Canada to ban foreigners from buying homes(bloomberg.com)
bloomberg.com
Canada to ban foreigners from buying homes
https://www.bloomberg.com/news/articles/2022-04-06/canada-to-ban-some-foreigners-from-buying-homes-as-prices-soar
796 comments
https://archive.ph/oWGMM
> During last year’s election campaign, Trudeau’s party also proposed a ban on “blind bidding” for houses -- the prevailing system by which offers are kept secret when someone is auctioning a home.
This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of the information to one side (the sellers), while leaving the buyer stuck guessing at what the real price for the house is supposed to be. An absolutely horrible process that should be banned. Banning this is such a simple reform. I sincerely hope it happens, though I doubt it it will.
This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of the information to one side (the sellers), while leaving the buyer stuck guessing at what the real price for the house is supposed to be. An absolutely horrible process that should be banned. Banning this is such a simple reform. I sincerely hope it happens, though I doubt it it will.
You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided.
Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically.
While you're at it, you could go after other wildly popular policies that lead to high housing prices, like the primary homeowner capital gains tax exemption (probably, by value, the biggest tax dodge in the industrialized world), and Canadian cities' extremely low property tax rates (0.3% of assessed value in Vancouver, for example).
Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically.
While you're at it, you could go after other wildly popular policies that lead to high housing prices, like the primary homeowner capital gains tax exemption (probably, by value, the biggest tax dodge in the industrialized world), and Canadian cities' extremely low property tax rates (0.3% of assessed value in Vancouver, for example).
> You're fighting scarcity.
No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated.
A rational actor should walk away from a system like this, but if that's all that's available around you because of scarcity, you're forced to work at a disadvantage.
Banning this is akin to banning other anticomptitive behavior, such as collusion and monopolies. That is, it's up to the government to decide whether the harm outweighs the problems regulation introduces (regulation always introduces some level of friction and problems, you just hope to minimize them and maximize the benefits it brings) and is thus worth pursuing.
No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated.
A rational actor should walk away from a system like this, but if that's all that's available around you because of scarcity, you're forced to work at a disadvantage.
Banning this is akin to banning other anticomptitive behavior, such as collusion and monopolies. That is, it's up to the government to decide whether the harm outweighs the problems regulation introduces (regulation always introduces some level of friction and problems, you just hope to minimize them and maximize the benefits it brings) and is thus worth pursuing.
These kind of little tweaks to symptoms of the housing shortage are ultimately useless band aids. After a decade of stopping foreigners and corporations from buying houses, slapping the wrists of landlords who have vacant units, and mandating that the bidding process is emotionally nurturing, house prices will still be higher if there is more demand than supply.
In a world where there was enough housing supply, you would just walk away from a blind bidding auction since it's a pain, and buy a bigger house for cheaper across the street.
In a world where there was enough housing supply, you would just walk away from a blind bidding auction since it's a pain, and buy a bigger house for cheaper across the street.
I don't disagree that they don't fix the problem entirely, nor that they don't address the core problem of housing affordability. I don't think they're useless though. They affect what many people see as an unfair practice. If stopping it is as easy as regulating it away, why not do so? Nobody is going to then turn around and assume the housing affordability problem is fixed, and if they did nobody is going to believe them. It's not like this is some new and not understood problem, nobody believes blind bidding is causing all the problems.
This, 100%. The rules can be whatever they are, but the participant with the most market power will always end up having the upper hand somehow
Sure! But still or even more then, wouldn't hurt to remove this intransparency aspect and what feels very unfair? Or what's the downside?
All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.
You pick your battles, as perfect is the enemy of good. That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way.
That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way
That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity.
None of these things will matter one whit to housing affordability. "Helps in some way" is fine as long as we understand that it has nothing to do with high housing prices. "Helps in some way" is fine as long as we measure our claims and admit that this is about basic fairness and respect for the law. "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
Every one of these things should be dealt with. Canada should probably have anti-racketeering laws. Real-estate boards should have less power and should be compelled to publicize their sales data. Etc, etc, ...
Just quit the bullsh*t about this being about addressing housing affordability.
That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity.
None of these things will matter one whit to housing affordability. "Helps in some way" is fine as long as we understand that it has nothing to do with high housing prices. "Helps in some way" is fine as long as we measure our claims and admit that this is about basic fairness and respect for the law. "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
Every one of these things should be dealt with. Canada should probably have anti-racketeering laws. Real-estate boards should have less power and should be compelled to publicize their sales data. Etc, etc, ...
Just quit the bullsh*t about this being about addressing housing affordability.
> the real reason that housing is so expensive in popular cities, which is scarcity.
This isn't really true though. Housing is expensive everywhere, even in unpopular cities, even in cities losing population. (Except for a few specific cities), housing is not scarce, we just pretend it is because we pretend all these fake financial transactions count as valid 'demand'.
> we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity
And why is housing "scarce"? Because we waste housing on fake buyers (every single thing you just mentioned). That's why it's all in focus so much.
My midwestern city has built 2x to 3x more housing units than it's received in new residents, for almost 15 years straight now, and housing still goes up 15% each year like clockwork. You can outbuild new resident growth (many places already do), but you can never outbuild investor demand while housing is federally forced to appreciate like this.
I'm so sick of people bullsh*tting that 'zoning' and 'nimbys' are why housing is expensive, when we have dozens of major cities with no meaningful zoning restrictions, no 'nimbys', and no restrictions on growth or construction of any kind -- and even in these cities, housing is shit and expensive.
This isn't really true though. Housing is expensive everywhere, even in unpopular cities, even in cities losing population. (Except for a few specific cities), housing is not scarce, we just pretend it is because we pretend all these fake financial transactions count as valid 'demand'.
> we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity
And why is housing "scarce"? Because we waste housing on fake buyers (every single thing you just mentioned). That's why it's all in focus so much.
My midwestern city has built 2x to 3x more housing units than it's received in new residents, for almost 15 years straight now, and housing still goes up 15% each year like clockwork. You can outbuild new resident growth (many places already do), but you can never outbuild investor demand while housing is federally forced to appreciate like this.
I'm so sick of people bullsh*tting that 'zoning' and 'nimbys' are why housing is expensive, when we have dozens of major cities with no meaningful zoning restrictions, no 'nimbys', and no restrictions on growth or construction of any kind -- and even in these cities, housing is shit and expensive.
> This isn't really true though. Housing is expensive everywhere, even in unpopular cities, even in cities losing population.
Calgary? Its a hugely popular city, with a similar growth rate as vancouver and yet housing is much cheaper (relatively speaking)
Calgary? Its a hugely popular city, with a similar growth rate as vancouver and yet housing is much cheaper (relatively speaking)
Very true. The same house I just sold in Calgary for 400k is worth 1.2M in Vancouver and area. Which is why there is so much money coming from Vancouver and the GTA to Calgary and Alberta.
The growth of remote work, fuelled partly, but not entirely by the pandemic has supercharged our market which is two and a half hours outside the GTA. Such a temporary solution though because equilibrium will be achieved with or without Federal intervention. Sadly we won’t probably even get high speed rail transit to and from the GTA out of this.
> None of these things will matter one whit to housing affordability.
> "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
That isn't what the commenter you originally replied to was stating, nor was it my position. While your argument may have merit, it's a non-sequitur when used as a rebuttal to either that commenter or myself.
> Just quit the bullsh*t about this being about addressing housing affordability.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
> "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"
That isn't what the commenter you originally replied to was stating, nor was it my position. While your argument may have merit, it's a non-sequitur when used as a rebuttal to either that commenter or myself.
> Just quit the bullsh*t about this being about addressing housing affordability.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
That isn't what the commenter you originally replied to was stating, nor was it my position. While your argument may have merit, it's a non-sequitur when used as a rebuttal to either that commenter or myself.
The poster is literally responding to a news article about housing affordability with the declaration about blind-bidding, "This is such a huge deal".
It really isn't. This is the difference between English vs Dutch auctions and the relative merits in an open and sane market can be debated. Sealed auctions are not a market failure. Sealed auctions do not necessarily lead to higher bids. Sealed auctions do not necessarily lead to market asymmetries. The effects of these two auction choices is largely irrelevant as long as we have the demand curve pushed out to crazy-town.
Do research on the property! One of the big advantages of Dutch auctions is that bidders don't get information on how you value something! Except of course that everything is valuable because of scarcity so yeah actually I guess sealed bids won't really provide a lot of value for the buyer.
Adjust your bid as others bid! English auctions allow you to make lots of adjustments based on what other bidders think something is worth! Oh, except of course everything is in demand so everyone just keeps bidding and the frenzy makes other participants unpredictable... so yeah, actually I guess open bids won't really provide a lot of value for the buyer.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
I'm really just tired of the bs.
The poster is literally responding to a news article about housing affordability with the declaration about blind-bidding, "This is such a huge deal".
It really isn't. This is the difference between English vs Dutch auctions and the relative merits in an open and sane market can be debated. Sealed auctions are not a market failure. Sealed auctions do not necessarily lead to higher bids. Sealed auctions do not necessarily lead to market asymmetries. The effects of these two auction choices is largely irrelevant as long as we have the demand curve pushed out to crazy-town.
Do research on the property! One of the big advantages of Dutch auctions is that bidders don't get information on how you value something! Except of course that everything is valuable because of scarcity so yeah actually I guess sealed bids won't really provide a lot of value for the buyer.
Adjust your bid as others bid! English auctions allow you to make lots of adjustments based on what other bidders think something is worth! Oh, except of course everything is in demand so everyone just keeps bidding and the frenzy makes other participants unpredictable... so yeah, actually I guess open bids won't really provide a lot of value for the buyer.
I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.
I'm really just tired of the bs.
>> All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.
I disagree. Depending on the jurisdiction (in the US), part of the issue is the 10% net loss you end up with. 5-6% on the agent fee(s), another 1% on "mansion tax", in NYS/NYC there is a 1% and 1% transfer tax and 1/2% mortgage tax. Different jurisdictions are less (or more). Throw in more for the lawyer and you're down 10% on the sale. The sales agent fee seem fair for tough markets but even 1% sales agent fees seem preposterous given the market. If the house flips in 1 day, how is that worth 5 or 6%? These days people are negotiating that down to 4% but even that is preposterous given the market.
The problem with the extra 5 or 6% agent fees is: that people dont want to buy/sell as much, because you're effectively losing 20-30% of your 20% down equity on the sale (you'll lose more on the buy with the the 1-2% Title Insurance.) Effectively, you're losing half your 20% down equity.
Of course then...even if sellers want to sell, they dont because they need to bypass the frictional hurdles. Because if you sell and host half your 20% down equity, how the heck do you buy the next home?
I disagree. Depending on the jurisdiction (in the US), part of the issue is the 10% net loss you end up with. 5-6% on the agent fee(s), another 1% on "mansion tax", in NYS/NYC there is a 1% and 1% transfer tax and 1/2% mortgage tax. Different jurisdictions are less (or more). Throw in more for the lawyer and you're down 10% on the sale. The sales agent fee seem fair for tough markets but even 1% sales agent fees seem preposterous given the market. If the house flips in 1 day, how is that worth 5 or 6%? These days people are negotiating that down to 4% but even that is preposterous given the market.
The problem with the extra 5 or 6% agent fees is: that people dont want to buy/sell as much, because you're effectively losing 20-30% of your 20% down equity on the sale (you'll lose more on the buy with the the 1-2% Title Insurance.) Effectively, you're losing half your 20% down equity.
Of course then...even if sellers want to sell, they dont because they need to bypass the frictional hurdles. Because if you sell and host half your 20% down equity, how the heck do you buy the next home?
All this is true and bad but the Canadian market is primarily driven by supply issues, not red tape. There just aren’t enough houses/condos.
The resulting price boom isn’t a mere 5-10% increase, but hundreds of percent over the course of only 5-10 years.
I’ve seen condo prices double three times in five years in places.
The resulting price boom isn’t a mere 5-10% increase, but hundreds of percent over the course of only 5-10 years.
I’ve seen condo prices double three times in five years in places.
> All this is true and bad but the Canadian market is primarily driven by supply issues, not red tape. There just aren’t enough houses/condos.
You forgot cheap debt. There's also a ton of speculation. Jack up those interest rates and see where we're at.
You forgot cheap debt. There's also a ton of speculation. Jack up those interest rates and see where we're at.
Jack up interest rates to trigger a recession, and now not only do you still have a housing market that exists in its current form due to perpetual undersupply but with a recession on top.
Making it too expensive to buy a home does 'help' with prices, but it's more like treating the symptom than the cause. The result is there still isn't enough affordable housing in places where it is needed.
Making it too expensive to buy a home does 'help' with prices, but it's more like treating the symptom than the cause. The result is there still isn't enough affordable housing in places where it is needed.
If raising interest rates causes a recession then we’re already in one and just pretending we’re not.
Consider the long term consequences of this debt economy. We’re just kicking the can down the road. It won’t magically get better. The sooner we (society) learn that massively over borrowing has consequences, the better.
I agree though that building more housing (or maybe radically changing the way housing works) should also happen. Maybe once everyone wakes up from this real estate debt fantasy there’ll be the political will to actually do something about it.
Average house price in Canada has ballooned. It’s like a crypto scheme, only instead of a bunch of shady YouTubers selling it, we have an entire industry of snake oil pushers. I don’t think your average Jane really gets how ridiculous it is… yet.
Consider the long term consequences of this debt economy. We’re just kicking the can down the road. It won’t magically get better. The sooner we (society) learn that massively over borrowing has consequences, the better.
I agree though that building more housing (or maybe radically changing the way housing works) should also happen. Maybe once everyone wakes up from this real estate debt fantasy there’ll be the political will to actually do something about it.
Average house price in Canada has ballooned. It’s like a crypto scheme, only instead of a bunch of shady YouTubers selling it, we have an entire industry of snake oil pushers. I don’t think your average Jane really gets how ridiculous it is… yet.
>> All this is true and bad but the Canadian market is primarily driven by supply issues, not red tape.
My point is that if you reduce the red tape (and deadweight loss) there are actually people who want to sell, but wont sell if they are losing a ton of money on the sale. Reduce the loss and more supply appears.
In the US this is a huge issue. If you switch cities twice and sell each time, your entire downpayment has disappeared in fees/taxes. You literally have nothing left to buy your next home with. So people stick around in houses they dont want in cities without ideal jobs because they have no choice.
My point is that if you reduce the red tape (and deadweight loss) there are actually people who want to sell, but wont sell if they are losing a ton of money on the sale. Reduce the loss and more supply appears.
In the US this is a huge issue. If you switch cities twice and sell each time, your entire downpayment has disappeared in fees/taxes. You literally have nothing left to buy your next home with. So people stick around in houses they dont want in cities without ideal jobs because they have no choice.
That isn’t what’s happening in the Canadian market is what we’re telling you.
It is not that there are people that aren’t selling, it’s that there aren’t enough houses for the number of people in the country. House prices have risen enough to cover all of the fees, except that there is nowhere in the country you can move to where this isn’t happening.
It is not that there are people that aren’t selling, it’s that there aren’t enough houses for the number of people in the country. House prices have risen enough to cover all of the fees, except that there is nowhere in the country you can move to where this isn’t happening.
When markets are rising so rapidly, there are very few people who might lose money on a sale. There’s a lot of fat in the process, but it’s not particularly relevant when prices are going up double digits each year.
Unless potential sellers are leaving the country or are choosing to rent after they sell, wouldn't more sellers also increase the number of buyers (because those sellers have to live somewhere else after they sell), and it all will end up being a wash?
(And if they are choosing to rent after they sell, that just shifts unaffordable home prices to unaffordable rents, as rental demand increases without a corresponding increase in supply.)
(And if they are choosing to rent after they sell, that just shifts unaffordable home prices to unaffordable rents, as rental demand increases without a corresponding increase in supply.)
If the broker fee isn't worth it, then sell your house yourself. It's not that hard, but it's not zero work either. In addition, it's increasingly likely that many modern transactions involve a buyer and a seller broker, reducing their commission to half of whatever you pay.
I've sold 3 houses myself, and bought 3 without a broker.
I've sold 3 houses myself, and bought 3 without a broker.
In the US, The buyer AND the seller fees are paid by the seller. Even if you have no seller agent, you lose practically every buyer without a buyer agent because many agents will not show you a home not offering a fee. Its a shakedown.
I sold one of the 3 houses I've owned & sold to someone using a buyer broker. The broker reached out to negotiate the fee, and we settled on 2.5% (a bit too easily, I suspect I could have pushed it down to 2%). The last house I sold we almost sold via a buyer agent, and they did the same thing.
They are doing work, so the real question is whether you feel they are overcharging or not for whatever it is that they do.
Also, I think you meant to say "you lose practically every buyer WITH a buyer agent". This has not been my experience.
They are doing work, so the real question is whether you feel they are overcharging or not for whatever it is that they do.
Also, I think you meant to say "you lose practically every buyer WITH a buyer agent". This has not been my experience.
No one is required to pay a 5-6% commission. Use a discount real estate broker. You won't get much in the way of marketing or staging service, but in a hot market that hardly matters.
Market inefficiency would add an x% overhead on the price, but it doesn't uncontrollably increase the price. That's scarcity.
I mean scarcity defines value -- the reason gold or platinum are "valuable" is because of scarcity. That is it. Market inefficiency leads to unstable pricing, which for instance would be an "uncontrollably increase [of] the price."
For given supply and demand if market was efficient the price of housing should have been a constant. I am guessing of course here there is an increase in demand also. (Which is what you perhaps you might mean as "scarcity?" Scarcity however has a separate definition.)
For given supply and demand if market was efficient the price of housing should have been a constant. I am guessing of course here there is an increase in demand also. (Which is what you perhaps you might mean as "scarcity?" Scarcity however has a separate definition.)
Scarcity in my mind is a function of both supply and demand. Both low supply and high demand result in scarcity. In this case, supply and demand are both increasing, but one is way outpacing the other due to zoning laws. Even with perfect market efficiency, you still cannot make up for lack of supply caused by greedy home owners who don't allow any new constructions.
but... blind bidding is how everything works. If I was a CapEx manager at Y company, why would i reveal pricing of other bidders? It's a conflict of interest for the other bidders. Even if you were to keep the pricing entity private it's the opposite of efficient because creates this 'bit-wise' incremental bidding that destroys the price. Unless you did some kind of random candle auction, this is easily gamed for a such a high value asset like real-estate.
Are public stocks and bonds bought and sold with blind bidding?
In parts yes and in parts no.
There’s indeed an order book that’s “public enough”, but not every trading system enters every intent into the public order book. (Even as a retail nobody, I can create contingent orders that only become public orders once the trigger conditions are met.) I also don’t believe that individual bid/asks can be traced to a specific bidder.
Further, block trades are negotiated off-order-book and later reported.
There’s indeed an order book that’s “public enough”, but not every trading system enters every intent into the public order book. (Even as a retail nobody, I can create contingent orders that only become public orders once the trigger conditions are met.) I also don’t believe that individual bid/asks can be traced to a specific bidder.
Further, block trades are negotiated off-order-book and later reported.
I'd like to know more about all of this. Do you have any links?
> Even as a retail nobody, I can create contingent orders that only become public orders once the trigger conditions are met.
Do different brokers implement this differently, or is this an a property of the exchanges themselves?
> Even as a retail nobody, I can create contingent orders that only become public orders once the trigger conditions are met.
Do different brokers implement this differently, or is this an a property of the exchanges themselves?
The contingent or smart orders are implemented by brokers (E*Trade’s are different from Interactive Brokers) or in trading platforms. They are held outside the exchange until whatever trigger condition allows them to be expressed as an order directly supported (which introduces timing and other risks that they won’t work like a natively exchange-supported order).
In terms of links, I don’t have a ready primer to vouch for. I worked 6 years in online broker tech, but it was decades ago.
In terms of links, I don’t have a ready primer to vouch for. I worked 6 years in online broker tech, but it was decades ago.
Stocks and bonds are traded something on the order of 1 million times more frequently than a given house, making price discovery much more transparent even without an open bidding process.
A free market doesn't require laws to enforce bans on bidding systems some people happen not to like..
> Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically.
I'm all for building more houses in cities/high demand areas, but doesn't Canada only have a population growth rate of around 1%/yr? It seems like you could easily build your way past that without giving up the advantages of immigration and a little population growth.
I'm all for building more houses in cities/high demand areas, but doesn't Canada only have a population growth rate of around 1%/yr? It seems like you could easily build your way past that without giving up the advantages of immigration and a little population growth.
Canada is a big country. But immigration goes where the jobs are, and those are concentrated in 3-5 large cities which are hitting the limits of sprawl (congested highway commute time) and geography (water and mountains).
Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.
Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.
Densification is absolutely not unpopular with municipal voters!
My current city, Hamilton, is currently fighting with the Ontario government over this matter. The mayor is a regular feature on the local news and speaks to that often.
Their major push is for more density and resources for urban development. The provincial government has pushed for developing in Ontario's green belt and watershed instead. They've faced massive backlash over that to the point where they had to capitulate in some cases.
The current provincial government is the one pushing for downtown to be filled with parking lots and low-density housing developed outward. They're also responsible for nixing various transit and green power initiatives in favour of highway expansion. It's infuriating.
My current city, Hamilton, is currently fighting with the Ontario government over this matter. The mayor is a regular feature on the local news and speaks to that often.
Their major push is for more density and resources for urban development. The provincial government has pushed for developing in Ontario's green belt and watershed instead. They've faced massive backlash over that to the point where they had to capitulate in some cases.
The current provincial government is the one pushing for downtown to be filled with parking lots and low-density housing developed outward. They're also responsible for nixing various transit and green power initiatives in favour of highway expansion. It's infuriating.
Everywhere is different. Hamilton may be in favour of densification - I wouldn’t know - but even in Toronto, where I’m from, there’s endless pushback against densifying the single family homes that dominate much of the city. Right now I live in Victoria, and although many people and groups (including the mayor and the province) are pro-development, there’s a loud contingent of busybodies here who oppose literally any change or construction project whatsoever.
That doesn't only exist in Victoria and that busy-body group isn't only about building and housing. They are active against many things. I live in California and they complain about people walking down the street, water restrictions, lifting water restrictions, cleaning your driveway with water, not being able to use water, it goes on and on.
It does touch on building, but it's mostly about, "NOT IN MY BACKYARD!"
It does touch on building, but it's mostly about, "NOT IN MY BACKYARD!"
There’s a certain street in SF across from a shopping mall where there are fatal accidents involving pedestrians every year. Consequently, the city planned on building a crosswalk. Well, the NIMBYS blocked it because it would ruin their view.
Fellow Hamiltonian here...
Council wasn't for intensification until they got the results of the poll back (and even then, the likes of Ferguson continue to be aghast at the idea of not being in the pockets of suburban developers).
We can see that with the kneejerk response to Bill 109, and the fact that only one Secondary Housing Unit has been approved by the city so far, the rest denied for what seem like vague reasons that won't hold up at OLT.
Council wasn't for intensification until they got the results of the poll back (and even then, the likes of Ferguson continue to be aghast at the idea of not being in the pockets of suburban developers).
We can see that with the kneejerk response to Bill 109, and the fact that only one Secondary Housing Unit has been approved by the city so far, the rest denied for what seem like vague reasons that won't hold up at OLT.
Man, that gets hard to swallow. Especially seeing old photos of Hamilton. I grew up nearby and for as long as I've been alive it's been large swathes of parking lots. There's still so much promise, but old downtown looked so much more alive before the sprawl took over.
Another displaced Hamiltonian here.
Back in the 90s they had a plan called "Vision 2020" that painted a dense, people-friendly Hamilton.
Now that 2020 has come and gone, the sprawl is crazy, downtown dead, transit gutted, and commuting by bike a near impossibility unless you're in the west end.
Some fun Hamilton transit facts: 1. There's an abandoned subway station underneath downtown. 2. There used to be a Funicular going up and down the escarpment. 3. When I was a kid many of the buses were electric, with overhead lines criss-crossing the streets like other cities have for trams.
Back in the 90s they had a plan called "Vision 2020" that painted a dense, people-friendly Hamilton.
Now that 2020 has come and gone, the sprawl is crazy, downtown dead, transit gutted, and commuting by bike a near impossibility unless you're in the west end.
