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- Written by Gordon Prentice
Last week's revelation that foreign buyers bought 9.1% of all homes sold in York Region between 24 April and 26 May 2017 is, at least to me, unsettling. That's 1 in 11 homes going to people who are neither Canadian citizens nor permanent residents and who have no obvious connection with this country.
Who are these buyers? Where do they come from? And why are they buying homes here?
Some of the answers are self evident.
Safe Haven
Foreign buyers see Canada as a very safe haven to protect chunks of their wealth. Canada is a stable, mature democracy unlike, say, China where the private ownership of land is prohibited. (Everyone leases from the State.)
Like Canada, the UK has traditionally been seen as a safe berth, attracting the super rich - from Saudi princes to Russian oligarchs and everything in between. This arresting video clip from 2014 shows what happened to Bishops Avenue in Hampstead, London, when the billionaires bought mansions but then left them empty.
Justin's Choice
For reasons best known to himself, Justin Beiber last year rented a mansion in Bishops Avenue for C$178,000 a month. At 22 he is old enough to know what to do with his money.
The entry of super-rich (or just very rich) absentee foreign buyers distorts the housing market at the top end. But I suspect the ripples are felt further down the food chain in the prices being asked for more modest properties.
Newmarket's housing bubble
Figures from the Toronto Real Estate Board in the June 2017 Home Price Index for Newmarket are truly startling. The figures were published on 6 July. (The index starts at 100 in 2006. The benchmark price refers to what can be expected for a standard property in its class - single detached, semi, townhouse or apartment.)
A detached home goes for $955,900 - a year over year increase of 24.4%
A single family attached goes for $659,700 - up 20.9%
A townhouse goes for $559,800 - up a staggering 37.9%
An apartment sells for $463,900 - up 27.5%
The Toronto Real Estate Board says its index doesn't predict the future. Just as well.
We don't know how many foreign buyers are active in Newmarket but, whatever it is, something is going on. The figures released last week do not go down below the Regional level to the municipalities.
Foreign Buyers Tax
The Globe and Mail story quotes Markham councillor Karen Rea who pushed for a foreign buyers tax after getting lots of complaints about homes being left empty. She also wants figures that reflect what is happening in the municipalities.
The Globe and Mail points out:
"The new Provincial form requiring home buyers to declare their citizenship did not become mandatory until May 6, meaning the Government's figures may understate the extent of international investors' purchases."
Why do we allow foreign nationals to buy houses as an investment and then leave them empty?
What’s in it for the rest of us?
Apart, that is, from runaway housing inflation.
We need a foreign buyers tax set at a level that bites and empty property taxes that send a signal to those who believe houses are not to be lived in, but are, rather, a store of value to be cashed in when the time is right.
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- Written by Gordon Prentice
Clock Tower developer Bob Forrest paid $4.1M for the Clock Tower building and for the properties at 184-194 Main Street South. We know because he told us. This is shown on the slide (right) which was presented to councillors in May 2016.
Bob snapped up the old Post Office building for $2,340,000 in March 2011. It was an astute move. It had been on the market for $3,275,000.
As long ago as June 2011 he was briefing councillors on his "Clock Tower concept".
Later, he bought the buildings to the south of the Clock Tower (184-194 Main Street South) for $1,760,000 from Michael Bryan.
Winks and Nudges
Bob says there is no truth in the rumour that he was encouraged to press ahead with his Clock Tower development because he was given winks and nudges.
The Mayor, Tony Van Trappist, was incandescent at the very suggestion that winks and nudges might have played a part in getting us to where we are now. Preposterous!
On 3 May 2017, Ira Kagan, Forrest's lawyer and consiglieri, told the first OMB pre-hearing there was a "tacit agreement" between Bob and the Town which, I suppose, is lawyer-speak for a nod and a wink. Anyway, it never came to anything.
At the OMB witnesses are under oath to tell the truth so if anything turns on this so-called tacit agreement it will all come out in the wash.
Bob has invested a huge amount of time on this project and it seems he can't let go.
Bob's Tax Burden
Keeping the Main Street properties empty is costing him an arm and a leg. Bob evicted his business tenants on the pretext of redevelopment and, instead of getting a steady stream of rental income, he has been shelling out money to the Town in property taxes ever since. Some tenants shut up shop in May 2014. The last tenant left in September 2014.
