THE SCAPEGOATiNG OF FOREiGN INVESTORS —AN INTEGRATED APPROACH TO HOUSiNGUNAFFORDABiLiTY
On January 1st 2022, the federal government implemented first-ever national-tax on non-resident owners of vacant and underused housing. However, measures have not been effective at effectively reducing foreign speculation on Canadian real-estate as GTA home prices are up 28% from last year. What measures would you introduce in Ontario to combat the effects of foreign speculation on Canadian real-estate? Considering the ineffectiveness of prior demand side policy initiatives could supply side measures aimed at increasing inventory and creating price competition increase Canadian housing affordability? Have prior policies implemented in attempt to hinder foreign buying been useful in combating the housing crisis? How would these policies impact local economies in both the short- run and the longrun? How would housing markets within Canada outside of a policy’s jurisdiction be affected by it? You may want to consider the following sources when constructing your brief:
Housing minister: Canada needs temporary ban on foreign buyers to ease affordability crisis
Trudeau pledges expansion of first-time home buyers’ initiative, new foreign speculation tax
Curb unproductive foreign ownership
While international investment in domestic real estate has contributed to the growth of housing prices in Ontario, a significant portion of increases may be ascribed to domestic speculation that must be accounted for when addressing housing affordability. Therefore, our integrated three-step policy approach aims to implement long-term measures to overcome the short-term inelasticity of housing supply...
Author: Albert Cheng, Angela (Ziyi) Liu