Some fun Hamilton transit facts: 1. There's an abandoned subway station underneath downtown. 2. There used to be a Funicular going up and down the escarpment. 3. When I was a kid many of the buses were electric, with overhead lines criss-crossing the streets like other cities have for trams.
I gave you an upvote for local info. But here in Toronto, we elected Rob Ford who canceled every transit project in flight, and anyone who wants to tear down a rotting house to put up a four-flex faces a 10 year fight.
Waterloo region is building density, despite complaints (1), because there’s no supply. People claim to want all of: affordable housing, no sprawl, no community impact - but that’s not possible. Glad they prioritized units, although a lot are still condos which are not quite ‘affordable’, but the supply will help
(1) https://www.cbc.ca/news/canada/kitchener-waterloo/belmont-vi...
(1) https://www.cbc.ca/news/canada/kitchener-waterloo/belmont-vi...
BC seems to be doing similarly, with the NDP playing hardball and threatening transit and other concessions to holdout municipalities
Can they not move to nearby cities and commute?
No, that's what the person you replied to mean when they wrote:
> hitting the limits of sprawl (congested highway commute time)
There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively.
In cities where sprawl isn't physically prohibitive, like Calgary or Toronto, the upper bound of "this shit ain't worth it" for time and money is a limiting factor. I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more.
Remote work might help with this but even there, you have people who are moving "a little further out" but not leaving the region because they want to stay nearby for other reasons (or because they're not entirely convinced that full remote is actually on the table long term).
> hitting the limits of sprawl (congested highway commute time)
There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively.
In cities where sprawl isn't physically prohibitive, like Calgary or Toronto, the upper bound of "this shit ain't worth it" for time and money is a limiting factor. I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more.
Remote work might help with this but even there, you have people who are moving "a little further out" but not leaving the region because they want to stay nearby for other reasons (or because they're not entirely convinced that full remote is actually on the table long term).
> There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively.
Canada's largest urban area is 5.6 million people. London, Paris and Seoul are around double that, NYC is 19 million and Tokyo is 37 million.
Why are Canadian cities hitting this limit at such a comparatively low population compared to other cities in the world? Why are all the major cities in the western world seemingly hitting this limit at the same time, even though they all have different populations?
It seems to me that we've just become less aggressive at building the infrastructure necessary to support population growth.
Canada's largest urban area is 5.6 million people. London, Paris and Seoul are around double that, NYC is 19 million and Tokyo is 37 million.
Why are Canadian cities hitting this limit at such a comparatively low population compared to other cities in the world? Why are all the major cities in the western world seemingly hitting this limit at the same time, even though they all have different populations?
It seems to me that we've just become less aggressive at building the infrastructure necessary to support population growth.
Extreme car dependency.
Toronto is suffering from the same problem Dubai has. It suddenly became relevant when sovereignists gained power in Quebec and the business class were worried about Montreal being a liability. So they packed up and went down the 401 to Toronto.
It has the infrastructure for a much much smaller city, and one in the North American car-driven style (massive highways, occasional regional rail that is artificially slowed down by regulation, little to no metro service in most areas, etc)
Combine with NIMBYs blocking every form of intensification, and here we are:
https://www.google.com/maps/@43.6783092,-79.352227,3a,90y,68...
A metro station close to the downtown core. In Tokyo this is the kind of development you find on the far side of Saitama, bounded by mountains or poor soil. In Toronto, this is an area that has suffered population decline, as the locals went from having a nuclear family to being 2 or even 1 empty nesters, being replaced by DINKs.
It gets much, much worse the further out you go.
A lot of the city has a blanket ban on anything more dense than a single family detached home.
Just look at the city's size in sqkm. It will never scale like this, things need to change and density needs to be improved.
All other Ontario cities suffer the same paste-eating mentality, especially Ottawa and cities in the GTHA.
Toronto is suffering from the same problem Dubai has. It suddenly became relevant when sovereignists gained power in Quebec and the business class were worried about Montreal being a liability. So they packed up and went down the 401 to Toronto.
It has the infrastructure for a much much smaller city, and one in the North American car-driven style (massive highways, occasional regional rail that is artificially slowed down by regulation, little to no metro service in most areas, etc)
Combine with NIMBYs blocking every form of intensification, and here we are:
https://www.google.com/maps/@43.6783092,-79.352227,3a,90y,68...
A metro station close to the downtown core. In Tokyo this is the kind of development you find on the far side of Saitama, bounded by mountains or poor soil. In Toronto, this is an area that has suffered population decline, as the locals went from having a nuclear family to being 2 or even 1 empty nesters, being replaced by DINKs.
It gets much, much worse the further out you go.
A lot of the city has a blanket ban on anything more dense than a single family detached home.
Just look at the city's size in sqkm. It will never scale like this, things need to change and density needs to be improved.
All other Ontario cities suffer the same paste-eating mentality, especially Ottawa and cities in the GTHA.
It's not only that, it is also zoning laws that mandate massive front lawns, wide roads etc etc. Compare newer suburbs to an old one like Riverdale. Riverdale is at least 3-4 times more dense and it is mostly single family houses.
Personally, I think the problem is more a question of the sort of business development that happens downtown vs the surrounding areas. If you look, for example, at development on highway 7 over the decades, there's definitely densification going on, e.g. this area[0] used to be farmlands back in the day, but now those red lanes are public transit lines and there are condo buildings sprouting up along that corridor. All in all, though, it's still much sparser than Toronto's downtown core.
If you look around the area, other than campuses like IBM's and CGI's, a very significant percentage of the business development in the area is still big box B2C (walmart/home depot/etc) or small-ish businesses. That's in stark contrast to areas like the financial district where the vast majority of workers are white collar office people. Which is to say, Markham/Vaughan could still stand to become much more metropolitan with the presence of more B2B big corps.
My pet theory is that concentration of white collar work is what drives up home prices. Exhibit A: places like Palo Alto and Mountain View in the San Francisco Bay Area (vs, say, Pacifica or Half Moon Bay) are clearly propped up by the presence of FAANG campuses. I'd bet that if a Google setup a campus in Ajax, you'd see an appreciable increase in demand for housing in surrounding areas even if they are traditionally considered too far from downtown TO (e.g. Whitby)
[0] https://www.google.com/maps/@43.842627,-79.3906732,3a,75y,20...
If you look around the area, other than campuses like IBM's and CGI's, a very significant percentage of the business development in the area is still big box B2C (walmart/home depot/etc) or small-ish businesses. That's in stark contrast to areas like the financial district where the vast majority of workers are white collar office people. Which is to say, Markham/Vaughan could still stand to become much more metropolitan with the presence of more B2B big corps.
My pet theory is that concentration of white collar work is what drives up home prices. Exhibit A: places like Palo Alto and Mountain View in the San Francisco Bay Area (vs, say, Pacifica or Half Moon Bay) are clearly propped up by the presence of FAANG campuses. I'd bet that if a Google setup a campus in Ajax, you'd see an appreciable increase in demand for housing in surrounding areas even if they are traditionally considered too far from downtown TO (e.g. Whitby)
[0] https://www.google.com/maps/@43.842627,-79.3906732,3a,75y,20...
People want to live close to work, because it's hard to multitask while commuting, and if you're paid hourly, it's essentially unpaid work time. Higher paying jobs allow those higher earning workers to bid up prices on the land closest to their high paying workplaces, which tend to be in desirable areas, because those areas have other amenities that the highly paid workers are able to pay to enjoy. It's a ratcheting flywheel that drives up home prices.
The high paying companies benefit from this when the markets are up, as their stock prices appreciate due to being able to compete in the market and remain highly paying companies. And when bubbles burst, their stock prices may go down, but so do their outlying obligations, which are denominated in dollars also. The gains made and invested into the company during the boom years allow strong companies to ride out the lean years better than their weaker competitors, whose workers are then in need of a job at one of the remaining companies unless they become or are already self-employed. This allows the strongest companies to get the benefit of both extremes of market conditions.
All of this causes metro areas, which are full of both established megacorps and VC-infused startups, to become pressure cooker bellwether barometers of property values and rent prices.
There are many ways to solve the problem of unaffordable home prices, and an answer is more supply. Why it isn't chosen more often is primarily a political problem inasmuch as it is a market problem, or land availability problem, or zoning problem.
The high paying companies benefit from this when the markets are up, as their stock prices appreciate due to being able to compete in the market and remain highly paying companies. And when bubbles burst, their stock prices may go down, but so do their outlying obligations, which are denominated in dollars also. The gains made and invested into the company during the boom years allow strong companies to ride out the lean years better than their weaker competitors, whose workers are then in need of a job at one of the remaining companies unless they become or are already self-employed. This allows the strongest companies to get the benefit of both extremes of market conditions.
All of this causes metro areas, which are full of both established megacorps and VC-infused startups, to become pressure cooker bellwether barometers of property values and rent prices.
There are many ways to solve the problem of unaffordable home prices, and an answer is more supply. Why it isn't chosen more often is primarily a political problem inasmuch as it is a market problem, or land availability problem, or zoning problem.
I mean, for a market like the SF Bay Area, sure, the political landscape wrt housing is notoriously difficult to navigate, but at least for Toronto, I never got the impression of housing construction being deterred to as significant of a degree. In fact I'd say condos have been going up all over the place for decades to the extent that people were even voicing concerns over disappearing parking lots as construction companies gobbled them all up and turned them into condo projects.
I think at some point, even if the government were to scream "let there be more housing", there still needs to be private capital poured into these very expensive projects, and surely there must be a significant amount of analysis done to determine where it makes sense to put up condos, where amenities and other businesses sprout up in response, and rinse and repeat.
The side of supply where I think things get dicier is wrt wealth inequality. The real estate agent I used to buy my house had 3 mortgages of her own, it's an incredibly common thing for well-off people and real estate insiders to over-leverage on rental property mortgages. My wife had friends from China buying up property with corruption money given to them by their parents, it's been a thing since forever. There's no easy way to regulate who gets to buy houses and who doesn't.
I think at some point, even if the government were to scream "let there be more housing", there still needs to be private capital poured into these very expensive projects, and surely there must be a significant amount of analysis done to determine where it makes sense to put up condos, where amenities and other businesses sprout up in response, and rinse and repeat.
The side of supply where I think things get dicier is wrt wealth inequality. The real estate agent I used to buy my house had 3 mortgages of her own, it's an incredibly common thing for well-off people and real estate insiders to over-leverage on rental property mortgages. My wife had friends from China buying up property with corruption money given to them by their parents, it's been a thing since forever. There's no easy way to regulate who gets to buy houses and who doesn't.
> There's no easy way to regulate who gets to buy houses and who doesn't.
I get what you’re saying, but didn’t Canada do just that? That’s not to say that it was easy, but I think it’s a step in the right direction.
Additional/secondary homes, and especially empty homes need to be taxed more to help disincentivize the anticompetitive behavior in the housing market that you mentioned.
I get what you’re saying, but didn’t Canada do just that? That’s not to say that it was easy, but I think it’s a step in the right direction.
Additional/secondary homes, and especially empty homes need to be taxed more to help disincentivize the anticompetitive behavior in the housing market that you mentioned.
London (ON) is definitely on that list.
One of our chief problems is that there’s no interlock between development - whether dense or not - and public transit and other public infrastructure. London is still bisected by surface level train tracks with minimal above or below grade crossings; and in the seven years I’ve lived here nothing has changed.
One of our chief problems is that there’s no interlock between development - whether dense or not - and public transit and other public infrastructure. London is still bisected by surface level train tracks with minimal above or below grade crossings; and in the seven years I’ve lived here nothing has changed.
I too blame the FLQ. Toronto was well prepared to be Canada's second city. But completely unprepared to be her first.
We didn't build a single subway station for decades.
We didn't build a single subway station for decades.
They’re talking about physical size. North American metropolises are a lot less dense than their peers.
The solution is to enable density. Zoning in the US and Canada is done at the local level and zoning codes look like a list of things you can’t do. (You can have a house, but you can’t live with more than X unmarried people, you can have a home office but you can’t do hairdressing out of your home, etc.)
Zoning codes in Japan are a lot more relaxed, in that there are only about a dozen types defined by “maximum nuisance level.” Every additional level of zoning permits all the uses from the previous level as well. Which generally increases building capacity and density and lowers prices by staying ahead of demand.
The solution is to enable density. Zoning in the US and Canada is done at the local level and zoning codes look like a list of things you can’t do. (You can have a house, but you can’t live with more than X unmarried people, you can have a home office but you can’t do hairdressing out of your home, etc.)
Zoning codes in Japan are a lot more relaxed, in that there are only about a dozen types defined by “maximum nuisance level.” Every additional level of zoning permits all the uses from the previous level as well. Which generally increases building capacity and density and lowers prices by staying ahead of demand.
Car culture. It is insanely inefficient at moving people and at land use.
It’s amazing how many downvotes pointing this out gets. People have quite the kneejerk reaction when the downsides of car transit are pointed out to them.
It’s a lazy slogan that gets us nowhere. I live in NYC and we’ve built three brand new subway stations in the last fifty years.
It’s not just a matter of people’s preferences for cars, it’s not possible to build a non car city anymore due to pathologies that have nothing to do with “car culture”.
The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a halt. This is not some inherent feature of democracy either, you can have a democracy where the majority gets to do things. We just don’t have one of those in the US, or Canada it sounds like.
It’s not just a matter of people’s preferences for cars, it’s not possible to build a non car city anymore due to pathologies that have nothing to do with “car culture”.
The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a halt. This is not some inherent feature of democracy either, you can have a democracy where the majority gets to do things. We just don’t have one of those in the US, or Canada it sounds like.
> It’s a lazy slogan that gets us nowhere.
“Cars are land inefficient” isn’t a slogan, it’s literal fact.
> I live in NYC and we’ve built three brand new subway stations in the last fifty years
Ah, the stereotype of New Yorkers not paying attention to other cities strikes again! Yes, New York has its own problems, but for the vast majority of other cities GP’s comment is true. New York is one of the very few exception cases in the US.
> The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a halt. This is not some inherent feature of democracy either, you can have a democracy where the majority gets to do things. We just don’t have one of those in the US, or Canada it sounds like.
What if I told you that for a lot of transit activists, undemocratic processes that prioritize the needs of drivers over the rest of society is car culture?
“Cars are land inefficient” isn’t a slogan, it’s literal fact.
> I live in NYC and we’ve built three brand new subway stations in the last fifty years
Ah, the stereotype of New Yorkers not paying attention to other cities strikes again! Yes, New York has its own problems, but for the vast majority of other cities GP’s comment is true. New York is one of the very few exception cases in the US.
> The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a halt. This is not some inherent feature of democracy either, you can have a democracy where the majority gets to do things. We just don’t have one of those in the US, or Canada it sounds like.
What if I told you that for a lot of transit activists, undemocratic processes that prioritize the needs of drivers over the rest of society is car culture?
Environmental impact reviews are car culture? Public notice and comment processes are car culture? Kafkaesque public bidding processes are car culture? Decade long litigation needed to exercise eminent domain is car culture? Union work rules are car culture?
You wrote: <<built three brand new subway stations in the last fifty years>>
That sounds pithy, but it overlooks all the maintenance work done on the system. Have you ever looked at pictures from the NYC subway in the 1970s? It was hell. (You can Google it.) My father lived in NYC in the 1970s and said the subway was like the "Fourth World" (vis-a-via first/second/third world!).
Also, how about PATH, Metro North, NJT, LIRR, AirTrain JFK, or AirTrain Newark? These are not the NYC subway, but they have also seen major upgrades in the last 50 years.
Finally, I tried to Google for list of stations opened from 1972. It could not find a concise list. I'm pretty sure it is more than three, just for NYC subway.
That sounds pithy, but it overlooks all the maintenance work done on the system. Have you ever looked at pictures from the NYC subway in the 1970s? It was hell. (You can Google it.) My father lived in NYC in the 1970s and said the subway was like the "Fourth World" (vis-a-via first/second/third world!).
Also, how about PATH, Metro North, NJT, LIRR, AirTrain JFK, or AirTrain Newark? These are not the NYC subway, but they have also seen major upgrades in the last 50 years.
Finally, I tried to Google for list of stations opened from 1972. It could not find a concise list. I'm pretty sure it is more than three, just for NYC subway.
Also, you don’t need to add a ton of subway stations when you already have an extensive network. 3 stations in 50 years would be a much worse outcome in say, Cincinnati.
I agree it is car culture... but I feel that too often people treat it similar to self-driving-car predictions.
Sure, we have a good option for a significant majority of the time. But those many edge cases are non-trivial to resolve so a large majority of people will keep their cars for simple practicality sake.
Sure, we have a good option for a significant majority of the time. But those many edge cases are non-trivial to resolve so a large majority of people will keep their cars for simple practicality sake.
This is pointing out a symptom. Car transit exists due to massive NIMBYism spreading people out and corrupt governments that don't build good transit.
https://www.nationalbcc.org/news/latest-news/1737-ca-high-sp...
Pointing out obvious symptoms without pointing out the causes can get this "kneejerk reaction".
https://www.nationalbcc.org/news/latest-news/1737-ca-high-sp...
Pointing out obvious symptoms without pointing out the causes can get this "kneejerk reaction".
> Why are all the major cities in the western world seemingly hitting this limit at the same time, even though they all have different populations?
I can’t speak for Canada, but in America the answer is always cars. Car based transit is wildly land inefficient, and the main reason why all car based cities hit their limit at the same time.
In particular there are two huge shortcomings with cars in urban design:
1. Parking eats up a huge amount of space. Either you let that drive density way down (which means commutes get longer) or you build underground parking at exorbitant prices driving up rents. Even in the latter case the roads around housing ends up becoming an issue, limiting density far below what you’d expect in say, Paris on Chicago.
2. Car transit to a shared destination is almost comically inefficient, which is really noticeable when people try and commute via car to job centers. This wouldn’t be as bad if we restricted cars to what they’re good at, such as driving away from the city, but most American cities have the unique psychosis of demanding that transit into the city center be via car. This does not scale, and is why places with wildly different zoning laws can have equally hellish commutes.
The issue is not that we can’t build, we’re really good at adding more highway lanes, it’s more that we are monomaniacally focused on building the wrong things.
I can’t speak for Canada, but in America the answer is always cars. Car based transit is wildly land inefficient, and the main reason why all car based cities hit their limit at the same time.
In particular there are two huge shortcomings with cars in urban design:
1. Parking eats up a huge amount of space. Either you let that drive density way down (which means commutes get longer) or you build underground parking at exorbitant prices driving up rents. Even in the latter case the roads around housing ends up becoming an issue, limiting density far below what you’d expect in say, Paris on Chicago.
2. Car transit to a shared destination is almost comically inefficient, which is really noticeable when people try and commute via car to job centers. This wouldn’t be as bad if we restricted cars to what they’re good at, such as driving away from the city, but most American cities have the unique psychosis of demanding that transit into the city center be via car. This does not scale, and is why places with wildly different zoning laws can have equally hellish commutes.
The issue is not that we can’t build, we’re really good at adding more highway lanes, it’s more that we are monomaniacally focused on building the wrong things.
Isn't this more a limit of dense (taller) housing?
If we had much more housing in tall buildings near where people worked then they either would not need a car or would at least not need to drive their car to work. You still of course need to provide parking but tall parking garages can solve that as well (or underground).
Seems like tons of cars are the symptom of the problem here not the cause
If we had much more housing in tall buildings near where people worked then they either would not need a car or would at least not need to drive their car to work. You still of course need to provide parking but tall parking garages can solve that as well (or underground).
Seems like tons of cars are the symptom of the problem here not the cause
It’s symbiotic. We can’t build denser housing because we need space for car storage and roads. We can’t encourage people to reduce/eliminate their car usage because our infrastructure makes that miserable.
So I hate driving and actually moved to DC for work and also partly for the transit. Here's what I found:
1) Taking the metro many places (for example, from my apartment in an urban "luxury" apartment building a couple blocks from the initial station to my boat near the waterfront in downtown DC) doubled the time it took to get there. It was actually faster to drive there even during rush hour where you'll sit motionless on the 395 bridge. Yes I can redeem a lot of that time with my above average personal mobile computing set up but a: most people have a pretty mediocre personal mobile computing setup and b: now I can't use that time for anything other than programming projects.
2) I couldn't get rid of the car entirely because I still needed it to move bulky things that I really can't take on transit. It's bad enough not having a truck but losing the car entirely would create some serious logistical problems on a regular basis. So while I saved some money I couldn't save as much as I wanted.
3) Most wealthy people (many of my friends) start families^ and people who can afford it buy detached housing for that. You're not going to be taking transit to these places. It might not ever be economical. Like it or not transit will probably always lower property values in the US too. For whatever reason the more violent people here tend to take it and anywhere it goes becomes more violent so building it into suburbs like these is always going to be unpopular.
4) Bringing me to the fact that I've been accosted multiple times on transit by people who were high, drunk, or just belligerent. I have an extremely high tolerance for this sort of thing (I've wandered around some of the more violent cities early in the morning just to see what the fuss is about) but I can absolutely see why most people here would give up after that happening once at a maximum.
I'm a huge fan of transit but pretending it isn't a large sacrifice to give up a car is just going to get people to ignore you, because it is and for most people it isn't worth it.
(^ and for those that don't start families, many have lots of intense DIY projects that don't fit in apartment buildings and actually need either detached housing or industrial space with similar density.)
1) Taking the metro many places (for example, from my apartment in an urban "luxury" apartment building a couple blocks from the initial station to my boat near the waterfront in downtown DC) doubled the time it took to get there. It was actually faster to drive there even during rush hour where you'll sit motionless on the 395 bridge. Yes I can redeem a lot of that time with my above average personal mobile computing set up but a: most people have a pretty mediocre personal mobile computing setup and b: now I can't use that time for anything other than programming projects.
2) I couldn't get rid of the car entirely because I still needed it to move bulky things that I really can't take on transit. It's bad enough not having a truck but losing the car entirely would create some serious logistical problems on a regular basis. So while I saved some money I couldn't save as much as I wanted.
3) Most wealthy people (many of my friends) start families^ and people who can afford it buy detached housing for that. You're not going to be taking transit to these places. It might not ever be economical. Like it or not transit will probably always lower property values in the US too. For whatever reason the more violent people here tend to take it and anywhere it goes becomes more violent so building it into suburbs like these is always going to be unpopular.
4) Bringing me to the fact that I've been accosted multiple times on transit by people who were high, drunk, or just belligerent. I have an extremely high tolerance for this sort of thing (I've wandered around some of the more violent cities early in the morning just to see what the fuss is about) but I can absolutely see why most people here would give up after that happening once at a maximum.
I'm a huge fan of transit but pretending it isn't a large sacrifice to give up a car is just going to get people to ignore you, because it is and for most people it isn't worth it.
(^ and for those that don't start families, many have lots of intense DIY projects that don't fit in apartment buildings and actually need either detached housing or industrial space with similar density.)
Almost everything you're saying is a symptom of poor investment in public transport. I have no doubt that the car works better for your commute, as is the case for millions of other people. Unfortunately, stick millions of cars on the road and you have a huge bottleneck for growing the commuter belt, which means only houses in a relatively small area are useful, and they get extremely expensive.
Historically, and in some countries still, we solved this problem by identifying when it was happening and creating new public transport lines for faster commutes and people living further out. In the UK, we even developed whole "New Towns", upgraded their transport, amenities and infrastructure specifically to support shuttling a greater number of people into London. They weren't particularly inspiring towns, and we still make fun of them nearly a century later - but it worked. Even today, it's far quicker to take the train into London from those towns than it is to drive, as is the case for pretty much all suburb to central commuting here.
There are still lots of situations where a car will be better (I have one too, in London), but if we can get people out of their cars for their commutes, that frees cities up to expand and useful houses will become more affordable. Driving to the tip or mall is much less of a problem.
Regarding the violence and antisocial behaviour, that's really a problem of policing and allocation of funding. It needn't be that way and it doesn't happen to nearly the same extent in the UK and I put that down at least partially to the excellent British Transport Police. Apparently it used to be violent and dangerous in the 80s but we turned it around. Now the train stations are mostly far safer than the surrounding environs. If I was ever being harassed or attacked, I would run towards the station as there would most likely be someone to help me there. Living within a few minutes of a train station also significantly increases your property value here, provided you're not so close that it rattles your bed...
