Here’s the rub about the red-hot housing market in Toronto: it’s not foreign buyers that are driving it. Even proponents of the provincial Liberals’ new “speculation tax” conceded it accounts for only five to eight per cent of purchases.

The major explanation for mismatched supply and demand is domestic — new homes not keeping pace with Toronto’s 1.6 per cent annual immigration rate (an increase in population of over 100,000 a year), a local economy that’s actually doing quite well, and the irruption into Toronto of an ascendant set of values that can be attributed to an already landed, prospering immigrant class.

The latter is not a racist suggestion — as, to an extent, the “foreign buyers” charge is — but the tail end and proof of the arguments we use to justify welcome new arrivals, typically portrayed as hardworking and with the drive to augment Canadian prosperity.

To wit: one of my wife’s daughters has been looking for a property for a year. When finally she rented, it was from a “new Canadian” who believed (as a certain fictional character in my own family’s past did) that “a man without land is nobody.” A university professor, he’d bought properties in the city for himself and for each of his children — present ages six and four — and these are the ones he is renting. She encountered versions of this story several times. So what’s to blame, “foreign buyers” or the rationale of Canadian immigration policies actually working?

And, besides, why is the rise in the price of houses and homes in Toronto, in fact, distressing? If we take a holistic view of economic laws following their course, then what is bad for some parts of the GTA is good for other communities — as is proved by the Golden Horseshoe stretch of areas to be affected by finance minister Charles Sousa’s new tax — and, indeed, for other underperforming parts of the province and country.

What we are really seeing here is a 21st century phenomenon that we can do very little about. Demographics of urban organization that used to be local — wealthy people on the breezy hilltop, working people on the flats — are now reorganizing themselves nationally.

The few cities in Canada that rank as such — Montreal, Toronto and Vancouver, maybe Calgary and Edmonton — are the new hilltops, and the Prairie and Atlantic Provinces are the new flats. But is this a bad thing? Is this not an opportunity for other cities? Did not the sold soul of Manhattan give life to Brooklyn, and has not the proliferation of beautiful empty apartments made other London boroughs swell?

Go to New Orleans to see that youth are actually able to afford a house (after the devastation of Hurricane Katrina supposedly made the city unliveable) and can utterly transform a place, make it a hub of innovation and multi-faceted productivity, as so many lesser Canadian cities yearn to be. To imagine that we can hedge against these global tides is to make like King Canute.

The flip side of the real estate boom is that it is enriching the province — an estimated billion dollars accruing to the province this year (of which $625 million is accounted for by Toronto action).

What a chance this is! For as much as affordable homes, the livable city depends upon shared amenities rendering all communities within it content — poorer people because they actually use them, and the wealthier because they do not, then live in a city exacerbated by social division.

Build the transit, parks, schools and amenities that compensate for low wages and contribute to a city’s harmony. The new tax is appealing because it provides new revenue streams that can be put into play by a government appearing to act benevolently. But it will do nothing to stimulate new supply and infinitely less than, say, finally instituting a long overdue national child care policy.

The latter would afford women, in particular, the chance to work and grow their families without exhausting their incomes or worrying about their children in inexpensive and unsafe facilities and many more families would be accorded the chance to rent or buy than will be aided by a tax on foreign buyers. (And, umm, do not Canadians also “speculate’?)

Loading... Loading... Loading... Loading... Loading... Loading...

If Toronto does not have the will to enact the social measures that will make a difference, then watch as people and companies, move elsewhere. Let the laws of economics work themselves out. This is no bad thing. A more equitable distribution of prosperity is what will likely result.