“It will never happen.”
That’s what I told myself on Friday night as I went to bed, thinking about this promise by mayoral favourite, Olivia Chow.
“It can’t happen,” I told myself.
Politicians make promises all the time and don’t fulfill them. That’s actually become part of the job description for any politician on the campaign trail.
Whether you’re Jeryd Mencken, promising Roman Roy and Kendall Roy that you’ll block the merger between GoJo & Waystar in exchange for calling the federal election on ATN, or whether you’re Justin Trudeau promising to run two budget deficits of $10 Billion per year before balancing the budget, only to rack up over a trillion dollars in national debt, I mean, hey, if you want to make an omelet, you’ve got to break a few eggs…
Politics has never been dirtier. But more importantly, it’s never been more dangerous.
In order to get elected, whether you’re a career nobody looking to become a city councilor, or whether you’re running for the highest office on the planet, you have no choice but to make a lot of promises.
Many of these promises, unfortunately, can cause more harm than good.
Whether it’s stances on social issues that can cause massive civil unrest, or whether it’s economic and financial decisions and promises that can be massively counter-productive, politicians have to make a lot of promises in order to buy voters.
Er, I mean, earn votes.
No, wait, sorry, I was right the first time: buy votes.
That’s what happens in every election, especially in social democracies such as ours. It’s why I have mockingly described every campaign as “the great give-away” in recent years, as politicians from all parties stand in front of podiums and promise to give more, to more people, for more things, more often.
Many of these pieces of delicious voter candy are never ingested by constituents, however. It’s anybody’s guess which promises will be fulfilled and which will simply fall by the wayside with the countless others.
In Toronto, we have a surprising mayoral by-election on June 26th which has some one-hundred and two candidates on the ballot.
Over the last few months, we’ve all listened to the mouthpieces stand in front of their literal podiums atop their metaphoric soap boxes and make all kinds of promises.
Plans, platforms, promises. Call them what you want, but understand that some of these, er, suggestions will be acted on, and some won’t be.
Personally, I do not like any of the 102 candidates. I am an “undecided voter,” and while I’m more likely than not to write-in John Tory‘s name on my ballot, I do know, for absolute certain, who are the candidates that I don’t like.
It’s times like this when I’m reminded of that old saying:
Three things you don’t discuss at a dinner party: money, religion, and politics.
Well, in case you haven’t noticed, this is Toronto Realty Blog, so away we go…
The favourite in the race is Olivia Chow who, I think most of us are fairly certain, is going to be the next mayor of Toronto.
I’ve lamented for the past decade that the mayor of Toronto doesn’t actually have any power, which is why John Tory was able to sit on the fence for so long and avoid making any impactful decisions during his tenure, but suddenly these “strong mayor powers” that Doug Ford has given the City could mean that Ms. Chow, or whoever ends up as mayor, will be far more likely to enact real, meaningful change at the municipal level.
But there is one part of Ms. Chow’s platform that I want to discuss today.
This was brought up by the readers in Friday’s blog and it’s something I actually wasn’t aware of.
That scares me.
With 102 candidates on the ballot, even though most are “fringe candidates,” there are still to many for us to know all the points of their platforms.
After the readers noted what I will dub “the vote for chaos” in the comments section on Friday, I read through every page on Ms. Chow’s site.
Here is Olivia Chow’s website: https://www.oliviachow.ca/
There are obviously many pages on the site, but one, in particular, stands out.
This one: OLIVIA CHOW ANNOUNCES SECURE AFFORDABLE HOMES PLAN FOR RENTERS
Protecting affordable housing, yep, great.
Building affordable housing, of course that’s great too.
Every politician bangs this drum, although very few ever follow through. And that’s fine. We know they typically don’t enact change in reality after making many promises to do so, but it’s nice to hear them talk about it.
But about halfway down the page, we see something that is, without exaggeration here, one of the craziest things I have seen in real estate politics and legislation in a long time:
Olivia will explore securing the right of refusal for the City of Toronto – the pre-emptive right for the city to acquire properties that are already listed for sale in order to secure them as affordable units. This is not the same as expropriation since it only applies to properties already on the market.
