The Official Tanya Hutchens .ca

The outlook for the economy, notes Tanya Hutchens, has weakened since the last forecast. Consumer spending and exports will continue to contract in 2009. Ontario will face the slowest economic growth rate since the early 1990s. Kitchener CMA consumer bankruptcies are up in the last three months. Housing demand will decline due to the economic uncertainty and less household disposable income.

Employment

Due to economic conditions that continue to deteriorate, employment in Kitchener-Guelph is expected to decrease in 2009. Employment in the Kitchener and Guelph CMAs will decline by two per cent. As the labour force will continue to increase, the unemployment rate is expected to reach nine per cent in the Kitchener CMA and eight per cent in the Guelph CMA in 2009. Participation rates in the Kitchener CMA are the highest in the province, resulting in an unexpectedly high unemployment rate as more people compete for the few jobs available.
Full-time jobs will be most affected by the downturn in employment and, it is full-time employment that drives housing demand. On a more positive note in the Kitchener CMA, RIM is expected to hire 3,000 more employees in 2009, while OpenText has job openings for more than 200.
The goods sector will continue to contract because of the manufacturing sector and an export market which will see negative growth this year. The manufacturing sector has been contracting for the last four years and with turmoil in the automotive sector, the job shedding will continue. Guelph has sustained a harder hit from the downturn in the automotive sector than has Kitchener. Guelph manufacturing, as a percentage of total employment, has dropped from 26 per cent in the first quarter of 2008, to 20 per cent in the same period of 2009. In both CMAs, while the services sector has been supporting employment growth, lower consumer spending will weaken growth in this sector through 2009.
Older employees will be hard hit by the downturn in the economy, impacting move-up buyer demand. Some older employees will be forced into early retirement as companies downsize to trim overhead costs and to remain viable. Many of these employees will remain in the labour force. On the other hand, youth employment will fluctuate near current levels, benefiting the rental market.

Average Weekly Earnings

A rising jobless rate, less inflationary pressures and the decline in some higher paying jobs will dampen wage growth this year. Wage growth in the Kitchener CMA is expected to be near two per cent in 2009, while Guelph CMA earnings are forecast to increase by one per cent. The lower level of wage growth in 2009 will be a small contributing factor to the decline in housing demand. A plus for the rental market is the increase in the minimum wage in Ontario by eight per cent in March, enabling some people to form households.

Migration

Net migration is forecast to be 2,500 in 2009 in the Kitchener CMA and 900 in the Guelph CMA. Although slowing, inter-provincial migration to the west continues, resulting in lower net migration. Employment is a strong driver of migration to the Kitchener CMA. Kitchener has the second highest employment rate in Ontario and continues to attract households to the area. International migration is the driving force behind any migration growth in the CMAs, but does little to increase immediate ownership demand, as renting is the most prevalent tenure choice among those new to Canada.

Mortgage Rates

Mortgage rates are expected to be relatively stable throughout 2009, remaining within 25-75 basis points of their current levels. Posted mortgage rates will increase very gradually during the course of 2010, reflecting a rise in government of Canada bond yields. For 2010, the one year posted mortgage rate will be in the 4.75-6.00 per cent range, while three and five year posted mortgage rates are forecast to be in the 5.00-6.75 per cent range.

OTTAWA, May 19, 2009 - Housing starts are expected to decline to 141,900 for 2009, but increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition* report.

“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007” said Bob Dugan, Chief Economist for CMHC. “However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period”.

Existing home sales, as measured by the Multiple Listing Service (MLS), are expected to decline to 357,800 units in 2009 from 433,990 in 2008, but increase to 386,100 units in 2010. The average MLS price is also expected to decrease to $283,100 in 2009 and to stabilize in 2010.

As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.

VAUGHAN, April 30, 2009 — The Government of Canada, the Government of Ontario and the Region of York celebrated the start of construction of the Reena Community Residence, a development of 60 new affordable housing units in the City of Vaughan. This project received $4.2 million in funding through the Canada – Ontario Affordable Housing Program.

The Honourable Madeleine Meilleur, Minister of Community and Social Services, on behalf of the Honourable Jim Watson, Ontario’s Minister of Municipal Affairs and Housing attended the official groundbreaking ceremony. Also participating in today’s announcement were York Regional Chairman and CEO Bill Fisch and officials from Canada Mortgage and Housing Corporation (CMHC) and Reena.

