By: Karen Filice

Affordability and Government Policy

Tags: CMHC, Hamilton Spectator, Toronto, Commute, Affordability, Mortgages

Recently I have been writing letters to the Hamilton Spectator regarding rules and regulations and qualifying for mortgages in relation to articles being written.  For some reason, my letters are being ignored and/or buried; I suspect because I am saying "THE EMPEROR IS WEARING NO CLOTHES".  

The latest subject of my angst if you will was an article from CMHC that said, amongst other things:  "But a new study from Canada Mortgage and Housing Corp. (CMHC) released Tuesday provides fresh evidence of what many have long suspected — that the cost of commuting into Toronto actually eats up the savings homebuyers seek by locating in 905-area communities such as East Gwillimbury, Newmarket, Mississauga, Whitchurch-Stouffville and Caledon."

What they are failing to mention is that the average commuter CAN'T QUALIFY FOR A HOME IN THE TORONTO AREA UNDER THE PRESENT QUALIFYING RULES AND REGULATIONS!!!!  Gas for a vehicle is not included in the calculation for GDS/TDS - but interest and principal are.  As are municipal taxes.  Also the additional land transfer tax payable in Toronto must be part of savings.  

On the outskirts, the homes are less expensive, the buyer qualifies under GDS/TDS, and has half of the land transfer tax to pay in comparison with Toronto.  

My biggest beef with the current qualifying rules is the fact that people - in another article - are spending up to 50% of income in rental housing, are told that they do not qualify to buy a home.  There is something sadly wrong with a government that manipulates a market to its liking in direct conflict with basic economic principles that the market dictates price, i.e. the rules of supply and demand.

It appears to me that the government is attempting to create a crisis which during an election year, they can fix and look like heroes.  Never mind they were the villans in the first place.  Government policy has no place in the marketplace where supply and demand should dictate.  Thoughts?