Federal action on local housing could have consequences elsewhere: PM
Posted June 17, 2016 11:31 am.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – As he calls Vancouver’s housing situation a crisis, the prime minister is warning any federal action here could have unintended consequences in other parts of the country. Justin Trudeau says Ottawa is worried about the ballooning cost of housing in the Lower Mainland, but he wants to be certain doing something about it doesn’t affect other people.
Trudeau admits money coming in from overseas is playing a role in fueling the overheated market where the average price of a single-family detached home is $1.5 million.
Tom Davidoff with UBC’s Sauder School of Business feels Trudeau’s comments are fair, but he insists the federal government has wiggle room to put together a customized plan for our region.
“We can fix land use policy,” explains Davidoff. “When home prices are high enough, the government can force local governments to have more sensible zoning. There’s plenty the government can do in a tailored way that doesn’t crash the national economy, but addresses affordability locally.”
Today, Trudeau is hosting a roundtable on the housing situation with local politicians, academics and activists.
“It’s terrific that the prime minister is interested in our market,” says Davidoff. “We’ve got a crisis for locals. If prices crash, the risk of which grows as prices accelerate, that becomes a national problem for the financial institutions and for CMHC. I think the prime minister is aware that now’s the time for action, and it’s great that he’s coming to town.”
The federal government has already promised to investigate housing prices in out of control markets like Vancouver and Toronto.
