In case you haven’t noticed, all of the topics thus far (and my opinions therein…) are intended to create reactions.

Widen your eyes, jump out of your seat, clench your fist, crack your knuckles and start typing.

Disagree.  Call me or the other readers/commenters out.  It doesn’t mean we can’t be friends and can’t discuss!

The entire point of “hot button topics” is to reach out and push that button.

Through two posts and four discussion points, I have already seen incredible contributions from the readers, some of which might give us pause and allow us to think about our opinions.

So let’s pick up where we left off on Monday…

6) Vacant Home Tax

Did you hear that?  That sound?

That metallic “click?”

That was the sound of a can opening…

…a can of worms.

Excuse the 40-something humour, but that’s exactly what this is.  But when it comes to the vacant home tax, I haven’t personally heard from anybody that likes the idea of the tax to begin with, the implementation, and the way the city of Toronto rolled it out.

Comments on TRB started to flood in late last year as homeowners began receiving notices from the city and tried, often in vain, to access the website.

I received my notice over the Christmas holidays and guess what?

I’m going to take a stand.

I’m not going to respond.

If I get fined, I’ll post a copy here on Toronto Realty Blog for all to see.

But I don’t like the way the City of Toronto has gone about this and I think it’s an overreach.  I think those that do have a vacant home should “check the box,” but the rest of us shouldn’t need to affirm that it’s our primary residence.  I think it won’t be long before they’re asking us how many people live in the house so they can determine if the house is being used effectively.

If one person owns a 7-bedroom house, and chooses to live there alone, then so be it.  That’s their right.  And the survey for the vacant home tax is just the beginning of what could be a step toward forcing seniors from their homes, forcing empty-nesters to take on renters or boarders, or determining how best property in this city should be utilized.

The TRB readers have been all over this.

Blog reader, Sigruper, commented on the “Happy Holidays” post but the comment might have been buried, so here it is:

As with most new taxes, whether municipal, provincial, or federal, the government clearly hasn’t thought far enough ahead to deal with these potential issues.

But why would they?

This is nothing more than a tax grab, and it’s not meant to “make housing more affordable,” sorry to say.

How much money will the tax raise?  And how much did this tax cost to implement?

Jon Burnside, councilor for Ward 16, recently commented on Facebook to one of our agents:

“According to city staff November 2021 report, one time start up cost is $11 Million and the projection is to generate $55-56 million annually.  Annual continuing operating costs are estimated at $3.1 Million and staff will report back during Q4, 2023.”

I will believe the $55-56 million when I see it.  But I won’t, since it will never happen.

How in the world this tax cost $11 Million to implement, I don’t understand.

In the private sector, they could have probably got this up and running for $50,000.  But that’s how our government works.  ArriveCAN cost $54 Million and a teenage computer whiz could have probably done it for a thousand bucks.  The Phoenix online pay system has cost taxpayers $2.6 Billion to date just to fix, not to mention the $500 Million in overpayments which will never be recovered.

The vacant home tax is not going to “help ease home prices,” but I also don’t think it’s going to be a big revenue generator either.

How has the response been among the public?

Here’s one recent article:

“‘Guilty Until I Prove I’m Innocent’: Homeowners Frustrated By Vacant Unit Tax Rollout”
CBC News
January 2nd, 2023

No kidding.

And according to the article, Vancouver has brought in $32 Million in tax revenue since the implementation of its one-percent vacancy tax in 2017.

So again, I ask: how will Toronto bring in $55-$56 Million per year?

This is going to be scandalous, folks.

And it’s yet another regressive tax that does nothing to “help with housing affordability” nor will it “ease housing prices.”

We can’t tax our way out of problems.  It has never worked and it never will.

So why would the problem of housing affordability be any different?

It’s comical if you think about it.  It has to make you smile, no?

We’re going to add a Quebec-city-sized number of people to our country every year, and instead of putting forth actual plans on how to house these people, and the 38 Million people already here, we’re trying to scrape together one-percent vacancy taxes on a few thousand properties.

What else is new?

7) Net Migration

This could have been a topic for last year, and it also could have been higher on this year’s list!

Raise your hand if you’ve heard one of those radio ads “Calling Ontarians” to go west?

