God Help Us All – Ontario’s “Fair” Housing Plan

April 21st, 2017 · 5 Comments · Landlord Advocacy, Property Management, Rental Property

Here’s the real problem people. Politicians in Canada will never stop this property bubble, because they will ensure their complete and total obliteration in the voting booth, regardless if it’s the proper avenue to pursue. The idea is to look like you’re doing something without actually risking doing something that might blow up the gargantuan property bubble because that would seriously screw shit up on a major level we all can’t understand. Our entire economy is based on selling real estate to each other, to foreigners, to dogs, kids in kindergarten, in fact anyone with a pulse, a job and a decent credit rating is prey for the voracious monster of the great canadian real estate lottery.

So this is the exact plan as published on the government press release site. My comments are in italics.

Ontario’s Fair Housing Plan

April 20, 2017 9:00 A.M.

Ontario’s Fair Housing Plan introduces a comprehensive package of measures to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market. The plan includes:

Actions to Address Demand for Housing

  • Introducing legislation that would, if passed, implement a new 15-per-cent Non-Resident Speculation Tax (NRST) on the price of homes in the Greater Golden Horseshoe (GGH) purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations. Ontario’s economy benefits enormously from newcomers who decide to make the province home. The NRST would help to address unsustainable demand in this region and make housing more available and affordable, while ensuring Ontario continues to be a place that welcomes all new residents. The proposed tax would apply to transfers of land that contain at least one and not more than six single family residences. “Single family residences” include, for example, detached and semi-detached homes, townhomes and condominiums. The NRST would not apply to transfers of other types of land including multi-residential rental apartment buildings, agricultural land or commercial/industrial land. The NRST would be effective as of April 21, 2017, upon the enactment of the amending legislation.
  • Refugees and nominees under the Ontario Immigrant Nominee Program would not be subject to the NRST. Subject to eligibility requirements, a rebate would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students. See technical bulletin for further information.

Ok this NRST has so many loopholes, it’s like a collander, but it makes it look like the government is actually trying to cool foreign speculation. I wonder if it will allow these nasty foreign buyers to continue to buy up new condos like the Vancouver tax does?

  • Actions to Protect Renters (and completely screw landlords)Expanding rent control to all private rental units in Ontario, including those built after 1991. This will ensure increases in rental costs can only rise at the rate posted in the annual provincial rent increase guideline. (I’m sure you’ll also pass similar legislation to control landlord’s costs like maintenance fees and hydro and water bills that transfer over to property taxes because this is the “fair” part of the act right?) Over the past ten years, the annual rent increase guideline has averaged two per cent. The increase is capped at a maximum of 2.5 per cent. (This is because in a year that followed a less than one percent increase (0.08%) we had a year that was over 3% and tenants weren’t going to elect us so we just made landlords responsible for sucking up the difference in inflation)  Under these changes, landlords would still be able to apply vacancy decontrol and seek above guideline increases where permitted. (Small landlords will not be able to cost effectively access above the guideline rent increases because the application fee and the legal costs will be more than you collect in the increased rent. The most you can get is 3% per year. Maintenance fee increases are NOT a reason to apply so if you own a condo just get a second job to suck up that negative cash flow) Legislation will be introduced that, if passed, will enact this change effective April 20.?

Here I must add that some landlords have been abusing the exemption for Guideline increases for properties built after 1991, however a more equitable way to deal with this issue might be to require the rent increases to be based on actual cost increases such as increases in maintenance fees or even market rents. Tenants have a new form they can use called “Notice in Bad Faith” if they have a problem with landlords abusing the N-12 (usually by requiring the property for their own use but then renting it out for more money or selling the property.) First tenants should be allowed to give the notice to the landlord before they move out, in response to what they think is an excessive illegitimate exempted rent increase, a fake N-12 or a fake N-13. Seriously realtors are making great commissions, they can go deliver notices of entry if the landlord needs the property sold. Conversely tenants who try to block showings once properly notified should be evicted. The amount of time the landlord should have to live in the unit ? A full year, and you have to live there.

  • The government will introduce legislation that would, if passed, strengthen the Residential Tenancies Act to further protect tenants and ensure predictability for landlords. (I heard a lot of landlords ask for things but really predictability?) This will include developing a standard lease with explanatory information available in multiple languages, ( Why? 99% of stuff you can put in lease is already legislated and can’t be enforced and the Tenant & Tenant Board doesn’t enforce anything you write in a lease anyways, including non smoking provisions) tightening provisions for “landlord’s own use” evictions, (This over used and abused form should actually carry stiff fines and not even upon sale if the unit is subsequently rerented) and ensuring that tenants are adequately compensated if asked to vacate under this rule; prohibiting above-guideline increases where elevator work orders have not been completed; (Ok is this even a widespread problem we need a law for?) and making technical changes at the Landlord-Tenant Board to make the process fairer and easier for renters and landlords. These changes would apply to the entire province. (How about filling Adjudicator positions when they become empty instead of waiting and waiting and waiting so that the entire system clogs up and landlords can’t get court dates for months)

