Why are Toronto House Prices 10 times that of Nearby Buffalo?
I stumbled across this article in the Buffalo News earlier this year.
Fort Erie, Ontario is a fifteen-minute walk to Buffalo, New York, separated only by a border crossing and the Niagara River. Taxes have always been higher on the Canadian side, unemployment 7% against Buffalo at just over 5%, and its economy, according to its own development corporation continues to stall while Buffalo grows.
So why are house prices more than double those of adjacent Buffalo? The article looks at the discrepancy (along with similarly glaring difference in other border cities) but is only able to stab at reasons. Median Salaries are higher. But so are taxes and living costs, so very little real difference. No one’s being lured across the river to any high paying jobs from Buffalo any time soon.
But look at the bigger picture. House prices in nearby Niagara Falls, Ontario are 20% higher again (3 times higher than Niagara Falls, NY) and Toronto, 1.5 hours away by car, prices are over 10 times higher than Buffalo.
Is it just me, or does that fact that a city that currently is 1.5 hours drive away, with house prices 1/10th of the price, merit some economic investigation from Toronto?
The glaringly obvious thing to develop the Canadian border cities as well as cross border economic activity would be a fast train link to the border at Fort Erie. Not only would this open up the (relatively inexpensive) area to hard pressed Toronto commuters, it would have the knock on effect of pulling people and investment into the region, with the added bonus of allowing lower taxed Buffalo/Niagara Falls to suddenly be within commuting distance to a city 10 times more expensive. It would also allow easy access to Niagara Falls, NY and Buffalo Airports, which can easily compete with Toronto Pearson, the most highly taxed airport in the world.
Torontonians already visit Buffalo. Canadian Newspapers have been really positive on Buffalo this year last. They no longer just buy goods in the mall. Local banks lend to Canadians on real estate and a fast transit solution would be just one more piece in the jigsaw towards helping making Buffalo, NY an attractive commuter city for Toronto, Ontario. The long term dynamics in an ever shrinking world means that its only a matter of time before the discrepancies between houses prices in Fort Erie and Buffalo shrink, and people in Toronto realise they can live in a beautiful old house in historic Buffalo, for the same $300k price as a grotty 1-bed apartment in Toronto.
Sadly there’s a big difference in what’s good for a city and what politicians want, but I thought I’d throw the idea out there in case the local transport minister is reading.