Historically, and in some countries still, we solved this problem by identifying when it was happening and creating new public transport lines for faster commutes and people living further out. In the UK, we even developed whole "New Towns", upgraded their transport, amenities and infrastructure specifically to support shuttling a greater number of people into London. They weren't particularly inspiring towns, and we still make fun of them nearly a century later - but it worked. Even today, it's far quicker to take the train into London from those towns than it is to drive, as is the case for pretty much all suburb to central commuting here.
There are still lots of situations where a car will be better (I have one too, in London), but if we can get people out of their cars for their commutes, that frees cities up to expand and useful houses will become more affordable. Driving to the tip or mall is much less of a problem.
Regarding the violence and antisocial behaviour, that's really a problem of policing and allocation of funding. It needn't be that way and it doesn't happen to nearly the same extent in the UK and I put that down at least partially to the excellent British Transport Police. Apparently it used to be violent and dangerous in the 80s but we turned it around. Now the train stations are mostly far safer than the surrounding environs. If I was ever being harassed or attacked, I would run towards the station as there would most likely be someone to help me there. Living within a few minutes of a train station also significantly increases your property value here, provided you're not so close that it rattles your bed...
Antisocial behavior on public transit isn’t just a matter of policing and funding.
It’s also a matter of civil liberties.
In California, people have a constitutional right to defecate on the streets.
In was once in a San Francisco bus and watched a young woman of West Asian descent break down in tears because a homeless man was calling her a “sand n***”.
She screamed back at him the Trump was going to put him in a concentration camp. He made some comments about the Muslim faith, and she told she was going to pray he’d die a horrible death.
Some more words were exchanged about Trumps policies towards Muslims and the homeless.
She got off early and walked the rest of the way.
This is all 100% constitutionally protected, or at least, under the policies of subsequent DAs (including Kamala Harris) officially tolerated.
It also makes public transportation unusable.
It’s also a matter of civil liberties.
In California, people have a constitutional right to defecate on the streets.
In was once in a San Francisco bus and watched a young woman of West Asian descent break down in tears because a homeless man was calling her a “sand n***”.
She screamed back at him the Trump was going to put him in a concentration camp. He made some comments about the Muslim faith, and she told she was going to pray he’d die a horrible death.
Some more words were exchanged about Trumps policies towards Muslims and the homeless.
She got off early and walked the rest of the way.
This is all 100% constitutionally protected, or at least, under the policies of subsequent DAs (including Kamala Harris) officially tolerated.
It also makes public transportation unusable.
I think that's just a think that happens where people are, and the more people you run into in your travels, the higher the likelihood that you'll run into them.
Public transit is one of the few public spaces we have left, ironically. Perhaps especially so post-Covid. I think that it's worth the investments necessary to make it usable. You can't blame public transit for the lack of effectiveness of homeless programs, and some folks are homeless by choice. It's a fraught situation, and that's why folks choose cars a lot of the time. It's more convenient for them and I guess I don't fault folks for that, but the built environment shows a lot of deference for cars in many metro areas, and that doesn't help with the traffic issues, or with zoning issues, or with housing affordability.
Yet, if you improve those other issues, then property values will probably just go up even higher than they already are, but at least that money will benefit more than just the buyer and the seller; it will benefit the entire community.
Public transit is one of the few public spaces we have left, ironically. Perhaps especially so post-Covid. I think that it's worth the investments necessary to make it usable. You can't blame public transit for the lack of effectiveness of homeless programs, and some folks are homeless by choice. It's a fraught situation, and that's why folks choose cars a lot of the time. It's more convenient for them and I guess I don't fault folks for that, but the built environment shows a lot of deference for cars in many metro areas, and that doesn't help with the traffic issues, or with zoning issues, or with housing affordability.
Yet, if you improve those other issues, then property values will probably just go up even higher than they already are, but at least that money will benefit more than just the buyer and the seller; it will benefit the entire community.
> Regarding the violence and antisocial behaviour, that's really a problem of policing and allocation of funding.
Japan has one of the lowest crime rates in the world with heavy investment in public transportation & policing, and yet they still have issues with sexual harassment and sexual assault on their trains. It’s a hard problem to fix related to population density.
Japan has one of the lowest crime rates in the world with heavy investment in public transportation & policing, and yet they still have issues with sexual harassment and sexual assault on their trains. It’s a hard problem to fix related to population density.
Are you aware that many Tokyo train lines have women-only cars during rush hour? I think they started in the 1990s and have greatly improved the situation for women in Tokyo.
>Like it or not transit will probably always lower property values in the US too. For whatever reason the more violent people here tend to take it and anywhere it goes becomes more violent so building it into suburbs like these is always going to be unpopular.
This smells of the coded racism that is so rampant in the USA. It's sad because there might be some element of truth at its root, but it gets exaggerated and the attitude creates more and more segregation, exacerbates the divisions and creates a hostile society.
This smells of the coded racism that is so rampant in the USA. It's sad because there might be some element of truth at its root, but it gets exaggerated and the attitude creates more and more segregation, exacerbates the divisions and creates a hostile society.
The problem is you’re comparing the commute by public transport in the current status quo and missing the point that fixing the car culture means improving public transport so that it does become more convenient than taking the car.
Plenty of European cities have achieved this. I work in London and I wouldn’t even dream of driving into the city. It’s far more convenient to get the train.
Plenty of European cities have achieved this. I work in London and I wouldn’t even dream of driving into the city. It’s far more convenient to get the train.
I think you should read my comment a little more carefully. 1 and 2 are due to serious physical and economic constraints that are very unlikely to change and apply to all but the absolute most dense areas. Remember, this is in DC. It's unusually dense and is supposed to be the best we have. 3 and 4 are additionally due to cultural, historical, and demographic problems that are becoming worse rather than better and the current political situation is working to accelerate it.
I'm not against transit but it's not the solution people think it is.
I'm not against transit but it's not the solution people think it is.
DC isn't unusually dense. It's only the 6th most dense city in America and not even in the top 100 for the world. It doesn't even have an districts that are in the top 100 (Paris, on the other hand, features several districts and still has good public transport networks).
And this is just looking at density in terms of population. There's also building density, London would rank very high up there and has excellent public transport.
The problem in DC isn't technical; the problem is cultural. You see the car as a solution so you keep investing in roads and under funding public transport. Whereas Europe took a different approach. Some UK cities have "park and ride" schemes where you parks on the outskirts and get a cheap bus into the city. Buses will have their own dedicated lanes too so aren't subject to congestion. Some of these cities even go as far as pedestrianizing chunks of the city center so the only way to access it is via subway, bus, tram or bicycle.
The benefits of improving public transport isn't just reducing congestion either. You improve the transport for the vulnerable (elderly, poor, etc), you improve the air quality in the city, you improve road safety. It's better for the environment, it's better for peoples health, it's better for moving people around. But it requires a cultural shift to happen.
And this is just looking at density in terms of population. There's also building density, London would rank very high up there and has excellent public transport.
The problem in DC isn't technical; the problem is cultural. You see the car as a solution so you keep investing in roads and under funding public transport. Whereas Europe took a different approach. Some UK cities have "park and ride" schemes where you parks on the outskirts and get a cheap bus into the city. Buses will have their own dedicated lanes too so aren't subject to congestion. Some of these cities even go as far as pedestrianizing chunks of the city center so the only way to access it is via subway, bus, tram or bicycle.
The benefits of improving public transport isn't just reducing congestion either. You improve the transport for the vulnerable (elderly, poor, etc), you improve the air quality in the city, you improve road safety. It's better for the environment, it's better for peoples health, it's better for moving people around. But it requires a cultural shift to happen.
It is. But the problem is that the US is about 80-100 years behind Europe in this.
Personal economies are literally built on the idea of driving, it will be painful to solve that, but unfortunately it’s necessary to solve it otherwise you end up losing enormous amounts of your life to traffic and the infrastructure cost grows exponentially.
Personal economies are literally built on the idea of driving, it will be painful to solve that, but unfortunately it’s necessary to solve it otherwise you end up losing enormous amounts of your life to traffic and the infrastructure cost grows exponentially.
The comments pushing for urban densification and public transport are largely theoretical and abstract, while your comment is personal and subjective.
To all those thinking about is as 'policy' - you have to solve ways for making the subjective experience actually better if people are going to go for it.
To all those thinking about is as 'policy' - you have to solve ways for making the subjective experience actually better if people are going to go for it.
> and b: now I can't use that time for anything other than programming projects.
Read a book.
Read a book.
> Taking the metro many places (for example, from my apartment in an urban "luxury" apartment building to my boat near the waterfront in downtown DC) doubled the time it took to get there. It was actually faster to drive there even during rush hour where you'll sit motionless on the 395 bridge.
Depends a lot on where you live and work. My experience was the exact opposite in Chicago. Heck, for some of my jobs I could outrun car commuters on my bike pretty trivially.
One of the clear downsides to transit oriented cities is that you do need to pay attention to transit access when renting. A unit being “luxury” is no guarantee that it’s in a convenient place for transit, nor that the trip will be short.
> Yes I can redeem a lot of that time with my above average personal mobile computing set up
I find the need to make commute time productive quite an odd but common impulse. How about just making your commute suck less? Reading a book is better than driving in traffic.
> I couldn't get rid of the car entirely because I still needed it to move bulky things that I really can't take on transit.
Again, experience varies. For a lot of people it would be cheaper to abandon the car and pay for deliveries when necessary.
Regardless, do not let the perfect be the enemy of the good. If you relegate your car trips to just when you need bulk goods, that is far more efficient than the current habit of using a car fo every single trip.
> Most wealthy people (many of my friends) start families and people who can afford it buy detached housing for that. You're not going to be taking transit to these places.
We could, but we’ve built our infrastructure with the opposite assumption in mind. Most other rich countries use a mix of regional rail, bus, and cars to solve this problem. The issue of “mass transit doesn’t go to the burbs, therefore I must use a car everywhere for everything” is an entirely self inflicted wound.
> Bringing me to the fact that I've been accosted multiple times on transit by people who were high, drunk, or just belligerent
Maybe we could solve that problem instead? Because that seems like a rather silly rationale for designing a transit system around.
Also, it’s not like all car drivers are sober. In fact, a drunk driver is almost certainly a far bigger risk to your safety than a belligerent drunk on the train.
> I'm a huge fan of transit but pretending it isn't a large sacrifice to give up a car is just going to get people to ignore you, because it is and for most people it isn't worth it.
It’s almost like I’m arguing that we should make public transit more convenient than using a car for urban transit or something.
Depends a lot on where you live and work. My experience was the exact opposite in Chicago. Heck, for some of my jobs I could outrun car commuters on my bike pretty trivially.
One of the clear downsides to transit oriented cities is that you do need to pay attention to transit access when renting. A unit being “luxury” is no guarantee that it’s in a convenient place for transit, nor that the trip will be short.
> Yes I can redeem a lot of that time with my above average personal mobile computing set up
I find the need to make commute time productive quite an odd but common impulse. How about just making your commute suck less? Reading a book is better than driving in traffic.
> I couldn't get rid of the car entirely because I still needed it to move bulky things that I really can't take on transit.
Again, experience varies. For a lot of people it would be cheaper to abandon the car and pay for deliveries when necessary.
Regardless, do not let the perfect be the enemy of the good. If you relegate your car trips to just when you need bulk goods, that is far more efficient than the current habit of using a car fo every single trip.
> Most wealthy people (many of my friends) start families and people who can afford it buy detached housing for that. You're not going to be taking transit to these places.
We could, but we’ve built our infrastructure with the opposite assumption in mind. Most other rich countries use a mix of regional rail, bus, and cars to solve this problem. The issue of “mass transit doesn’t go to the burbs, therefore I must use a car everywhere for everything” is an entirely self inflicted wound.
> Bringing me to the fact that I've been accosted multiple times on transit by people who were high, drunk, or just belligerent
Maybe we could solve that problem instead? Because that seems like a rather silly rationale for designing a transit system around.
Also, it’s not like all car drivers are sober. In fact, a drunk driver is almost certainly a far bigger risk to your safety than a belligerent drunk on the train.
> I'm a huge fan of transit but pretending it isn't a large sacrifice to give up a car is just going to get people to ignore you, because it is and for most people it isn't worth it.
It’s almost like I’m arguing that we should make public transit more convenient than using a car for urban transit or something.
> Depends a lot on where you live and work. My experience was the exact opposite in Chicago. Heck, for some of my jobs I could outrun car commuters on my bike pretty trivially.
I got a taxi from Gare du Nord to a hotel on Champs Eleyse this evening -- took about 40 minutes to go 2 miles. That's ridiculous, but it's apparently a thing.
I got a taxi from Gare du Nord to a hotel on Champs Eleyse this evening -- took about 40 minutes to go 2 miles. That's ridiculous, but it's apparently a thing.
A lot of people don’t like public transit for several major reasons:
1. It takes a lot longer to get to your destination even accounting for traffic.
2. The potential for harassment based on your gender or race.
3. The potential for sexual assault.
4. The potential for violence.
Unfortunately, Western society at large is not collective and conformist like the one in Japan, which would heavily mitigate 2 out of the 4 problems stated above. Even then, Japan has a huge problem with harassment and sexual assault when it comes to female passengers.
1. It takes a lot longer to get to your destination even accounting for traffic.
2. The potential for harassment based on your gender or race.
3. The potential for sexual assault.
4. The potential for violence.
Unfortunately, Western society at large is not collective and conformist like the one in Japan, which would heavily mitigate 2 out of the 4 problems stated above. Even then, Japan has a huge problem with harassment and sexual assault when it comes to female passengers.
That's an interesting question, but it skips some steps.
The reason is that these are all post-war constructions. London and Paris (I don't know Seoul) already had dense, walkable cores that predate not just the modern highway, but even the automobile. Inner London was 5 million people in 1911, and the rise of the car drove that population down! And things didn't really get going until the highway boom. The interstate system (and similar projects in Canada) didn't start until the 50s, and didn't finish until the 80s. So this whole project is fairly recent. Highways enabled a whole new kind of development - the suburban project. And now the boom is over, and it's time for the hangover.
And you'll note that it hasn't been all at the same time. LA famously hit these limits in the 80s. While Atlanta only hit them in the last couple of decades. What you're seeing is the end of a long process.
The reason is that these are all post-war constructions. London and Paris (I don't know Seoul) already had dense, walkable cores that predate not just the modern highway, but even the automobile. Inner London was 5 million people in 1911, and the rise of the car drove that population down! And things didn't really get going until the highway boom. The interstate system (and similar projects in Canada) didn't start until the 50s, and didn't finish until the 80s. So this whole project is fairly recent. Highways enabled a whole new kind of development - the suburban project. And now the boom is over, and it's time for the hangover.
And you'll note that it hasn't been all at the same time. LA famously hit these limits in the 80s. While Atlanta only hit them in the last couple of decades. What you're seeing is the end of a long process.
I'd argue that NYC is not such shining example when it comes to commutes or sprawl, either. That particular corridor has some of the most traffic and longest commute durations in the country.
Sure but it got to almost 20 million before it hit that point, unlike Canadian cities.
There's also only been one subway line opened this century.
We seemed to do better at facilitating growth last century, particular in the first half. Since then we've struggled, mostly for political reasons.
There's also only been one subway line opened this century.
We seemed to do better at facilitating growth last century, particular in the first half. Since then we've struggled, mostly for political reasons.
It hit that point long before it reached a population of 20 million.
The population isn't the main factor, it's the density and percent who commute by car that matter most.
Indeed, that's what I was alluding to.
Given the right infrastructure, we can probably scale cities up to incredible populations.
Instead, we stopped building that infrastructure, and everyone started commuting by car. Then we wonder why cities are struggling to expand and usefully located housing has become so expensive.
We're trying to watch 4K YouTube over 28.8k dialup, and wondering why it's buffering all the time.
Given the right infrastructure, we can probably scale cities up to incredible populations.
Instead, we stopped building that infrastructure, and everyone started commuting by car. Then we wonder why cities are struggling to expand and usefully located housing has become so expensive.
We're trying to watch 4K YouTube over 28.8k dialup, and wondering why it's buffering all the time.
It is interesting that you did not mention Los Angeles (and Orange County) and the special hell of car traffic in that region. The places that you picked have world-class mass transport that provide viable alternatives to driving.
Don't look at the population look at the land area - and also look at the available public transit options.
Toronto has a laughable subway / train network given the urban sprawl and distance that people are commuting.
If I pay to take one of the most expensive toll highways in the world I can get from my home to the office in just under an hour.
Toronto has a laughable subway / train network given the urban sprawl and distance that people are commuting.
If I pay to take one of the most expensive toll highways in the world I can get from my home to the office in just under an hour.
> I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more.
Isn't this a good thing in some ways or maybe many/all ways? Now wealth is less concentrated in one or a few locations. Every dollar not spent commuting is a dollar spent at a local coffee shop, or money that goes into the tax base of the other city.
Isn't this a good thing in some ways or maybe many/all ways? Now wealth is less concentrated in one or a few locations. Every dollar not spent commuting is a dollar spent at a local coffee shop, or money that goes into the tax base of the other city.
In theory, yes it would be nice to have the wealth more spread out, but jobs aren't concentrated in Toronto just for lack of creativity. The agglomeration of talent causes firms to be more productive, earn more money, and pay employees more. If a company moves to Winnipeg, the lose some access to the most productive employees and their employees have fewer companies to move to where they'll be more productive themselves.
So while you'd be spending a larger percentage of your money locally, you'd also be spending less money in absolute terms.
So while you'd be spending a larger percentage of your money locally, you'd also be spending less money in absolute terms.
Yea but paying employees more means they can afford to buy more expensive houses. It all fits together.
While I think there's a lot that Canada (and other democracies) can do to help reduce housing prices, it's almost like a truism that if you have a great city with a lot of high paying jobs, getting closer to the city and getting access to that city will be expensive. I mean, if we were to take what you were saying to heart, why doesn't all of Canada move to one city? Clearly there are some bounds.
> So while you'd be spending a larger percentage of your money locally, you'd also be spending less money in absolute terms.
True, but in absolute terms it's cheaper to live where you're spending the money as well, which pays for a house, etc.
While I think there's a lot that Canada (and other democracies) can do to help reduce housing prices, it's almost like a truism that if you have a great city with a lot of high paying jobs, getting closer to the city and getting access to that city will be expensive. I mean, if we were to take what you were saying to heart, why doesn't all of Canada move to one city? Clearly there are some bounds.
> So while you'd be spending a larger percentage of your money locally, you'd also be spending less money in absolute terms.
True, but in absolute terms it's cheaper to live where you're spending the money as well, which pays for a house, etc.
If corporate culture embraced remote work, this wouldn’t be an issue
Then shouldn’t the government be incentivizing businesses (and thus people) populate other cities?
That's generally happened. House prices have notably increased not just in major cities, but also in smaller municipalities within commuting distances of Toronto, Vancouver, Ottawa, and Montreal.
Truly "cheap" housing is historically limited to rural areas far outside the traditional commuting area of the big cities, but the covid shock has put even that in question through remote work. Even though a small number of people in absolute terms are moving to rural areas (with sufficient Internet infrastructure, etc), that still can represent a large relative demand increase.
Some of this will probably shake out over the next few years as construction catches up where it can, but that's cold comfort to younger families on the market today.
Truly "cheap" housing is historically limited to rural areas far outside the traditional commuting area of the big cities, but the covid shock has put even that in question through remote work. Even though a small number of people in absolute terms are moving to rural areas (with sufficient Internet infrastructure, etc), that still can represent a large relative demand increase.
Some of this will probably shake out over the next few years as construction catches up where it can, but that's cold comfort to younger families on the market today.
Goodness, I live in a rural area, and the house prices are only insane, instead of egregiously insane. I don't know how I'd afford a home for a young family if I was just starting out today.
I concur with this. The story of insane housing prices being limited to TO and Vancouver is a 2016 story. Since the pandemic, it has hit ever podunk town in the country. Look at rural Nova Scotia and New Brunswick for evidence. Same price increases on a percentage basis as in significantly more populated areas.
It’s interest rates!
It’s interest rates!
NS/NB/PEI rates went nuts due to lack of building and people from Ontario buying places unseen and well above asking (and from their point of view why not - sell your house in Ontario and you could buy 5 of them in NS at inflated prices and still be mortgage free).
Go and look how many of these homes are on AirBNB and summer short term rentals every year and then sit empty the rest of the time.
Go and look how many of these homes are on AirBNB and summer short term rentals every year and then sit empty the rest of the time.
Well, they thought of that; it's just as expensive out there too.
If you want a house and a job in this country, you have to go to Alberta, Saskatchewan, or Manitoba. BC has no land and is either mountain or agricultural land reserve (the second-largest city in the province has massive fields in the middle of it; average single family home price $1M). ON and QC are similarly boxed in for land (the Canadian Shield is very difficult to build on, and if you don't know French the only part of Quebec you can really go to is the Montreal area), and the Maritime provinces have land but no work.
The important thing to remember is that, unlike the US, the vast majority of Canadian land is much more difficult to inhabit- 90% of the population lives within 100 miles of the border, because that's where the good land ends.
If you want a house and a job in this country, you have to go to Alberta, Saskatchewan, or Manitoba. BC has no land and is either mountain or agricultural land reserve (the second-largest city in the province has massive fields in the middle of it; average single family home price $1M). ON and QC are similarly boxed in for land (the Canadian Shield is very difficult to build on, and if you don't know French the only part of Quebec you can really go to is the Montreal area), and the Maritime provinces have land but no work.
The important thing to remember is that, unlike the US, the vast majority of Canadian land is much more difficult to inhabit- 90% of the population lives within 100 miles of the border, because that's where the good land ends.
All of those provinces have vast swathes of undeveloped land. The Canadian Shield is not hard to build on, plenty of cities are built directly on bedrock.
You can go to BC and see massive valleys of farmland (maybe used for grazing) that could easily be built on.
90% of Canadians live within 100 miles of the US border because: 1) the weather is better and 2) transportation options 150 years ago drove settlement (transCanadian railway and access to waterways) and 3) development begets more development, so established communities tend to grow rather than new one sprouting up.
You can go to BC and see massive valleys of farmland (maybe used for grazing) that could easily be built on.
90% of Canadians live within 100 miles of the US border because: 1) the weather is better and 2) transportation options 150 years ago drove settlement (transCanadian railway and access to waterways) and 3) development begets more development, so established communities tend to grow rather than new one sprouting up.
Would this change due to climate change? I’ve been looking at the climate trends in major cities and there are some drastic temperature changes in the coming decades.
No, and this (https://d3d0lqu00lnqvz.cloudfront.net/media/media/9d427dba-c...) is the reason why.
The area in the red is one continuous granite slab called the Canadian Shield. The US has no comparable geography.
There's almost zero topsoil, and building any community there involves a lot of very expensive blasting. It's bad land for the opposite reason that the Australian continent is largely uninhabitable: there's tons of water, but no soil.
(The only real upside to it is that it's very conducive to hydroelectric energy; the vast majority of Canadian energy production can be, and has always been, zero-emissions- we call electric companies "the hydro", and combined with the nuclear reactors in Ontario, 85% of national electrical power generation is zero-emissions.)
Superimpose a population density map on the Eastern provinces, and you'll notice that generally speaking, the settled area of the provinces ends where the shield begins. That isn't a coincidence.
Sure, climate change should make a bit of the [non-red-shaded] land more economically useful, but that's about it, and mining/farming communities generally aren't large enough to provide a base for a new city especially because it's landlocked- so you're not going to see any new cities spring up there any time soon.
The area in the red is one continuous granite slab called the Canadian Shield. The US has no comparable geography.
There's almost zero topsoil, and building any community there involves a lot of very expensive blasting. It's bad land for the opposite reason that the Australian continent is largely uninhabitable: there's tons of water, but no soil.
(The only real upside to it is that it's very conducive to hydroelectric energy; the vast majority of Canadian energy production can be, and has always been, zero-emissions- we call electric companies "the hydro", and combined with the nuclear reactors in Ontario, 85% of national electrical power generation is zero-emissions.)
Superimpose a population density map on the Eastern provinces, and you'll notice that generally speaking, the settled area of the provinces ends where the shield begins. That isn't a coincidence.
Sure, climate change should make a bit of the [non-red-shaded] land more economically useful, but that's about it, and mining/farming communities generally aren't large enough to provide a base for a new city especially because it's landlocked- so you're not going to see any new cities spring up there any time soon.
The capital of Canada (Ottawa) is well within your red zone and I've never heard of any concerns about difficulty building houses.
