Elitist social engineering comes with a cost
A new report from the Ryerson University Centre for Urban Research and Land Development is pinning the blame for Toronto’s housing crisis on the Ontario Liberals 2006 Places To Grow Plan.
The report illustrates the consistent flaw with government social engineering projects: They are unable to accurately manage the complexity of the countless interactions within an economy, and result in serious distortions.
As the Ryerson report points out, the plan – which restricted and mandated land-use – gave too much space for condos, and too little for single-family homes. As a result, home prices in the GTA have skyrocketed – creating a dangerous housing bubble.
Government shouldn’t be controlling so much land in a free society
Politicians and bureaucrats shouldn’t be in charge of deciding who can build what on which swath of land. It’s not the role of the government to just arbitrarily say a certain area can’t be developed. That lesson has been learned harshly in Ontario, as government intervention backfired badly. Government should manage public land in a hands-off matter, letting the market dictate housing needs, not dictating to the market.
In a free society, people must be free to choose the kind of housing they want to build and purchase/rent.
Just as we see in socialist command-economies, huge mismatches between supply and demand occur when politicians try to control the economy. As the Ryerson report notes, “A large proportion of the new completions have been high-rise condominium apartments whereas a large proportion of the demand has been for owner-occupied ground-related housing.”
The report also points out that the recent foreign buyers tax won’t be enough. Said the report, “While there is a need to take action to remove speculative-type purchasers from the [Greater Toronto Area] housing market, this is not a solution to improving housing affordability … over the longer-term.”
Ontario government knew they were getting the balance very wrong
The Ontario Liberals don’t have the excuse of ignorance on their side. They had data in 2005 which showed the housing mix in the GTA should have been 70% single-family homes, and only 30% apartments and condos.
So what did the government mandate?
46% single-family homes and 54% apartments and condominiums.
It’s simple economics. There is massive demand for single-family homes, and far too little supply. That drives up the price of single-family homes far above what it should be. The Ontario government failed even the simplest test of economics.
Of course, this is due to a political agenda. The elites are obsessed with “density” and “urbanization.” Despite the fact that Canada is one of the least population-dense nations on Earth and has immense amounts of free space on which to build, the foolish elites are trying to pack people in closer and closer together.
Now, their arrogance has caused a crisis.
The Ryerson report makes that clear beyond any doubt, saying, “The blame falls largely on the provincial government and municipalities for failing to respond effectively to the expected demand.”
Remove the restrictions, let people make their own choices
The solution to the Toronto housing crisis is simple: Remove the government-imposed restrictions. Open up the land for the building of single-family homes, and a construction boom will commence that will create jobs, growth, and also fix the housing crisis by bringing prices down to a balanced level.
The Ontario PC’s must push for such a policy, and perhaps the Wynne Liberals will give up their big-government arrogance and do the right thing. I’m not holding my breath on that one.