The property taxes (Town, regional and school board) on the Clock Tower building were $21,370.53 in 2016. As a residential property it is ineligible for a vacancy rebate. The other buildings in Bob's ownership (184-194 Main Street South) are deemed mixed use residential and commercial and the tax levied last year was $21,185.13. I do not know what was paid to the Town because this is regarded as private and confidential. I also don't know if Bob applied for an empty property rebate.
In any event, all this constitutes a drain on Bob's resources. The mortgage repayments - if he still has a mortgage - must be colossal. I know Bob took out a mortgage on the Clock Tower property for $3,000,000 on 9 September 2013 with PACE Savings and Credit Union but I don't know where things currently stand. I haven't paid the obligatory $30 to check with the Land Registry recently.
Stuck in the Superior Court
The future is, of course, uncertain. Bob now has to budget for the action brought by the Town in the Superior Court which is being heard on 20 October 2017. My lawyer friends who know about such things tell me the application and any subsequent trial could be stuck in the Court for, perhaps, well over a year. Think of the expense!
On 23 October 2012, Bob sent the Town’s Chief Administrative Officer Bob Shelton an email threatening to pull out of any understanding reached on the redevelopment of the Clock Tower:
“We are spending money to work out the issues with Heritage and BIA. The cost of preparing a complete application for zoning is too onerous for us to undertake without having (redacted). Given that we have spent over $100,000 on reports and design in the last 30 days if the above is not going to fly we prefer to withdraw right now.”
Bob probably feels a deep sense of grievance. He has been working on his Clock Tower project for over six years.
And it has all turned to dust.
Bob needs a friend to tell him it is time to throw in the towel.
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- Written by Gordon Prentice
Bob Forrest - the developer who wants to dump a seven storey condo into the heart of Newmarket's downtown Heritage Conservation District - has presented a single defining issue to the forthcoming OMB Appeal which has its second pre-hearing on 11 August 2017.
Bob wants to know what amendments are "warranted" to the Heritage Conservation District Plan which would allow the construction of his Option B "and to achieve good heritage conservation planning".
I shall deconstruct this is a moment but, first, a little background.
Identifying the key issues
All the Parties to the Clock Tower OMB Appeal had until yesterday (7 July 2017) to hand over their "issues lists" to Bob Forrest's lawyer, Ira Kagan, who had to incorporate them all into a draft Procedural Order to be presented to the OMB and considered at the next pre-hearing on 11 August.
The OMB tells us the pre-hearing:
"identifies the issues, parties and participants; organises complicated matters; decides what documents should be exchanged and determines procedures before and during the hearing."
In contrast to Bob and his single issue, the Town of Newmarket has identified 21 issues worthy of consideration and Trinity United Church has come up with 12. The Heart of Newmarket Citizens' Group has heroically identified 42 issues with the Architectural Conservancy of Ontario (a putative Party) concentrating on its 17 core issues.
Spanner in the works
However, the Town of Newmarket has thrown a spanner in the procedural works by going to the Superior Court to enforce a land swap agreement it entered into in 2003 with Michael Bryan, a property owner on Main Street who subsequently sold his lands on to Bob. This has a direct bearing on the OMB Appeal. The case will be heard in Newmarket on 20 October 2017.
The Town's issue number 20 asks:
"Is any approval of the development, as proposed to be revised, premature pending a determination of legal ownership of portions of the subject land?"
It is difficult to imagine the OMB - which is an administrative tribunal - cocking a snook at the Superior Court. My guess is the OMB adjudicator will put things on hold until after the Court has pronounced. When I asked the OMB what its practice was in these circumstances I was told it was a matter for the pre-hearing.
We have a further complication. Bob has now withdrawn the original application and is going with his Option B which was unveiled for the first time on 3 May 2017 to the first OMB pre-hearing.
It is incomplete. There are no supporting studies that directly address Option B. This is what I told Bob's lawyer, Ira Kagan, when I emailed the ACO's issues list to him on Thursday 6 July:
As a layperson, it seems to me that Option B is not in a fit state to go before the Board. The Market Square elevation is unavailable and the supporting studies all relate to the original application which has now been abandoned. This puts me in a difficult position.