I think you're just ascribing cause when in fact northern Alberta is just as empty but has no Canadian Shield.
I think you're just ascribing cause when in fact northern Alberta is just as empty but has no Canadian Shield.
Thank you - that is very insightful.
I was going to say, there is still a lot of land both outside and inside the “Shield”.
I was going to say, there is still a lot of land both outside and inside the “Shield”.
Not so much where the jobs are, but where there is already a community of their own people. We have lots of jobs out west (that fact goes unrecognized by ON and QC) but hardly any immigrants in comparison to cities like Toronto.
You need to be more specific. The “west” means nothing. Calgary is just coming out or a terrible crash and still has dozens of empty buildings. Vancouver and Victoria are growing madly and have the housing pressures to match.
>doesn't Canada only have a population growth rate of around 1%/yr? It seems like you could easily build your way past that without giving up the advantages of immigration and a little population growth.
You would think that wouldn't be too hard, but housing construction in Canada has been seriously lagging even at a countrywide level[1] with housing units per capita continuing to trend downward. And then of course it doesn't help if major metros see population growth rates faster than this.
[1] https://dailyhive.com/vancouver/canada-new-housing-populatio...
You would think that wouldn't be too hard, but housing construction in Canada has been seriously lagging even at a countrywide level[1] with housing units per capita continuing to trend downward. And then of course it doesn't help if major metros see population growth rates faster than this.
[1] https://dailyhive.com/vancouver/canada-new-housing-populatio...
Probably
Parent post’s point is that there are many levers that can be pulled to alleviate the problem, but that zero of the options are being acted on.
Maybe it’s trivial to stack wood together, but apparently you can’t “easily build your way past” given the political climate.
Parent post’s point is that there are many levers that can be pulled to alleviate the problem, but that zero of the options are being acted on.
Maybe it’s trivial to stack wood together, but apparently you can’t “easily build your way past” given the political climate.
Canada on average builds around 198K houses per year.
Our current immigration targets are around 400-450K per year.
The houses are being built across the country, immigration tends to drive people to 3 main cities in the country.
The 3 main cities have a hard time expanding and building due to zoning laws, NIMBY, and basic infrastructure (transit, roads, education, health).
The houses are being built across the country, immigration tends to drive people to 3 main cities in the country.
The 3 main cities have a hard time expanding and building due to zoning laws, NIMBY, and basic infrastructure (transit, roads, education, health).
As a contractarian libertarian, I agree, and in fact I am in favor of open borders. And Canada's age-demographic profile is terrifying, given that the baby-boomers are heading into retirement. We can use as many tax-paying millennials and gen-x'ers as we can get.
Perhaps you and I should get together and we can explain to a group of detached-house-owning baby-boomers/empty-nesters why liberalizing or eliminating zoning laws would lead to optimal land utility and that they should be ok with allowing row-houses in their neighborhood. And that would be an interesting conversation.
Perhaps you and I should get together and we can explain to a group of detached-house-owning baby-boomers/empty-nesters why liberalizing or eliminating zoning laws would lead to optimal land utility and that they should be ok with allowing row-houses in their neighborhood. And that would be an interesting conversation.
No, land is a tool to make future generations be in debt to past generations. No sane person would give up their power. Only insane people who want everyone to succeed actually step down after they had their turn.
When I hear baby-boomers arguing against the numbers, statistics, and facts and saying things like, "don't touch my equity! You just have to be patient! It'll work out for you, too!", I sort of think about this - that this is a huge intergenerational transfer of wealth.
Of course some millennials will enjoy a windfall when mom and dad eventually downsize. Not all, by any means - but some.
I hope you're lucky enough to have some house-rich parents! It's always good to be an aristocrat!
Of course some millennials will enjoy a windfall when mom and dad eventually downsize. Not all, by any means - but some.
I hope you're lucky enough to have some house-rich parents! It's always good to be an aristocrat!
To be fair, mostly the homeowners of that generation scrimped and scrimped and saved for their productive decades to get their home.
Without holidays, iphones, food delivery, cafe coffees, gap year, 'finding myself', international travel etc.
That generation (of which I'm not part, but have taken the time to hear the stories of) lived week to week scraping by on bare subsistence living so they could pay the mortgage, with interest rates of 7-18%.
So they strove and sacrificed for the defining decades of their life for that equity, and of course they want to keep what they worked and sacrificed so hard for.
Without holidays, iphones, food delivery, cafe coffees, gap year, 'finding myself', international travel etc.
That generation (of which I'm not part, but have taken the time to hear the stories of) lived week to week scraping by on bare subsistence living so they could pay the mortgage, with interest rates of 7-18%.
So they strove and sacrificed for the defining decades of their life for that equity, and of course they want to keep what they worked and sacrificed so hard for.
If you cut off foreign buyers then you absolutely will have cut out some competition for the purchase so I don'd see how you can possibly say what you're saying? I mean it's a basic economics principle.
Might not move the needle.
Plus there are a few stories of rich int'l students eventually becoming PR holder and get their monies from parents.
Plus there are a few stories of rich int'l students eventually becoming PR holder and get their monies from parents.
Sure if someone wants it bad enough, they’ll jump through all the hoops. I feel that while deterrents aren’t full proof, they do their job of limiting the overall amount of undesired behavior.
Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line.
Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing.
While there may be some "scarcity" not having full transparency and realtors not in alignment with their own clients needs is a step in the right direction.
(I use scare quotes here because while I know we're not building enough but the current market has a fair share of retail speculation, institutional investors inflating prices, and homes held as purely places to mark money(non-owner occupied). Scarcity is real and building does need to happen, but thats slow and expensive. Millions of homes are kept empty or as poor speculative investments and thats a problem)
Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing.
While there may be some "scarcity" not having full transparency and realtors not in alignment with their own clients needs is a step in the right direction.
(I use scare quotes here because while I know we're not building enough but the current market has a fair share of retail speculation, institutional investors inflating prices, and homes held as purely places to mark money(non-owner occupied). Scarcity is real and building does need to happen, but thats slow and expensive. Millions of homes are kept empty or as poor speculative investments and thats a problem)
Is it so far fetched to assume some realtors may be juicing the bidding to...
Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing.
It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices.
In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%.
In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing.
It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!"
Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.
Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing.
It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices.
In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%.
In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing.
It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!"
Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.
I agree that scarcity is the main issue, but how do you address it in a city like Vancouver? There’s no more land and downtown is dense. Make artificial islands? Deforest the mountainsides and build on 40 degree slopes? Replace local farms with subdivisions?
As a developer, why can't I buy 5 or 6 detached houses, tear them down, and build row-houses/town-houses on the site? I could house 3x as many families and charge a lot more than 1/3 the price for those homes. Why can't I do that? That is an unalloyed good in 2022 with the benchmark home price in Vancouver approaching $2 million. It would make me money and it would be a tremendous social good.
I can't do it because it's illegal, that's why. And I would have to go to city council to have them change the law (rezone the land). And the neighbors will campaign against me and argue against density. I own the land - I paid good money for it and it's mine in every sense of the word, but the neighbors will argue that their preferences and whims outweigh both my property rights and the rights of other Canadians to have a home.
I can't do it because it's illegal, that's why. And I would have to go to city council to have them change the law (rezone the land). And the neighbors will campaign against me and argue against density. I own the land - I paid good money for it and it's mine in every sense of the word, but the neighbors will argue that their preferences and whims outweigh both my property rights and the rights of other Canadians to have a home.
Unless things have changed radically since I was last there, downtown is mostly not dense.
But even if it were, it wouldn't solve the real problem in these north american cities, which is the "missing middle".
The model of small area of highly dense towers aimed at 20-something urbanites with no kids surrounded by spaced out single family homes with a yard is just fundamentally unworkable at any real scale.
If Vancouver wants to solve it's problem and not become a suburban/exurban sprawl (typical failure mode these days in north american growth) it's going to have to build a whole bunch of mid density housing near to downtown, and it's mostly going to have to build that on top of areas that are currently full of single family detached. This is not going to make current denizens of those "nice neighbourhoods" happy, naturally.
But even if it were, it wouldn't solve the real problem in these north american cities, which is the "missing middle".
The model of small area of highly dense towers aimed at 20-something urbanites with no kids surrounded by spaced out single family homes with a yard is just fundamentally unworkable at any real scale.
If Vancouver wants to solve it's problem and not become a suburban/exurban sprawl (typical failure mode these days in north american growth) it's going to have to build a whole bunch of mid density housing near to downtown, and it's mostly going to have to build that on top of areas that are currently full of single family detached. This is not going to make current denizens of those "nice neighbourhoods" happy, naturally.
Vancouver downtown (In large part, thanks to the west end) is incredibly dense. 23,838 people/km2 - the same density as Manhattan.
Once you leave the penninsula, though, it's surrounded by a lot of suburban sprawl, with small pockets of density around the SkyTrain stations. Unlike most North American cities, though, at least it has those pockets of density!
Once you leave the penninsula, though, it's surrounded by a lot of suburban sprawl, with small pockets of density around the SkyTrain stations. Unlike most North American cities, though, at least it has those pockets of density!
This map (https://maps.nicholsonroad.com/zones/) from another thread (https://news.ycombinator.com/item?id=30960632), I think illustrates the problem.
If I understand "the pennisula" correctly, you are referring to something like 1/10th of the city proper (not the greater area, just the city of Vanc.). It is mostly zoned appropriately; outside of that it's a mess.
Everything in grey and yellow is part of the problem mentioned above.
If I understand "the pennisula" correctly, you are referring to something like 1/10th of the city proper (not the greater area, just the city of Vanc.). It is mostly zoned appropriately; outside of that it's a mess.
Everything in grey and yellow is part of the problem mentioned above.
> it's mostly going to have to build that on top of areas that are currently full of single family detached. This is not going to make current denizens of those "nice neighbourhoods" happy, naturally.
They're not happy with megatowers. They're ok with missing middle (townhouses).
There is a whole stretch of roads being bought out and converted to missing middle that leads to downtown. (Oak, Cambie).
They're not happy with megatowers. They're ok with missing middle (townhouses).
There is a whole stretch of roads being bought out and converted to missing middle that leads to downtown. (Oak, Cambie).
Small Townhouses aren’t really enough though , you need to go 4-5 stories at least in part. I’ve seen zoning fights about even duplexes, let alone anything bigger - not sure if Vancouver is more accepting of that than other places .
Is it the case there that people are ok/happy with mid rise places along busy corridors only , but want to maintain SFD on all the side streets? That really doesn’t work either , it’s just people making a noise etc. barrier on “their” neighborhood…
Is it the case there that people are ok/happy with mid rise places along busy corridors only , but want to maintain SFD on all the side streets? That really doesn’t work either , it’s just people making a noise etc. barrier on “their” neighborhood…
O ya, I agree with you that "small" townhouses aren't enough. Low rises helped though nobody wants to build "concrete" low risers (esp with the mandate from govt to set aside rental units, below market rental units, etc).
> I’ve seen zoning fights about even duplexes, let alone anything bigger - not sure if Vancouver is more accepting of that than other places .
Nobody has any issues with duplexes and townhouses.
It's a bunch of patch up jobs really.
I do agree that they should just bulldoze and start developing around Skytrain stations first. That way they have a starting point to sprawl a bit. It should be a give and take from both sides: govt and nimby. Govt needs to give nimby something to keep them happy (sad but what can you do) while telling them to F off when it comes to building towers around skytrain (first).
> I’ve seen zoning fights about even duplexes, let alone anything bigger - not sure if Vancouver is more accepting of that than other places .
Nobody has any issues with duplexes and townhouses.
It's a bunch of patch up jobs really.
I do agree that they should just bulldoze and start developing around Skytrain stations first. That way they have a starting point to sprawl a bit. It should be a give and take from both sides: govt and nimby. Govt needs to give nimby something to keep them happy (sad but what can you do) while telling them to F off when it comes to building towers around skytrain (first).
Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets.
This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
...but I'm not sure that just building more will do much of anything
<sigh>
As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets
Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it?
Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity!
Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity!
Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity!
The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side.
Don't talk to me about housing prices unless you deal with scarcity.
<sigh>
As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets
Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it?
Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity!
Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity!
Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity!
The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side.
Don't talk to me about housing prices unless you deal with scarcity.
> Do those foreign investors leave the house empty? Who cares if we can just build more?
I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would.
Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.
I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would.
Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.
There is no legitimate complaint about empty housing, not just because empty houses pay the same tax as occupied ones, but because empty housing is a myth.
Is empty housing a myth? https://openhousing.ca/2020/12/30/vancouver-empty-homes-cros...
I used to live in Yaletown (Vancouver) and the building I lived in was this very tall, maybe 35 story two tower block which only had two elevators. It took me about 6 months to realize that I never saw anybody else in the building. There were only 3 occupied apartments on my floor (I think there were 8 units per floor). I was told the building was designed to be a "piggy bank in the sky" and that low occupancy was in the design.
This is just an anecdote, but I was under the impression low occupancy is an issue in Vancouver so much so that they tried to pass laws regarding empty homes.
I used to live in Yaletown (Vancouver) and the building I lived in was this very tall, maybe 35 story two tower block which only had two elevators. It took me about 6 months to realize that I never saw anybody else in the building. There were only 3 occupied apartments on my floor (I think there were 8 units per floor). I was told the building was designed to be a "piggy bank in the sky" and that low occupancy was in the design.
This is just an anecdote, but I was under the impression low occupancy is an issue in Vancouver so much so that they tried to pass laws regarding empty homes.
> not just because empty houses pay the same tax as occupied ones
you've literally just responded to a post demonstrating that this is not the case, please don't just do template rants off keywords
you've literally just responded to a post demonstrating that this is not the case, please don't just do template rants off keywords
Empty housing is a myth? Please explain.
Jack up interest rates (or qualifying rates) and demand plummets, particularly among multi unit investors. That should help scarcity.
To summarize, you argue that it's a supply-side problem and not a demand-side one.
It has always been but people who vote (homeowners) have a vested interest to shape the narrative to be a demand-side problem.
The only loss when building more dense housing in urban areas is the existing owners whose views are blocked. Otherwise it seems to generally increase the tax base, support more businesses (when mixed-use housing is built), and increase renter mobility.
The only loss when building more dense housing in urban areas is the existing owners whose views are blocked. Otherwise it seems to generally increase the tax base, support more businesses (when mixed-use housing is built), and increase renter mobility.
>> The only loss when building more dense housing in urban areas is the existing owners whose views are blocked.
It is a lot about more supply (and less price increase, or even decrease). Not about views being blocked. People who own homes feel the need to defend the price of their prized asset, for which they have used their life savings plus leverage. The system is designed to perpetuate itsself
It is a lot about more supply (and less price increase, or even decrease). Not about views being blocked. People who own homes feel the need to defend the price of their prized asset, for which they have used their life savings plus leverage. The system is designed to perpetuate itsself
To summarize, you argue that it's a supply-side problem and not a demand-side one.
That is not an accurate summary. Earlier...
Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically
That is not an accurate summary. Earlier...
Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically
People love to talk about cutting back immigration and how it'll magically solve housing problems when it only slightly reduces the demand. You'll never see any kind of valuation thrown, just good fee fees about keeping our jobs.
The people writing the laws are all about the scarcity, and they aren’t on HN and you can’t take any shots at them or tell them to f*ck off. They’ve gotten this far by diligently min maxing and if you think they are going to have a change of heart, you’re way off base.
You've mistaken me for someone who thinks there's a political needle that can be threaded here.
I completely agree with you - housing prices are high, mechanically, because of scarcity. But scarcity exists because voters like high housing prices. The truth is that most Canadians own property and are perfectly happy with their $1-3 million in equity. And regardless of their stated preferences for affordable housing, the revealed preference for scarcity and expensive housing is clear.
All I want is to shut down people looking for someone to validate their cognitive dissonance.
I completely agree with you - housing prices are high, mechanically, because of scarcity. But scarcity exists because voters like high housing prices. The truth is that most Canadians own property and are perfectly happy with their $1-3 million in equity. And regardless of their stated preferences for affordable housing, the revealed preference for scarcity and expensive housing is clear.
All I want is to shut down people looking for someone to validate their cognitive dissonance.
Having grown up poor, I was going to challenge the statement that 'most Canadians own property', but it looks like it's ~70%.
I mean, I think hanging 30% of your population out to dry is a bad idea, but I can't argue that this isn't a tyranny of the majority situation (or maybe tyranny of those in power, of which I expect closer to 100% are property owners).
I mean, I think hanging 30% of your population out to dry is a bad idea, but I can't argue that this isn't a tyranny of the majority situation (or maybe tyranny of those in power, of which I expect closer to 100% are property owners).
This is an ad nauseam repeated false statistic. That number counts household members - meaning ~70% of population owns property when you account children in those households (and grandparents). And those children are definitely going to need homes of their own... Or I guess you'll have situation akin to one in my home country where >60% of 25-34 y.o. young adults live with their parents, with all the economic and psychological stunted development that entails.
Lets see. Assume I am a realtor, I earn outrageous commissions of 2.5%. Does it make sense for me to jack up price of 1M condo by say 15% above the market and spend a month trying to sell it or to lower the price by 10% below and possibly sell two similar properties in the same month?
But every house that is on the market IS being sold, even at outrageous price, because buyers don't believe the price hike will slow down anytime soon (why would they? this segment of the market is guaranteed to be protected by any government who wishes to get re-elected)
So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
that is classic cause and effect. realtors are just tagging along. I bet even if they make realtors accept second highest price instead of first(aka google adds) the impact would be minimal overall
It isn't the Realtor accepting the price, it is the owner. At least in my state they are obligated to present every offer. Price is not the only dimension to factor in either. Just off the top of my head:
(1) inspection contingency
(2) mortgage contingency (or how much to make up for the appraisal)
(3) timing for closing
(4) lease back option
Can all affect what you would select, not just the price.
Can all affect what you would select, not just the price.
Yes, it does. Because you don't know if it will take a month, and if you have any confidence (maybe too much) in your abilities, you will likely assume you will sell it quickly. And a second one too.
Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.
Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.
> Either we limit Canada's crazy-high immigration rate (1% of population every year)
You could just stop there, it’s clear where your priorities lie. I’m not Canadian (and don’t worry I’m not emigrating), but I welcome a “crazy high” 1% population immigration rate and I don’t see a conflict with that and reasonable housing policy. Many major cities already see this kind of growth regardless of where people are moving from. We should be able to house and sustain that growth.
Limits on immigration don’t slow the growth, they just satisfy anti immigration attitudes for a while.
You could just stop there, it’s clear where your priorities lie. I’m not Canadian (and don’t worry I’m not emigrating), but I welcome a “crazy high” 1% population immigration rate and I don’t see a conflict with that and reasonable housing policy. Many major cities already see this kind of growth regardless of where people are moving from. We should be able to house and sustain that growth.
Limits on immigration don’t slow the growth, they just satisfy anti immigration attitudes for a while.
>You could just stop there, it’s clear where your priorities lie
This is such a toxic take - listen I know there are xenophobic people out there, but just because someone brings up the fact that our immigration is high doesn't make them one.
Canada builds on average something like 189K houses a year, our current immigration targets are 400-450K ppl per year. We have the LOWEST housing stock in the G8 while having one of the largest immigration numbers, plus due to the selection / scoring methods for our immigration policy they are often entering the country with a sizable nest egg which allows them to enter the housing market sooner.
Add on top of all this that Canada has a blatantly broken provincial nomination process which allows people to get perm residency faster if they have a province nominate them - it was intended to get people to put down roots in those provinces, instead people use it to fast track PR status and then immediately move to Toronto, Vancouver or Montreal. This again stresses an already saturated market and infrastructure.
Canada needs immigration - there is zero doubt about it - however the rate needs to be lock step with the infrastructure and housing needs that population boost brings with it.
Canada needs to:
1. Slow immigration by roughly 1/3 for a period of 3-5 years. 2. Massively increase housing stock during that period, possibly shifting some of the entrance requirements for people in #1 from white collar workers to trades to help with this. 3. Close the provincially nominated loop holes, either do away with the system and not allow fast tracks or require that if you fast track you need to stay in the province until you become a full citizen - moving revokes your PR status. 4. In Canada's smaller cities start doing deed restrictions like Colorado did with Vails Indeed program, this will help with smaller towns / cities having their native population priced out by people fleeing the larger cities.
None of those takes are xenophobic or anti-immigration. A person can be pro immigration but be against the current policies that surround it. You muddy the water and come off as dishonest and toxic when you automatically assume malice.
This is such a toxic take - listen I know there are xenophobic people out there, but just because someone brings up the fact that our immigration is high doesn't make them one.
Canada builds on average something like 189K houses a year, our current immigration targets are 400-450K ppl per year. We have the LOWEST housing stock in the G8 while having one of the largest immigration numbers, plus due to the selection / scoring methods for our immigration policy they are often entering the country with a sizable nest egg which allows them to enter the housing market sooner.
Add on top of all this that Canada has a blatantly broken provincial nomination process which allows people to get perm residency faster if they have a province nominate them - it was intended to get people to put down roots in those provinces, instead people use it to fast track PR status and then immediately move to Toronto, Vancouver or Montreal. This again stresses an already saturated market and infrastructure.
Canada needs immigration - there is zero doubt about it - however the rate needs to be lock step with the infrastructure and housing needs that population boost brings with it.
Canada needs to:
1. Slow immigration by roughly 1/3 for a period of 3-5 years. 2. Massively increase housing stock during that period, possibly shifting some of the entrance requirements for people in #1 from white collar workers to trades to help with this. 3. Close the provincially nominated loop holes, either do away with the system and not allow fast tracks or require that if you fast track you need to stay in the province until you become a full citizen - moving revokes your PR status. 4. In Canada's smaller cities start doing deed restrictions like Colorado did with Vails Indeed program, this will help with smaller towns / cities having their native population priced out by people fleeing the larger cities.
None of those takes are xenophobic or anti-immigration. A person can be pro immigration but be against the current policies that surround it. You muddy the water and come off as dishonest and toxic when you automatically assume malice.
>> illiberal zoning laws
One of the problems is that once people buy into the system, their entire life's savings (plus often 4x more via leverage) is tied up in the house and the price of the house. At that point, most dont want more development, because they lose their life savings if home prices go down.
Each person entering this horrible system is forced to perpetuate it, or lose it all.
One of the problems is that once people buy into the system, their entire life's savings (plus often 4x more via leverage) is tied up in the house and the price of the house. At that point, most dont want more development, because they lose their life savings if home prices go down.
Each person entering this horrible system is forced to perpetuate it, or lose it all.
In France and Germany, housing supply is more carefully planned. In most places, housing prices are flat in real price terms (including inflation). That's ideal for middle income and below. Even in places that have seen sharp rises like Paris and Berlin, there is a lot of political pressure (and action) to solve these problems.
1%/year is not a crazy-high rate, considering that Canadian fertility is below replacement.
If the country can't figure out how to deal with a population growth of ~1%/year, the problem is not the growth, the problem is somewhere else.
If the country can't figure out how to deal with a population growth of ~1%/year, the problem is not the growth, the problem is somewhere else.
I completely agree. 1%/year should be very manageable. Especially for the country with the 2nd largest landmass in the world.
And yet here we are.
Folks love their suburbs. And they love those laws protecting their suburbs and excluding everything else the market might want to try.
And yet here we are.
Folks love their suburbs. And they love those laws protecting their suburbs and excluding everything else the market might want to try.
It’s not population growth, just immigrantion. 1.3 million in the next 3 years and 430k this year when the population is not even 40 million. That’s not even including the hundreds of thousands of foreign students and temporary workers. There are several cities where the majority of residents were not born in Canada so it obviously has an enormous strain on everything.
1. So, it's a mere 1% of the population/year, in a country that has below-replacement fertility.
2. Of course you shouldn't count foreign students or temporary workers, they get counted if they choose to stay. If you were counting them, as well as immigrants, you'd be double-counting the same people.
3. I didn't realize that the singular suburb of Vancouver called Richmond, BC (Population: 216,000) can be referred to as 'several cities'.
4. Why does a young[1], educated[2] person moving into the country in the prime of their life 'put an enormous strain on everything'? Would you care to elaborate? To me, it seems like a gift of all the costs of early-life childcare, plus the cost of a K-12-post-secondary education from their country of origin.
[1] https://www.statista.com/statistics/443305/international-mig...
