In Conversation With – Bob Finnigan
By Gale Beeby
Affordability the biggest issue facing homebuyers, says the president of the Canadian Home Builders’ Association.
Bob Finnigan is one of those rare people — well spoken, well dressed, hard working and with a heart as big as a barn; in a word, a gentleman.
But when it comes to housing affordability, Finnigan has a few things to say and he says them with the passion of a person who cares about homeowners.
Canadians — particularly those in the GTA — are facing an affordability crunch for new housing that has left first-time homebuyers behind, says Finnigan, the new president of the Canadian Home Builders’ Association (CHBA). “It’s the culmination of a lot things, including a growing disparity between incomes and home prices and constrained land supply on top of Ontario’s Places to Grow policy, which demands higher levels of density everywhere in the province, not just the major cities.”
Home prices in the 1950s and ’60s, cost about three times the income of a single wage earner. In the GTA now, house prices are six to 10 times higher than the income of a two-income family, according to CHBA.
On top of that, 94 per cent of Canadians want to buy lowrise housing (detached, semis and townhomes) but can’t afford it, according to data collected by CHBA.
“Until we get a constant stream of lowrise housing in the GTA, new product is going to be priced at a premium. There are a lot of people chasing a few homes,” Finnigan said, noting that over 300,000 people come into the country each year — 100,000 into the GTA.
Adding to the price of new homes is a supply issue caused by the Ontario government, Finnigan says, lack of serviceable land, complicated building codes, regulation and approval process delays and developments fees, which cost a total of $6 billion annually across the country.
Finnigan points to a long delay in Whitby waiting for approvals as an example of the waste of time and energy required to reach the point where shovels can get into the ground.
“In 2006, when the growth plan was announced, bringing new lands into the urban boundary stopped for five years — and then it took five more for the region and towns to figure out all the new rules. Delays increase costs, which then, of course, adds to the cost of a new home. When Country Lane finally came to market, over 500 homes were sold in six weeks.”
Also, Finnigan adds, there is clearly a need for Ontario to facilitate the quicker release of the already approved development lands to ease the supply shortage.
Affordability in the GTA is also greatly affected to higher costs of living, including property taxes, utilities and transportation costs.
“It’s about time we stopped taxing new homebuyers and share the costs of infrastructure among the entire community,” Finnigan says of development charges, which can add thousands of dollars to the price of a new home.
The CHBA is also suggesting that the GST be removed from municipal development charges on new residential developments, calling it a “tax on a tax.”
“I’d also like to see tax breaks for purpose-built rental housing, especially ‘secondary suites’ — rental units in lowrise homes — which are not allowed in most municipalities.
“This would certainly address some of the issues of affordable housing and also help homeowners finance their homes.”