The City of Montreal has this right – it has 60 days to match an offer from a buyer for any properties on the market. Montreal is actively using this power to both save and build affordable rental housing. Olivia Chow will advocate for Toronto to have this tool so that we can use it to address our affordable rental housing shortage.
Folks, I’m not overreacting here.
This has the potential to turn the housing market into absolute chaos.
If you’re an Olivia Chow supporter or one of those people who just really, really hates anything real estate related, that’s fine – but please listen.
Please.
Because this idea makes absolutely zero sense and, if implemented, it would result in chaos.
Hard stop. No exaggeration. Just chaos.
To illustrate this, let me walk through an example of a typical residential housing transaction and ask questions where needed. These questions will serve to not only demonstrate how and where this could go wrong, but also to show that this idea has clearly not been vetted.
Alright…
Nick and Amanda own a downtown condominium and are looking to purchase a new house.
They eventually find a home owned by Lukas and Ebba and purchase the house for $1,300,000.
Nick and Amanda then put their downtown Toronto condo up for sale and sell it for $600,000.
The City of Toronto has 60 days to match an offer for any property on the market.
When and how does the City of Toronto step in?
Are we creating a new wing of government here? Is there a department to comb through real estate transactions?
Do Ebba and Lukas report the sale to the City, or does the City get in contact with Ebba and Lukas?
More importantly:
How quickly does the City get in touch?
Does that 60 days start from the date of the sale? Or the date the City is notified?
If the City is the one getting in touch, and not Ebba and Lukas, then Ebba and Lukas are just waiting around on pins and needles.
That’s no way to live, is it?
So let’s assume that the City won’t be in touch right away. How could they be? They wouldn’t know if they wanted to buy a certain house, or not.
So then what if they matched that offer on Day #58?
It certainly could happen, based on what we know so far, which is next to nothing.
But Lukas and Ebba purchased a house for $2,500,000 which is scheduled to close on July 28th, 2023.
That’s why Lukas and Ebba insisted that Nick and Amanda close the purchase of their $1,300,000 home on July 31st, 2023.
What happens if the sales are scheduled to close in 60 days?
Hmmm…. did Ms. Chow’s team think of that?
What happens if there’s a sale for a property that closes in 15 days?
I’m sure there are political answers, such as:
1) “We have a fantastic plan to roll out and all these details will be explained when the time is right.”
2) “Consultations with experts in multiple fields associated with real estate are being consulted, ’round the clock, and there’s a solution to any and all question or concern here, we assure you.”
3) “We will continue to support Torontonians in all walks of life and fight for every person and increase their quality of living!”
That last one was a classic cop-out.
Ask a politician what day it is and they might just tell you they’re working hard for you, and they appreciate your support.
So if a property is scheduled to close in 15 days, does the City’s new legislation override that?
Chaos.
No matter how this thing rounds into form.
Let’s say that the City of Toronto decides to match the offer for Lukas and Ebba’s house, but they do so two weeks before the scheduled closing on July 28th, and they simply can’t close the transaction on time.
What happens to the purchase of the $2,500,000 house now that Lukas and Ebba haven’t closed on their sale?
Interesting!
Will the City of Toronto pay any additional costs associated with the extended closing?
Or how about:
Will the lender, be it TD Bank, RBC, BMO, et al continue to work with Lukas and Ebba?
But look at the fallout from here.
What happens to Nick and Amanda as a result?
Just consider what happens in the United Kingdom with gazumping.
Their contracts are non-guaranteed meaning that, in some cases, a person selling for $3,000,000 can accept an offer of $3,100,000 two months later, and the person who bought for $3,000,000 has been gazumped. But that person sold his house, so now he pulls out of the sale of his own house, meaning a third buyer is affected. This goes on and on.
It’s called a “chain.”
Properties in the UK that aren’t part of a “chain” are far more attractive to buyers and are often marketed as such.
