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Toronto City Councillor Kristyn Wong-Tam of Ward 27 Toronto-Centre\/Rosedale recently proposed a moratorium on new high-rise residential condo developments in the downtown core. Her rationale for doing so? Housing oversupply, gridlock, road safety and disruptions to business owners caused by construction. Wong-Tam believes that implementing a one-year moratorium on new tall building residential re-zoning applications will assuage concerns over the city\u2019s strained infrastructure, which has not been able to keep up with the \u201cintense growth of downtown\u201d.<\/p>\n
The first point of contention with Wong-Tam\u2019s reasoning is that there is an oversupply of housing. According to Urbanation, there is only a 6.8 month supply of condo inventory, and there has been a 9% drop from 2015. With Toronto detached home prices surging over $1.3M in October, home buyers are looking to high-rises for more affordable housing. Jason Mercer, TREB\u2019s Director of Market Analysis is quoted in the October 2016 Market Watch report as saying \u201cNew listings were up slightly in October compared to last year, but not nearly enough to offset the strong sales growth. \u2026 Until we experience sustained relief in the supply of listings, the potential for strong annual rates of price growth will persist, especially in the low-rise market segments,\u201d said Jason Mercer, TREB\u2019s Director of Market Analysis.<\/p>\n
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She is dead-wrong. There is not<\/em> an oversupply, and condo developers are furious. They contend that City Council is to blame for the lack of infrastructure, as they have been using development charges to keep property taxes artificially low<\/em>. By this reasoning, if there were a one year moratorium, not only would the city become more cash strapped and less likely<\/em> to upgrade infrastructure.<\/p>\n Toronto prices have been steadily increasing, and there are no shortage of buyers looking to move into the city. The already sky-high prices of properties would only increase more<\/em> with a decrease in supply. A moratorium is not the answer; infrastructure concerns are very real, but where does the onus of responsibility lie?<\/p>\n Matrix Mortgage Global wants to hear your input on this issue. Reply in the comments below! <\/em><\/p>\n\n