Dear Editor:
I have grown intensely tired of the affordable housing game of deception and the assumption that a simple solution rests in the hands of politicians.
Define affordable housing in the context of the economic realities of Ontario. The demand for housing is often blamed on the explosive immigration caused by climate change, international conflict, and humanitarian principles valued by all Canadians including me.
Immigration is only one of the factors affecting housing in Ontario, but it is frequently cited as a major contributor. So the Ford government releases land formerly designated as green space. The outcry of fraud is driven by the immense value of this land.
A conservative estimate of construction costs today suggests the cost of building a home in Ontario is somewhere around $200 per square foot and the average cost of building a home in Ontario is between $275,000 and $500,000. Add to that, the cost of the land, the enormous profits of land developers, and the profits desired by home builders. In October, the minimum wage in Ontario will rise to $16.55 per hour. That creates an annual income of less than $35,000 before taxes. That is the reality facing many new Canadians.
What will all these new Canadians, supposedly driving demand for housing, be able to afford in relation to their earning potential? Forget about buying, what about renting? According to Rentals.ca data, the average rent in Toronto is $2,818 and the rent for purpose-built rentals exceeds $3,000 a month.
The rule of thumb in Canada is that housing expenses should represent approximately 25% of after-tax household income. Two people, earning minimum wage would be required to spend over 50% of their pre-tax income on rental housing. Are they supposed to do this while having children, saving a down payment for home ownership, and dealing with inflation?
None of this makes any sense. Control inflation by keeping wages low. The costs of land, building, mortgage qualification rules, interest rates, etc. so far outstrip the earning potential to buy or even rent “affordable housing” for the people we are told are creating the demand. Politicians have no answers. The problem is multifactorial and will require a generational solution. Politicians are elected for four years at a time.
At both the federal and provincial levels of government, affordable housing is about blowing smoke, grandstanding and political posturing to win votes. It just isn’t that simple.
Walter O’Rourke,
Fergus