If Olivia Chow were to implement this insane legislation, then every single property sale in Toronto could be part of a dreaded “chain.”
If the City of Toronto buys Lukas and Ebba’s house, then Nick and Amanda are out of luck.
What if the closing date was four months and the average home price rose 9% in that time?
Now Nick and Amanda are really out of luck.
Oh, and they’re also homeless, since they sold their condo. But the city didn’t buy that condo, so there’s a happy new couple living in the condo while Nick and Amanda are paying for an AirBnB.
Wait….how is this making housing more affordable?
So now, let’s assume that there are horror stories, like the one above, that are making the rounds.
Now, let’s assume that people stop buying first and selling second, and instead, they sell first and wait sixty days to see if the city is going to buy their house.
Wouldn’t this result in far less inventory on the market?
Absolutely.
Wouldn’t this result in fewer transactions?
Undoubtedly.
Wouldn’t fewer transactions result in less land transfer tax revenue for the City of Toronto?
Yes, but nobody has thought that far ahead. And they can always invent a new tax, so big whoop!
We can continue playing this game for another hour, but I think you get the point.
There are hundreds of questions we could ask that demonstrate just how full of holes this “plan” really is, but I think it would get old, fast.
Not only that, I have a question that I want to ask:
What gives any government the right to match an offer to purchase a residential property, and take the purchase/sale process into their own hands? In what democratic system? In what style of government? In what society? In what world?
You might reply, “The municipal government of Montreal, it would seem,” and you’d totally fair.
But my question is meant to be rhetorical.
What world are we living in here, folks? Who among us thinks the government should be able to impulsively, arbitrarily, and punitively enact such a measure?
I didn’t believe the blog commenter, Ace Goodheart, when he wrote this on Friday. It sounded insane to me.
And yet, it’s on Ms. Chow’s website, clear as day.
Then in the next section, appropriately called, “HOW WE’LL PAY FOR IT,” we’re given an obvious answer:
Olivia will use Toronto’s Vacant Home Tax to stand up for renters. The City’s Vacant Home Tax is meant to increase the supply of housing by creating an incentive for owners to ensure their unit is occupied and not sitting empty. Homeowners who choose to keep their properties empty for six months or more (exemptions exist) pay the vacant homes tax and this funding is used to secure affordable housing for all Torontonians.
By increasing the Vacant Homes Tax by two percentage points to 3%, the City can generate millions more. The amount collected by the Vacant Homes Tax is meant to decline each year as the number of vacant homes is reduced because of the tax.
Who’s good at math?
Better yet: who’s good at making numbers say one thing versus another?
“Two percentage points” is a small number, right?
“3%” is another small number, whether it’s written as “three percent” or as 3%.
All of those numbers are very small, relative to, say one hundred percent or 100%.
But here’s where the math comes in: if you have one apple and then you have three apples, you’ve increased the number of apples by two hundred percent or 200%.
So if there’s a tax that’s 1% and it’s raised to 3%, then the increase is…………wait for it………….two hundred percent.
Olivia Chow’s plan is to TRIPLE the tax.
Have you ever seen a tax tripled?
I mean, it’s only increasing, per the above, “two percentage points to 3%,” which sounds insignificant. But it’s TRIPLING!
This must be where consultants make their money.
I meant what I said at the onset: politics has never been more dangerous.
Perhaps my clamouring over a municipal government interfering in free-market real estate transactions is tone-deaf when compared to “real” dangerous politics, like the civil war happening in south of the border. But what I mean is that politics has really become about extremes. There’s no moderation anymore.
Politicians, as a result, have become extremists.
Left or right, blue or red, young or old, whatever you want to call it – politicians are becoming far more bold, as are their ideas.
Something as innocuous to a politician or political advisor as “having the right of first refusal on a real estate transaction” has dire consequences if and when it’s played out in the real world.
And my fear here is that this idea was hatched over a proverbial beer or in a focus group with like-minded strategists.
