Affordable Cost of Living

Support Construction of Privately Funded, Publicly Sold Apartments

Home prices and rents are rising across Ontario, and are putting huge pressure on the affordability of living in the province; in major urban areas costs are completely out of control.

 

I am proposing a for-profit program with a guaranteed return of 5% for investors, which will cover its own costs, and put significant downward pressure on the current cost of condos and apartments in urban areas. This program will involve raising money from private sector investors of any scope, possibly through the sale of a special government bond, and using that money to build simple, attractive, and livable five or six story walk-up apartments in urban neighbourhoods which suffer from low density.

 

*Warning math ahead

 

As a rough proof of the costs involved I'll use an example in Toronto, assume the cost of building at $125 per square foot, and the cost of the land to build on at around $3 000 000.

 

If the typical building is five stories and contains ten apartments, each of which are 800 square feet, the cost of construction, land, and paying bond holders would come out to $4 200 000. This would put the price of each apartment at $420 000.

 

*Math has concluded

 

A new $420 000 two bedroom apartment near downtown Toronto would undercut the current market by 30%-50% and put pressure on condo developers to drop prices if the scale of the project were large enough. I would suggest having buyers commit to owning their unit for a year to prevent flipping, and immediate rent controls on these properties, but those kinds of specifics would be at the discretion of the government.

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Idea No. 35