My hand is raised.

In fact, everybody’s hand is raised, provided they listen to the radio.

I was fascinated when I first heard one of those ads!  I pulled my car over and started jotting down notes.

This reminds me of America’s westward expansion in the 1800’s.

“Go West, young man!”

With promises of opportunity, industry, and…………gold!

Only this time around, the promises aren’t free land and all the gold you can pluck out of the riverbed with your eyes closed.

The promises are more like a trail of bread crumbs that lead the listener, viewer, or reader to the conclusion that life is better out west.

Like this graphic from the website, www.albertaiscalling.ca:

Well gee, folks.  I may as well just pack my bags!

I clearly wasn’t the only one who noticed this massive campaign last summer.

“Alberta Is Calling’: Marketing Campaign Calls On Toronto Residents To Move Out West”
City News
September 26th, 2022

The cost of the campaign was $2.6 Million and included radio ads, social media ads, and posters in high-traffic areas such as subway stations.

But is life really better out west?

One student at the University of Alberta wrote a piece for the student newspaper called, “Alberta Is Calling Campaign Catfishes Vulnerable Canadians.”

Yikes!

He argues, “The campaign is filled with creative liberties, enticing unsuspecting Torontonians to move here when things aren’t as great as they seem.”

Double-Yikes!

We talked about people moving out of the city of Toronto quite a bit after the onset of the pandemic, so this has been a topic now for three years.

But it wasn’t until last year that we started to see people moving back.

Here’s a headline that doesn’t pull any punches:

“I Moved To Alberta And Hated Everything About It. After Three Months, I Came Back To Toronto”
Toronto Life
December 13th, 2022

The protagonist in this story describes the move as “an expensive mid-life crisis.”

Her basic premise was: nobody goes out, there’s nothing to do, everybody is married so there’s no dating scene, the job market is poor, and eventually depression sets in.

“Now, I tell people who are considering leaving Toronto not to uproot if they have any intention of living in the city again. Not everyone has the financial freedom to come back. Why would anyone want to leave anyway? Toronto has jobs and entertainment galore. You can be at a park on a random weeknight in June, and the atmosphere is amazing. You won’t find such a vibrant place anywhere else in Canada—and definitely not anywhere in Alberta. Other cities just don’t have our energy.”

So it’s a great place to visit but not live?

Or it’s a great place to live, maybe, but not work?

To each, their own!

Ironically, two weeks after this article appeared in Toronto Life, this article appeared in the Toronto Star:

“People Keep Leaving Ontario In Record Numbers For Affordable Homes And A Better Life”
Toronto Star
December 28th, 2022

More ironically, the couple profiled in this article moved from Toronto……….wait for it……..Alberta!

A teacher and an accountant, respectively, they bought a detached house for under $500,000 that has a basement apartment for her parents.

So which is it?

Are people moving out of Toronto and regretting it, or are they moving out of Toronto and loving it?

Toronto Life did a massive feature back in October called “The Homecoming Club,” in which they profiled five families who moved out of Toronto, hated it, and moved back:

“The Homecoming Club”
Toronto Life
October 25th, 2022

“Should I stay, or should I go now?” isn’t just a great song by The Clash.  It’s a question that a lot of Torontonians and Ontarians are asking themselves daily, and one that will continue to be asked in 2023.

And thanks to our incessant desire and insatiable appetite for stories on people both moving to-and-from, I think we’ll see a lot more articles like those above this year…

8) Development

Or lack thereof, perhaps?

We have to remember then we’re talking about development, we’re talking primarily in the future, and at the very least, the present.

That’s why some storylines can be misleading.

“Record Number of Condos To Flood Toronto Market In 2023”
The Globe & Mail
January 3rd, 2022

First of all, the word “flood” is hardly impartial.

But if this truly is a year in which a record number of condos will be completed, then maybe the word is fair.

From the article:

Nearly 32,000 condos will hit the city and surrounding suburbs, according to data from condo research firm Urbanation Inc. That surpasses the previous high in 2020, when 22,473 units were completed.

The article is talking about condo “completions,” meaning the units that were previously under construction are now finished and handed over to owners who bought in pre-construction.

But to suggest the units are set to “flood the market” assumes that all of them will be offered for sale or for lease.