If implemented, this idea could literally bring the real estate market to a standstill, create mass chaos, and complicate an already complicated market and process.
As a result, “housing affordability” would suffer.
Wouldn’t that completely defeat the purpose of the legislation in the first place?
Or have we completely lost sight of what we’re doing?
A Grant
at 6:21 am
The thing is, the horror story you mentioned about ISN’T HAPPENING. Based on my quick reading of Montreal’s right of first refusal, it’s in relation to a specific number of properties, and is designed to protect existing rooming houses and some parcels of vacant land.
That’s it.
Nick and Amanda have nothing to worry about.
JF007
at 7:27 am
I agree on this one David would disagree with you here on a few points…one the policy will not be implemented if at all on day one there would be quite a bit of deliberations, rule making planning etc etc…then i don’t think there is any realistic chance in hell it will apply to every residential transaction Vs being applied to instances where existing rental buildings are converted into condos n what not..as for increasing in vacant home tax i think we discussed this was a big can of nada cuz there was hardly anyone reporting their homes vacant so it is 1 2 3 or 10% big deal if only 100 homes are declared vacant there won’t be a meaningful tax collection source anyhow..anyway i think while as any policy when implemented causes a fair bit of churn i don’t think this would be any different but wont be as dire too as mentioned above.
Peter
at 8:21 am
Intended???
Who cares what’s intended on pre planning stages.
Income tax was intended as a temporary measure to help the war effort and now its half of Canada’s tax revenue.
https://www.rcinet.ca/en/2017/07/25/canada-history-july-25-100-years-of-temporary-tax/
Yah sure this housing policy could be intended to protect multi residential but how about five or ten years down the road when the government has the right to buy any property out there? Give ‘em an inch and they take a mile.
Yuck.
A Grant
at 9:01 am
The thing is, David didn’t outline the actual intention of Montreal’s “right of first refusal” before going down the rhetorical “give ’em an inch…” rabbit hole.
Instead, he engaged in the worst kind of “extremist” rhetoric, whereby he ignored the actual intention of the existing legislation entirely, and argued that what was being proposed would result in real estate “chaos” that would leave hypothetical families homeless (complete with an image burning building – nice touch BTW).
Honestly, this type of rhetoric is no better than those who argue against “15 minute cities” because they are a plot driven by a global cabal to institute open-air prisons.
David Fleming
at 9:36 am
@ A Grant
The photo I had in mind was Terminator 2 ‘esque in nature. The one of the burning playground, sort of post-apocalyptic.
Yes, my response is extreme. But that’s the point, hence my discussion of politics being a war of extremes in the intro.
I understand that you work in planning or politics at some level and your contributions are always spot on. If I had to guess, I wouldn’t think you and I would see eye-to-eye on this one, but “TO Planner” and “Cyber” will likely take me to task for this as well.
My point is more in line with what “Peter” said above. This opens a door and I fear what’s behind it.
The spirit and intent of legislation often get lost as soon as there’s a change in leadership, and this legislation, if not implemented properly, is dangerous.
Municipal, provincial, and federal governments are desperately trying to figure out how to solve the “housing crisis” and none of them can, or likely will.
Legislation like this isn’t going to solve anything. It’s going to cause problems and make things more difficult. I desperately wish that I didn’t see everything as a “worst case scenario” but I’ve learned that failure to do so often leaves me disappointed in the end…
A Grant
at 1:06 pm
Hi David.
The issue I have with your post is the way it was framed.
Rather than outlining what Montreal’s existing “right of first refusal” actually entails (that is, the *potential* purchase of *select* existing rooming houses and vacant land), then going on to make your “slippery slope” argument, your piece makes it appear as though the Olivia Chow’s proposal will result in a real estate apocalypse the likes we haven’t seen since Judgement Day…
Olivia Chow’s proposal (which, again, based on my quick review of campaign website) appears to suggest nothing more than a “exploration” of the possibility of replicating Montreal’s current mandate. I mean, from a political standpoint, you may disagree with this approach. Meanwhile, I might think it is reasonable. But I would hope we would both agree that Montreal’s approach is not on the “extreme” end of the political spectrum.