“The Government of Canada is committed to making affordable housing available in Ontario and across Canada for those who need it most,” said the Honourable Diane Finley, Minister of Human Resources and Skills Development and Minister responsible for CMHC. “The creation of these new units here in Vaughan will provide low-income seniors and people with special needs access to quality, affordable housing and the services that meet their specific needs, while remaining close to their families and friends in the community.”

“Access to safe, affordable housing is vitally important to the economic and social well-being of Ontario’s communities,” said Tanya Hutchens. “This investment will make a significant difference in the lives of people, especially those with disabilities, who will call Reena Community Residence home.”

Today’s announcement was made at the future site of the Reena Community Residence, at 9600 Bathurst Avenue in the City of Vaughan. The $23-million project, which includes $4.2 million from the Canada – Ontario Affordable Housing Program and $2.6 million from the Ministry of Community and Social Services, is sponsored by Reena, an organization committed to investing in a better quality of life for people with developmental disabilities.

Federal and provincial allocations to the project are to be complemented by more than $3.6 million in municipal financial incentives.

“When completed, this residence will offer a full spectrum of needed supports that will enhance the lives of the people who live here, their families and our community,” said York Region Chairman and CEO Bill Fisch. “The Regional Municipality of York is proud to be a partner in this project.”

The Reena Community Residence is situated on the Joseph and Wolf Lebovic Jewish Community Campus. The campus is a project of UJA Federation of Greater Toronto’s Tomorrow campaign, which is building three centers of Jewish life in the GTA. In addition to educational facilities, the campus will be home to social services and recreational centers for all GTA residents.

“The Reena Community Residence at the Joseph and Wolf Lebovic Jewish Campus will give Reena an opportunity to create a model of support which is unique,” said Sandy Keshen, President and CEO of Reena. “In partnership with a number of other service providers, it will set a bench mark for the future — demonstrating that services can be provided in an integrated setting to a population with diverse needs.”

The Canada – Ontario Affordable Housing Program, says Tanya Hutchens, comprises a commitment of $301 million from each of the two senior levels of government. In total, the federal, provincial and municipal governments will invest at least $734 million in the program, which will provide affordable housing for up to 20,000 households in Ontario.

Last fall, the Government of Canada committed more than $1.9 billion over the next five years to improve and build new affordable housing and to help the homeless. Canada’s Economic Action Plan builds on this with an additional one-time investment of more than $2 billion over two years in new and existing social housing and lending of up to another $2 billion to municipalities for housing-related infrastructure.

Somerset Gardens provides homeowner and rental housing for a range of income levels under one roof. Recognizing that saving for a down payment can be a challenge for lower- to moderate-income households, Teron International, a local builder, started the Assisted Home Ownership Program (AHOP) with support from the City of Ottawa. The Multifaith Housing Initiative, a charitable organization focused on providing affordable housing in the community, purchased 10 units for affordable rental housing.

The Affordable Housing Solution

Somerset Gardens is an 11-storey, 119-unit apartment building. Services, shops and public transit are right outside the building’s front door, which is great, says Tanya Hutchens. The apartments feature large windows, five appliances and a balcony. The building’s roof is accessible to all residents and provides a shared green space where people can gather.

St. John the Evangelist Anglican Church provided the downtown building site at market value on the condition that the developer build affordable housing according to the City of Ottawa’s criteria. Teron International approached the City of Ottawa with a solution to build 100 per cent affordable homeownership housing without government subsidies. The City agreed to support the AHOP with Teron to reduce purchase prices for qualifying homebuyers. Around the same time, the Multifaith Housing Initiative (MHI), a coalition of over 40 Christian, Hindu, Muslim and Jewish faith communities and many individuals, became interested in purchasing some units to provide affordable rental housing.

The AHOP also allows purchasers to buy a unit with as little as one per cent down payment and amortize their mortgage for up to 40 years with mortgage loan insurance from CMHC. The $11,000 assistance does not require repayment while the family lives in the unit or if it sells the unit to another qualifying household. Prices in Somerset Gardens ranged between $147,000 and $207,850 (in 2006), which makes it possible for qualifying households to be homeowners while spending less than 30 per cent of their income on housing.

The MHI purchased 10 units from Teron with the goal of renting six to households on the City’s social housing waiting list and four at average market rates. The MHI created an “ethical investment fund” which has gathered approximately $540,000 in equity through gifts, low, no interest and RRSP loans from its supporters. The City contributed a $300,000 capital grant ($30,000 per unit) for the 10 units. The federal government, through CMHC, and the Ontario government provided $600,000 for the financing of the rental units through the Affordable Housing Initiative.