Tuesday, April 30, 2013

Condominiums and Affordable Housing

Last week I briefly touched on some of the housing issues confronting people living in Peel as a result of growing income inequality. I wanted to drill down a little on that issue.

The housing issues facing families, especially those on below-average (or even average) incomes is particularly acute. Getting the space needed at a reasonable price is very difficult. For singles, couples or small families one of the solutions offered to the “middle class” seeking affordable housing has been condominiums.

Condos conveniently skirt the social stigma of renting, allows people to accumulate equity and provides some social prestige. In many ways condos have supplanted traditional starter-homes. Starter-homes are typically one- or two-bedroom houses that are usually smaller than others available on the market. They are ideal for single adults or couples without children, or perhaps one child for those in the middle class. I know a lot of peers are living in, or saving for, their home in the sky. In our shift to greater density it seems natural for condos to replace older, smaller residential homes.

Sadly, other factors are at work. As I mentioned last week, starter-homes are now well out of the reach of young adults just getting their lives together and most young families. My recent survey of the Brampton housing market showed that homes begin at $300,000+. Condominiums seem to be the only option below $300,000, at least in this city by my survey. The various condominium markets across Canada have been sources of rampant speculation. Low interest rates, Canada’s strong banking system and overall economic stability have made Canada a very attractive market to invest in. As a result these shoeboxes in the sky are now selling for exorbitant prices.

Given that so many condominiums are now investment properties with the owners waiting for them to accumulate value many are putting them on the market to rent. This is leading to another disturbing trend. From the Toronto Star, condominium-renters are not protected by the same laws that protect people renting a normal apartment. This giant loophole allows owners to arbitrarily and massively increase rents.

The condo boom is fraught with other challenges. There are increasing questions about maintenance fees and consumer protection issues. ONDP MPP Rosario Marchese (ONDP – Trinity-Spadina) has been fighting to improve the laws governing condos for years now. Condo-owners do not have a simple way to have their needs addressed and there is a lot of concern over the long-term structural stability and soundness of these new buildings.

What once seemed like a smart plan for me and my peers increasingly seems like a way to get fleeced. However all the new construction anywhere seems to be new houses, where even townhouses start at $300,000, or condominiums. It is apparent that more affordable options are needed, along with a greater supply of apartments and other rental choices. Not providing affordable housing of some kind will only push people further from job centres and cause the GTHA/Toronto commutershed, which already includes much of central Ontario, to sprawl even further outward, leading to greater problems of employment, traffic, infrastructure expense, and environmental degradation.  

No comments: