For possibly the first time in history, housing has become a key federal election issue.
All parties decry the shortage of housing supply, the runaway prices, and the improbability that many will ever get into home ownership.
Each of the three main parties’ platforms include major promises and major money to address this.
Their platforms have many similarities, but also differences.
One similarity is that they all blame predatory buying practices. They also blame foreign buyers. Some of that is certainly true, and the criticism deserved.
But they’re all avoiding mentioning where another big share of the blame lies: themselves! It’s disingenuous, in my opinion, for them suddenly to address a problem at least partially of their own making at election time and lay all the blame elsewhere.
Federal governments and municipal governments of all stripes are big contributors to the problem. At the municipal level, outrageous development costs keep forcing land prices up and massive restrictions on building types, lot sizes, zoning, etc., keep a shortage of supply. At the federal level, it’s control of CMHC, the introduction of, then the increase in, the stress test, and most recently, CERB and other government handouts during the pandemic, and even rent controls, that contribute to housing unaffordability.
It’s for the voter to decide which of the three platforms best addresses the challenges; or, at least, which party does the best job of selling their platform.
Among the platforms, we have–likely for the first time in history–one party promising to implement a rent-2-own program. Wow! They’ve caught on, at long last, of the benefits of rent 2 own.
So how does one take that news? Will it help potential clients get into our program? Will it help my industry to grow? Or will it compete with us? But, most importantly, will it help to fix our housing problems?
Here’s my early take on the topic.
- A half-baked election promise doesn’t really mean much. I wouldn’t hold my breath waiting for it. First, they have to be elected to even think about implementing it and, as of this date, that is far from certain, with the two biggest parties in a virtual tie.
- Even if the Liberals win, it will almost certainly be another minority, and who knows how much of their platform will get enacted in that scenario?
- Governments tend to forget—or abandon—much of their hurriedly constructed election platforms, devised during campaigns to sway the voters instead of provide good government. What are the odds of it even happening?
- Even in the Liberals’ best case scenario, a majority government, governments tend to move very slowly, especially with measures that are new and novel. Even if a plan is fleshed out and put into place, it will be a long time coming. (Remember Trudeau’s promise to get safe drinking water to all reserves? Or Chretien’s departing 2003 promise to fully four-lane the Trans-Canada Highway from Kamloops to the Alberta border?) Again, I wouldn’t hold my breath.
- It would be a delight if the government worked with our industry to implement such a scheme. But, as governments do, they will likely start something completely new, run by their own agency, CMHC.
Bottom line: if you’ve been thinking about rent 2 own but are now tempted to put those plans on hold to see what the government alternative is, I’d suggest that you’ll be waiting a long time. You could probably have already completed a rent-2-own program with a reputable operator and become a homeowner by then.
As a rent 2 own provider, I’m not too worried about the government taking away my business just because of a half-baked election promise.
At least, that’s how I see it . . .
Thanks to those who responded to last week’s quiz. I know there were many more of you who enjoyed it. For the most part there were no “correct” answers; there were just options to ponder.
But there were correct answers for the two rent-2-own questions, so here they are:
# 9. In checking out Rent 2 own I’ve learned that a rent 2 own program can help with all but which one of the following:
The correct answer is: d) Not a high enough income for a bank mortgage.
We can’t change that.
#10. I understand that, for a rent 2 own program, I will need an initial deposit of:
The correct answer is: b) 4-5% of the property value.
It’s less than half of what you’ll need to have saved up by the end.