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Published on Tuesday, June 20, 2017

Halton urged to help solve the housing crisis

Bank economist says Ontario economy "is back"

Halton urged to help solve the housing crisis
Halton Region Chair Gary Carr
By Marta Marychuk, Oakville Beaver

CIBC deputy chief economist Benjamin Tal urged Halton regional council to have a “serious conversation” with developers to find a solution to the affordable housing crisis.

Tal spoke to councillors on Wednesday (June 14) to provide insight and analysis on the growing housing market trends, according to a memo to council from Mark Scinocca, commissioner, finance and regional treasurer.

Tal, who has 20 years of experience advising both the public and private sector, provided council with an overview of current business conditions, credit markets and real estate in Canada.

Scinocca said council has raised a number of concerns related to affordable housing, requesting staff to investigate further and report back. Housing prices in Oakville and other communities in the Greater Golden Horseshoe have grown significantly in recent years, creating concerns about the stability of the housing market.

Tal told council that Canada’s economy is starting to move in a positive direction. Manufacturing is increasing in Ontario, Canada is a leading nation in gross domestic product and 30,000 jobs were added to the economy in the past six months.

“We are actually back,” said Tal. “Even wages are starting to rise.”

But in 2016, Tal said something happened to the housing market — with 20,000 new immigrants moving to Ontario.

“Twenty thousand people is a lot of demand,” he added.

While a number of factors (land speculation, foreign ownership and flipping homes) have led to the shortage in affordable housing, Tal said the No. 1 reason is a lack of supply — exacerbated by the Places to Grow Act.

“Clearly, the Places to Grow Act is a factor and we can’t ignore it,” said Tal.

“We wouldn’t grow at all, unless the Place to Grow Act forced us to,” added Oakville Mayor Rob Burton.

Government needs to help slow down the housing market, said Tal. Normally, the market would take care of itself, but he said this is not a normal market.

“Why does everyone look to government to solve the problem?” asked regional chair Gary Carr.

“This is future of the city,” replied Tal.

Tal said that he’s told developers to put their proposals together and present them to government. “There are two sides of the story,” he added.

Tal said he does not represent the developers but has met with them, and they (developers) say they are totally misrepresented. “They (developers) say you (government) are to blame,” he added.

Although Canada’s economy is doing well, Tal said low interest rates are supporting growth. A sudden increase in interest rates would bankrupt 25 per cent of people.

“If they (interest rages) go up too quickly, we will be crushed,” said Tal. “As a society, never before have we been at such risk of high interest rates.”

Carr also pointed out that any increase in taxes would also hurt homeowners. “If we have big tax increases, we’re going to push people out of their homes.”

Tal said that it’s important to create conditions that help people stay in the region and keep this place affordable. That, he added, is the key message.
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Author: Mayor Rob Burton

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