Record housing demand and ever-rising home prices have created a perfect storm in the Greater Toronto Area (GTA) market, combining with various other factors in what is being referred to by many experts and politicians as an affordability crisis. This is of particular concern to the region's millennial population, the hardest hit demographic, while a recent OREA/Nanos survey found that 58.7% of non-millennial Ontarians agree or somewhat agree that home ownership is unaffordable in their neighbourhood.
A new book titled “The GTA Affordable Home Ownership Crisis: A Deeper Understanding and the Pathway to the Solution” highlighting the crisis and its increasing urgency was recently released as a free download, and we got the chance to speak with the book's author. Written by R. Scott Davie, who has worked in sales and marketing of GTA new homes and condos for decades, the book aims to break down the various elements causing the housing crisis in an engaging way, exposing the crisis' driving factors and offering up solutions in an easily digestible format packed with visuals and infographics. The book explores a range of topics including taxes and Canadian mortgage regulations, the importance of market forces on supply and demand, and new thinking in design like alternatives for ‘missing middle’ housing typologies.
UT: You cite this book as your "personal contribution towards solving the serious crisis of affordable homeownership." How has your work in the GTA real estate industry shaped your awareness of the growing crisis?
RSD: "I grew up around the development industry and became a real estate agent at 20 years old - I have spent my life immersed in real estate development. As an advisor to many top developers, I have sold low rise and high rise pre construction projects in communities all across the GTA, under different economic conditions, to a an incredibly diverse spectrum of clients from billionaires and politicians to every day people of all economic levels. For decades, I have witnessed first-hand, the changing dynamics that are driving the market from the perspective of developers, their consultants, real estate agent colleagues, and the public. By studying market conditions and their drivers, and consulting with others through my work, I have learned much about what brought us to this crisis in affordable home ownership, and what will happen if the public does not become aware of both the causes and the solutions."
What are some of the driving factors fuelling this crisis?
"There are political and economic factors driving the affordable home ownership crisis like: low interest rates; an imbalance between the number of new Canadians arriving in Canada versus the amount of new homes and condos that developers are able to build; a cumbersome zoning process; the interest rate stress test ; and an excessive 22 to 25% aggregate of taxes on new homes and condos as examples."
Share some examples of potential affordability solutions laid out in your book.
"Certainly reducing taxes by eliminating the HST on new homes, Section 37 charges, and the City of Toronto Land Transfer tax would be a good place to begin to solve the affordable home ownership crisis. It is unfair to both existing, and new Canadians, to invite people to Canada if we do not have houses for them, so reducing immigration to responsible levels would be another solution. The book illustrates in detail why there was no catalyst for OFSI to introduce the stress test, so that should be eliminated. The book also shares new ideas for housing types and designs that would help to use land more efficiently and increase supply."
What was your inspiration to offer the book free of charge?
"My motivation to write the book was to contribute to solving the affordable home ownership crisis in a meaningful way. I believe that we as individuals can make a difference. It is only through public awareness from professionals in the development industry, that government, non-government organizations, and developers will have the political will, and the ability, to make the needed changes to solve the affordable home ownership crisis. Since people lead busy lives and we live in the internet age, not many people read printed books today. So I wrote the book in an easy to read, magazine style format, with pictures and info graphics and offered it free to download in order to maximize readership, and its effect."
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Source: Urban Toronto, October 2019