Housing debate differentiates party views

Date: Sept. 13, 2003

Stripped of all the rhetoric, the recent all-party provincial debate on housing boiled down to three issues: mortgage interest deductibility; rent controls; and smart growth.

The remarkably well-timed event, hosted by the Fair Rental Policy Organization, the Greater Toronto Home Builders’ Association, and the Urban Development Institute (Ontario), was held on September 4, just two days after the provincial election was called.

Representing the parties were The Honourable David Young, MPP (Willowdale), Minister of Municipal Affairs and Housing, David Caplan, MPP (Don Valley East), Liberal Municipal Affairs Critic, and Michael Prue, MPP (Beaches/East York) NDP Housing Critic.

The debate, attended by more than 150 developers, builders and landlords, was very ably moderated by Graham Murray, publisher of the influential newsletter Inside Queen’s Park.

David Young was up first up and noted that the housing market is firing on all cylinders with homes being built at an unprecedented rate, the homeownership rate increasing, vacancy rates increasing, and rent increases moderating.

He laid out in succinct fashion the housing initiatives his party has taken since first forming the provincial government in 1995 including streamlining planning and building approval processes, reducing red tape, refining the Development Charges Act, introducing the land transfer tax rebate for first-time buyers of newly built homes, changing labour laws regarding collective bargaining in the residential construction sector, and introducing vacancy decontrol.

I’d lost track of how pro-active the Tories have been in the housing area. In particular, the changes to the labour laws have been good for workers as well as builders and buyers, and more than 60,000 first-time buyers of newly built homes have benefited from the land transfer tax rebate of up to $2,000.

Speaking for the Liberals, David Caplan’s common and oft repeated theme was that the province needs balanced growth which starts with a very strong provincial role and a clear province-wide vision and ground rules. His party would restructure the land transfer tax rebate so that you would only get it if you purchased your new home on a former “brownfield” site, found primarily in the city of Toronto.

On behalf of the New Democratic Party, Michael Prue focused on cities, alleging that provincial downloading has hurt Toronto and other urban areas of the province. The NDP wants to dedicate 3 cents per litre from the gasoline tax to urban transit and give cities “charter” status, whatever that means. He further indicated that like the Liberals, his party would reform the Ontario Municipal Board.

Regarding mortgage interest deductibility, Young pointed out that the government’s goal is to put money back into the hands of hard working Ontarians. Both Caplan and Prue argued that mortgage interest deductibility is too expensive. Caplan claimed that mortgage interest deductibility has lead to house-price inflation in the U.S. and promoted higher mortgage debt. This may be true south of the border where they have full mortgage interest and property tax deductibility not only for principal residences but second homes. It is a stretch, however, to assert that Ontarians would rush to buy bigger, more expensive homes, leveraging themselves to the hilt in the process, to save a maximum of $500 on their provincial income tax. On the issue of rent controls, Minister Young stated that the “unheard of” vacancy rates speak for themselves, adding that the ideal solution would be to take the federal tax laws back to the 1970s when tens of thousands of rental apartments were being built.

Caplan said the Liberals propose a legislative “trigger” so that in cities where the market is not competitive, the government would somehow balance things. From the audience, housing economist Frank Clayton cut right to the chase when he pointed out to Caplan that every market in this province is competitive or soon to be competitive. “Why are you even talking about rent controls,” Clayton queried.

Prue said his party’s focus is more on proper building upkeep and maintenance and reasonable, affordable rents. He didn’t deny his party would freeze rents, but disputed the suggestion that the NDP would roll rents back. On smart growth, Young said it’s essential that we have continued growth and not just a policy of freezing lands deemed to be in the public interest. Caplan returned to his theme of clear ground rules. Prue emphasized regional coordination and cooperation.

Amazingly, there was one thing that all parties agreed on, and that is the strength of the Habitat for Humanity housing model and organization. Michael Prue called it “one of the greatest social agencies anywhere.” As a proud Habitat home sponsor, we at the GTHBA would have to agree.