That assumption is flawed.

Some units will be owner-occupied.  Some units will sit empty.

And if all the units were offered for lease or all the units were offered for sale, then it might affect that particular market.  But since we could fairly estimate that half will be offered for sale and half will be offered for lease (not including those owner-occupied or left vacant), then the absorption into the market is hardly worth getting excited over.

What I believe will be a story in 2023 is future development.

Where?  What?  By Whom?  And How?

We already talked about developing the Greenbelt, which I think will be a huge story in 2023.

But what else will be developed?

Will we see government-owned lands put up for sale or incorporated into a public housing strategy?

Is now the time for developers to start acquiring land for the future?  Who’s buying out there right now?

A colleague pitched me a development site two months ago, and in his email, he oddly disclosed who had already passed on the project and for what reasons.  No fewer than four major Toronto condominium developers were offered the site and passed, for various reasons, which I found almost as interesting as the fact that this was included in the email!

I work with a very large developer who is looking to acquire sites for future development, but they’re in the minority right now.  Not only that, a site purchased today is likely 6-8 years away from seeing an inhabitable unit on site, so let’s always keep that in mind.

We have to remember that condo completions in 2023 have little to do with “development” as a topic, since these units could have been sold in 2017, and built from 2020 through 2022.

But if the provincial government’s goal is to build 1.5 Million new homes in Ontario over the next ten years, that has to start today.

It’s a huge number if you really think about it.  We might be desensitized to that figure since there are 38 Million people living in the country already.  But if an average downtown Toronto condo is 350 units, then we would have to build – are you ready for this – 4,286 condo towers of this size in the next ten years.

That’s insane.

And of course, not everybody wants to live in a condo.

But how many houses are in your average sub-division?  Maybe 400?

So again, think about how many sub-divisions we need in Ontario, where those are going to be located, and who is actually going to build them!

I know I said that I would try to be less cynical in 2023, but I don’t believe there’s a hope in hell that 1.5 Million new homes are built in Ontario in the next decade.  Building 150,000 per year sounds a lot less daunting, but if you consider just how hard it is, how long it takes, how much red tape you have to clear, and how expensive it is to actually build in this province, you’d realize what a lofty goal this is.

We also have contradictory goals both within government and within society.

We want to set immigration records but we have no plan for housing.

We want to build housing but only if it’s not in my backyard.

We don’t want every “new” unit of housing to be a condo, but we won’t open up lands to allow for detached single-family housing.

We don’t have enough rental supply but we don’t want our next-door neighbour turning his house into a triplex.

Every idea, good, bad, or ugly, is going to come with opposition.  And as we’ve seen in the past, it can often take a decade or more from idea to implementation.

9) Toronto vs. Ontario

“I’m at the corner of first and first!  How can the same street intersect with itself?”
~Cosmo Kramer

How can Toronto be pitted against Ontario if Toronto is part of Ontario?

Well, because as we saw last year, the province stepped in and took power away from the city!

Actually, it started well before last year.  It started in 2018 when Doug Ford cut the number of wards in the City of Toronto from 47 down to 25, to align geographically with provincial and federal ridings.

In any event, that was the first shot across the bow from the province, and we saw a lot more of this in 2022.

Doug Ford provided both Toronto and Ottawa the so-called “Strong Mayor Powers” ahead of the municipal elections last October.

And while it feels like this should be viewed as a reward bestowed upon John Tory from Premier Ford, it actually felt a little more like a punishment.  It felt like Ford was saying, “Hey John, you never get anything done.  So now I’m going to give you these powers to ensure you have no choice but to finally act.”

If you don’t think that giving a person power is a form of punishment, I’ll understand.  Some also say this is “a threat to democracy,” and in theory, they might be correct.  But there’s been so little action from City Hall, especially as it pertains to housing, and I think giving Mayor Tory these “powers” is the province’s way of forcing him to get things done.  No longer can he sit on the fence or aim to remain popular at the risk of making tough decisions.

Last year, we also saw the provincial government introduce the “More Homes Built Faster Act,” which as noted, seeks to create 1,500,000 new units of housing over ten years.

