Owning a home is becoming a dream unless…

BY JAY BRIJPAUL

Currently, 83% of buyers cannot afford to buy a home and 63% of renters cannot afford an average 2-bedroom apartment. Homeowners, on a long term, are more financially secure than the average renter. With more people owning homes, our government can generate more revenue from property taxes. According to Statistics Canada, it takes about two years to approve a site plan for new buildings and about ten years to complete an apartment building. The soaring cost of approvals combined with the long-winded process for new-builds is clogging the process and affordability is quickly evaporating. Homeownership should be affordable.

First, reduce wait-time and development cost. Developers and builders should be given incentives instead of red tapes. Our trade schools should be revamped, and apprentice time reduced. With new building blocks such as a robust skilled work force, a user-friendly approval process, quick turnaround on approvals, and incentives for developers and builders, the landscape for affordable housing will begin to develop.

Why rental is high? The answer is because of rent control. It is not profitable for landlords to invest in rental properties. Rent control helps to keep rent low but landlords suffer. Buildings would be poorly maintained and there is no incentive for landlords to grow their business. With fewer buildings being built, it creates scarcity and rental cost soar. If landlords were given incentives, by reducing high developmental charges and remove rent control, then, the free market will take care of itself. More investors building units will create more supply and with more supply rental cost will drop.

If we can encourage more secondary suites, we can drastically reduce the cost of renting. The current system is self-sabotaging. Homes with a retrofitted secondary suite pay higher taxes. How about, reversing the system so that homes with retrofitted suites pay less taxes? Homeowners will be encouraged to renovate and bringing their secondary suites up to code. Municipalities should provide incentives to homeowners such as a quicker and cheaper way to retrofit. If municipalities can provide a user-friendly approval process with architects to assist, we can create more affordable accommodations. Secondary suites, when comes to fire safety, are safer compared to suites in a high-rise building. What’s even better, is that building a secondary suite does not require vacant lands to build on. We can use existing homes, catering for the entire GTA.

Investing in infrastructure such as building high speed rails to the suburbs is worthwhile. Quick commuting access would encourage people to spread out thereby releasing steam from the housing crisis in GTA. Many people are now working from home and in the suburbs, there is more vacant land. New, affordable and energy efficient homes in small towns is a good tonic to quench buyers’ thirst. Small towns will prosper because more residence in a community is good for the local economy.

Scores of government owned properties are underutilized and can be converted to multi residential suites. These subsidized suites should be sold to first time buyers with good credit and stable jobs to cater for their families. This will facilitate the conversion from tenants to owners and the dream of homeownership will become a reality for many deserving families. With more tenants becoming homeowners, more rental space will become available and affordable.

Restructuring is indeed a great plan, but it is a distant dream. The Canadian population is about 38 million. Many are baby boomers who require health care. Our tax system is overburdened and with the pandemic, we are racking up more debt. We cannot rely only on the government and must metamorphosize into something better.

To escape the rental orbital, we must make a quantum leap. Start by restructuring our financing. Try this secret, scoop 10% of your gross income and put it into a saving account. Call that your house buying account. Set a goal to buy your first home within a certain time. You may need to get a second job and pay off high interest credit cards. Aim at buying an RRSP. You will save on income taxes and can use some of it towards a down payment.

Saving alone cannot do it. Educate yourself. Each time we learn something, it’s like a new light shining along the dark pathways to financial freedom. There is plenty of information out there, but true guidance is like gold dust lost in the washed ashore sands. When you find a fountain of pure knowledge, share it. It’s like a beacon light for the lost ship in a dark and stormy sea. The Toronto Caribbean Newspaper is kindle for the community.