However, I worry that by framing your rhetorical flight of fantasy to appear as though it is based on actual fact, rather than simply your distrust of the public sector, you might fuel those extreme elements you so loath.
*P.S. I don’t work in politics or planning. Rather, one of my primary interests are liveable cities, a subject that often intersects with real estate.
David Fleming
at 10:23 am
@ A Grant
I will admit, and only to you – that I could have written this better.
I wouldn’t change my thoughts and opinions, but I wrote furiously and quickly and glossed over some of the points that you have subsequently made for me, such as my mistrust of the public sector being the impetus for my fears.
It’s not so much that I fear “what is happening in Montreal” but rather I fear what could happen ten years down the road if this door were opened. That is what’s missing from my post. My “Nick & Amanada” story isn’t one for six weeks after the election, but rather one for down the line when this door has been opened and the public sector has rushed through, yes, “changing real estate as we know it.”
I don’t want the public sector interferring in private real estate transactions in the free market. The same sector that can’t build a goddam subway is going to step their foot through the door to the right of first refusal in residential real estate transactions? What does this look like in ten years?
As for your thoughts on “liveable cities,” I would value your take on what that means for Toronto; past, present, and future. I should feature more guest blogs from long-time readers. You guys have a lot of thoughts and opinions that you provide in the comments section every day, and my takes on mistrust of government are getting old… 🙂
A Grant
at 12:46 pm
@David
Would you consider changing the title of your blog post from “A Vote For Absolute Chaos” to “A Vote For Absolute Chaos, Maybe, But Not Right Now, And Only If My Worst Fears About Government Hold True” 🙂
Joking aside, I recognize that our views differ substantially in many areas – for instance, I have very little faith in the private sector/free market’s ability to solve big ticket issues like affordable housing; city infrastructure; and public transportation, because they are not directly tied with maximizing potential profits.
That said, I’ve always enjoyed your blog as it does offer an alternative point of view – we are all in danger of living in like-minded silos, after all. At the same time your comment section is (for the most part) rather intelligent and devoid of the vitriol that makes the Yahoo/Facebook comment sections such a cesspool. Which is good, because it forces me to put in the effort (research or otherwise) before I contribute to a discussion (hence why I don’t comment that often).
As for guest blogs, you have my email 😉
David Fleming
at 6:41 pm
@ A Grant
Surely there would be interest in guest blogs from the likes of yourself, Ace Goodheart, Appraiser, Condodweller, Kyle, Derek, Libertarian, and some of the other regulars.
I absolutely wouldn’t mind sharing the forum and I’d value the contributions.
It’s funny because I get bombarded with requests for guest blogs from marketing firms, literally a dozen every week, going on ten or twelve years. But I would never even consider it, and back when this blog was in its infancy, I turned down a whack of money from a developer who wanted to advertise on the site.
But guest blogs from the “regulars” would be different. I’m gonna noodle on this!
Parkhurst
at 10:46 am
Just because you use the word “extremist” to describe David’s entirely rational and well argued opinion doesn’t make your (unpersuasive) rebuttal any stronger. It actually makes *you* sound “extreme” and kind of invalidates everything you’re trying (valiantly) to say.
416echelon
at 3:00 pm
That was a cogent argument from A Grant. You don’t have to defend your son ‘Parkhurst’. He’s a grown man! He can take valid criticisms.
David Fleming
at 10:16 am
@ 416echelon
My mother posts under “Moonbeam.”
But I did “LOL” at this. 🙂
Parkhurst
at 5:43 pm
I don’t have a son. That would be a biological miracle.
I do, however, have a brain.
Anwar
at 11:14 am
Taking the worst case or extreme scenario out of the equation, this plan would still add another layer of red tape to an already complex housing market.
The legislation will be sweeping and across the board for all property types, not just “those houses that are likely to be bought for affordable housing purposes.”