[2] https://www.statista.com/statistics/555224/number-of-landed-...
2. Of course you shouldn't count foreign students or temporary workers, they get counted if they choose to stay. If you were counting them, as well as immigrants, you'd be double-counting the same people.
3. I didn't realize that the singular suburb of Vancouver called Richmond, BC (Population: 216,000) can be referred to as 'several cities'.
4. Why does a young[1], educated[2] person moving into the country in the prime of their life 'put an enormous strain on everything'? Would you care to elaborate? To me, it seems like a gift of all the costs of early-life childcare, plus the cost of a K-12-post-secondary education from their country of origin.
[1] https://www.statista.com/statistics/443305/international-mig...
[2] https://www.statista.com/statistics/555224/number-of-landed-...
Toronto is >50% foreign born. idk what stats you’re looking at
The problem is the allocation of jobs in a handful of city centers.
Then it sounds like the obvious solution is to ban rural people from moving into the cities!
... Or build more.
... Or build more.
Canada's immigration rate isn't "crazy high" it's been an average of 1% per year for the last 100 years. It's standard. What's not standard is limiting new construction.
Open auctions will help.
In the last year, we've ended up #2 in 6 bidding wars (as disclosed by the listing agents) in one particular area of the GTA. In each case we reached our absolute max and wouldn't have paid any more.
Several times we lost by $100-200k, and once by $250k. These overpayments set new price benchmarks for the area which became sticky. To continue to be competitive, we had to make hard sacrifices to increase our budget throughout the year.
The fact that houses continued to move at the prices determined by these over-payments indicates there are some buyers at the higher prices. However, the market is very thin and the pace of price growth in this speculative market would've been slowed with open bidding.
Beyond the blind bidding issue, I don't know why people focus on foreign and large corporate buyers. Yes, they're scary because they represent potentially large sources of demand. But are they actually buying a large percentage of the homes? No. It's the smaller investors who speculatively bought 40% of homes last fall.
But we should definitely protect mom and pop investors, such as our housing minister wink
Real solution? Reduce the incentive for speculation among these groups by treating all gains on non-primary residences as income.
In the last year, we've ended up #2 in 6 bidding wars (as disclosed by the listing agents) in one particular area of the GTA. In each case we reached our absolute max and wouldn't have paid any more.
Several times we lost by $100-200k, and once by $250k. These overpayments set new price benchmarks for the area which became sticky. To continue to be competitive, we had to make hard sacrifices to increase our budget throughout the year.
The fact that houses continued to move at the prices determined by these over-payments indicates there are some buyers at the higher prices. However, the market is very thin and the pace of price growth in this speculative market would've been slowed with open bidding.
Beyond the blind bidding issue, I don't know why people focus on foreign and large corporate buyers. Yes, they're scary because they represent potentially large sources of demand. But are they actually buying a large percentage of the homes? No. It's the smaller investors who speculatively bought 40% of homes last fall.
But we should definitely protect mom and pop investors, such as our housing minister wink
Real solution? Reduce the incentive for speculation among these groups by treating all gains on non-primary residences as income.
No it’s just classic abuse of power what’s described. Information asymmetry is one of the classic reasons for market failure.
[deleted]
A better plan would be to increase the friction to buy a home without actually living in it, and tax the living shit out of homes that are empty and not occupied by anyone at all most of the time.
So.......built up in big cities? Isn't that what a big city is supposed to have in the first place?
I think that blind bidding is a bit of a scape-goat here: the problem isn't that the bidding process is blind per se, it's the complete lack of transparency. Once a house is sold, the price that it sold for AND all bids should be made a matter of public record — accessible without having to pay a ridiculous amount of money to view.
Not to mention the ridiculous commission fees for realtors, and their well-known practice of "steering" people away from homes with lower commission or prices. A practice that is technically illegal, but not enforced.
Not to mention the ridiculous commission fees for realtors, and their well-known practice of "steering" people away from homes with lower commission or prices. A practice that is technically illegal, but not enforced.
There's never a root reason.
But because real estate agents are middlemen in the process, there's an incentive in a hot market to not act as an honest broker.
When the market isn't "hot", a realtor has an interest to move quickly. When the market is hot, they have incentive to move their own listings so they get both sides of the commission. In my case circa 2005, I bid $50k over list via the broker who was managing my home sale. The selling broker "lost" the bid somehow and sold it for $20k over listing price.
7% of 20,000 is close to 3% of 50,000. But... I came to learn later that the selling agent targeted a particular religious community hard, and did a hard sell on insurance, inspection, and even attorneys to buyers, and frequently yielded another 3-5% based on "spiffs" from those providers.
All of these inefficiencies and bad behavior add up and inflate prices.
But because real estate agents are middlemen in the process, there's an incentive in a hot market to not act as an honest broker.
When the market isn't "hot", a realtor has an interest to move quickly. When the market is hot, they have incentive to move their own listings so they get both sides of the commission. In my case circa 2005, I bid $50k over list via the broker who was managing my home sale. The selling broker "lost" the bid somehow and sold it for $20k over listing price.
7% of 20,000 is close to 3% of 50,000. But... I came to learn later that the selling agent targeted a particular religious community hard, and did a hard sell on insurance, inspection, and even attorneys to buyers, and frequently yielded another 3-5% based on "spiffs" from those providers.
All of these inefficiencies and bad behavior add up and inflate prices.
For the record dual agency is actually illegal in some places: https://www.homelight.com/blog/dual-agency-is-illegal-in-som...
Though I will point out that in most of the jurisdictions in the link provided, there's nothing that prevents your scenario - a third party offer is turned down due to the dual agency bid being favored by the sellers because they never received your bid. Only in Colorado, Florida or Kansas is it explicitly prohibited. But at least if it was in one of the other states that requires disclosure (Alaska, Maryland, Texas, Vermont, Wyoming) the sellers would have at least been aware of a possible conflict of interest and may not have entered into a contract because of it.
Though I will point out that in most of the jurisdictions in the link provided, there's nothing that prevents your scenario - a third party offer is turned down due to the dual agency bid being favored by the sellers because they never received your bid. Only in Colorado, Florida or Kansas is it explicitly prohibited. But at least if it was in one of the other states that requires disclosure (Alaska, Maryland, Texas, Vermont, Wyoming) the sellers would have at least been aware of a possible conflict of interest and may not have entered into a contract because of it.
Totally get that what the other guy did wasn't illegal in my state. The thing that bothers me is that as salespeople, real estate agents can deploy all sorts of fluffery and bamboozle people who believe their "agents" are acting in their interest.
Of course the reality is that there is very little governing their conduct and behavior. Without a functional "exchange" or disclosure rules, both buyer and seller are dependent on good faith.
Of course the reality is that there is very little governing their conduct and behavior. Without a functional "exchange" or disclosure rules, both buyer and seller are dependent on good faith.
The lack of transparency makes these deals ripe for fraud. I have heard anecdotes from people I trust of their realtor offering to generate a fake offer (by soliciting one from a third party) to drive up the escalation clause.
Where there is money and little oversight there is bound to be fraud. It grinds my gears to think about this because I bought a house and the escalation clause went to the maximum. Now do you think that was purely coincidence?
Where there is money and little oversight there is bound to be fraud. It grinds my gears to think about this because I bought a house and the escalation clause went to the maximum. Now do you think that was purely coincidence?
If you have a good realtor they will confirm the competing offer exists.
Eg. my realtor called up the selling realtor and asked for the name of the realtor that submitted a competing offer. My realtor called the competing realtor to confirm they had a client that submitted an offer.
Yes, of course the two other realtors could conspire together. But, now instead of one dodgy realtor you have 2 and the probabilities go down further.
Is there fraud, I'm sure there is. But, I don't think it's a significant factor in the market.
Eg. my realtor called up the selling realtor and asked for the name of the realtor that submitted a competing offer. My realtor called the competing realtor to confirm they had a client that submitted an offer.
Yes, of course the two other realtors could conspire together. But, now instead of one dodgy realtor you have 2 and the probabilities go down further.
Is there fraud, I'm sure there is. But, I don't think it's a significant factor in the market.
Escalation clauses are dumb anyway. If you tell me “I’m willing to pay you up to 100k for your house” then my offer just became $100k.
You can require proof of competing offers in your escalation clause.
Just get the realtor or some random person to bid $99,999.99
Why should not selected bids be made public? If I bid $1.2M on a house 2 months ago and didn’t get it, I don’t want the seller of a house that I just bid $950K on to have access to a datapoint that strongly suggests I’m good for another $250K.
In such a case, I’d predict a lot of partnerships (or whatever the lowest cost legal structure that isn’t traceable over time if not activated) would be bidding for houses. My bid as “123 Main St Partners” can be as public as you want I suppose.
In such a case, I’d predict a lot of partnerships (or whatever the lowest cost legal structure that isn’t traceable over time if not activated) would be bidding for houses. My bid as “123 Main St Partners” can be as public as you want I suppose.
>I think that blind bidding is a bit of a scape-goat here:
Almost everything mentioned in the various comments here is a scapegoat. These all might contribute a little to the escalating prices at the margins, but they are not the root cause.
The root cause is that many capitalist societies have decided that purchasing a house is the most expensive and important investment most people will make in their lifetime. Therefore these societies gradually shape their policies to ensuring these investments continue to increase or else there are widespread repercussions. The end result is we have collectively refused to build enough housing to keep prices stable or decreasing. The prices need to go up. I don't understand why no one is willing to admit this.
All the other problems originate from this. The reason foreigners want to buy homes as speculation or a place to park their money is because governments are committed to ensuring that housing is a safe and profitable investment. It all comes back to us deciding that a basic human need should also be an investment that always is increasing in value.
Almost everything mentioned in the various comments here is a scapegoat. These all might contribute a little to the escalating prices at the margins, but they are not the root cause.
The root cause is that many capitalist societies have decided that purchasing a house is the most expensive and important investment most people will make in their lifetime. Therefore these societies gradually shape their policies to ensuring these investments continue to increase or else there are widespread repercussions. The end result is we have collectively refused to build enough housing to keep prices stable or decreasing. The prices need to go up. I don't understand why no one is willing to admit this.
All the other problems originate from this. The reason foreigners want to buy homes as speculation or a place to park their money is because governments are committed to ensuring that housing is a safe and profitable investment. It all comes back to us deciding that a basic human need should also be an investment that always is increasing in value.
I think the root cause is supply, demand, the salaries of buyers, interest rates and multiple of salary for mortgages permitted by law.
Those are downstream effects of the problem with housing being an investment.
We don't want prices to go down so we don't build enough supply. The policies that make housing a good investment increase demand from speculators and investors above the natural need for housing. There are all sorts of subsidies that exist to give people more money to buy housing instead of trying to make housing actually cheaper. Interest rates are a lever the government uses to support its political goals which includes increasing housing values. It all comes back to the same root cause.
We don't want prices to go down so we don't build enough supply. The policies that make housing a good investment increase demand from speculators and investors above the natural need for housing. There are all sorts of subsidies that exist to give people more money to buy housing instead of trying to make housing actually cheaper. Interest rates are a lever the government uses to support its political goals which includes increasing housing values. It all comes back to the same root cause.
I doubt there is a conspiracy to stop house building, there's just planning laws that prevent and slow down development. The public want to two contradictory things, homes their children can afford and banning anything that could reduce their house price. Hence politicians look for scape goats like foreign Investors. Two conservative governments in the uk have tried to simplify planning law , and failed. We try all sorts of hacks like "affordable housing" legislation. The fact is, we make it hard to build where demand is greatest.
Where are you building these houses in the protected Oak Ridges Moran? Building requires space to begin with.
Canada, famously a country with no free space. Even if the problem was a lack of space, building denser is always an option and none of the big Canadian cities are really overflowing due to population density.
You kid, but 90% of land in Canada is crown land. Nobody is allowed to own it.
Which would still leave more land than exists in France, Germany, UK, Italy, Japan, and numerous other countries with larger populations.
which are all influenced at every level by the desire (need?) to keep housing prices high and increasing..
Speculation isn’t great, but let’s not pretend this is some elaborate scheme orchestrated by all the homeowners.
If it’s feasible and profitable to build new homes, then developers will do so.
Everyone loves the simple solution of “build more houses”. Very few actually consider the execution of the master plan. What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies.
When everyone wants to live in the same areas, housing prices go up. Lifting zoning restrictions isn’t some magic bullet that will alleviate that fact.
If it’s feasible and profitable to build new homes, then developers will do so.
Everyone loves the simple solution of “build more houses”. Very few actually consider the execution of the master plan. What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies.
When everyone wants to live in the same areas, housing prices go up. Lifting zoning restrictions isn’t some magic bullet that will alleviate that fact.
> Speculation isn’t great, but let’s not pretend this is some elaborate scheme orchestrated by all the homeowners.
No, but real estate companies wouldn't be able to lower property taxes alone. It's only happening once there is a critical mass of homeowners that is voting themselves a tax cut. Large real estate companies get exactly the same tax cut and since they have more property they benefit more than the average homeowner. One could have a tax cut for owner occupied housing but no, there is no limit to the tax cut. Everyone including billionaires gets it. That's incredibly unfair.
No, but real estate companies wouldn't be able to lower property taxes alone. It's only happening once there is a critical mass of homeowners that is voting themselves a tax cut. Large real estate companies get exactly the same tax cut and since they have more property they benefit more than the average homeowner. One could have a tax cut for owner occupied housing but no, there is no limit to the tax cut. Everyone including billionaires gets it. That's incredibly unfair.
If most voters are homeowners then what exactly do we expect? Of course they're going to push for lower property taxes...maybe homeowners feel that their money already gets taxed 5+ times before they can spend it on their literal shelter. Most folks effectively work for the government 4 months/yr AND owning property requires another annual fee to the tax man.
High property taxes hurt renters too. Rent prices increase to cover the difference.
High property taxes hurt renters too. Rent prices increase to cover the difference.
I never said it was an "elaborate scheme orchestrated by all the homeowners." It is a natural result of people independently acting purely based on their personal incentives.
Homeowners don't need to orchestrate and elaborate scheme, they just vote for the politicians who will prioritize increasing home values because that will help them financially. That politician will enact policies favorable to homeowners because that is what their constituency wants. That will encourage more people to become homeowners because people see homeownership as a financially beneficial endeavor. That will increase the power of homeowners as a constituency which will lead to more politicians courting homeowners with favorable policies making homeownership more attractive. And on and on the cycle goes until it isn't "feasible and profitable to build new homes" because we have made it difficult and expensive through all our pro-homeowner policies.
Homeowners don't need to orchestrate and elaborate scheme, they just vote for the politicians who will prioritize increasing home values because that will help them financially. That politician will enact policies favorable to homeowners because that is what their constituency wants. That will encourage more people to become homeowners because people see homeownership as a financially beneficial endeavor. That will increase the power of homeowners as a constituency which will lead to more politicians courting homeowners with favorable policies making homeownership more attractive. And on and on the cycle goes until it isn't "feasible and profitable to build new homes" because we have made it difficult and expensive through all our pro-homeowner policies.
> Homeowners don't need to orchestrate and elaborate scheme, they just vote for the politicians who will prioritize increasing home values because that will help them financially.
Or y'know...maybe homeowners don't want to have their neighborhood become overcrowded. Not everyone wants to live in a megacity with traffic, air pollution, constant bustle, and restricted personal liberty.
If financial gain is your only motive as a homeowner, you would actually WANT an increase in density. As you cram more people into a smaller space, the land underneath becomes more valuable. Increased density attracts amenities, restaurants, businesses, nightlife...etc, all of which raise the value of your property.
Homeowners care about things other than net worth.
Or y'know...maybe homeowners don't want to have their neighborhood become overcrowded. Not everyone wants to live in a megacity with traffic, air pollution, constant bustle, and restricted personal liberty.
If financial gain is your only motive as a homeowner, you would actually WANT an increase in density. As you cram more people into a smaller space, the land underneath becomes more valuable. Increased density attracts amenities, restaurants, businesses, nightlife...etc, all of which raise the value of your property.
Homeowners care about things other than net worth.
> maybe homeowners don't want to have their neighborhood become overcrowded.
Then it’s time to collect your scarcity-generated windfall and move someplace rural you’ll like better! Super-common, and you can even complain self-righteously about the terribly governed crime-ridden hellhole you’re leaving behind.
Then it’s time to collect your scarcity-generated windfall and move someplace rural you’ll like better! Super-common, and you can even complain self-righteously about the terribly governed crime-ridden hellhole you’re leaving behind.
I live in a duplex the middle of a big city with practically no zoning restrictions. I love it here. You're the one complaining self righteously.
I am quoting my original comment because it seems like you didn't read it:
> Not everyone wants to live in a megacity with traffic, air pollution, constant bustle, and restricted personal liberty.
> If financial gain is your only motive as a homeowner, you would actually WANT an increase in density. As you cram more people into a smaller space, the land underneath becomes more valuable. Increased density attracts amenities, restaurants, businesses, nightlife...etc, all of which raise the value of your property.
Do you have an actual response? Or do you just need to be outraged at something?
I am quoting my original comment because it seems like you didn't read it:
> Not everyone wants to live in a megacity with traffic, air pollution, constant bustle, and restricted personal liberty.
> If financial gain is your only motive as a homeowner, you would actually WANT an increase in density. As you cram more people into a smaller space, the land underneath becomes more valuable. Increased density attracts amenities, restaurants, businesses, nightlife...etc, all of which raise the value of your property.
Do you have an actual response? Or do you just need to be outraged at something?
>Or y'know...maybe homeowners don't want to have their neighborhood become overcrowded.
Nothing I said here is specific to neighborhoods. It also applies at the city, state/province, and national level. A homeowner in San Diego likely doesn't care about the density of various neighborhood in San Francisco. But they might still vote for Prop 13 which put harsh limitations on property taxes in the state and in turn increased the value of homeownership and the cost of housing. That decision has nothing to do with personal preferences of what type of neighborhood in which people want to live. It is purely homeowners being powerful enough to vote themselves tax breaks which makes homeownership more attractive which makes homeowners more powerful...
Nothing I said here is specific to neighborhoods. It also applies at the city, state/province, and national level. A homeowner in San Diego likely doesn't care about the density of various neighborhood in San Francisco. But they might still vote for Prop 13 which put harsh limitations on property taxes in the state and in turn increased the value of homeownership and the cost of housing. That decision has nothing to do with personal preferences of what type of neighborhood in which people want to live. It is purely homeowners being powerful enough to vote themselves tax breaks which makes homeownership more attractive which makes homeowners more powerful...
Prop 13 is intended to protect homeowners from being gentrified out of their residence. Even if I think it's backfired, I understand the motivation. I would be livid if I was a lifelong CA resident and suddenly could no longer afford my lax liabilities as a result of demand/speculation.
This is just one piece of the puzzle, and frankly its a bit much to chalk it all up to power/greed. Again, if CA homeowners make up the majority of voters what exactly is the alternative?
If I'm being honest, my opinion on CA housing markets means nothing...but it seems pretty sensible to me that when a shitload of people all want to live in a handful of cities, prices HAVE TO increase. Removing prop 13 and zoning restrictions isn't going to double the housing supply.
On a semi-related note, pretty much everything in CA is more expensive. The residents there vote for expensive public services and legislation. When everything is more expensive, you bet your sweet ass houses will be as well.
This is just one piece of the puzzle, and frankly its a bit much to chalk it all up to power/greed. Again, if CA homeowners make up the majority of voters what exactly is the alternative?
If I'm being honest, my opinion on CA housing markets means nothing...but it seems pretty sensible to me that when a shitload of people all want to live in a handful of cities, prices HAVE TO increase. Removing prop 13 and zoning restrictions isn't going to double the housing supply.
On a semi-related note, pretty much everything in CA is more expensive. The residents there vote for expensive public services and legislation. When everything is more expensive, you bet your sweet ass houses will be as well.
> What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies.
There's also no incentive to build affordable or well-constructed homes. Many builders will try to maximize profit by investing the bare minimum (i.e., cutting corners) and creating the largest number of dwellings possible. Mattamy Homes is infamous for developing large neighborhoods with pretty homes that practically fall apart in a matter of months if you look at them wrong.
There's also no incentive to build affordable or well-constructed homes. Many builders will try to maximize profit by investing the bare minimum (i.e., cutting corners) and creating the largest number of dwellings possible. Mattamy Homes is infamous for developing large neighborhoods with pretty homes that practically fall apart in a matter of months if you look at them wrong.
> There's also no incentive to build affordable or well-constructed homes.
This is sort of my point. Who's going to build the "affordable housing"? Why won't the affordable housing get snatched up by the highest bidder?
The federal government already spends way more than it can afford. State/local governments don't have anywhere near enough tax revenue. It would require a multi-trillion dollar operation to increase supply enough to offset shortages.
This is sort of my point. Who's going to build the "affordable housing"? Why won't the affordable housing get snatched up by the highest bidder?
The federal government already spends way more than it can afford. State/local governments don't have anywhere near enough tax revenue. It would require a multi-trillion dollar operation to increase supply enough to offset shortages.
I almost agree, but I think you've got the causality backwards.
> The end result is we have collectively refused to build enough housing to keep prices stable or decreasing
This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up.
I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.
> The end result is we have collectively refused to build enough housing to keep prices stable or decreasing
This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up.
I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.
>This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices.
And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.
And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.
Sure. The question is why they didn't do that until ~1970, which is when I think that era started.
It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.
It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.
>Sure. The question is why they didn't do that until ~1970, which is when I think that era started.
I'm American so I can't speak to the specifics of what happened in Canada, but I imagine it is similar to what happened in the US.
It is all related to the post-war suburbanization of the population. In the early part of the 20th century, homeownership rates in the US were in the 40% range. By the 70s it jumped to roughly 65%. Large swaths of the population went from being lifelong renters in cities to buying single family homes in the suburbs. Owning a home became a symbol of American middle-class life and the government both supported and encouraged this transition. Obviously a constituency that makes up 65% of the population is going to see more political power than one that only makes up 45% of the population.
I'm American so I can't speak to the specifics of what happened in Canada, but I imagine it is similar to what happened in the US.
It is all related to the post-war suburbanization of the population. In the early part of the 20th century, homeownership rates in the US were in the 40% range. By the 70s it jumped to roughly 65%. Large swaths of the population went from being lifelong renters in cities to buying single family homes in the suburbs. Owning a home became a symbol of American middle-class life and the government both supported and encouraged this transition. Obviously a constituency that makes up 65% of the population is going to see more political power than one that only makes up 45% of the population.
Actually, Germany ran a very successful public housing program after the 70s. It's pretty recent that the government basically sold their properties for pennies and now everything is getting more expensive because nobody is building anymore.
Population has more than doubled and the proportion of urban population has increased by more than 50%.
1960:
Pop: 3,034,949,748
%Urban: 34%
2020
Pop: 7,794,798,739
% Urban: 56%
That isn't true. The housing projects of Lyndon Johnson's Great Society poverty reduction efforts didn't start until mid decade. Before that, you could infer that there was an actual need for it (even though it ultimately failed).
I don't think the people who moved to the housing projects were typically sleeping on the streets.
I think it was more a case of upgrading to modern sanitation standards etc.
That said, I have no real detailed knowledge, and would be happy to learn how wrong I am about this :)
I think it was more a case of upgrading to modern sanitation standards etc.
That said, I have no real detailed knowledge, and would be happy to learn how wrong I am about this :)
Bottom living standards were a lot lower back then: people could live in shacks without plumbing, flop houses were plentiful. These days none of that is legally allowed, so people would have fallen into that housing 50-80 years ago are homeless today. That being said, poverty reductions between then and now are real, it’s only that our standards keep getting higher (as they should).
I would 100% bring back flop houses. They're much better than sleeping in the street.
The insanity of "we can't let you have a bad X, so you get no X!" is one of my least favorite things in this era...
The insanity of "we can't let you have a bad X, so you get no X!" is one of my least favorite things in this era...
I agree. I remember the flop house my grandpa ran in Spokane fondly. We cousins called it the empty arms.
On the other hand, flop houses aren’t economical to run anymore, and the drug problems (especially with decriminalization) have gotten much worse. It’s not clear they can work like they did in the past.
On the other hand, flop houses aren’t economical to run anymore, and the drug problems (especially with decriminalization) have gotten much worse. It’s not clear they can work like they did in the past.