For some studies or parts of studies there will undoubtedly be a straight read-across from the original submission to Option B. But there are aspects of Option B where very significant revisions will be required. In some cases - I am thinking, for example, of the five level underground garage - new studies will be required.
Option B appears to rely - as did the original application - on easements from the Town. There is absolutely no indication from the Town that these will be forthcoming. Indeed, all the information I have points in the opposite direction. Mr Longo told us yesterday that
"the Town is not interested in having any of its lands utilized by the developer for that unwanted project." (ie the original application)
Insofar as your client views Option B as a variation of the original application there are no grounds for assuming the Town will consent for its lands to be used in any way to facilitate Option B when it has already denied the original application. To believe otherwise offends common sense.
In all the circumstances, I believe Option B should be withdrawn as it is manifestly incomplete and that your client should submit it, when complete, to the municipality where it can be given proper consideration.
What does Bob mean by "warranted"?
Now, I must return to Bob's single issue. Bob wants to know what amendments are "warranted" to the Town's Heritage Conservation District Plan to allow the construction of a seven storey apartment block with 143 rental units, 5 commercial retail units and 5 levels of underground parking containing spaces for 177 vehicles. It has a Floor Space Index of 4.19.
What does Bob mean by "warranted"? Does he mean amendments that can, in some way, be justified or is there a special legal meaning going beyond ordinary English usage?
Personally, I am quite happy with the Town's Heritage Conservation District Plan as it currently stands. There is a height cap of three storeys and an FSI of 1.0 which seems entirely appropriate for the area and nothing I see warrants a departure from the Plan.
Side-show to the main event
Others take a different view. When the Council rejected Bob's original application on 5 December 2016, John Taylor called on staff to bring forward a site specific Zoning By-law amendment to restrict the height of development fronting Main Street South and Park Avenue to three storeys but with the possibility of a fourth storey if set back by a minimum of 15 feet. Of course, no-one has been consulted about this yet. It may not be wanted. Anyway, this is a side show to the main event.
Bob wants to know how the Heritage Conservation District Plan can be changed to accommodate his inchoate Option B rather than the other way around.
Just to put the matter in this way is to underline the essential silliness of Bob's position.
Planning lawyers may see Bob's single issue in an entirely different light.
It may make perfect sense to them, if not to me.
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- Written by Gordon Prentice
I drop in to the Metrolinx open house on rail electrification at the Community Centre in Doug Duncan Drive, Newmarket. It is Wednesday 5 July 2017 at 7pm and there is a good crowd - mostly people who will be directly affected as they live close to the rail tracks.
Metrolinx is planning to electrify the entire Barrie line from Toronto up to Allandale. I am very much in favour of this but it should have happened twenty years ago.
As I enter it is impossible to miss Chris Ballard, Newmarket-Aurora's smiley MPP, who is standing strategically by the entrance, making sure his constituents know he is here.
When the facilitator (with a melodious faintly Bronx accent) asks how many people actually use GO trains only five hands go up, including Chris Ballard's and mine. Oh dear! Then again, most people - including rail commuters - are getting on with their lives rather than sitting through two hours on the minutiae of electrification, overhead wires, gantries and all that stuff.
I am here to learn more about electrification and level crossings. We have four of these in Newmarket and only one will disappear as a result of grade separation - Mulock Drive.
25,000 volts
The remodelled Davis Drive is going to be a jumble of wires. The thick cables slung from the hydro poles will be joined by sizzling 25,000 volt overhead wires above the level crossing, adding to the general clutter.
Of course, 25,000 volts is no big deal. There are level crossings all over the world with live wires above them. Hmmm.
Electricity can jump or arc so you don't need to touch the wire to get electrocuted. So I suspect open top double-decker buses will be a no-no on Davis Drive. And these SUVs sporting ridiculously long wavy aerials would be well advised to find another route.
As it happens, the questions from the audience touch on a thousand issues far removed from the main topic, electrification.
15 minute service
Some people are getting quite animated about the 15 minute service stopping at Aurora, calling for it to be extended northwards. Hear! Hear! I say, turning towards Chris Ballard.
He smiles and hints this is his next project.
Over two years ago, on 17 April 2015, he tweeted:
"Enhanced service coming to Newmarket. Need time to build a number of crossings in Newmarket before 15 minute service possible, though."