Now there would be another level of reporting to the government for all home sellers in the city. Another requirement. We saw how poorly this worked with the vacant home tax. The federal underused housing tax is a mess and it’s invasive and requires way too much information. Isn’t the CRA now going after Toronto baseball players for back taxes? There’s just too many layers of reporting and responsibility.
If the government wants to purchase residential real estate for affordable, housing purposes, then they should do so. But they should not legislate the right to purchase all properties that have already sold. This is extremely unnecessary and will add to the onus on home sellers with the additional reporting.
A Grant
at 1:18 pm
Honestly, this was biggest concern regarding David’s take. Based on my (albeit cursory) review of Montreal’s “right of first refusal”, there is nothing in it that would result in “sweeping” or “across the board” changes to all real estate transactions.
Rather, it allows for the *potential* purchase of a *select* number of existing rooming houses and vacant land. Full stop. None of the scenarios mentioned by David are actually happening in Montreal. And nothing in Olivia Chow’s platform appears to suggest otherwise.
Yet here we are, arguing that this proposal will up end real estate as we know it, based on nothing more than the rhetorical equivalent of “I don’t trust government”.
Mike
at 7:27 am
More Liberal promises here:
https://globalnews.ca/news/9760937/nate-erksine-smith-housing-policy-announcement/
Ace Goodheart
at 10:15 am
They did that already. It was called “Ontario Housing Corporation”. If you do a bit of research you can see how that turned out.
One of the biggest boondoggles in modern political history
Ace Goodheart
at 10:19 am
And I’m not saying that social housing is bad. It is not. It is a good thing and we need more of it.
But it is best handled at the municipal level. When Provincial or Federal governments try to do it, it becomes a disaster. They are not connected enough to the local community to understand it, or how it is working, or what it needs to keep working. It always ends badly.
Ideally, what happens is it is funded by the Provincial or Federal government, and then the funding is managed by a Municipal corporation.
That does not seem to be what Nate Erksine-Smith is proposing to do
Ty
at 9:41 am
Politics is a boring topic. But definitely more interesting than the funny photos posts on Friday.
Ace Goodheart
at 10:01 am
The interesting thing about this new City power is, as commenters above have pointed out, it is not actually the same as the Montreal city power.
The power that Ms. Chow wants, is literally to be able to have the City of Toronto purchase any house that has been sold, within 60 days of the date the offer it intends to match, is made.
There will be a $100 million dollar fund set aside to do this.
Having worked for governments on contracts for now over 20 years, I know how procurements work. You have the proposal for funding submitted. Then you have this long process where it goes through various departments for vetting and signatures, then it usually comes back a few times for changes, and then finally it goes to funding.
You then wait about six months to a year for funding to happen.
That is the reality of government. It is very, very slow.
So what happens if the City of Toronto buys your house on day 59 of your 60 day close, and you are supposed to close on another house on day 60?
Do you ask for a six month to a year extension, while the City of Toronto puts the successful funding for purchase proposal through procurement, and then you eventually get your closing funds?
If the seller of the other house you purchased says “no”, can they sue you for failure to close (even though you HAD the money, but the City took over your firm offer to purchase, and now you are sitting in procurement, waiting for funds to be approved?)
The reporting requirements are also kind of funny (as David points out). We all know that governments put the responsibility for letting them know about things on the public. So likely, your real estate agent or real estate lawyer will have to fill out a form advising the City that a house has been sold, and then giving the City 60 days to purchase it for the agreed upon price.
If someone forgets to fill out that form, what happens?
Likely, this new law will also outlaw quick closes. No more 15 day closing dates. Every close has to be 60 days from the date the City is notified of the final unconditional agreement of purchase and sale.
One thing I can say for certain, this will result in there being far, far less homes on the market.
Faced with the option of renovating and adding to your existing home, or moving up to a larger one, who is going to risk selling, when you could get stuck in a process like this?
Might as well just stay where you are.
TokyoTuds
at 12:07 pm
As stated by other readers, if the rule is based on Montreal as Chow’s website implies, it will not apply to SFHs. It is for commercial properties operating as rooming houses or multi-unit buildings (i.e. apartment buildings).