>"The prices need to go up. I don't understand why no one is willing to admit this."
No, rather somebody at the top needs to go down.
No, rather somebody at the top needs to go down.
Policies that forbid landowners from building housing are central planning and the opposite of capitalism.
That aside, this is absolutely correct. It's constantly irritating to hear politicians praise "strong housing markets" when "strong" means "unaffordable if you're not already wealthy".
That aside, this is absolutely correct. It's constantly irritating to hear politicians praise "strong housing markets" when "strong" means "unaffordable if you're not already wealthy".
> Policies that forbid landowners from building housing are central planning and the opposite of capitalism.
You mean opposite of a free market. Property rights, aka the exclusion of other people, is actually an inherent part of capitalism. When you think about it, capitalism isn't actually about physical capital. It's actually about having the rights to be allowed to do things and restricting other people's rights while boosting your own rights is considered perfectly okay under the guise of private property.
When you think about it. We have built a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. It's like a brain cage that tells people they are powerless when they really aren't, they just aren't allowed to help themselves.
A lot of laws that set a minimum living standard basically make it illegal to live. If you are going to demand that everyone must meet that bar, then you must actually do something to let them achieve it. Instead, we just abandon people under the guise of personal responsibility.
You mean opposite of a free market. Property rights, aka the exclusion of other people, is actually an inherent part of capitalism. When you think about it, capitalism isn't actually about physical capital. It's actually about having the rights to be allowed to do things and restricting other people's rights while boosting your own rights is considered perfectly okay under the guise of private property.
When you think about it. We have built a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. It's like a brain cage that tells people they are powerless when they really aren't, they just aren't allowed to help themselves.
A lot of laws that set a minimum living standard basically make it illegal to live. If you are going to demand that everyone must meet that bar, then you must actually do something to let them achieve it. Instead, we just abandon people under the guise of personal responsibility.
> a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills.
can you give an example of this? I don't believe the current system prevents anyone from working if they have the skill. The closest policy to what you described is segregation and racism, but i don't think that is what you're referring to.
> A lot of laws that set a minimum living standard
there's no such law. There's minimum wage law, which might cause unintended consequences, if the minimum is inappropriate. But so far, the current minimums don't seem that inappropriate.
can you give an example of this? I don't believe the current system prevents anyone from working if they have the skill. The closest policy to what you described is segregation and racism, but i don't think that is what you're referring to.
> A lot of laws that set a minimum living standard
there's no such law. There's minimum wage law, which might cause unintended consequences, if the minimum is inappropriate. But so far, the current minimums don't seem that inappropriate.
acting in a way to get rich off your property is very capitalistic, including manipulating policy to raise the value of your property
Bidding is a total red herring. Bid what you value the property. Go low if you have patience. If you aren't the best bid, look somewhere else.
Steering is a problem.
Steering is a problem.
In some provinces, the sold data is at least available. It definitely helps get a feel for what one can expect to pay in a given neighborhood.
While the sold data is useful, it doesn't capture nuances like "this house sold for 200k over asking and 175k over other bids because the buyer's agent mislead them and they were scared to lose." Often times a single large sale sets the bar for all future sales in the area; Zillow is a good example of how merely going off the sale history can quickly drive up prices.
As someone who recently bid in a hot property market, I'm a huge fan of common sense bans and unwaivable rights.
In a competitive market, filled with buyers of questionable sophistication, i.e. residential real estate, everyone gets to the bottom of maximally-waived, minimal-safeguards pretty quickly to make a competitive offer. And ultimately, that isn't good for anyone, sellers included.
Better to explicitly prohibit the stupidest behavior and require some safeguards. E.g. non-waivable 72 hour cooling off period. Then everyone can compete within those bounds however they want.
In a competitive market, filled with buyers of questionable sophistication, i.e. residential real estate, everyone gets to the bottom of maximally-waived, minimal-safeguards pretty quickly to make a competitive offer. And ultimately, that isn't good for anyone, sellers included.
Better to explicitly prohibit the stupidest behavior and require some safeguards. E.g. non-waivable 72 hour cooling off period. Then everyone can compete within those bounds however they want.
It's complex. There are two sides to every equation. Buyer and seller. Sellers aren't necessarily sophisticated either. If I sell my home, and the roof is leaking and I don't know about it, I don't want to be liable down-the-road.
Peace-of-mind is worth a lot. Especially if the buyer is sophisticated, I might take a lower offer if it has the right waivers.
Peace-of-mind is worth a lot. Especially if the buyer is sophisticated, I might take a lower offer if it has the right waivers.
How bad are the bidding wars ie how much over listed price do houses tend to sell for?
>This is such a huge deal.
Is it though? I chatted with someone from Australia which has open bidding and you know what .. houses still went way over reserve. At the end of the day, if you have 20+ offers on a house, you're not getting that house without destroying your budget, no matter how you set up the bid system.
The common sense change I wanted to see implemented was to prevent the waiving of a home inspection as a condition of purchase.
Is it though? I chatted with someone from Australia which has open bidding and you know what .. houses still went way over reserve. At the end of the day, if you have 20+ offers on a house, you're not getting that house without destroying your budget, no matter how you set up the bid system.
The common sense change I wanted to see implemented was to prevent the waiving of a home inspection as a condition of purchase.
It is because Realtors are crooks. That's about it. We also had to tack down assignment clauses so that realtors wouldn't re-sell their client's houses for more and pocket the difference.
I also want to see mandatory home inspection, seems common sense.
I also want to see mandatory home inspection, seems common sense.
I'm more interested in mandatory house inspections at a regular intervals, rather than as part of a sale.
Ew, nobody needs more mandatory red tape for their private property. Busybodies like you make life a hellish nightmare of compliance with crushing systems that bloat their way into every facet of life. What you are describing is megalomania by slices.
I'm not sure why "amount over reserve / list" is a meaningful metric. It's clear that in a lot of cases the list prices are intentionally below market to attract more bidders and produce the appearance of more competition at open houses and the like.
It's a very manipulated and manipulable metric.
It's a very manipulated and manipulable metric.
>I'm not sure why "amount over reserve / list" is a meaningful metric.
It's not. The salient part is that the current market is crazy and there is a large number of bids on any given house.
>It's clear that in a lot of cases the list prices are intentionally below market to attract more bidders and produce the appearance of more competition at open houses and the like.
Yes, list prices are intentionally below market but you know what ... houses are going for crazy amounts because we are in some sort of a bubble. This isn't the fault of blind bidding, or unscrupulous realtors or greed property owners. There are systemic economic issues at play. In my area, for example, there are houses that doubled in value in under 24 months. When I bought my property 12 years ago, there was blind bidding, and bad realtors, but on any given property there were only 2-3 bids, so there was no issue.
It's not. The salient part is that the current market is crazy and there is a large number of bids on any given house.
>It's clear that in a lot of cases the list prices are intentionally below market to attract more bidders and produce the appearance of more competition at open houses and the like.
Yes, list prices are intentionally below market but you know what ... houses are going for crazy amounts because we are in some sort of a bubble. This isn't the fault of blind bidding, or unscrupulous realtors or greed property owners. There are systemic economic issues at play. In my area, for example, there are houses that doubled in value in under 24 months. When I bought my property 12 years ago, there was blind bidding, and bad realtors, but on any given property there were only 2-3 bids, so there was no issue.
> Yes, list prices are intentionally below market but you know what ... houses are going for crazy amounts because we are in some sort of a bubble
Why? The last 40 years interest rates have continued to decline and inflationary pressures have hurt the value of every currency. What reason is there to believe this won't continue indefinitely (low interest + ~2% y/y inflation) and that the market is simply pricing things well?
Clearly all these homes are being bought so it would appear people have the money.
Why? The last 40 years interest rates have continued to decline and inflationary pressures have hurt the value of every currency. What reason is there to believe this won't continue indefinitely (low interest + ~2% y/y inflation) and that the market is simply pricing things well?
Clearly all these homes are being bought so it would appear people have the money.
>Clearly all these homes are being bought so it would appear people have the money.
Yes ... Back in 2007, people bought homes as well - so everything was OK - rite?
By the way, people aren't paying cash for houses.
Yes ... Back in 2007, people bought homes as well - so everything was OK - rite?
By the way, people aren't paying cash for houses.
Why would you pay cash? I made a cash offer on mine but still took out a loan since interest rates are so low.
Homes are priced based on what people who want to live in a place are willing to pay per month. The interest rate, property tax rate, and home price determine that. As rates go down prices go up.
Homes are priced based on what people who want to live in a place are willing to pay per month. The interest rate, property tax rate, and home price determine that. As rates go down prices go up.
>Why would you pay cash? I made a cash offer on mine but still took out a loan since interest rates are so low.
That was a response to your statement that 'people have the money'. The larger point is that just because people are buying houses doesn't mean that things are healthy, case in point: 2007/2008 housing crash, which was preceded by a housing bubble and led to a lot of misery.
That was a response to your statement that 'people have the money'. The larger point is that just because people are buying houses doesn't mean that things are healthy, case in point: 2007/2008 housing crash, which was preceded by a housing bubble and led to a lot of misery.
I don't think it was really a bubble if you look back on it. Yes, some people were exposed (flippers and people that borrowed WAY too much) but anyone that was just buying a property to live in was fine, mainly. If you look at prices from then VS now, they have more than doubled for example. So was it a bubble? Anyone who bought a house at the top then and is still in it is doing just fine.
People have the loans, at least.
Corporations and pensions might have the proper money
Corporations and pensions might have the proper money
Fun fact: you can waive your inspection contingency … and then still go inspect the house.
Just bring your inspector along to a showing or open house, etc. Owners won’t even be there.
Just bring your inspector along to a showing or open house, etc. Owners won’t even be there.
You're not going to be able to do a full inspection during an open house, the listing agent isn't going to let you climb on the roof, go into crawlspaces/attic, trip off all the GFCI breakers in the house, etc.
What you're suggesting is called a "walk-and-talk" inspection, and is not going to find the high dollar problems a traditional inspection can find.
What you're suggesting is called a "walk-and-talk" inspection, and is not going to find the high dollar problems a traditional inspection can find.
" ... the listing agent isn't going to let you climb on the roof, go into crawlspaces/attic ..."
I have done all of those things on home viewings / open houses. I've opened septic risers, started generators, tripped breakers ...
Nervous smiles were the worst responses I've ever gotten.
You, and your sibling poster, are correct though: a real, comprehensive inspection is hours long and no amount of brashness is going to bridge that gap - but there is a LOT you can do with 30 minutes of knowledgeable poking and prying. You don't need an hour to see if the sills are rotting or if there are no foundation anchors ... or if all the floor joists are swiss-cheesed up by 40 years of ad-hoc electrical and plumbing runs ...
I have done all of those things on home viewings / open houses. I've opened septic risers, started generators, tripped breakers ...
Nervous smiles were the worst responses I've ever gotten.
You, and your sibling poster, are correct though: a real, comprehensive inspection is hours long and no amount of brashness is going to bridge that gap - but there is a LOT you can do with 30 minutes of knowledgeable poking and prying. You don't need an hour to see if the sills are rotting or if there are no foundation anchors ... or if all the floor joists are swiss-cheesed up by 40 years of ad-hoc electrical and plumbing runs ...
You can inspect certain things. But you won't be inspecting to see if there's an oil tank buried in the yard, the quality of the chimney, if there's any radiation in the basement, and plenty of other things.
But yes, you can probably inspect the construction quality and foundation pretty easily, a visual inspection of the roof and siding, and if you care the quality and age of utility appliances. You can also pull the permits if you're really interested before placing a bid. You can probably scan for termite damage, etc.
A decent inspection is a 4 hour job or longer generally in my experience.
But yes, you can probably inspect the construction quality and foundation pretty easily, a visual inspection of the roof and siding, and if you care the quality and age of utility appliances. You can also pull the permits if you're really interested before placing a bid. You can probably scan for termite damage, etc.
A decent inspection is a 4 hour job or longer generally in my experience.
I understand that - but if you're seeing a lot of houses, it gets very expensive very quickly to bring an inspector to every showing.
The effects of blind bidding on price increase are still not very clear. I haven't had a chance to look at the literature, but I've been seeing several news articles about this:
https://www.cbc.ca/news/business/blind-bidding-real-estate-1...
https://www.ctvnews.ca/business/study-supports-blind-bidding...
I live in Canada, and the real estate business is such a mafia. They are leeches, and I'm not sure how much value these real estate agents are providing.
It baffles me how this industry has not yet been disrupted by an outsider, like Uber did with taxis. I still remember when taxi licenses costed a fortune, and you had the exact same leeches exploiting it. They were seen as an investment in some cities, like NYC.
I know there are useless regulations that keep these agents being needed, but so there were with taxis as well, and Uber did not give a crap.
It baffles me how this industry has not yet been disrupted by an outsider, like Uber did with taxis. I still remember when taxi licenses costed a fortune, and you had the exact same leeches exploiting it. They were seen as an investment in some cities, like NYC.
I know there are useless regulations that keep these agents being needed, but so there were with taxis as well, and Uber did not give a crap.
In the case of real estate, the entrenched transaction businesses control both supply and demand, and hence are more able to block new entrants.
In the case of Uber, supply (people who own vehicles) was effectively unlimited and independent.
In the case of Uber, supply (people who own vehicles) was effectively unlimited and independent.
Uber is an interesting comparison, because their primary competitive strategy was to ignore existing government regulations. Regulations, of course, are a huge issue in the real estate industry. Maybe someone can step in and invest a many billions of dollars in real estate -- while ignoring the red-tape regulations that often prevent building? This seems unlikely, but could certainly be a path towards disruption.
The difference, with Uber, of course, is their cost of capital was relatively low. They didn't have to buy vehicles, for example. (Imagine having to tear down a few multi-billion dollar real estate developments. Yikes.)
The difference, with Uber, of course, is their cost of capital was relatively low. They didn't have to buy vehicles, for example. (Imagine having to tear down a few multi-billion dollar real estate developments. Yikes.)
Uber was just an obvious con that demonstrated the danger of unrestrained capital and an era of ineffective government.
Real Estate isn't a regulatory trap; it's an information trap. You can buy and sell property direct. All of the legal stuff is (nominally) done by attorneys. But the association of realtors controls the listing service and makes discovery easy.
Like all salespeople, realtors add "value". When you've been in 2,000 houses, you pick up insights that are useful and learn about neighborhoods. The information is used for both good and bad purposes.
Most of the disruptors do stupid shit with stupid investor money or integrate with the existing players and add some value.
Real Estate isn't a regulatory trap; it's an information trap. You can buy and sell property direct. All of the legal stuff is (nominally) done by attorneys. But the association of realtors controls the listing service and makes discovery easy.
Like all salespeople, realtors add "value". When you've been in 2,000 houses, you pick up insights that are useful and learn about neighborhoods. The information is used for both good and bad purposes.
Most of the disruptors do stupid shit with stupid investor money or integrate with the existing players and add some value.
> or integrate with the existing players and add some value
Since 1973. https://en.m.wikipedia.org/wiki/RE/MAX
Since 1973. https://en.m.wikipedia.org/wiki/RE/MAX
> Real Estate isn't a regulatory trap; it's an information trap.
No -- you're confusing real estate sales with real estate. Real estate is one of the most highly regulated industries out there. You literally can't make any significant changes to most properties without a significant permitting process that goes through many layers of regulations. Not to mention the many real estate developments that are never even a possibility because of regulation. I'm not against regulation -- it can be a very good thing -- but it is clearly at the core of the real estate problem. Society has decided, via regulations, to starve the supply of housing.
No -- you're confusing real estate sales with real estate. Real estate is one of the most highly regulated industries out there. You literally can't make any significant changes to most properties without a significant permitting process that goes through many layers of regulations. Not to mention the many real estate developments that are never even a possibility because of regulation. I'm not against regulation -- it can be a very good thing -- but it is clearly at the core of the real estate problem. Society has decided, via regulations, to starve the supply of housing.
I would add that Uber has traditionally operated at a loss, and on top of that they don't provide the same level of benefits and payment to their "contractors".(whether or not they should is a different question)
While they did disrupt the taxi market, they are also setting false expectations about what sort of model is viable in the space since _Eventually_ they will need to bring in revenue or could potentially be forced to pay their drivers more which would lead to a big hike in prices and would probably have an impact on how it functions now.
While they did disrupt the taxi market, they are also setting false expectations about what sort of model is viable in the space since _Eventually_ they will need to bring in revenue or could potentially be forced to pay their drivers more which would lead to a big hike in prices and would probably have an impact on how it functions now.
Easy. Buildings have problems. It's in your interest to have some clueless salesman talk to buyers and represent whatever they represent than to do it yourself.
You can list and sell on mls yourself through a low cost "mere posting" agent agreement. A few hundred bucks.
Why sellers want to pay tens of thousands in commission in a bidding war environment is a mystery to me.
Why sellers want to pay tens of thousands in commission in a bidding war environment is a mystery to me.
I'm not so sure.
We're currently hunting for houses, and lost out on a few listings because we didn't want to overbid. When the sold price was revealed, SO many times we'd think DAMN, we'd prob pay $10-$25K on top of that to get it had we known..
We're currently hunting for houses, and lost out on a few listings because we didn't want to overbid. When the sold price was revealed, SO many times we'd think DAMN, we'd prob pay $10-$25K on top of that to get it had we known..
This is an interesting question, what is worse for buyers, blind or open bids?
Blinds bids prevent bidding wars. They use them in Scotland. Not sure if buyer or seller is better off using them.
Blinds bids prevent bidding wars. They use them in Scotland. Not sure if buyer or seller is better off using them.
Also another interesting dynamic is that bids can’t simply be compared by headline price. There’s so many other factors to consider in a bid: contingencies, time to close, reliance on a lender, likelihood of close, etc.
I don’t see how a blind system can take those factors into account to algorithmically select a single winning bid.
I don’t see how a blind system can take those factors into account to algorithmically select a single winning bid.
It isn’t done algorithmically.
Often the best bid is obvious - for example an unconditional offer at the highest bid. Sometimes the best bid is not so obvious, and the vendor chooses the bid that suits their situation the best, or they renegotiate price or conditions with the highest bidding buyer(s).
A vendor that doesn’t really need to sell and that believes prices are still rising, might accept a high price with a long settling date, or other conditions that might cause the sale to fall through.
A vendor than desperately needs the money might accept a lower price with immediate settlement, or if they know their house has problems they will accept a lower bid if it reduces their future liabilities (e.g. zero inspection, as-is clauses, etcetera).
Often the best bid is obvious - for example an unconditional offer at the highest bid. Sometimes the best bid is not so obvious, and the vendor chooses the bid that suits their situation the best, or they renegotiate price or conditions with the highest bidding buyer(s).
A vendor that doesn’t really need to sell and that believes prices are still rising, might accept a high price with a long settling date, or other conditions that might cause the sale to fall through.
A vendor than desperately needs the money might accept a lower price with immediate settlement, or if they know their house has problems they will accept a lower bid if it reduces their future liabilities (e.g. zero inspection, as-is clauses, etcetera).
> Not sure if buyer or seller is better off using them.
There's a theorem an auction design that says that, under some vaguely reasonable assumptions about bidder information, it doesn't matter what form you use for the auction. Open auction, sealed auction, even second price auction should all give the same winner and same final price: https://en.wikipedia.org/wiki/Vickrey_auction#:~:text=Revenu...
There's a theorem an auction design that says that, under some vaguely reasonable assumptions about bidder information, it doesn't matter what form you use for the auction. Open auction, sealed auction, even second price auction should all give the same winner and same final price: https://en.wikipedia.org/wiki/Vickrey_auction#:~:text=Revenu...
That's not entirely correct.
The theorem says that in Vickrey auctions (sealed bid 2nd price), each bidder's optimal strategy is to bid their actual valuation of the auctioned object.
It doesn't work with open bidding, because then you could bid artificially much as long as the 2nd highest bid was at your real valuation or below.
It doesn't work with open bidding, because then you could bid artificially much as long as the 2nd highest bid was at your real valuation or below.
Sorry, that's not the theorem I'm referencing. See the section "Revenue equivalence of the Vickrey auction and sealed first price auction".
(Or https://en.wikipedia.org/wiki/Revenue_equivalence)
(Or https://en.wikipedia.org/wiki/Revenue_equivalence)
Is there anything in game theory related to this? (Very naive question, so probably not)
But yes my intuition when selling my house was "surely I'd get more if this was open bids"
But yes my intuition when selling my house was "surely I'd get more if this was open bids"
Blind bids prevent bidding wars, but from an idealistic standpoint they don't find the true price of a home. Particularly when you have buying agents routinely advising their clients to bid 50k over what turns out to be the next highest bid.
Though psychology comes into play in a bidding war, at least it's happening because the asset for sale is highly desired. It's efficient.
Though psychology comes into play in a bidding war, at least it's happening because the asset for sale is highly desired. It's efficient.
Blind bidding, but the winning bid only pays the 2nd highest bid. This will lead to an actual price as the highest bid. The only problem is that the seller won't receive the highest price, even if they know what it is afterwards.
Why do you think there's such thing as "real price of the house"? I've sold a house recently. I had 4 offers, all for different prices. Which one of them were "real"? Should I have rejected the highest offer because it's "unreal"? Should I be forced to accept the lowest price - I am sure the highest buyer would appreciate to pay less? Why?
And BTW I also bought a house before (no wonder, since I am not that handy, to sell a house I had to buy it first ;) - and if you hire RE agent, which at least in the US most people do, and they are worth anything, they'd get you at least the rough information on how high you should go, and sometimes even the exact numbers. There were situations where we knew exactly how high the highest bid is, and more when we had decent idea if not exact figure. So it wasn't exactly blind.
And BTW I also bought a house before (no wonder, since I am not that handy, to sell a house I had to buy it first ;) - and if you hire RE agent, which at least in the US most people do, and they are worth anything, they'd get you at least the rough information on how high you should go, and sometimes even the exact numbers. There were situations where we knew exactly how high the highest bid is, and more when we had decent idea if not exact figure. So it wasn't exactly blind.
[deleted]
> This is such a huge deal.
Probably, less than people think. Sealed bid auctions do not increase revenue to the seller, according to auction theory.
https://en.wikipedia.org/wiki/Revenue_equivalence
> gives all of the information to one side (the sellers)
Well, not all the information; just what other people are bidding. But all that matters to the bidder is that that other bidders do not have access to more information.
The fact that someone's bid is higher than yours, is not caused by its temporary secrecy.
Probably, less than people think. Sealed bid auctions do not increase revenue to the seller, according to auction theory.
https://en.wikipedia.org/wiki/Revenue_equivalence
> gives all of the information to one side (the sellers)
Well, not all the information; just what other people are bidding. But all that matters to the bidder is that that other bidders do not have access to more information.
The fact that someone's bid is higher than yours, is not caused by its temporary secrecy.
> https://en.wikipedia.org/wiki/Revenue_equivalence
Auction theory has so many assumptions that it really can’t be applied to buying a home. The link above assumes the highest bidder knows[1] the highest price the underbidder would pay, which is extremely silly. Apart from the fact that if you know the highest price of another bidder, then the seller also probably knows your highest price, and the seller can just ask for the highest possible price, duhhhh!
Bidding (auction or blind) is used precisely because the prices are not known.
Personally I have been involved with enough home auctions and blind bids to know that there are huge information asymmetries or uncertainties. When you lack information, sometimes you need to make your best bid, and you might value a property a lot higher than the underbidder.
I would like to see more protection against lemon markets, but realistically I can’t think of a fair way to enforce that. Banks and insurance protect some people against doing stupid things.
[1] First price auction: “if each player bids such that they bid the expected value of second highest bid”
Auction theory has so many assumptions that it really can’t be applied to buying a home. The link above assumes the highest bidder knows[1] the highest price the underbidder would pay, which is extremely silly. Apart from the fact that if you know the highest price of another bidder, then the seller also probably knows your highest price, and the seller can just ask for the highest possible price, duhhhh!
Bidding (auction or blind) is used precisely because the prices are not known.
Personally I have been involved with enough home auctions and blind bids to know that there are huge information asymmetries or uncertainties. When you lack information, sometimes you need to make your best bid, and you might value a property a lot higher than the underbidder.
I would like to see more protection against lemon markets, but realistically I can’t think of a fair way to enforce that. Banks and insurance protect some people against doing stupid things.
