The housing crisis: Not just a southern Ontario problem anymore

Fast-rising prices in the south are driving would-be homebuyers farther north — and that has experts calling for action from the next federal government
By Nick Dunne - Published on Aug 30, 2021
Kathy Lafrance with her grandchild. (Courtesy of Kathy Lafrance)

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Kathy Lafrance never thought she’d be priced out of North Bay. The 46-year-old single mother of two, who also takes care of her grandchild, has been studying to become a paralegal. As a student without a full-time income, she relied on a sweetheart deal from her boyfriend’s uncle: a three-bedroom home for $700 per month. But the landlord had always intended to move into the place himself someday. After he told her she’d need to get a new place by September 1, she found herself confronting a rental market where comparable accommodations cost twice what she’d been paying. “I don’t remember ever seeing a three-bedroom being over $1,000 — and that was all-inclusive,” she says. As a result, she’ll be moving to Mattawa, a 60-kilometre commute to her school placement, to live with her step-father.  

Fast-rising home prices in southern-Ontario markets, together with the pressures of the pandemic, are driving people in search of more affordable dwellings farther north. As a result, northern Ontarians are being priced out of their own communities, experts say — and they’re looking for solutions from the next federal government. 

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Agenda segment, April 8, 2021: What should the government do about housing?

Market observers suggest the supply shortage is already being reflected in soaring home prices in the north. In North Bay, the average price of a home through the first seven months of the year was $390,571, up 34.7 per cent over the same period in 2020, according to the North Bay Real Estate Board. Susan Symons, the board’s president, says there many out-of-town buyers from southern Ontario are either moving in themselves or purchasing investment properties. “To those buyers, we are still affordable,” she says. For instance, the average home price of a non-waterfront home in Orillia, a two-hour drive south of North Bay, was $660,000 in July — a 36.8 per cent increase from a year ago. 

As families move into homes that were previously leased out to tenants as investment properties, the supply of rental units is shrinking, pushing rents up — and renters out. “A lot of those secondary-income properties have been sold to people who intend to live in them,” says Meghan MacDonald, a case worker for the Lake Country Community Legal Clinic. “That means a rental family has been displaced, and there’s no new rental place for them to go to.” 

Mark King, a North Bay city councillor and the chair of the District of Nipissing Social Services Administration Board, says that homelessness — already a prominent issue pre-pandemic — has accelerated since last year and that growing home prices and rents are partly to blame: “I’m watching the real-estate market, and homes are turning over quickly. What’s happening is those landlords that have single or multi dwellings are capitalizing on the market, selling many of them. It puts a major impact on the system.”

MacDonald has also noticed more people in North Bay getting displaced. “We are already seeing a wave of homeless families like I have not seen before,” she says. MacDonald assisted in researching the March 2021 study North at Home, conducted by Advocacy North and the Advocacy Centre for Tenants of Ontario, which underscores the region’s housing issues. According to the study, more than 70 per cent of housing in Elliot Lake, Sault Ste. Marie, Thunder Bay, Timmins, and Kenora was built before 1980 (the number is below 50 per cent in southern Ontario urban centres such as Barrie, Guelph, Kingston, Ottawa, and Toronto). Few new homes are being built, the report notes, and while rent in the region is comparatively cheaper, for locals it still falls below the threshold of affordability, which involves shelter costs being below 30 per cent of household income. 

When people looking for lower home prices and rents move from northern urban centres to remote areas, MacDonald says, they can face a different set of difficulties. “You’re not only moving away from everything you know; you’re becoming so much more isolated with way fewer resources,” she explains, citing examples including transportation, food banks, and mental-health services. And, while such communities are more affordable, she adds, property standards may be poor. “A lot of the north is unincorporated or unorganized territory, which means there’s no local bylaws about building standards,” she says. “Even though the Ontario Building Code applies, there’s no one on the ground to actually enforce … I’m not talking a leaking sink — I’m talking a huge hole in the floor that goes to the basement, so they put a piece of plywood over it, or this window has been knocked out for years and in the winter there’s snow in the living room.” 

According to Madgda Barrera, an ACTO housing-economics policy analyst, building new homes is only part of the answer: “We need to have a good distribution on where the new homes are going to be. Not just geographically, but we also need a good mix [of housing types].” Barrera says purpose-built rentals — housing designed specifically for landlords to rent out — are needed and that government involvement is necessary: “When it comes to affordable rental, I don’t say market incentives are enough.”

Agenda segment, May 11, 2021: Can government control the housing market?

Like Barrera, Richard Joy, executive director at the Urban Living Institute in Toronto, sees rental-housing development as a key component of addressing the housing crisis. “Purpose-built rental building has been a rarity for four decades,” he says. He suggests that the federal government should provide incentives by funding applications or tax breaks that encourage environmentally friendly, low-carbon apartments.

The federal parties have made various housing-related promises. The Liberals are pledging to build, repair, or renovate 1.4 million units; introduce a two-year foreign-homebuyer ban, and create a tax-free savings account for first-time homebuyers. The Conservatives say they will build 1 million new homes, temporarily ban non-resident homebuyers (purpose-built rentals are exempt), and convert at least 15 per cent of federal buildings into housing. The NDP says it will build, renovate, and preserve 1.7 million homes (500,000 of them new builds), introduce a 20 per cent foreign-buyer’s tax, establish “dedicated fast-start funds” for co-op and non-for-profit housing, and re-introduce 30-year mortgages. 

Mike Moffat, an assistant professor at Western University’s Ivey Business School, tells TVO.org via email that the federal platforms fall short when it comes to details and comprehensive solutions. “The only housing plan that even uses the term ‘purpose-built rental’ is the Conservative platform,” he writes, noting that it mentions encouraging foreign investors to fund purpose-built rentals. “Neither the Liberals nor the NDP mention it in those terms, but all three do talk about the rental market. The NDP promise to build 500,000 units of affordable housing would include a combination of ownership and rental, though it's not clear in what proportion.” The Liberal platform, he says, “looks to be focused on creating rental, but, like the NDP, it’s not clear what percentage would go to rental versus ownership.”

“In short,” he concludes, “there is some mention of rental priorities in all of the platforms but with little detail.” 

As the election campaign continues, Lafrance is in the midst of moving to Mattawa. She’s lined up work at a law firm, which will bring some stability. She’s hoping to eventually become a lawyer, and — if she hasn’t been priced out by the time she can save up — buy a home in Mattawa one day. She hasn’t paid much attention to the campaign promises so far, but she knows one promise she wants the new government to deliver on: “housing that is affordable for families, especially for single parents with kids.”

This is one in a series of stories about issues affecting northeastern Ontario. It's brought to you with the assistance of Laurentian University.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.

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