Measures in federal party platforms 'not enough' to curb GTA's soaring housing prices, expert warns

With the release of the Liberal Party's election platform on Wednesday, all three ofthe country'smajor parties have set out their key promises to Canadians, andhousing affordability has emerged as a key theme across all of them.

It's not surprisingthat the parties are focusing on the problem. Recent opinion polls suggest affordable housing is at or near the top of the list ofelection issues for voters.The average price for all home types combined in the Greater Toronto Area as of July was$1,062,256up 12.6 per cent compared to July 2020, according tothe Toronto Regional Real Estate Board.

While the Liberals and Conservatives have tried tobring overall housing pricesdown and increase supply, the New Democratic Party haszoned in onsocial housing.

However, at least one expert warns these pledges alonewon'tendthe housing crisis, especially in the GTAand much of Ontario.

"None of these plans go far enough,"Mike Moffat, senior director of policy at the Smart Prosperity Institute in Ottawa, told CBC News.

Liberals push 'first-home savings account'

LiberalLeader Justin Trudeaureleased his election platformseveral weeks afterConservative Leader Erin O'TooleandNDP Leader Jagmeet Singh released theirs.

The centrepiece of the Liberals'housing program is a "first-home savings account" where money would go in tax-free and could be withdrawn without any taxes owing on investment gains.

The program, which the Liberals estimate wouldcost the federal treasury some$3.6 billion over the next four years, is meant to makeit easier for some first-time home buyers under 40 to scrape together enough money for a down payment.

The party has also committed to:

• Building, preserving or revitalizing nearly 1.4 million homes by 2025-26.
• Doubling the Home Buyer's Tax Credit.
• Investing $4 billion in a new Housing Accelerator Fund for municipalities.
• Pledging $1 billionin loans and grants to develop a new rent-to-own program between landlords and renters.

Trudeau said he would also reduce the price charged by the Canadian Mortgage and Housing Corporation on mortgage insurance by 25 per cent.

Conservatives focuson supply

The Conservatives' housing pledges predominantly aim toincreasesupplywhile curbing speculation.

O'Toole's platform sets out a plan to:

• Build 1 million homes overthe next three years.
• Release at least 15 per cent offederally owned real estate for housing thus significantly boosting supply.
• Banforeign investors not living in Canada and new arrivals from owning a home here for at least two years.
• Removethe requirement to conduct a stress test when a homeowner renews a mortgage.
• Encouragedevelopers withdeferredcapital gains taxeswhen a rental property is sold to reinvest in rental housing.

O'Toole said he would also encourage a new market in seven-to 10-year mortgage terms.

Lastly, the Conservatives say they would invest $325 millionover the next three years to create 1,000 residential drug treatment beds and build 50 recovery community centres.

NDPemphasizessocial housing

The NDP's platform also promises anarray of policies aimed at bringing down the cost of homes, including:

• Building 500,000 units of quality, affordable housing in the next 10years, with half of that done within five years.
• Waiving federal sales tax on the construction of new affordable rental units.
• Imposing a 20 per cent foreign buyers taxon the sale of homes to individuals who aren't Canadian citizens or permanent residents.
• Setting up dedicated fast-start fundsto streamline the application process for things like co-ops and non-profit housing.
• Mobilizingunder-usedfederal lands for non-profit housing projects.

Also, the New Democrats say they would reintroduce 30-year termsfor mortgages insured by the Canada Mortgage and Housing Corporationon entry-level homes for first-time home buyers.

Similar to Trudeau, Singh would alsodouble the Home Buyer's Tax Credit.

'More needs to be done'

But Moffatdoesn't findmuch of what's in the party platforms very convincing.

He saidthe housing crisis preceded the pandemic, when 60,000 people in search of cheaper housing moved out of Toronto to other parts of the province, and prices have only gone up since then.

He said the term "affordable housing" means homes that accountfor no more than 30 per cent of a family's income and "most housing in the GTA does not meet that criteria."

WATCH: The housing platforms from the Liberals, Conservatives and NDP

The housing platforms from the Liberal, Conservative and NDP governments

3 years ago

Duration 2:39

Liberal leader Justin Trudeau was in Toronto today to unveil his party platform. The Liberals are the last of the top three national parties to show Canadians their plans. According to polls, at the top of mind for Canadians during this federal election is the issue of housing. Chris Glover has more on what each party is promising on this front.

The Conservatives and Liberalsare takinga"less ambitious" approachto focuson the "market side" of the housing crisis, Moffat said, while the NDPisfocusingon increasing social housing and co-ops.

"The housing we are seeing built tends to be out in what's currently rural areas," he said.

"We're seeing massive amounts of sprawl. So both the Liberal and Conservative plan are designed to help address that issue," he said.

When asked which of the party's plans was most effective, Moffat said the Liberals had the most "aggressive approach."

"There's more that's going to need to be done. But I think the Liberal approach on the housing accelerator has the most potential, but it's also the most untested."

Nonetheless, Moffat said he was "skeptical" of each party's ability to fulfil their promises on affordable housing.

"We've seen the current government, as well as provincial governments and municipalities, put a lot of money into building affordable housing but that money just sits there," he said.

"They can't get the approvals they need to actually get shovels in the ground and to overcome local opposition to some of these projects and actually get those projects built."

He also said he was "very concerned" for first-home buyers, as mortgage and insurance rule changes would only allow people to make larger bids, rather than addressing the core issue.

"The problem is, if you allow these people to place larger bids, that's actually just going to drive the prices up even further. So while you might help some individuals, you're making the overall problem worse."