[1] First price auction: “if each player bids such that they bid the expected value of second highest bid”
Most of the people crying foul over the blind real estate bids have no idea about auction theory and what those assumptions are, and who is favored by the ways in which those assumptions do not hold, and how much.
> The link above assumes the highest bidder knows the price of the underbidder, which is silly
The first price auction and second price auction types are understood to be sealed bid. The English auction is open: bidders can bid more than once and see other bids.
In the second price auction, the underbidder's price is revealed when the auction ends, not during the bidding; the highest bidder pays that price.
> The link above assumes the highest bidder knows the price of the underbidder, which is silly
The first price auction and second price auction types are understood to be sealed bid. The English auction is open: bidders can bid more than once and see other bids.
In the second price auction, the underbidder's price is revealed when the auction ends, not during the bidding; the highest bidder pays that price.
I think you are making sweeping statements. In particular, the link you gave looks to be harmfully misleading in relation to blind auctions for houses.
In my experience academic auction theory is almost irrelevant when buying a house. I do have a close friend who designs huge market trading systems, so I will talk to them and validate my opinion.
In practice, house transactions appear to be driven by irrational or ignorant participants (vendors, other bidders, agents, banks, insurance companies) and sometimes understanding those factors can give you a significant edge in the market. Also every house transaction has different context, risks and it’s own unique factors, so it is very difficult to make generalised rules.
Disclaimer: I know little about auction theory, and I have only spent a few years trying to understand one tiny property market, so my opinions are not that valuable.
In my experience academic auction theory is almost irrelevant when buying a house. I do have a close friend who designs huge market trading systems, so I will talk to them and validate my opinion.
In practice, house transactions appear to be driven by irrational or ignorant participants (vendors, other bidders, agents, banks, insurance companies) and sometimes understanding those factors can give you a significant edge in the market. Also every house transaction has different context, risks and it’s own unique factors, so it is very difficult to make generalised rules.
Disclaimer: I know little about auction theory, and I have only spent a few years trying to understand one tiny property market, so my opinions are not that valuable.
> house transactions appear to be driven by irrational or ignorant participants
Right; so wouldn't those be the causes of whatever (if anything) is wrong, rather than bids being sealed? Give some irrational bidders open bids and they will have a bidding war instead.
Right; so wouldn't those be the causes of whatever (if anything) is wrong, rather than bids being sealed? Give some irrational bidders open bids and they will have a bidding war instead.
[deleted]
There are a number of things like this that I don't think will move the needle on housing prices, but because of the massive seller's market we're in, are politically expedient to do now:
- Make home inspections an unwaivable right.
- Eliminate blind bidding
- Fully open MLS data
- Heavily regulate (specifically buyers') real estate agents to eliminate much of the corrupt practices.
- Make home inspections an unwaivable right.
- Eliminate blind bidding
- Fully open MLS data
- Heavily regulate (specifically buyers') real estate agents to eliminate much of the corrupt practices.
[deleted]
There's nothing unfair about a bidding process. It's an efficient means of price discovery. If you get emotional about it then that's your problem. Some prospective buyers get irrationally attached to a single property, which makes no sense. Just go buy a different home.
It is supply and demand. If the buyers don't think it worth the price, they wouldn't place the bids.
If you want open bid/ask, there is always the stock/futures/options markets.
If you want open bid/ask, there is always the stock/futures/options markets.
Interesting. Is the process for home buying in Canada always blind-bidding or is there a regular practice similar to Australia where people show up for an in-person public auction?
worth noting that Aus and NZ don't have blind bidding and have severe housing issues as well.
New Zealand has deadline sales, which you sign a blind offer with whatever conditions you want, and then the vendor can choose any offer or change the rules or ask for more money or do basically anything they want.
There are also tenders, which I don’t know much about.
And I have seen auctions where they set the reserve at a ridiculously high amount, and then negotiate with the highest bidder. A few years ago, one place I was underbidder at $280k (for something that I thought should go for about $250k), final bid was $290k, then vendor negotiated that bidder up to $350k! Another I was underbidder at $190k, final bidder was at $200k, then vendor negotiated them up to $250k.
The dirtiest trick that real estate agents do is to convince/pressure vendors to bring the date of sale forward. Sale goes through at a lower price, agent does less work and turns over their properties more quickly (which vastly enhances the agents yearly profits).
New Zealand restricted sales to foreign buyers in 2018, to prevent ballooning property prices for New Zealanders. Also rich foreigners buying large farms and prime coastal real estate was unpopular with most of the voting public?
Edit: when the real estate market was burning hot, lots of sales were deadline (blind). I think deadline sales mean that the winner often has bid their highest price (I certainly did for my home). In auctions you often pay just a little bit over the underbidder, even if your top dollar might have been potentially a lot higher. When selling you mostly care about that one person who really loves your place and that is willing to, and can afford to, pay well over market price for it. All other potential buyers are just wasting time.
There are also tenders, which I don’t know much about.
And I have seen auctions where they set the reserve at a ridiculously high amount, and then negotiate with the highest bidder. A few years ago, one place I was underbidder at $280k (for something that I thought should go for about $250k), final bid was $290k, then vendor negotiated that bidder up to $350k! Another I was underbidder at $190k, final bidder was at $200k, then vendor negotiated them up to $250k.
The dirtiest trick that real estate agents do is to convince/pressure vendors to bring the date of sale forward. Sale goes through at a lower price, agent does less work and turns over their properties more quickly (which vastly enhances the agents yearly profits).
New Zealand restricted sales to foreign buyers in 2018, to prevent ballooning property prices for New Zealanders. Also rich foreigners buying large farms and prime coastal real estate was unpopular with most of the voting public?
Edit: when the real estate market was burning hot, lots of sales were deadline (blind). I think deadline sales mean that the winner often has bid their highest price (I certainly did for my home). In auctions you often pay just a little bit over the underbidder, even if your top dollar might have been potentially a lot higher. When selling you mostly care about that one person who really loves your place and that is willing to, and can afford to, pay well over market price for it. All other potential buyers are just wasting time.
I think a tender is really a blind bid. A bunch of offers from different people (the tenders) are received before a deadline, and then the vendor views them all and chooses whatever one they like (which is probably the highest offer).
I've just bought a house, and it's been interesting to see the selling method change as the market goes from hot to cold - Auction, Tender, Deadline, Buyer Enquires Over, Asking price.
I've just bought a house, and it's been interesting to see the selling method change as the market goes from hot to cold - Auction, Tender, Deadline, Buyer Enquires Over, Asking price.
There’s also the possibility of using homomorphic encryption to make it blind on both sides.
I think people are missing the fact that for many Canadians values of their homes represent their live savings. So while homeownership remains high in Canada doing something substantial about re prices would ruin peoples lives.
We are at the point where foreign and Canadian speculation in housing is making housing totally unaffordable for the vast majority of Canadians. In a country of less than 40 million, it's pretty easy to swamp our markets.
We need to take speculation out of the marketplace.
I'd also like to see a ban on corporations purchasing private homes and significant tax increases on non principle residences.
We need to take speculation out of the marketplace.
I'd also like to see a ban on corporations purchasing private homes and significant tax increases on non principle residences.
Your last line is pretty much my exact opinion. I'm an idiot, but I struggle to see how significant taxes (and I mean SIGNIFICANT - something like having all rental income and cap gains on secondary residences taxed at the highest rate ~54%) in these cases wouldn't have extremely broad appeal. Make the sector unappealing as an investment class and you should stop seeing unfettered speculation. The idea of housing being an investment in general is warped.
The principal residence tax exemption is also a joke but I also understand it's political suicide to try and get rid of it and at this point, since so many people have their life savings tied up in real estate, you'd probably be causing more problems by removing it.
The principal residence tax exemption is also a joke but I also understand it's political suicide to try and get rid of it and at this point, since so many people have their life savings tied up in real estate, you'd probably be causing more problems by removing it.
Rent control doesn't work because of liquidity preference. Rental income must exceed the liquidity premium of land or else it will be kept empty. Liquidity preference is effectively the concept that people prefer keeping assets exchangeable for other assets.
For real estate this means keeping the property ready to sell at any time. It is easier to exchange an empty apartment and even easier to exchange an empty plot than a rented out apartment.
The downsides of renting out, i.e. the inability of being able to quickly sell the property must be compensated and that compensation is part of your rent. If you cap rent, that compensation will be insufficient to "bait" the property owner into renting his property out. They would rather keep it liquid and wait for a better offer. To keep it simple, the owner has options, the renter doesn't, so the renter must go out of his way to attract the owner's attention by paying higher rent than if he had outright owned the property himself.
Eliminating the liquidity preference of land would require all land to be leased or a sufficiently high tax on owned land (so that waiting and doing nothing has opportunity costs).
For real estate this means keeping the property ready to sell at any time. It is easier to exchange an empty apartment and even easier to exchange an empty plot than a rented out apartment.
The downsides of renting out, i.e. the inability of being able to quickly sell the property must be compensated and that compensation is part of your rent. If you cap rent, that compensation will be insufficient to "bait" the property owner into renting his property out. They would rather keep it liquid and wait for a better offer. To keep it simple, the owner has options, the renter doesn't, so the renter must go out of his way to attract the owner's attention by paying higher rent than if he had outright owned the property himself.
Eliminating the liquidity preference of land would require all land to be leased or a sufficiently high tax on owned land (so that waiting and doing nothing has opportunity costs).
> ...or a sufficiently high tax on owned land (so that waiting and doing nothing has opportunity costs).
For non-primary residences? Sounds pretty good to me!
For non-primary residences? Sounds pretty good to me!
> I'm an idiot, but I struggle to see how significant taxes in these cases wouldn't have extremely broad appeal.
It would have broad appeal, but not to the developers etc. that are buying 10K plates at fundraising dinners ...
> The principal residence tax exemption is also a joke
The problem is that without that exemption, you literally can't afford to move. The 6% "tax" for real estate fees are already painful if you are trying to move to a house of the same value in another city, but if 40-50% of your sale value was considered a capital gain ...
The real problem is people "moving into" rentals for 6 months and then declaring that their principle residence and selling the property. Once you start renting it should be forever be a business property.
It would have broad appeal, but not to the developers etc. that are buying 10K plates at fundraising dinners ...
> The principal residence tax exemption is also a joke
The problem is that without that exemption, you literally can't afford to move. The 6% "tax" for real estate fees are already painful if you are trying to move to a house of the same value in another city, but if 40-50% of your sale value was considered a capital gain ...
The real problem is people "moving into" rentals for 6 months and then declaring that their principle residence and selling the property. Once you start renting it should be forever be a business property.
> It would have broad appeal, but not to the developers etc. that are buying 10K plates at fundraising dinners ...
Definitely true and thought it would go without saying haha
The rest of your post is totally fair and I can't really disagree.
Definitely true and thought it would go without saying haha
The rest of your post is totally fair and I can't really disagree.
The CRA is fairly particular[0] about income from the sale of a property. They want to know, for example, how long it has been your primary residence and if it was rented before then, what was the appraised value. You will end up paying capital gains on the delta. So, if you've been renting out a property, move in to it for 6 months and then sell you'll be paying capital gains on everything but the last 6 months. The only time that works out is with a sudden spike in values.
[0] source: an accountant I know that wants to stay in good standing with the CRA :-)
[0] source: an accountant I know that wants to stay in good standing with the CRA :-)
The point is that you have changed your principle residence to the new property and, hence, it is not taxed on sale.
"When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when you change its use. "
https://www.canada.ca/en/revenue-agency/services/tax/individ...
"When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when you change its use. "
https://www.canada.ca/en/revenue-agency/services/tax/individ...
The scenario allowed in your reference is not the same. The original scenario was a rental/income property declare principle (for some short period of time) for the purpose of shielding capital gains whereas the exemption you reference is a principle residence allowed to be used for rental/income. Note that you cannot declare another property as principle while you're renting out your homebase. I expect it is meant for cases where you might take a job transfer for a period of time.
The taxman never leaves money on the table.
The taxman never leaves money on the table.
>I'd also like to see a ban on corporations purchasing private homes and significant tax increases on non principle residences.
This would actually solve the problem (the calls are coming from inside the house- foreign investment is merely a scapegoat), and as such it won't be done.
This would actually solve the problem (the calls are coming from inside the house- foreign investment is merely a scapegoat), and as such it won't be done.
Foreign ownership is a problem, especially in some markets, but I agree it's not the only problem, nor the biggest problem.
But any step forward is a win.
Thank your MP and ask them to solve the next problem: Canadian corporate ownership.
But any step forward is a win.
Thank your MP and ask them to solve the next problem: Canadian corporate ownership.
How about you introduce a land value tax, primarily for corporate owned properties and a tax break for owner occupied properties and a small tax break for small private land lords with less than 5 properties. Like a 50% reduction for the first 500m^2 of land that a person owns.
Yeah, about 70% of Canadians are homeowners (almost 15% higher homeownership rate than in the US). Ideally, they find a way to keep home price growth at/below inflation for a few years rather than actually pulling prices down directly. There's very little appetite for reducing the notional price since that 70% is broadly "most voters."
Doesn't the 70% ownership stat include those living with their parents? I have friends at 30 who still live with their parents.
I believe the 70% stat is from the census, and it would % of households. So it is possible that it reflects a higher % of kids not leaving the nest and renting something, but I also don't think its fully compatible with the narrative that Canadians are being squeezed out of housing (by foreigners) if the home ownership rate is higher than at any other time in history.
Google Statistic Canada data which breaks it down by age group.
Every age group, including the youngest (18-25) have a higher rate of home ownership than 20 years ago.
Every age group, including the youngest (18-25) have a higher rate of home ownership than 20 years ago.
Those kids will get that house passed down to them.
Literally my brother's retirement plan. Good luck to anyone who doesn't have a well off family!
Actually no, because you still need a place to live. So it doesn't really matter if your home is worth $!M or $100K because it would cost you the same to move somewhere else. As such reducing home prices across the board isn't that problematic, because there's no loss in 'value'. You can still sell your apartment in Vancouver and buy a 5-bedroom in Saskatoon.
The issue becomes people with existing outstanding mortgages. If we considerably reduce house values, would outstanding mortgages need to be reduced pro-rata? Who would 'eat' that cost? The government? The bank?
The issue becomes people with existing outstanding mortgages. If we considerably reduce house values, would outstanding mortgages need to be reduced pro-rata? Who would 'eat' that cost? The government? The bank?
Most common scenario is to sell your Toronto home for 2m and retire to a 500k condo in Florida. And no, neither banks nor government would absorb the delta between mortgage value and current property evaluation. Banks are probably covered by some form of government insurance which people would have to pay up through taxes
There is another option. I believe Japan went through it in the 90s. So lets follow their example and do nothing about the real estate bubble too.
[deleted]
Not doing something about it eventually ruins the community and then takes the life savings away in an even more dramatic crash.
Canadian Real Estate is pretty clearly in bubble territory. Something can happen now or later, but it only gets worse with time.
Canadian Real Estate is pretty clearly in bubble territory. Something can happen now or later, but it only gets worse with time.
>I think people are missing the fact that for many Canadians values of their homes represent their live savings.
Let's ignore the property itself, which is a depreciating asset which was built and can be improved through manual labor.
That land is going to stay the same no matter how much you pay. Paying more for the same plot of land doesn't make it better. You don't get a bigger plot or a plot of better quality by spending more on the land. The land isn't wealth, it's the community around the land that gives it value. If you have demographic problems, your land is going to be worthless because the community is too old and shrinking.
Betting on ever growing populations is a pyramid scheme by the way.
Let's ignore the property itself, which is a depreciating asset which was built and can be improved through manual labor.
That land is going to stay the same no matter how much you pay. Paying more for the same plot of land doesn't make it better. You don't get a bigger plot or a plot of better quality by spending more on the land. The land isn't wealth, it's the community around the land that gives it value. If you have demographic problems, your land is going to be worthless because the community is too old and shrinking.
Betting on ever growing populations is a pyramid scheme by the way.
> Betting on ever growing populations is a pyramid scheme by the way.
it has been a good bet in the past. Whether it remains a good bet is unknown - that's what makes it speculative. However, i don't see the population declining within the investment time period of a typical person buying the home.
it has been a good bet in the past. Whether it remains a good bet is unknown - that's what makes it speculative. However, i don't see the population declining within the investment time period of a typical person buying the home.
And ruin lives for everyone who did not manage to buy house when it was affordable. Fuck that.
Just in case, I do own the house.
Just in case, I do own the house.
Do you have a mortgage too? Would you be happy owing the bank more than your property is worth?
Not the op but I have a mortgage; Bought in Toronto in 2018 so fairly high. It is possible to have two adjoining thoughts:
1. It'd suck for me if house prices went substantially down.
2. It is nevertheless absolutely positively the right same thing for society.
The assumption that house is mandatory, can be your main retirement or even only plan, and prices can only go up is crazy and unsustainable. Pain is coming and I see no reason to keep making it worse while enriching people in undeserving ways.
This was my opinion for 20 years,from poor university student to renter to condo owner to house "owner". But I come from Europe so my brain can grok the notion of "you don't have to have a massive house. You just don't". This may sound insulting but my wife is love of my life, born Canadian, and cannot comprehend not having a house, having a family without a house, or that prices can go down. It's like seeing ultraviolet - no matter how much she squint she's not physically equipped :-)
1. It'd suck for me if house prices went substantially down.
2. It is nevertheless absolutely positively the right same thing for society.
The assumption that house is mandatory, can be your main retirement or even only plan, and prices can only go up is crazy and unsustainable. Pain is coming and I see no reason to keep making it worse while enriching people in undeserving ways.
This was my opinion for 20 years,from poor university student to renter to condo owner to house "owner". But I come from Europe so my brain can grok the notion of "you don't have to have a massive house. You just don't". This may sound insulting but my wife is love of my life, born Canadian, and cannot comprehend not having a house, having a family without a house, or that prices can go down. It's like seeing ultraviolet - no matter how much she squint she's not physically equipped :-)
Government with their policies and regulations has brought us into this mess and it is up to them to figure out graceful exit. Somebody is going to get hurt either way. But if you leave things untouched you will end with two castes eventually. If this what happens what is the fucking point of our "advanced" system where everyone can pursue a "happiness".
Who would be happy with that? And who is happy with not being able to afford a house? What does happiness gave to do with it? You made a financial bet on buying your house for certain price. There’s always a risk in that price going down after you buy it. Sucks for you but the price going up for you just sucks for someone else.
Unhappy voters matter
That wouldn't be a big deal if the house was affordable to begin with.
It wouldn’t ruin lives to reduce wealth that was stolen from people unable to buy homes. It would also help their kids. Something lots of modern homeowners don’t give a shit about at all.
Stolen from people unable to buy homes? Someone else's house that you wish to own does not make it stolen property from you.
If you purchased a home that someone who had less money wanted is that stolen property?
Can I have your computer, phone and your car. I don't have any money but you having something I want means you stole it.
If you purchased a home that someone who had less money wanted is that stolen property?
Can I have your computer, phone and your car. I don't have any money but you having something I want means you stole it.
Stolen as in you literally cant build a home on your own property because the government with guns wont allow you to. The price of homes is not remotely the product of fairness or any kind of free market.
Can you please explain to all non-Canadians why you "can't build a home on your own property"?? Are you complaining about permitting, or what? Please explain the context.
I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all?
Thought I do agree that a non-primary-resident investment, whether from citizens, foreigners, or capital should be greatly limited overall and these rules should only loosen to direct investment towards areas that are in dire need of an influx of capital for redevelopment. That is - if it’s not distressed, and it’s not going to be your primary residence - GTFO, you should be last in line to buy.
And I say that as former landlord. I just believe that if I was looking to make some money - I could probably do just fine under these conditions. I don’t see an issue of buying a distressed property needing a rehab, and I think doing so benefits everyone.
I am getting real tired of society getting ever more dystopian just so that someone can make a buck.
https://www.fool.com/investing/stock-market/market-sectors/r...
Thought I do agree that a non-primary-resident investment, whether from citizens, foreigners, or capital should be greatly limited overall and these rules should only loosen to direct investment towards areas that are in dire need of an influx of capital for redevelopment. That is - if it’s not distressed, and it’s not going to be your primary residence - GTFO, you should be last in line to buy.
And I say that as former landlord. I just believe that if I was looking to make some money - I could probably do just fine under these conditions. I don’t see an issue of buying a distressed property needing a rehab, and I think doing so benefits everyone.
I am getting real tired of society getting ever more dystopian just so that someone can make a buck.
https://www.fool.com/investing/stock-market/market-sectors/r...
> massive investments made by hedge funds, private capital, REITs
I can't recommend this article enough on that subject:
https://www.vox.com/22524829/wall-street-housing-market-blac...
"The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach."
I can't recommend this article enough on that subject:
https://www.vox.com/22524829/wall-street-housing-market-blac...
"The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach."
I feel like both of these things can be problems.
If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers.
Limiting these groups does help on the supply-side. While it may not be the root cause, it's far better than showering the demand-side with cash like tax breaks for first-time home buyers.
Perfect is the enemy of good.
If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers.
Limiting these groups does help on the supply-side. While it may not be the root cause, it's far better than showering the demand-side with cash like tax breaks for first-time home buyers.
Perfect is the enemy of good.
Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are only entering the SFH market because supply constraints mean ever-higher prices. It's not like nobody thought to buy up houses 40 years ago. You don't have to be a genius to think of it. I can remember being a teenager and thinking, why don't big firms buy up all the housing and rent it back? The answer is that in most markets homes aren't naturally a good investment. It's a capital-intensive business and you end up with a depreciating asset, small margins, and lots of hassle.
But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!
But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!
I'm not contending that supply isn't the real issue, just that there's no way you're going to be able to change the culture around individual home ownership, nimbyism, and zoning laws on any reasonable time-frame. A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side.
Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.
Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.
> A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side.
black markets spring up to serve demand when there's law and regulation that tries to prohibit such demand. I don't see how making the real estate market this way is gonna get it better.
The only way to make prices drop is to increase supply. trying to tax a fringe group, or to penalize investors etc, is not going to do well at all. And doing so will also dry up investment for growing supply.
> help alleviate some acute symptoms.
A short term symptom abatement, if it even does abate anything, is not going to make any difference tbh. Concentrate on solving the fundamental issue - lack of supply due to various interest groups resisting supply growth.
black markets spring up to serve demand when there's law and regulation that tries to prohibit such demand. I don't see how making the real estate market this way is gonna get it better.
The only way to make prices drop is to increase supply. trying to tax a fringe group, or to penalize investors etc, is not going to do well at all. And doing so will also dry up investment for growing supply.
> help alleviate some acute symptoms.
A short term symptom abatement, if it even does abate anything, is not going to make any difference tbh. Concentrate on solving the fundamental issue - lack of supply due to various interest groups resisting supply growth.
I'm not so sure it's not possible. There are large numbers of people getting priced out, and YIMBY groups are springing up all over. Here in Oregon, we passed HB2001, which re-legalizes up to 4-plexes in our cities. One of the city councilors where I live is a huge YIMBY.
https://www.brookings.edu/blog/the-avenue/2022/03/31/where-p...
https://noahpinion.substack.com/p/the-yimbys-are-starting-to...
https://www.brookings.edu/blog/the-avenue/2022/03/31/where-p...
https://noahpinion.substack.com/p/the-yimbys-are-starting-to...
Yeah, you'd never get it done on a local level, but when people are forced to think about the issue holistically -- that is, when they can get outside of their immediate neighborhood and think about the fact that it's illegal to build enough housing on a state or even national level -- it looks like they can actually be swayed. These changes have to be made at the state/province level.
REITs are not buying million dollar homes in Vancouver to rent out. None of the real estate hotspots where you literally can't buy a home on a normal salary are caused by REITs, because those homes have terrible yields. Most REITs focus on either large, 10+ unit apartment buildings, or on cheaper houses in less appealing locations with good yields.
The real issue is that there is not enough supply in desirable locations.
The real issue is that there is not enough supply in desirable locations.
I don't think many people are really in favor of big investors getting into housing because no, it sure does not help, but the root cause is "not enough homes", and the solution is "build more homes of all shapes and sizes". That's also the solution to keeping big investors out! Big investors aren't piling into used cars despite the recent scarcity because they know that sooner or later the car companies are going to go back to churning out a bunch of new cars.
You're quite correct that more money chasing after the same limited number of homes is just going to drive up prices.