I can understand why he would want to move the 15 minute cut-off point to Newmarket, East Gwillimbury or points north. An army of commuters is going to descend on Aurora to take advantage of the 15 minute service. No doubt about it. The figures from Metrolinx' studies already predict this.
No rush says Van Trappist
We in Newmarket, a designated Place to Grow, will have the silver service while Aurora gets the gold. Our steady-as-she-goes, don't rock the boat Mayor, Tony Van Trappist, told the Council on 9 November 2015:
"In my own mind the difference between a 15 minute and 30 minute service doesn't change the world although I think eventually we'll need to get there. But I'd rather see us easing in to that, responding to the demand as we go forward."
Someone asks why Aurora? And we get referred to a 2013 study which suggests it was all thoroughly examined. But was it?
Population up
We shall soon be seeing explosive population growth in East Gwillimbury. Newmarket's population grew by 5.3% from 2011-2016 (above the national average) while Aurora's increased by 4.2%.
I recall Leslie Woo, Metrolinx Chief Planning Officer, telling Newmarket councillors on 9 November 2015:
"Newmarket will be getting two-way all-day service every 30 minutes. When we were developing the business case for Regional Express Rail there are several markers for evaluating the extent of the ten year program. It is based upon ridership uptake and also the level of difficulty for implementation. It was felt Aurora would be the best "edge-point" for the 15 minute service and that was the business case for going to Aurora. Every 30 minutes to Newmarket."
Ballard would like to push that "edge-point" north but the cost could be cripplingly expensive. I understand that but I don't lose sleep over these things. I'm not the Minister of Finance. (As if!)
Phasing out level crossings
Transport Canada guidelines say grade separations are warranted where the "exposure index" exceeds 200,000. (The index multiplies daily road vehicle traffic by daily train traffic.)
In 2015, the index was exceeded at Mulock Drive (458,400), Davis Drive (396,000) and Green Lane (464,400).
Metrolinx say they don't have the money to do everything they want to do. Fair enough. It is a huge undertaking with lots of moving parts.
But I am left wondering how much time Chris Ballard needs before we get the grade separations that will allow a 15 minute service to Newmarket.
It is not a trick question.
Difficult. Yes.
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- Written by Gordon Prentice
All is not well in Whitchurch-Stouffville if we are to believe the Toronto Star.
Tuesday's front page splash by Noor Javed paints a picture of a dysfunctional Council with a "CSI-style" wall in Mayor Justin Altmann's office washroom
"that displayed dozens of photos and names of fellow and former councillors, members of the public, and town staffers who have either been dismissed or resigned from their jobs in recent years."
Maybe the Mayor has trouble remembering names and this is his own - admittedly unusual - aide mémoire.
More concerning perhaps is the way the Town is going through staff. The turnover is unbelievably high. I had no idea the former Chief Administrative Officer Marc Pourvahidi has been on administrative leave for over a year and is on an eye-watering salary of $447,289.
It makes Newmarket's Bob Shelton - who gets $247,641 - look like a poor country cousin.
I am quiet and like to listen
From time to time I see Justin Altmann at York Regional Council. He says he is a quiet man who likes to listen. In fact, he contributes even less than Tony Van Trappist who snoozes through meetings, totally oblivious to what is happening around him.
Personally, I expect more from our representatives than being mute lumps of lard. The members of York Regional Council get a "stipend" of $54,337. For this, I expect them to be active participants in debates, not gawping spectators.
Of course, politicians have a duty to listen to their constituents and to others. But they cannot shelter in silence, like Newmarket's Tony Van Trappist, unwilling or unable to express a view.
At first I thought Mayor Altmann was a deep thinker, weighing the pros and cons before pronouncing. But when he refused to pronounce on anything I pretty much wrote him off.
Torrent of questions
Then there was a remarkable contribution last November when Altmann unleashed a torrent of questions about housing on the unsuspecting Chief Planner, Valerie Shuttleworth - all in one go. She couldn't possibly answer a dozen questions all rolled up into this humungous omnibus question. And she didn't try to.
At the time I thought, how strange. It was more than a stream of consciousness.
It was like the dam had burst. And after months of bottling-up his contributions and saying nothing it all came cascading out.
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Update on 8 July 2017. Saturday's Toronto Star has more on the Mayor's "creepy" washroom.
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