April, 2017 saw the announcement of sweeping changes to rent and housing in the City of Toronto and across the province.
Though it is yet to be seen the long-term impact that these reforms will have, how Kathleen Wynne’s 16-point rent and housing reform plan will affect owners, tenants, and landlords in Liberty Village in the short-term is a subject that needs to be outlined.
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More Rent Control
Prior to these reforms, the only units in the City that were afforded rent control were those built before 1991. The result of this has been a massive boom in condo developments and rent hikes of 30 percent or more, as evidenced in the last five to ten years across Toronto. As rent control has now been extended to all private rental units, those renting in any of the existing condo towers in Liberty Village will be provided with more stability as it relates to the type of increase they can expect in rent.
Introducing a 15 Percent Tax on Non-Residents
If you are a non-resident who has purchased units in Liberty Village to rent out, the new 15 percent Non-Resident Speculation Tax is going to take more money out of your pocket. Though this may prevent foreign condo investment in the neighborhood, much of the ownership in Liberty Village is domestic. With the large amount of interest in living in Liberty Village, this tax is also unlikely to slow down the condo ownership rate here.
No Property Scalpers
This refers to real estate agents who buy up properties in new developments and then sell them, thereby avoiding having to pay the taxes on these units. Liberty Village real estate agents will be under greater scrutiny than before with this rule, ensuring that consumers are being appropriately represented in dealings.
The Potential of a Vacancy Tax
The Ontario government has given the City of Toronto permission to introduce a vacancy tax that would tax properties deemed ‘vacant’. Though no legislation has yet been introduced by the City, units in some of the Liberty Village’s glowing condo developments could be affected. A similar vacancy tax has been introduced in Vancouver at 1 percent, with first payments due in 2018.
More of What Ontario is Doing with its Rent and Housing Reforms..
There are many other changes being made, such as creating new market housing and affordable housing units with surplus provincial lands; creating a ‘Housing Supply Team’ to identify obstacles to housing developments, working with municipalities to address them; establishing an advisory group to the provincial government to provide better oversight on the housing market; education-based resources targeting consumers, advising them on their rights in real estate transactions; the allowance of the City of Toronto to use property taxes to fuel development; increasing standards on elevator repair; and updating municipal growth plans to address density and “an appropriate range of unit sizes”.
There are still issues that persist such as the use of property taxes and the increases that are being seen in that category. The neighborhood might experience some difficulty in the design of some unit sizes in the future as some of the smaller living spaces in Liberty Village, though rare, are absurdly small.
What Does this All of This Mean for Liberty Village’s Future
Though many have predicted a potential slowdown in condo development growth, much of the development that has been planned for Liberty Village is still scheduled to move forward and there are no significant changes to the neighborhood’s annual growth rates expected.
As it relates a general outlook, Liberty Village has always been a very intelligently designed community. The reforms are not expected to stunt growth or to have much effect on the developments currently in the planning stages for the neighborhood. There will no doubt be higher scrutiny in general paid to any condo development. That said, the community has already seen its residential developments closely monitored.
For tenants, the reforms mean more stability as it relates to rent increases and more support in general. For landlords, all of this is going to impact their bottom line – reducing rent increases and potentially increasing property taxes beyond what is reasonable, but largely things well remain the same. These reforms are targeting growth across the City of Toronto and its surrounding regions, mainly focused in ensuring smart growth. Due to Liberty Village always having been a neighborhood where smart growth has been a priority, expect only minor changes as it relates to how the neighborhood’s residential units operate and/or how its developments are built.