Mandatory "subsidized" units in Toronto condos…hmm.
Mar 10, 2010
March 10, 2010
The housing market is tricky. It’s a difficult balancing act between affordability and encouraging price increases that are justified by the market. And right now, policy makers aren’t sure whether or not it’s a housing bubble that’s increasing prices so drastically or if the price increases are based on fundamentals of the Canadian real estate market.
Whatever the cause, prices have gone up and some people can no longer afford units. The potential solution? Force every developer with a development of 100 + units to make 5% of their units rent-geared-to-income housing (like other subsidized housing). The only question is, the government subsidizes other developments, who’s subsidizing these units?
Essentially, it will be the private developers who allocate the forgone income that WOULD have come from these units if they were sold at the regular market price. And it’s doubtful that they’ll take it out of the development’s overall profits, so the subsidizing costs will be passed onto other residents purchasing in the development. Developers believe this is an arbitrary, partisan policy that favours low-income families. Michael Collins-Williams, director of policy for the Ontario Home Builders’ Association, said:
“It’s asking new home buyers, or renters, to bear the cost of the social subsidy…[i]t’s inequitable because it’s a narrow segment of society that bears the cost of the social initiative.” The Toronto Star
So what are developers suggesting as an alternative for ensuring provision of affordable housing?
They suggest either government subsidies for renters in private buildings or permitting basement apartments or second suites in houses.
The bill will be brought forward by NDP MPP Cheri DiNovo (Parkdale-High park). DiNovo commented on the bill:
“We have to step in and come up with some novel ideas…[w]e have to look at the greater good.” The Toronto Star
But is it for the greater good? It might just be redistribution, which I can get behind, but at least call a spade a spade.