The government of Ontario recently announced a massive condo buyout project for GTA developers. The plan aims to buy 2,200 condo units for an estimated $1.3 billion. While the government presents this as a way to introduce more affordable housing, it is easy to see what this is: a massive developer bailout.
For years, the right wing claimed that giving developers tax breaks and other incentives would lead to an increase in affordable housing. But as we have always explained, relying on the capitalist market to create affordable housing is utopian. The result is not surprising: GTA developers sit on 22,000 unsold units, with another 35,000 units coming onto the market as construction completes! We now are faced with the absurd situation of record levels of homelessness and unaffordable rent with tens of thousands of empty condos! That’s the miracle of the so-called “free market” for you!
Instead of these units being provided to those who need them, private developers, not wanting to sell their condos at a loss, prefer to keep them off the market until prices return to an acceptable margin. But no worry, condo developers can count on Doug Ford to bail them out!
The plan is for the Building Ontario Fund (BOF) alongside a private investment firm, High Art Capital, to finance this. While most of the funds are to be raised by the private sector, over $300 million dollars will come straight from the government’s pocket. The units will be bought for roughly $590,909.09. Considering the value of condo apartments have plummeted from a median price of over $700,000 to median price of just $545,000 today, this is a huge blessing for condo developers, as well as High Art Capital who are using state money to subsidize their purchase to the tune of approximately $136,000 per condo!
The pretext for this buyout is that these units will be put up on the rental market and help reduce rent prices. But as they say, the devil is in the details. The program boasts that 25 per cent of the 2,200 units will be affordable. Considering that the waitlist for affordable housing in Toronto is over 100,000 applicants long, the impact will be miniscule.
In addition to this, the rental units are to be managed by private rental firms, who always try to squeeze as much profit from their tenants as possible. Private rental firms are well known for using every reprehensible method, including renovictions and above-guideline rent increases to make the most possible profit.
There is no solution to the rental crisis under capitalism and this is just the latest flagrant example.
