Emphasis on homeownership limited in housing strategy

by Peter Squire

For all the anticipation about the release of a National Housing Strategy, from a REALTOR® perspective, it is somewhat of a let-down.

It is more of a national shelter strategy, but this should not take away from its importance in aiding those Canadians who are the most in need of shelter, and enable them to have an opportunity to gain safe and affordable housing.

However, the housing continuum includes a vast majority of Canadians who covet and have embraced homeownership. Emphasis on homeownership is very limited and dwells more on mortgage financing, mortgage fraud and risks with Canadians taking on debt when buying a home.  It is hardly a ringing endorsement of pride in the fact that Canadians have some of the highest homeownership rates in the world and have been well served in this regard.

Why? It is well documented how homeownership is a cornerstone and positive force in creating better outcomes for families in terms of building wealth, stronger communities and healthier lifestyles.  

Homeownership also has a major economic impact and creates jobs, as borne out by the Altus Group’s most recent update on the benefits accrued to the Canadian economy through MLS® sales. 

The 2017 study showed: During the period between 2014 and 2016, for example, it was estimated that a total of $61,600 in ancillary spending (i.e., spending by purchasers on items other than the actual house and land) was generated by the average housing transaction in Canada. Considering the average of 504,538 home sales processed annually through Canadian MLS® systems during that period, ancillary spending attributable to moving, totaled more than $31 billion per year across Canada, which was a significant contributor to the overall national economy.

Direct and indirect employment resulting from housing sales was also significant. Some 220,065 jobs were estimated to have been generated annually by average annual MLS® systems resale housing activity in Canada over the 2014 to 2016 period. 

If you go further up the housing spectrum to include new residential construction, the Canadian Home Builders’ Association reported an impact of over one-million direct and indirect jobs, $59.4 billion in wages and $138.3 billion in economic activity.

According to the National Housing Strategy press release, it is addressing needs across the entire housing continuum, but there is hardly any mention of what that means. It seems to be more about regulating what might happen from a risk point of view than encouraging and enabling Canadians to realize the dream of attaining homeownership. For example, the strategy references the fact that the federal government has made changes to tax laws to improve compliance in the real estate sector; for example, ensuring principal residence exemption is claimed as intended.

There is also reference to the federal government seeking to work collaboratively with all orders of government to improve housing market data and modeling. There is no acknowledgment of the excellent market intelligence work and effort put forth by the real estate sector to give Canadians a very good understanding of the functioning of local housing markets and their own unique market drivers that influence housing supply and prices.  Canadians are very well served by Realtors across the country through their expertise and extensive use of MLS® systems to determine market value.

What does the federal government have in mind, if they see gaps in housing market data? They need to be working with the real estate sector to gain an in-depth understanding of how local housing markets are working.

A case in point is Manitoba’s concerted effort during the last few years to address some of its own housing supply issues through the Manitoba Housing Advisory Roundtable. The roundtable brought key housing stakeholders together, including representatives of WinnipegREALTORS® and the Manitoba Home Builders’ Association. It demonstrated how we can work together to address housing needs. 

A number of steps have since been taken, such as the rental construction tax credit and the new rent assist program, which allows renters to move and still receive rental assistance, wherever they live.

Creating more rental supply takes pressure off the resale market, which was clearly an issue for Manitoba during the first millennium decade. The province had one of the tightest housing markets in the country. In 2017, Manitoba’s housing market is far more balanced and stable, with house prices rising modestly and sales performing on par with last year.

Despite some initial concerns WinnipegREALTORS® has with the National Housing Strategy, it welcomes the opportunity to be more involved with helping the federal government address core housing needs and to liaise with the other two levels of government to ensure our local market is not being looked at from a major market lens, such as that of Toronto or Vancouver.  

After all, as was emphasized in WinnipegREALTORS® submission to the federal government on developing a national housing strategy, all markets are local and implementing tough measures to try to control overheated markets in Canada’s biggest cities can do more harm than good in other housing markets such as Winnipeg.

(Peter Squire is the vice-president of external affairs and market intelligence for WinnipegREALTORS®.)