Now, the problem we now have as developers, when we take a project to the city, there’s no to and fro. The city and the councillor, and hence the ratepayer, completely control the look of the city.
What’s happening now is that development sites aren’t selling. Lenders aren’t lending on land anymore, because they see it as being too risky, and developers aren’t taking development sites to the city in the same number as we were doing before.
I can tell you that I have 15 development sites that we’re ready to go with, and there’s five right now at the city that are all going to the OMB. The rest are just sitting. They’re just sitting, waiting, until we have some kind of an understanding of how we can move forward with a fair negotiation.
So the answer to your question for me is that the first thing that Doug Ford has to do is to bring back some form of court that looks at evidence and weighs the evidence and weighs in on a development when we can’t make a deal with the City of Toronto.
Han: When we think about the home ownership, in Toronto 55 per cent of the households today own homes, and another 45 per cent, they rent. With high housing prices in Toronto, is it really better to own a home versus renting a home?
I’m thinking, if I face such a high entry barrier with such tightened government regulations, will my life be much, much happier if I own a home instead of just renting all my life? My answer is, I’m not sure.
Maybe I will live a perfectly happy life if I just rent to, you know, stay in the city core. But from a government’s perspective, why does a government want to promote home ownership?
So what is the real benefit from promoting home ownership, increasing home ownership, say? Suppose we have 90 per cent of home ownership in Canada in Toronto. That’s something that we’re really trying to pursue. From an economist perspective, I do see there are a lot of benefits.
For example, like Michele said, it helps to promote savings. In addition to that, by giving a stake, by giving a piece of property to the citizens, the citizen will become a better citizen. So you are going to have better neighbourhoods with less crime, with better schools and with nice amenities because people, they really take care of where they live.
So there’s a lot of benefits. But all these benefits are based on the equity reasons, not really based on efficiency reasons.
So when we think about all these policies targeting the housing market, they’re not really achieving the purpose of making housing more affordable.
Johnson: What impact do affairs outside our borders, such as America’s trade war, have on the luxury higher end home market?
Cohen: Well, it’s significant with what’s gone on abroad.
You know, we’ve heard about the Asian market, where government there is reducing citizens’ ability to make foreign investment, and the mortgage qualifications here.
Before they used to be qualified on a loan based on income abroad. Now the income has to be local. Makes sense.
In addition, you see the Middle East and Iran, where loss of currency, due to U.S. sanctions, makes it hard for them to buy a house. So there’s a lot of pull back. There’s a 60 per cent loss of ability to purchase.
In the luxury market, you have to understand that the Toronto real estate, when they report the amount of sales and the ups and the downs, you know, the luxury market really represents five per cent of that statistic. So it’s not really a well-reported statistic. But we see things, you know?
We see the wealthier can sell, you know: a $10 million house is now going to $11 million. But you see everything below that compressing, and you know there’s money on the sidelines. But they’re not going to purchase because it’s a wait and see. So it’s basically softened the luxury market.
Johnson: Is the tax on foreign buyers still warranted?
Han: The foreign investor tax, you know, this is something that I really want to study. But so far we don’t really have the good data to give us any sort of definite evidence in terms of how much foreign demand is really reduced by this specific tax. Although I think the foreign investor tax is targeted at foreigners, but I feel like the real impact is actually on the local homebuyers here.