Montreal has specifically identified about 480 properties and “right-of-first refusal” for some party is not uncommon in commercial sales (often a tenant has this right).
TokyoTuds
at 12:07 pm
https://www.dwpv.com/en/insights/publications/2020/droit-de-premier-refus-montreal-logement-social
Ace Goodheart
at 12:17 pm
This may be true.
However it is not apparent from Chow’s campaign promise. She states “any property”.
She really should be asked about this by the media (ie, the same media that have been running what amounts to a propaganda campaign to get her elected…).
I wonder if they will ask her about this?
If she means including SFHs, then it becomes a complex mess.
TokyoTuds
at 3:36 pm
Actually I just had time to read Chow’s website directly and it fully reads like she is talking only about multi-tenant and multi-unit housing:
“a significant expansion of the successful but very underfunded Multi-Unit Residential Acquisition program” (by adding more funding)
“by moving 667 units in dozens of rental buildings into community ownership” (the city has already been doing this with Land Trusts)
Ace Goodheart
at 5:46 pm
Maybe
When Vancouver introduced its “vacant home” tax, it was going to only apply to actual houses.
It now applies to every city property other than commercial ones, meaning someone who owns a vacant piece of land, with no house on it (or anything else) is assessed “vacant homes tax” each year, until they either build a house on it, and rent it out, or they sell it.
Governments will tell you “we’ll only use this law for this purpose” and then as time goes on, they use it for more and more purposes.
Sooner or later, it will be every house. That is just how this works.
Remember, the vacant homes tax was 1%, now it will be 3%, then 5%, then 10%. Whatever they want.
I don’t like just giving them power and hoping they won’t use it.
Next thing you know they’ll want to know how many bedrooms are in my house and whether someone is sleeping in each one (or if not, I pay a bedroom tax or rent out the extra rooms).
Bryan
at 11:24 am
The trouble is that “A significant expansion” could just as easily be taken to mean expanding the criteria for which properties qualify for the program (so that many many more properties than the 480 in Montreal’s “underfunded” program are acquired)…. up to and including “any property” in Chow’s own words.
There is nowhere that she explicitly says it will be limited to multi-unit residences, and thus no clarity IMO. My somewhat cynical guess is that this lack of clarity is intentional in an attempt to get the “eat the rich” folks to believe she will go out and do exactly what David fears. The Davids of the world are likely never going to vote for her regardless, so allaying their fears around SFHs does little for her election bid (even if her plan is as you describe).
Absent her providing clarity though, this is all nothing but speculation.
Jennifer
at 12:30 pm
Montreal’s law is quite a bit different than you describe. I don’t think a law would ever get passed that this would apply for every property in the city. If it does, it would likely be for pre-identified properties as in Montreal so Nick and Amanda would be well aware of the situation before they go ahead and sell their condo, or buy the property. Not worried about chaos, now or in the future.
Toad
at 12:44 pm
The whole time reading, I was waiting for David to show/explain how Montreal is faring with it. Just like politicians, that crucial piece of info was left out. I just don’t understand how people latch on to one idea of something and therefore ignore anything that doesn’t support their thesis.
As A Grant mentions, it sounds like Montreal is nowhere near David’s prediction of:
“If implemented, this idea could literally bring the real estate market to a standstill, create mass chaos, and complicate an already complicated market and process.”
Why ignore the results of a city that already went through it?
I’m not saying that it’s a good idea. It probably isn’t, but damn. The biases are on full display here.
A Grant
at 1:30 pm
This.
I know it’s an opinion piece, so David is allowed some leeway when it comes to reporting on the facts, but when I first read it, I immediately thought that the French equivalent of Nick and Amanda must be having a terrible time navigating the Montreal real estate market now.
Turns out, a quick Google search of what Montreal’s “right of first refusal” actually entails put my fears to rest 🙂
Jason
at 3:16 pm
Show us a politician who has ever been given a special new super power and didn’t want to use it.
