Tim Hudak, CEO of OREA, has some advice for Ontario's new premier: It's time to give Millennials a real shot at home ownership.
For thousands of young Ontarians, the dream of home ownership is slipping away. But, the newly elected premier of Ontario can choose to do something about it.
Every family knows the story: The Millennial who did everything right, got their degree, worked hard and got a good job — but is still at home with mom and dad because they can’t get into the housing market.
This is especially a problem in the Greater Toronto and Hamilton Area (GTHA) where Millennials are the largest and fastest growing group. And they want to own a home — just like the generation before them.
In fact, research from Nanos Research Corporation for the Ontario Real Estate Association (OREA) found that 90 per cent of Millennials see housing as a smart financial investment.
A new report from Ryerson’s Centre for Urban Research and Land Development, sponsored by OREA, shows 700,000 Millennials in the GTHA are looking to move out of their parents’ basement and into ground-related housing (single-detached and semi-detached houses and townhouses) over the next 10 years.
But, there may not be anywhere for them to go.
(Graphics courtesy of Ryerson University Centre for Urban Research and Land Development)
The report also finds the GTHA will be short 70,000 homes if supply doesn’t catch up to meet Millennial demand.
Unfortunately, lately, most government action to address housing has been focused on quelling demand with a pile on of higher taxes, regulation overkill, supply restrictions and tougher mortgage qualification rules.
The last provincial government took some good steps forward when they committed to increasing housing supply. Now, building on the work of the previous government, Ontario’s next premier can make a big difference.
My first piece of advice: pump the brakes on government intervention and stop pushing home ownership out of reach.
Second, increase housing supply to meet demand as it grows.
The lack of new housing supply is one of the biggest barriers to an accessible housing market for first-time buyers or those looking to upgrade. Layers upon layers of approvals, lack of serviced land and zoning challenges are just a few examples of some policies which limit new building supply.
It’s also important that the right type of housing is available to meet this generation’s needs with more missing middle housing (such as townhouses, stacked flats, and mid-rise buildings) where young families can get their start.
Third, provide first-time home buyers with some relief.
Anyone buying a home in Ontario is slapped with a steep land transfer tax — and in Toronto, home buyers also pay a second municipal Land Transfer Tax. To help make it more affordable to enter the housing market, this tax needs to be dramatically reduced or eliminated altogether — especially for first-time buyers.
Another way to release the pressure is through government-initiated first-time home-buyer down payment loans.
A large number of provinces and states already do this, such as Nova Scotia, where low-income home buyers are offered interest-free loans that are repayable over 10 years with the first year of payments waived.
Young Ontarians, their parents and grandparents need a government that can make these ideas a reality.
Without increased supply and more housing options, young professionals will be pushed to longer commutes leading to more traffic congestion for all Ontarians. Or, many well-educated Millennials will be forced to leave the province altogether robbing the Ontario economy of an existing and talented workforce.
That’s why OREA launched the Keep the Dream Alive campaign — to help support the next generation of home owners in Ontario.
Home ownership is a good thing for the Ontario economy.
For every home purchased, more than $50,000 is created in economic spin-offs — think renovations, gardening equipment and furniture.
Home ownership also strengthens the social fabric as home owners are more likely to be active in their communities and neighbourhoods.
The newly elected premier of Ontario has an opportunity to create a legacy by keeping the dream of home ownership alive for the next generation of hard-working Ontarians.
So let’s get going.
