[URBAN NOTE] "Is the greenbelt squeezing Toronto’s housing market?"

[rfmcdonald]

The Globe and Mail's Jeff Gray reports on the latest on the debate as to whether or not the Greenbelt is causing land scarcity, hence higher prices.

One Friday afternoon last May, IT consultant Zvonimir Petric left work to meet his wife. She had been standing in line for five hours at a sales office offering new homes in north Burlington, a full day before it was to open. When he arrived, he found nearly 100 other people already waiting, all hoping for a shot at a yet-to-be-constructed detached house in one of the Toronto area’s most desirable suburbs – and willing to camp out overnight to get it.

Someone was taking down names and warning that a “roll call” would be held every hour to ensure prospective homebuyers were still in line. Nobody even knew for sure what the prices would be. The couple soon decided it just wasn’t worth it.

“There was just madness,” Mr. Petric said. “In front of everybody, I go: ‘Guys, you are all a bunch of dumbasses if you think you are going to pay this much money for a home and sleep here overnight.’”

Many others would walk away the next morning upon learning the lots ranged from $850,000 to more than $1-million. Still, the development sold out.

Across Toronto’s suburbs, people are trading similar real-estate war stories, as newly built detached homes become a scarce commodity. So it should be no surprise many are now hunting for someone to blame for the Greater Toronto Area’s increasingly unaffordable real estate prices. Pressure is mounting for a B.C.-style tax on foreign property buyers, even though it remains unclear just how much overseas cash is distorting Toronto’s market. The federal government has already tightened its mortgage rules.

But the development industry insists it knows the main culprit: Queen’s Park’s 10-year-old anti-sprawl policies – the Greenbelt and the Growth Plan for the Greater Golden Horseshoe – both now under review.

In increasingly insistent lobbying, industry voices say these two pieces of legislation have cut off the supply of land for new houses, especially detached or semi-detached ones, and are responsible for driving up prices across the GTA.

But a chorus of urban planners and environmentalists call that idea absurd, and point to statistics that suggest there is enough land already earmarked for development to last decades. They counter by saying that developers are twisting the market by holding on to ready land.