Actions to Increase Housing Supply

  • Establishing a program to leverage the value of surplus provincial land assets across the province to develop a mix of market housing and new, permanent, sustainable and affordable housing supply. Potential sites under consideration for a pilot project include the West Don Lands, 27 Grosvenor/26 Grenville Streets in Toronto, and other sites in the province. This builds on an agreement reached previously with the City of Toronto to ensure a minimum of 20 per cent of residential units within the West Don Lands are available for affordable rental, with an additional 5 per cent of units for affordable ownership.

Wow a whole three sites in the whole province and a whole 20% is going to be available for “affordable” rental and 5% for affordable ownership. This sounds like a whole lot of not very much. If there’s 100 units involved I’ll eat my shoe.

  • Introducing legislation that would, if passed, empower the City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage property owners to sell unoccupied units or rent them out, to address concerns about residential units potentially being left vacant by speculators.

Sigh this is another non-problem most of the empty homes are empty because they are waiting for a condo to be built there.

  • Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province.

What about the existing mutliresidential buildings with existing tenants? Why should those Parkdale tenants pay more than 3 times the property tax rate than some rich guy in a multimillion dollar house? That’s because the tenant doesn’t know that half or more of his rent goes into City pockets. This is completely inequitable. Property owners should start posting their property tax bills so tenants can understand where their rent goes, and their propertyhydro bills too.

  • Introducing a targeted $125-million, five-year program to further encourage the construction of new rental apartment buildings by rebating a portion of development charges. Working with municipalities, the government would target projects in those communities that are most in need of new purpose-built rental housing.

The average development charge is about $60,000 per unit. $125,000,000 will be a rebate for a whole 400 units per year. I’m impressed with your ability to sound like you’re doing something when you are using a bubble wand to throw sprinkles on a forest fire.

  • Providing municipalities with the flexibility to use property tax tools to help unlock development opportunities. For example, municipalities could be permitted to impose a higher tax on vacant land that has been approved for new housing.

Again is this a substantive problem?

  • Creating a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions. As well, a multi-ministry working group will be established to work with the development industry and municipalities to identify opportunities to streamline the development approvals process.

This actually sounds promising meet with the REITS and Developers but keep in mind you just gave them a swift kick in the gonads by eliminating the Above the Guideline Exemption for Rentals  built after 1991. Why should they build stable long term rental housing for you instead of building condos? Fun Fact: You’d better have an answer to that question before you meet. 

Other Actions to Protect Homebuyers and Increase Information Sharing

  • The province will work to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market such as “paper flipping,” a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.

Yeah, no one wants to pay your stupid HST.

  • Working with the real estate profession and consumers, the province is committing to review the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions. This includes practices such as double ending. The government will modernize its rules, strengthen professionalism and improve the home-buying experience with a goal to make Ontario a leader in real estate standards.

It should start with regulations about truth in advertising, including telling people “they can’t lose, guarantees” and other advertising practices that are prohibited when describing other investments such as stock and bonds. Developers who claim their condos are investments should have to follow the exact same prospectus requirements and rules as any other investment.

  • Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures in the Fair Housing Plan and any additional steps that are needed. The group will have a diverse range of expertise, including economists, academics, developers, community groups and the real estate sector.

So my invite is in the mail then?

  • Educating consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.

I’m going to say this once, many real estate agents are liars, they claim there is another bid, when there is not. In a multiple offer situation, the parties should have an open bid auction situation to ensure transparency and equity. Double ending should never be allowed.

  • Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.

This is half the battle right here why the hell hasn’t this been done before? 

  • Making elevators in Ontario buildings more reliable by establishing timelines for elevator repair in consultation with the sector and the Technical Standards & Safety Authority (TSSA).

Elevators suck. I have never worked in a building where the elevator repairman was not a daily visitor. Want job security? Repair elevators, they are just the most unreliable shit ever built on this planet. I can’t believe we managed to go to the moon and can’t even make it to the third floor reliably. I’m just going to say that planned future employment through lucrative service contracts is a problem from the manufacturer level.

  • Working with municipalities to better reflect the needs of a growing Greater Golden Horseshoe through an updated Growth Plan. New provisions will include requiring that municipalities  consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes. This will help support the goals of creating complete communities that are vibrant, transit-supportive and economically competitive, while doing more to address climate change, protect the region’s natural heritage and prevent the loss of irreplaceable farmland. As part of the implementation of the Growth Plan for the Greater Golden Horseshoe, 2006, enough land was set aside in municipal official plans to accommodate forecasted growth to at least 2031. Based on discussions with municipalities across the region, the government is confident that there is enough serviced land to meet the Provincial Policy Statement requirement for a three year supply of residential units. The Greenbelt provides important protection of natural heritage and farmland, and neither the area of the Greenbelt or the rules about what can occur inside of it will be weakened. The upcoming Growth Plan will promote intensification around existing and planned transit stations and will promote higher densities in the suburbs to support transit.