Amazingly, when asked about how this Act will affect cities in need of new housing, the Municipal Affairs and Housing Minister, Steve Clark, said:

“Our government needs to support efficient local decision-making to speed up development timelines.  We’re counting on municipalities to cut red tape and get housing built faster.”

The province has made it clear that if the municipalities don’t speed up housing construction, then the province will.

The province has shown they have power over the city.  They cut the number of city councilors.  They gave the mayor special powers.  What else could they do?

The Housing Affordability Task Force released their report early in 2022 and most of its recommendations had to do with the proverbial “red tape” that exists with respect to development.  It’s too hard, too costly, and takes too long to build housing.

The province of Ontario took this report to heart, introduced legislation, and made it known that they’re not afraid to step on the toes of the city.

And already, the landscape out there has changed.

I talked about the land assembly I completed in 2020 that was thwarted by one Toronto city councilor who said, “Over my dead body.”  Well, guess what?  After Doug Ford made his series of housing announcements last year, we re-assembled this parcel, and it will likely turn into two new condominiums.

2020: City says, “Never happening.”
2023: Province says, “Go get ‘er.”

2020: City expects the developer to beg, plead, and make concessions.
2023: City rolls out the red carpet and hopes the developer doesn’t just go straight to Doug Ford.

This is going to be a very interesting year to see how the City of Toronto and the Province of Ontario try to “play nice” in the sandbox…

10) Realtors & Business Models

Over the years, the real estate hype machine has given us some spectacular failures, eh?

Remember when Rogers pumped tens of millions of dollars into Zoocasa back in 2013, and this was supposed to be the real estate game-changer?

Yeah, it wasn’t.

Zoocasa was losing $1.5 Million per month at one point.

It was eventually sold for pennies on the dollar (is there a form of currency worth less than a penny?) a short while later in 2015.

Remember when Purple Bricks announced they would come to Canada back in 2018?

Remember their television advertisements that profiled complete morons who were left out on all the savings by not using their services?

Purple Bricks is no longer.  They were sold to another company, re-branded, and re-packaged.

Once upon a time Zillow was supposed to break into the Canadian market and revolutionize the way real estate listings are viewed by the public, which would shake up the industry forever!

I honestly don’t know if Zillow is still around.  I’d have to Google it.

Weren’t auction sites supposed to be all the rage in 2021 and 2022?

That didn’t go well for this guy, who started one such site, or for this woman, who had her life ruined by buying from the same auction site.

Every couple of years, there’s a big splash in the real estate industry.

I’ve seen it over and over for almost two decades.

And why not, right?

Just imagine Rogers, with all their money, looking at the real estate industry in the late-2000’s and thinking, “There’s got to be a way we could steal the whole market share.”

Big-money, big-thinkers have always salivated over the idea of revolutionizing the real estate industry in Canada, or in Ontario, or in Toronto.

But to date, every single one of them have failed.

I’ve personally witnessed a dozen of these examples.  The company behind it, or the entrepreneur, or the platform, or the “better mousetrap.”  And they’ve all failed spectacularly.

Some took longer than others, and some failed quickly.

And real estate critics will point to the Toronto Real Estate Board fighting the Competition Bureau, but that’s a different story.  That’s about data.  I’m talking about the process of buying and selling real estate.

The traditional business model has always prevailed.  Sure, there are many different types of real estate agents, real estate brokerages, and many different value systems and work ethics therein.  There are different commission and fee structures, and every property is listed and marketed differently from the next one.  But the attempts to “blow up” the real estate industry have never succeeded.

So with that said, I fully expect another such attempt this year.

It’s been a while since we’ve seen a Realty Sellers, or a Fraser Beach, or a Zoocasa, or a Bungol, or a Mongohouse or a Zillow, or a Justo, or a Purple Bricks.

I have a feeling there’s somebody out there right now with a plan to “disrupt” in 2023.

Wow, we made it!

Ten discussion points for 2023 and it only took three blog posts over six days.

The funny thing is – this was me trying to be brief!

I have no idea what I’ll write on Friday.  Maybe about taking a nap? 🙂

As I said at the onset, these are hot-button issues that demand conversation, even if we agree to disagree.  Too many people out there either lack an opinion, or an interest, or an understanding, or all of the above.  So thank you all for reading and contributing.