In a surprising turn of events, Quebec has emerged as a leader in housing affordability, showcasing a distinct advantage over its counterpart, Ontario. Let’s delve into the factors driving this phenomenon and explore predictions for the future.
Current Housing Landscape: Quebec vs. Ontario
Quebec’s housing prices have defied the odds, maintaining affordability even amidst a housing crisis influenced by immigration and interest rates. The numbers speak volumes – the average monthly rent in Montreal is a modest $981, significantly lower than Toronto’s $1,618. House prices follow suit, with Quebec’s average at $500,400 compared to Ontario’s staggering $1,112,000.
Decoding the Affordability Index
Analyzing the percentage of income spent on housing reveals an interesting trend. The thirty lowest percentages among 135 urban areas in Canada are predominantly in Quebec, signaling a consistent affordability advantage. Rents in Quebec, especially in Montreal, are notably 13.3% below the predicted levels based on overall housing prices, presenting a unique advantage for renters.
Crucial Factors Shaping Quebec’s Success
1. Urban Planning Strategies: Development Charges vs. General Taxes
- Quebec’s reliance on general property and provincial taxes for urban services fosters an open housing market.
- Ontario’s use of development charges, intended to make developers bear social costs, inadvertently led to cost pass-ons, limited small developer entry, and incentivized expensive unit constructions.
2. Soft Rent Control Model
- Quebec’s Tribunal administratif du logement (TAL) navigates the delicate balance between renter and landlord rights, ensuring controlled rent increases.
- This “soft rent control” approach promotes a culture of accommodation and flexible rent agreements.
Ontario’s Response and Quebec’s Future Path
1. Ontario’s More Homes Built Faster Act (Bill 23)
- A legislative move to stimulate housing supply, including the rollback of municipal power to levy development charges.
- Critics argue the impact on housing supply may be limited, pointing to Toronto’s $80,000 development charge for a two-bedroom apartment as a potential outcome.
2. Quebec’s Ongoing Reforms
- Bill 122 (2017) allows municipalities to levy development charges, raising questions about a potential shift towards an Ontario-style approach.
- The housing reform bill maintains soft rent control principles but faces critiques from both landlords and renters.
Predictions and Future Plans
As Quebec navigates its housing reform, predictions and future plans come into focus:
1. Redefining Urban Planning
- Quebec’s planned reform of urban and regional planning offers a unique opportunity to redefine allowable charges and establish a clear strategy for provincial financing of housing-friendly infrastructure.
2. Balancing Affordability Amid Demand
- With $40 million in housing allowances remaining unused due to a lack of available apartments, Quebec faces the challenge of maintaining affordability amid increasing demand.
- The province must strike a delicate balance between accommodating renters and encouraging construction to meet housing needs.
Conclusion
Quebec’s pragmatic and socially conscious approach, evident in its urban planning and rent control strategies, has positioned it as a housing affordability leader. The ongoing reforms will determine whether Quebec can sustain this success, presenting a critical juncture for the province’s housing landscape. Stay tuned for further updates as Quebec shapes the future of housing affordability.