Yeah it wouldn’t kill anyone to build some sixplexes in suburbia either or allow the existing 3 plexes, 4 plexes, and 5 plexes scattered illegally throughout Ontario to get legalized as long as they reasonably meet fire code. By reasonably I’m saying not that nitpicky dick Fire Inspector I had in Whitby. (You know who you are) but some of the decent Fire Inspectors who just want drywall in the furnace room, fire resistant doors and smoke carbon monoxide detectors.

See map “Greater Golden Horseshoe”.

Actions to Date

The government has taken a number of actions over recent months and years in order to support home buyers, increase supply of affordable and rental housing and promote fairness. These include:

  • Helping more people purchase their first home by doubling the maximum Land Transfer Tax refund for eligible first-time homebuyers to $4,000. This means eligible homebuyers in Ontario pay no Land Transfer Tax on the first $368,000 of the cost of their first home.

It seems hard to understand how giving this Tax refund is going to help cool the market. You need to stop encouraging young people to buy at this point. You need to give them alternatives, like decent affordable housing. Most people don’t need a concierge or party room or a lot of the expensive bells and whistles that condos have but they might not want to live in a 50 year old building either. Options would be nice. 

  • Modernizing the Land Transfer Tax to reflect the current real estate market, including increasing rates on one or two single-family residence over $2 million. Revenue generated from the increased rates is being used to fund the enhancements to the First-Time Homebuyers Refund.

Let me correct that for you… Revenue generated from the increased rates is being used to fund the enhancements to the First-Time Homebuyers Refund. Fix the cesspit known as the TORONTO COMMUNITY HOUSING CORPORATION. The City of Toronto is by far the biggest and the worst slum lord in this city. 

  • Making it easier for not-for-profit affordable housing providers to buy surplus government lands.

I’m going to define affordable as 30% of the wage of the median family living in Ontario. As long as the new building meets those parameters, why not lease the land to the building? No development charges either. Family housing with more two and three bedrooms than one bedrooms. Community common areas and child play areas etc. No reason it has to be a non profit, right now your best bet is to talk to the pension funds.

  • Introducing an inclusionary zoning framework for municipalities that will enable affordable housing units as part of residential developments.

All those swathes of houses in suburbia should have basement apartments in them. Agreed. This would be simpler if the cities stopped stupid policies like requiring two furnaces, and only allowing 70% of the basement to be used, or not allowing parking in the neighborhoods. Triplexes too.

  • Amending the Planning Act and the Development Charges Act to support second units, allowing homeowners to create rental units in their primary residence and creating additional supply.

Yeah this didn’t work because tenants don’t have to follow any rules such as not smoking pot in the house or not partying or not parking in the middle of the drive. Most small landlords have heard and experienced so many horror stories, they just don’t want it. It would be helpful if you and any of the ministers rented out a portion of your home for a while to experience the reality of landlording in your own home. I’m sure you’d love it just as much as I did when you come home and it smells like someone just lit a joint in your living room. People can follow rules if you give landlords some ways to feasibly enforce them. 

  • Freezing the municipal property tax burden for  multi-residential apartment buildings in communities where these taxes are high.

How about a rebate if the building agrees not to increase rent with an Above the Guideline Rent Increase but needs funds to improve the building?

  • Collecting information about Ontario’s real estate market to support evidence-based policy development

I have said that we need to rework the vacancy rate (not to sell condos) but to accurately reflect the amount of rental supply that’s been created by investors in condos and do the necessary research. Condo corporations could be asked to disclose (in conjunction with CRA) which units are for lease, and how many days they have been vacant per year.  Every condo requires every investor to send in a copy of the lease and register the tenant and book the elevator. It’s just sitting there in files waiting for collection.

Appendix: Data and Trends on the Real Estate Market

Ontario’s housing market has seen very dynamic growth in recent years, with prices in the Greater Toronto Area and the Greater Golden Horseshoe rising significantly. This has been supported by economic fundamentals, including a growing population, rising employment, higher incomes and very low borrowing costs and lots and lots of speculation.

House prices have been rising at a robust pace in the Greater Toronto Area since the end of the 2008-09 recession. Some people would even say completely unsustainably. 

After two consecutive years of double-digit gains, average house prices in the Toronto region reached $916,567 in March 2017, up 33.2 per cent from a year earlier.


See image “Toronto Home Resale Prices”

The Greater Toronto Area showed the sharpest rise in home prices in Ontario over the past two years.

