said he would control taxes, always a big issue with property owners, and get Toronto moving on transit.
His most dramatic promise during the campaign was to create what he called “Smart Track,” a 22 stop transit service primarily on GO railway tracks with a minimal cost. To sweeten his appeal to the vote rich residents of Scarborough, he added that he would build a three stop subway line from Kennedy Station to Scarborough Town Centre. This was enough to deliver him a victory at the polls.
That election was over two years ago now, long enough to make a judgement on his leadership. Yes, the chaotic days of the Ford era, thankfully, are at an end. Tory has been able to get the support of the suburban councillors and that has allowed him to dominate council, but looking at his record on issues illustrates that his leadership is in shambles.
Smart Track has gone from a 22 station transit plan to an addition of six new stations. Recently a Metrolinx study concluded that all but one of the new stations may discourage ridership. (Globe and Mail, March 17, 2017) It is now obvious the plan was designed on the back of an envelope in the midst of an election campaign. No transit experts were consulted before it was rolled out to the public.
It was an election gimmick, No more. An experienced politician like Tory would have known that it is very dangerous to make promises on technically complicated, expensive projects like transit without careful study, but he did it anyway to win votes. He promised an unworkable transit plan and he must take responsibility for its failure.
The Scarbough subway has now been revealed as an even greater failure. The difference is that it can be stopped before it becomes yet another failed project, but don’t count on it. The mayor has put his reputation on the line with this project and Toronto residents will have to pay for it, and live with it, just so John Tory can claim a victory.
After detailed studies, the subway line now has been reduced from three stops to one stop. The cost has ballooned to $3.35 billion. Ridership projections have been reduced to 7,400 per hour, well below the 15,000 riders per hour experts say is needed to make a subway successful. The city will have to pay for all of this except $1.48 billion promised by the Ontario government.
This one stop subway replaces a seven stop LRT line originally promised by David Miller’s Transit City plan. It would have gone from Kennedy Station to the Scarborough Town Centre and terminated at the Centennial Campus on Sheppard. Another LRT line would have gone from Kennedy, along Eglinton and Kingston Road to Morningside. It would have had 18 stations.
All of this could have been built for less than the one stop subway and would have provided good transit for many more riders. But no. To save John Tory’s reputation the people of Scarborough will get a one stop subway and all the people of Toronto will pay for it. This is not leadership; it’s a disaster.
Add the Scarborough subway and Smart Track to other important failures since Tory has been mayor.
We don’t have a new urban agenda in the City of Toronto. We are locked in the old agenda of the post war era of cars and suburbs. The once proud reputation of Toronto as a progressive city has been lost because political leaders, like John Tory, lack the imagination to think of anything other than their own personal reputations.