This power would give Ms Chow the ability to step into real estate transactions anywhere in the city. How does one resist that temptation?
I don’t like it. I’m not where David is with this massive mistrust in government and yet here I simply don’t trust the government. SMH
A Grant
at 3:27 pm
Because every politician has the ultimate “special superpower” when it comes to real estate.
It’s called “eminent domain”.
Suffice to say that politicians haven’t used this superpower to upend the entire Toronto real estate market either.
TOPlanner
at 1:59 pm
Go Olivia (;
Steve
at 3:42 pm
It’s a bit odd that it’s repeatedly discussed on this very blog that the vacant homes tax is a nothingburger but now we’re concerned that it’s tripling. They could increase it ten times and this program would not have the wide reaching impact this blog predicts if this is the path to funding it.
Anwar
at 8:08 pm
You’re missing Davids point entirely.
The conversation should not be about whether or not the tax base is large enough. The conversation is about increasing ANY tax by 200%.
Steve
at 9:41 am
Oh no I got it, it’s just that it’s an asinine point right out of the book of the same headline writers David is always railing against. It may be bad policy but the grandstanding that the world is going to end because of it is completely over the top.
The inverse to the rhetorical “Have you ever seen a tax tripled?” is have you ever seen a tax raised by 0.1%? Rarely, politicians swing for whole numbers both for meaningful impact and because it’s all the electorate can pay attention to (similarly whenever the HST boogeyman comes up nobody ever thinks it’s might go up to 13.2% or 13.5% – it’s always 15%).
Of course the real amusement is that the answer to “Have you ever seen a tax tripled?” is yes, the equivalent to this tax, in Vancouver. I am sure the entire city has been burned to the ground.
Sirgruper
at 12:26 am
Not true at all. Firstly it’s a power given by the province. Wait until Innisfil, Kawarthas, Muskoka, and the rest of cottage country does the same to cottages whose owners don’t vote locally. The vacancy tax is a huge problem coming and can go up to 5% by legislation.
Anwar
at 9:23 am
We’re making the same argument here I think. Whether the tax is or isn’t bringing in significant revenue. It just can’t be increased 500%. Nobody has sympathy for millionaire cottage owners but 5% of $3m is $150,000 per year and I wonder how many luxury cottage owners would stand for this.
Sirgruper
at 9:51 am
How many average $700,000.00 cottages paying an extra $35,000.00 can survive it. Oh but wait. They aren’t residents and can’t vote so the locals pay less tax. That is the problem with these vacancy taxes.
Ace Goodheart
at 12:18 pm
Cottagers vote locally I have voted in every municipal election since I bought my cottage back in 2009.
Taxation without representation is not allowed in Canada. If they charge me property tax (and they do) then I get to vote for them.
In the municipality where my cottage is located, more than 2/3 of the population are cottagers.
Any municipal politician who decided to put in place an empty house tax would get slaughtered at the polls.
It would be career ending.
Steve
at 7:49 pm
Yep…easily overlooked but he same is true of the current Toronto by-election. Owning or renting property in the city is enough to get a vote of you meet the other criteria even if not a resident.
L. Graham
at 9:59 am
Do you recall in 2018/2019 when TCHC sold 880 homes? The thought behind ownership of these properties in the first place was that tenants of subsidized housing could live in middle class neighbourhoods, attend higher rated schools etc as an altenative to concentrate proverty centres in large complexes.
At that time Anna Bailao said at that time funds will “strengthen the cities non-profit housing sector and allow them to focus on larger complexes”. Great news that Olivia Chow would like to buy the house back at twice the price now.
I have often wondered where those funds actually went…and then two years later during unprecedented real estate pricing and number of transactions created a land transfer tax explosion of funds for the City where those funds went. If you called Mayor Tory’s office at that time, they said affordable housing was the beneficiary of these hundreds of millions of dollar in LTT. Where did it go? Who did either the sale of the 880 properties and huge Land Transfer Tax go to?