While the growth rate of prices of homes in the Greater Vancouver Area have been slowing since August 2016 after the introduction of B.C.’s foreign-buyers tax, home prices have been climbing steadily in the Greater Toronto Area.

It’s almost like people from other countries don’t mind staying in the plane an extra 2 hours.

See image “MLS Home Price Index”, “Greater Toronto Area Price Increases Outstrip Other Cities” and “Housing supply in Ontario seems to be aligning with demographics”.

According to Urbanation, the average rent per square foot for new leases in the Greater Toronto Area condo market rose 11 per cent in the last quarter of 2016 compared to a year earlier, the fastest pace of growth since at least 2011.

Yes and Urbanation also said prices went down the last quarter. Neither Urbanation (Developer linked consultant that sources data from TREB) or TREB is a reliable source of facts. They are in the business of promoting the buying and selling of real property. They almost never report bad news about the housing market even when the rental market is really bad. 

The media and the realtors are also to blame for this by reporting when there’s a bidding war on rentals. I have never had one and I spoke to my colleague at Speedy Rental Agency and she doesn’t have any either. We’re just glad if we can get 2-3 people to come at the same time. Of course if you under price a unit by $400 per month, you may have a multiple offer problem. Occasionally I might get 2 or even 3 applications, I don’t use this as an opportunity to gouge the tenant, I pick the best application.

For those of you who want to tell me the MLS or Realtor.ca is different, and I don’t know because I don’t use it, I now use it and have access and we are able to market our properties on there. Kijiji is better for most properties (but not all) Toronto is a big city and there are also bound to be outlier situations. This isn’t news and even if you think it is, it just isn’t balanced to include just that information without including the places that linger for months without tenants. I had a lovely 3 bedroom at Yonge & Eglinton that took 2 months to rent. I had a full house with no parking at Bayview and Lawrence take 6 months through the winter, but no one ever talks about those properties. Nor do they talk about the fact that 50% of all the properties on the MLS don’t rent during their listing periods. 

And when is the government going to step in and regulate the amounts maintenance fees go up? Landlords are already in a terrible cash flow position and with no way to recoup increases in maintenance fees they will be forced to sell.
See image “% change, year-over-year, GTA”.

The number of owners with more than one residential property has been rising steadily since 2000.

This is because the rest of our economy is complete crap and housing is one of the only ways people have found that they think is safe to invest in. They are terrible wrong, but we don’t want to tell them or they might not specuvest another condo unit. 
See image “Number of Owners With More Than One Residential Property in the GTHA: 2000-16”.


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5 Comments so far ↓

  • Nathalie

    As I was reading the article about the ‘fair housing plan’ I was wondering why so much of the focus is on the rental market at all. And all of the focus is on legislating it more, to make it basically a subsidized system where the landlord pays and the tenants gain. I am not surprised that people get burnt when they try their hand at investing in real estate without actually researching the role and rights of tenants vs. landlords.

    There is no way to enforce that a tenant takes care of a property as if it were valuable to them and the landlords will just stop caring and will provide sub-par housing if they don’t throw in the towel altogether. It’s crazy… you can’t go to a grocery store and buy a load of groceries and not pay for them, but you can live in an apartment for months not paying your rent, or destroy the property without being evicted for months as the process is so lengthy. Landlords are expected to provide superior service and good properties with no protection from the bad tenants that may(will) come along, screening alone can’t catch every single bad tenant. Plus the government wants landlords to provide housing for even the ‘bad’ tenants, legislating what you can or can’t reject a tenant for. It’s just ridiculous.

  • Marina

    I expect if anyone was considering buying a property to rent out they won’t be for sure. You know our story since you helped us get our tenants out after we sold.They cost us $9000+ just to fix the damage and now under new rules a person like them would get compensated because the landlord is tired of their bullshit and sold?
    I really do not know what else to say except due diligence was not done to see what the typical landlord has to endure ,all they seen was the idiots who doubled rents a few weeks ago.
    For the record I am no longer a landlord so have no skin in the game anymore.

  • Christine

    So, we will get: 1. a new Housing Supply Team; 2. a new multi-ministry working group; and 3. a new housing advisory group.
    Sounds like government doing what government does best: growing itself, preferably in new directions.

    Also, I’m always somewhat bewildered by the expression “unsustainable demand”: it seems ambiguous; is the issue with demand or with supply, or both? (Question somewhat rhetorical.)

    Take care.

    • Christine

      P.S. . . . Or maybe with neither! I’ve always found that the more precisely I can define a problem, the more rigorously and usefully I can address it. Otherwise…I’m up the creek!

  • omeglechat.eu

    Season 5’s first episode’s teaser ended with Pierre Chang saying, “God help us all” if the energy of the Orchid were released.