It was an interesting week for a group of Canadian REALTORS® and government relations staff, when they participated in back-to-back political action events in Ottawa and in Washington, D.C. Both provided an opportunity to see first-hand how each nation promotes homeownership.
The commonality between the two events was the central focus of meeting elected officials — MPs in Canada and congressmen and senators in the U.S. — in order to deliver the REALTOR® message about issues deemed critical for the benefit of home buyers and property owners. In many respects, homeownership was one of the key platforms discussed in both countries, although for different reasons.
In Canada, two of the three issues presented to MPs dealt with the highly successful Home Buyers’ Plan (HBP). As a refresher, the Canadian Real Estate Association (CREA) was instrumental in convincing the federal government in 1992 to implement the HBP.
It allows Canadian first-time buyers to apply up to $25,000 of their RRSPs toward a down payment on a home as long as they pay it back over a 15-year period. In 2010, more than 45,000 homes changed hands using the HBP, which resulted in over $1.9 billion in economic spin-offs and more than 16,000 jobs.
At this year’s meetings with MPs, REALTORS® impressed upon them the need to index the HBP to the Consumer Price Index (CPI) to prevent it from losing its purchasing power. By adjusting the HBP limit of $25,000 just a bit higher to $27,500 in 2015, the cost to the national treasury is a mere $7.5 million.
The other issue raised deals with allowing some opening for eligibility to use your RRSPs for a house down payment when you have major life changes, including job relocation, a marital split or death of a spouse. To help people when they need help the most is the rationale for the proposal. As can be appreciated, these particular circumstances can seriously impact one’s ability to purchase another home.
Winnipeg provides a good example for the need for these changes, owing to our extremely tight rental market — options to rent are limited. By default and not by choice, homeownership is difficult to obtain due to the rise in housing prices and persistent strong demand for affordable housing by numerous buyers. As a result, houses in the affordable price range have been the most active in the marketplace.
South of the border, the entire focus was a huge rally at the base of the Washington Monument to extol the virtues and value of homeownership. The 15,000-person strong rally in Washington was part of a Home Ownership Matters campaign to celebrate and protect the American dream.
As NAR president Moe Veissi said to the sea of blue T-shirt wearing REALTORS® at this mass gathering, “You are the architects of the American Dream.”
Senator Johnny Isakson of Georgia said, “Homeownership is the cornerstone of the freedom of our country.”
Other speakers talked about the key linkage of a strong real estate market to a strong economy.
The last few years have been devastating to homeowners in the United States due to the fall-out from the sub-prime mortgage debacle.
It should also be pointed out Americans can claim interest paid on their mortgages as a tax deduction, so rumblings about any changes to the deduction is strongly opposed by the National Association of REALTORS®(NAR) in the U.S.
NAR is also concerned about how the federal government may change mortgage financing, including the future of Fannie Mae and Freddie Mac.
Homeownership brings fundamental benefits to society, including increased household wealth, maximum control for families over their living environment, stable neighbourhoods and stronger communities.
REALTORS® who mobilized on both sides of the border reinforced the message that homeownership does matter and is critical to a healthy economy and thriving communities.