You're quite correct that more money chasing after the same limited number of homes is just going to drive up prices.
Ironically, that quoted excerpt inserted its own "convenient boogeyman" of housing undersupply caused by local opposition.
Also, institutional investors do have a reputation for inciting bubbles and that possibility absolutely needs to be carefully scrutinized, particularly for something as essential and socially compounding as housing.
Also, institutional investors do have a reputation for inciting bubbles and that possibility absolutely needs to be carefully scrutinized, particularly for something as essential and socially compounding as housing.
Not everything is just a "convenient boogeyman": some things actually do contribute more to housing costs.
If you drive through any major American (or Canadian) city outside of the core downtown area...it's pretty clear _something_ is preventing large developments. If you drive through the Bay Area, or stand on a 4-storey "high-rise" and look out over miles upon miles of aging bungalows, and consider the value of the land they're sitting on, it's really a bit shocking.
And if you look into adding a suite for rental to your house, it'll be pretty clear what the barrier is to new development. It basically doesn't matter where you are in the country.
Local zoning really does play a huge role in housing cost in North America.
If you drive through any major American (or Canadian) city outside of the core downtown area...it's pretty clear _something_ is preventing large developments. If you drive through the Bay Area, or stand on a 4-storey "high-rise" and look out over miles upon miles of aging bungalows, and consider the value of the land they're sitting on, it's really a bit shocking.
And if you look into adding a suite for rental to your house, it'll be pretty clear what the barrier is to new development. It basically doesn't matter where you are in the country.
Local zoning really does play a huge role in housing cost in North America.
It's not "convenient" though. People desperately want to believe that there is some remote "other" that is causing the problems, not their otherwise kind, friendly neighbors.
And yet, at every hearing I've attended about housing, ever public comment period for a project, it is my "neighbors" opposing the homes. The editorials in the local paper about how re-legalizing fourplexes would lead to (I'm paraphrasing) "those people" living in your neighborhood are not from wall street bankers, they're from people I've met who live here.
And yet, at every hearing I've attended about housing, ever public comment period for a project, it is my "neighbors" opposing the homes. The editorials in the local paper about how re-legalizing fourplexes would lead to (I'm paraphrasing) "those people" living in your neighborhood are not from wall street bankers, they're from people I've met who live here.
If you want to sort out this problem then you will need to address the concerns about "those people".
There are some very real concerns that people have. Violence. Drugs. Noise. School quality. People want a good environment in which to bring up their kids and these are all crucial. Fortunately they could be solved in other ways than expensive housing. Unfortunately people have a very justified fear that they wont be.
There are some very real concerns that people have. Violence. Drugs. Noise. School quality. People want a good environment in which to bring up their kids and these are all crucial. Fortunately they could be solved in other ways than expensive housing. Unfortunately people have a very justified fear that they wont be.
Mostly it's not justified, just racism.
It's the real estate equivalent of blaming immigrants for stealing jobs.
Not even remotely. Immigrants can buy a home. This is about foreign ownership (not a primary residence).
Foreign ownership is just one problem though, and IMO a smaller one than both cheap debt and lack of supply.
Foreign ownership is just one problem though, and IMO a smaller one than both cheap debt and lack of supply.
Which is exactly the point of the parent post - blaming joblessness on immigrants stealing jobs is the same as blaming foreign ownership for making property too expensive for the ordinary citizens to buy!
Both are incorrect in the same way, and incite an emotional response of hating some "other" for causing the problem at hand!
Both are incorrect in the same way, and incite an emotional response of hating some "other" for causing the problem at hand!
Went over my head I guess :)
'Historically low supply' because it's been bought up as investments?
I can only speak of my local area in North Atlanta suburbs, but it does not seem like builder are building as many single family homes as before. I see complaints on our local social media and I have observed it as well. We bought our house new in 2016. There were many new neighborhoods at the tail end of completion. Every corner had huge signs telling you to stop by. Our house was not designed by us, but by the builder and it was good enough at the time.
We have been eyeing for a new construction neighborhoods in the last many years so we can get something larger and more specific for our needs (multi-generational). All I see are town homes and apartments. For reference, our city population is ~25,000...we have lots of land.
For the record - we don't need new construction and if an existing home fits our needs exactly we'd go for it. But I'm just referencing that no new single family home neighborhoods have popped up as abundantly as before...just townhouses, condos and "Luxury Apartments" with rents more than my monthly mortgage.
We have been eyeing for a new construction neighborhoods in the last many years so we can get something larger and more specific for our needs (multi-generational). All I see are town homes and apartments. For reference, our city population is ~25,000...we have lots of land.
For the record - we don't need new construction and if an existing home fits our needs exactly we'd go for it. But I'm just referencing that no new single family home neighborhoods have popped up as abundantly as before...just townhouses, condos and "Luxury Apartments" with rents more than my monthly mortgage.
Real estate is always a good investment (unfortunately), and capital flight from Asia is not a joke. It's happening in Europe too. Personally, I think governments in well developed countries should do their best to dissuade investment in housing as a financial instrument. Why should I compete with a millionaire, be it local or foreign, for a decent house to live in a city I've lived in for years?
tomatowurst(4)
> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners”
There is truth, however. The Wenzhou house wife property speculator trope has some basis in reality, and Chinese markets are already rife with massive speculation that has seeped into foreign markets popular for Chinese emigration (Toronto, Vancouver, and to a much lesser extent NYC and west cost American cities). You don't have to look hard to see the effects in Vancouver, where condo buildings and housing remain empty due to being seen as speculative assets.
American and some western European housing markets (e.g. UK) are a bit unique in that they haven't limited foreigners from buying and speculating on real estate. Whereas in China, many tier 1 and 2 cities have strict residency requirements before you can buy an apartment (but these also apply to Chinese via their hukou residency system).
There is truth, however. The Wenzhou house wife property speculator trope has some basis in reality, and Chinese markets are already rife with massive speculation that has seeped into foreign markets popular for Chinese emigration (Toronto, Vancouver, and to a much lesser extent NYC and west cost American cities). You don't have to look hard to see the effects in Vancouver, where condo buildings and housing remain empty due to being seen as speculative assets.
American and some western European housing markets (e.g. UK) are a bit unique in that they haven't limited foreigners from buying and speculating on real estate. Whereas in China, many tier 1 and 2 cities have strict residency requirements before you can buy an apartment (but these also apply to Chinese via their hukou residency system).
There is a huge crowd of local Canadian landlords that own or seek to own more than one property. This is the group that benefits from the narrative that Asian foreigners are buying up the local estate.
The really affluent immigrant groups aren't buying multiple properties, they already have a great deal of income, and their properties are well outside most of what HN can afford and do not impact the condo market which is the most competitive, accessible and volatile.
They already taxed and stopped foreign buyers but the home prices in Vancouver keep going up as sales amongst local Canadians make up most of the volume.
Now they announce this virtue signaling to appease the other Canadians who can't afford homes but the problem will not change.
In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties.
I'm no stranger to the anti-asian sentiments in Vancouver, just head over to r/vancouver to see people regularly blame Asians for the fact that they can't afford to live there. In fact in the 80s, they blamed Japanese, 90s they blamed Hong Kongers, 2000s they blame Taiwan, Mainlanders.
It's really disgusting to see the blatant racism against one group that is normalized but not for others. It literally is the same attitude that people with anti-semitic views constantly deride Jews of their financial success that largely came out of merit.
The really affluent immigrant groups aren't buying multiple properties, they already have a great deal of income, and their properties are well outside most of what HN can afford and do not impact the condo market which is the most competitive, accessible and volatile.
They already taxed and stopped foreign buyers but the home prices in Vancouver keep going up as sales amongst local Canadians make up most of the volume.
Now they announce this virtue signaling to appease the other Canadians who can't afford homes but the problem will not change.
In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties.
I'm no stranger to the anti-asian sentiments in Vancouver, just head over to r/vancouver to see people regularly blame Asians for the fact that they can't afford to live there. In fact in the 80s, they blamed Japanese, 90s they blamed Hong Kongers, 2000s they blame Taiwan, Mainlanders.
It's really disgusting to see the blatant racism against one group that is normalized but not for others. It literally is the same attitude that people with anti-semitic views constantly deride Jews of their financial success that largely came out of merit.
Lots of bigots have latched onto Vancouver housing issues as a way to further their anti-immigration views. It's gross.
This doesn't mean though that there haven't been real issues with the Vancouver market that involve foreign wealth.
Prior to the foreign buyers tax we were seeing condo developers explicitly opening up sales offices in foreign cities, explicitly marketing their condos as pied-a-terres. I understand why people didn't like that. That sort of thing really doesn't help the local buyer or renter.
I'm happy to see that while Canadian politicians have brought in these rules to deal with some distortions of the real estate market from foreign wealth, we really haven't our politicians embrace the bigoted anti-immigrant rhetoric around this topic of the sort that you occasionally see on twitter and reddit.
This doesn't mean though that there haven't been real issues with the Vancouver market that involve foreign wealth.
Prior to the foreign buyers tax we were seeing condo developers explicitly opening up sales offices in foreign cities, explicitly marketing their condos as pied-a-terres. I understand why people didn't like that. That sort of thing really doesn't help the local buyer or renter.
I'm happy to see that while Canadian politicians have brought in these rules to deal with some distortions of the real estate market from foreign wealth, we really haven't our politicians embrace the bigoted anti-immigrant rhetoric around this topic of the sort that you occasionally see on twitter and reddit.
> They already taxed and stopped foreign buyers but the home prices in Vancouver keep going up as sales amongst local Canadians make up most of the volume.
These were always easy to work around: how many Chinese students come to Canada to study and just happen to have a few million dollars to spend on a house? The new proposal is also easy to work around, the Canadian government isn't serious about solving the speculation problem.
> In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties.
Perhaps. We already went through this in the 80s with the Japanese, and after the Japanese real estate bubble burst, Vancouver real estate was depressed for almost a decade (I remember the signs for condos starting at $100k in 1997! And no one was blaming the Hong Kongese for that at the time). China is just Japan 2.0 in this regard: after the Chinese property bubble bursts, Vancouver real estate will be heavily effected.
These were always easy to work around: how many Chinese students come to Canada to study and just happen to have a few million dollars to spend on a house? The new proposal is also easy to work around, the Canadian government isn't serious about solving the speculation problem.
> In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties.
Perhaps. We already went through this in the 80s with the Japanese, and after the Japanese real estate bubble burst, Vancouver real estate was depressed for almost a decade (I remember the signs for condos starting at $100k in 1997! And no one was blaming the Hong Kongese for that at the time). China is just Japan 2.0 in this regard: after the Chinese property bubble bursts, Vancouver real estate will be heavily effected.
> Perhaps. We already went through this in the 80s with the Japanese, and after the Japanese real estate bubble burst, Vancouver real estate was depressed for almost a decade (I remember the signs for condos starting at $100k in 1997! And no one was blaming the Hong Kongese for that at the time). China is just Japan 2.0 in this regard: after the Chinese property bubble bursts, Vancouver real estate will be heavily effected.
Now this is why I love HN, its to see another fisherman!
I remember the 90s were depressing time for Vancouver. The economy was in complete slump and NDP took the fall for that.
Now the Chinese real estate market is incomplete shambles, people are in complete denial about that the Vancouver real estate market lags behind. Already the bubble has started to burst in Montreal, which I remember were the last to join the party!
Now this is why I love HN, its to see another fisherman!
I remember the 90s were depressing time for Vancouver. The economy was in complete slump and NDP took the fall for that.
Now the Chinese real estate market is incomplete shambles, people are in complete denial about that the Vancouver real estate market lags behind. Already the bubble has started to burst in Montreal, which I remember were the last to join the party!
> Now the Chinese real estate market is incomplete shambles
Chinese real estate prices are still pretty high. The government keeps things from bursting by controlling the real estate agents and their companies (owned mostly by red families, they just taper off on sales volume instead of letting prices fall). We will see how long they can keep juggling that. Which is why rich Chinese like to invest in western property markets in the first place: there is more liquidity in Vancouver and Toronto vs. Shanghai or Beijing.
BTW, I'm not from Vancouver, I just visited a lot in the 90s (when I was going to school in Seattle).
Chinese real estate prices are still pretty high. The government keeps things from bursting by controlling the real estate agents and their companies (owned mostly by red families, they just taper off on sales volume instead of letting prices fall). We will see how long they can keep juggling that. Which is why rich Chinese like to invest in western property markets in the first place: there is more liquidity in Vancouver and Toronto vs. Shanghai or Beijing.
BTW, I'm not from Vancouver, I just visited a lot in the 90s (when I was going to school in Seattle).
the Chinese communist party elites send money abroad is to put it out of reach. Very tough for the CCP to auction off your property in Canada or United States.
For the Japanese it was cheap debt that exported property inflation which led to an immediate drop in liquidity however currently there is cheap debt locally and its the locals participating in the real estate speculation.
the actual foreign ownership is like less than 5% in Vancouver yet the media and establishment constantly loves to shift attention away from REIT and institutional money, rich Canadians and against scapegoat groups.
unlike the melting pot system you have in America, Canadians fall into ethnic tribalism, safety in similarity. There's an idea that everyone can be Canadian/American but its implicit understanding that it is false. Canadians have this sort of superiority complex and see themselves holier than thou, it is far more broken than America in some ways and just in my personal interactions, Americans by large, were far more "Canadian" than real Canadians.
The country honestly feels very much broken and the more dystopian and divided it becomes, the more it will push people on the fringes away to isolation. Ethnic enclaves aren't by choice, they are a byproduct of an unwelcoming and implicitly hostile incumbent establishment.
For the Japanese it was cheap debt that exported property inflation which led to an immediate drop in liquidity however currently there is cheap debt locally and its the locals participating in the real estate speculation.
the actual foreign ownership is like less than 5% in Vancouver yet the media and establishment constantly loves to shift attention away from REIT and institutional money, rich Canadians and against scapegoat groups.
unlike the melting pot system you have in America, Canadians fall into ethnic tribalism, safety in similarity. There's an idea that everyone can be Canadian/American but its implicit understanding that it is false. Canadians have this sort of superiority complex and see themselves holier than thou, it is far more broken than America in some ways and just in my personal interactions, Americans by large, were far more "Canadian" than real Canadians.
The country honestly feels very much broken and the more dystopian and divided it becomes, the more it will push people on the fringes away to isolation. Ethnic enclaves aren't by choice, they are a byproduct of an unwelcoming and implicitly hostile incumbent establishment.
> the actual foreign ownership is like less than 5% in Vancouver
It is probably much higher than that, 5% is just what ownership can clearly be traced to a non-resident foreign owner. But you have a lot of property owned by Chinese students. The government is really conservative when they measure these numbers. Heck, I think the empty Seattle townhome next to mine, which I know is owned by an old retired couple in Beijing (the daughter told us as much before she left), is not counted as foreign owned even though it for all practical purposes is (and was bought with money from China...but then again, I bought my townhome largely with money I earned in Beijing as well).
I'm sure plenty of resident Chinese and Indians own property in Vancouver also (since there are so many of them), but I wouldn't count those as foreign owners either. At that point, it is mostly Canadian money chasing after Canadian assets, rather than Chinese or Indian money. Here in Seattle, it is rich techies driving the market, and many of those just happen to be Chinese or Indian (citizens, permanent residents, and H1s). That is a different problem (rich techies like us bidding up the market, not that many techies are Chinese and Indian).
It is probably much higher than that, 5% is just what ownership can clearly be traced to a non-resident foreign owner. But you have a lot of property owned by Chinese students. The government is really conservative when they measure these numbers. Heck, I think the empty Seattle townhome next to mine, which I know is owned by an old retired couple in Beijing (the daughter told us as much before she left), is not counted as foreign owned even though it for all practical purposes is (and was bought with money from China...but then again, I bought my townhome largely with money I earned in Beijing as well).
I'm sure plenty of resident Chinese and Indians own property in Vancouver also (since there are so many of them), but I wouldn't count those as foreign owners either. At that point, it is mostly Canadian money chasing after Canadian assets, rather than Chinese or Indian money. Here in Seattle, it is rich techies driving the market, and many of those just happen to be Chinese or Indian (citizens, permanent residents, and H1s). That is a different problem (rich techies like us bidding up the market, not that many techies are Chinese and Indian).
>Now this is why I love HN, its to see another fisherman!
Is "fisherman" supposed to be a Canadian expression?
Is "fisherman" supposed to be a Canadian expression?
"foreigners" make up 50% of Canadas largest cities - where all the money is. The richest of the world can afford to move there but farmboy from Peterborough is SOL if he ever wants to make real money. Im fine with putting your own citizens interests before the rest of the world.
Even if those “citizens” are massively capitalized corps seeking returns on their investments? Who cares if they are domestic or foreign (and if foreign becomes difficult - they’ll just open a subsidiary).
I don’t really know whether you have read the rest of what I wrote or just got triggered by me seemingly defending “foreigners” and hit the Reply button.
I don’t mean to single you out specifically, there other posts that seem oddly similar.
Anyway, I think there’s a big distinction between immigrants (who cease to be immigrants at some point, how many years does it take in your opinion by the way? Who is more worthy of being helped to buy a home - a immigrant who came to the country 30 years ago, or a natural-born 25 year-old citizen?… but I digress.) and investment real estate that requires an intervention.
Let’s say we put a huge tax on all real estate that isn’t a primary residence, I am all for making it super unprofitable to hold so that rents cannot cover the expense - to force all these REITs having to fire-sale their holdings to people who want to live in them.
I don’t really know whether you have read the rest of what I wrote or just got triggered by me seemingly defending “foreigners” and hit the Reply button.
I don’t mean to single you out specifically, there other posts that seem oddly similar.
Anyway, I think there’s a big distinction between immigrants (who cease to be immigrants at some point, how many years does it take in your opinion by the way? Who is more worthy of being helped to buy a home - a immigrant who came to the country 30 years ago, or a natural-born 25 year-old citizen?… but I digress.) and investment real estate that requires an intervention.
Let’s say we put a huge tax on all real estate that isn’t a primary residence, I am all for making it super unprofitable to hold so that rents cannot cover the expense - to force all these REITs having to fire-sale their holdings to people who want to live in them.
Anyway, I think there’s a big distinction between immigrants (who cease to be immigrants at some point, how many years does it take in your opinion by the way? Who is more worthy of being helped to buy a home - a immigrant who came to the country 30 years ago, or a natural-born 25 year-old citizen?… but I digress.) and investment real estate that requires an intervention.
There was a two year moratorium announced today, but there are several exemptions. Permanent residents, refugees, some international students on the path to PR, and people here on work permits are all exempt.
There was a two year moratorium announced today, but there are several exemptions. Permanent residents, refugees, some international students on the path to PR, and people here on work permits are all exempt.
I refuse to get into an argument that I know will turn out to be emotional so I'm just going to skip to the last point.
>Let’s say we put a huge tax on all real estate that isn’t a primary residence
Because cottages are a traditional part of life here and real estate is one of the only ways to make real money for someone with some capital in the middle class.
>Let’s say we put a huge tax on all real estate that isn’t a primary residence
Because cottages are a traditional part of life here and real estate is one of the only ways to make real money for someone with some capital in the middle class.
I am not sure what you are afraid of since every reply seems to narrow the gap in our differences of opinion.
At what point cottages cease to be “way to make real money with some capital in the middle class” and we firmly enter the territory of “make a buck while fuck everyone else”? One or two is probably the former. 80,000 properties we all probably agree is the latter.
At what point cottages cease to be “way to make real money with some capital in the middle class” and we firmly enter the territory of “make a buck while fuck everyone else”? One or two is probably the former. 80,000 properties we all probably agree is the latter.
> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians)
Yeah the Right loves to blame poor foreigners while the Left prefers to blame rich foreigners but at the end of the day they at least agree that it is never the voters themselves who are to blame.
Yeah the Right loves to blame poor foreigners while the Left prefers to blame rich foreigners but at the end of the day they at least agree that it is never the voters themselves who are to blame.
Weird, I know the left likes to blame the rich, but I’ve never seen specifically rich foreigners.
Also for real how can the voters (ie the average citizen) be the problem? The average citizen has no money and no political or regulatory power. The average citizen just exists in a system they have no control over and responds to incentives. Hoping that en mass people won’t do that is like politely asking a river to move.
Also for real how can the voters (ie the average citizen) be the problem? The average citizen has no money and no political or regulatory power. The average citizen just exists in a system they have no control over and responds to incentives. Hoping that en mass people won’t do that is like politely asking a river to move.
Attacking rich foreigners for not paying enough <insert tax or contribution> to their adopted homes is fairly common throughout the world, no? America does make it harder to avoid paying tax with a system that taxes income regardless of which country you earned it in, but most of the rest of the world does not work this way.
To use the UK as an example, attacking rich foreigners for their "non-domiciled" tax status is extremely common. This is where you live in the UK, but for tax purposes hide your wealth in another system with lower tax rates, effectively paying no income taxes at all in the UK. Variations of this concept exist throughout the world in many countries and routinely draw politically ire.
Just this week: https://www.bbc.com/news/uk-politics-61017993
Wealth coupled with a collection of passports often creates far more opportunities to avoid tax than being stuck under the rules of one single State, rightly or wrongly.
To use the UK as an example, attacking rich foreigners for their "non-domiciled" tax status is extremely common. This is where you live in the UK, but for tax purposes hide your wealth in another system with lower tax rates, effectively paying no income taxes at all in the UK. Variations of this concept exist throughout the world in many countries and routinely draw politically ire.
Just this week: https://www.bbc.com/news/uk-politics-61017993
Wealth coupled with a collection of passports often creates far more opportunities to avoid tax than being stuck under the rules of one single State, rightly or wrongly.
But at least in the USA, the left treats the rich pretty uniformly (no distinction is made between rich born-here citizen, rich citizen immigrant, or rich foreigner). Many don't even know Elon Musk was born in South Africa, nor do they really care.
Tax evasion is seen as a moral problem no matter how you accomplish (so hiding it with your other citizenship is just as bad as using a shell company).
Tax evasion is seen as a moral problem no matter how you accomplish (so hiding it with your other citizenship is just as bad as using a shell company).
>Tax evasion is seen as a moral problem no matter how you accomplish (so hiding it with your other citizenship is just as bad as using a shell company).
Tax evasion is a legal term, not a moral one. Tax evasion isn't a problem in USA given that it has the highest compliance rate in the world. Jurisdictional arbitrage is a freedom and should be protected as such.
Tax evasion is a legal term, not a moral one. Tax evasion isn't a problem in USA given that it has the highest compliance rate in the world. Jurisdictional arbitrage is a freedom and should be protected as such.
Well for housing in particular, average voters are the ones supporting restrictive zoning and stalling new housing.
While I agree that getting people to change their mind is pretty hopeless, I dislike the framing that they are just "responding to incentives" and therefore not only off the hook for the shitty outcomes of their choices, but also not responsible for the choices themselves.
While I agree that getting people to change their mind is pretty hopeless, I dislike the framing that they are just "responding to incentives" and therefore not only off the hook for the shitty outcomes of their choices, but also not responsible for the choices themselves.
This is definitely a thing in Vancouver: https://www.npr.org/2019/06/05/726531803/vancouver-has-been-...
This is refreshing to see a left wing media writing on China. After COVID I pretty much lost trust in left wing media when it comes to China.
it is a good observation, I think you mean most immigrants are not rich. If you didn't mean immigrants, immigrants are not rich until 10+ years later. Definitely don't spend like the rich. But they are willing to commit years to buy into real-estate.
> The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.
The article says some of those foreigners will be exempt. I will say this, the country needs the immigrants' money (ie spend in that country, on top of taxes paid)
> The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.
The article says some of those foreigners will be exempt. I will say this, the country needs the immigrants' money (ie spend in that country, on top of taxes paid)
It's low interest rates to blame
It's a lack of supply caused by costly and overzealous environmental assessments which strangle the process of land development in Canada, particularly Ontario.
If you want a convenient scapegoat, blame the McGuinty government of the early 2000s. When the 2005 Greenbelt Act was passed, developers across the country warned of a housing crisis in the future due to the effect the bill would have on the price and timelines for new construction. 17 years later we'd prefer to blame China or NIMBYs, but the reality is Canadians, and especially Ontarians, did this to themselves when they allowed politicians and environmentalists to ignore the concerns of land developers and engineers.
If you want a convenient scapegoat, blame the McGuinty government of the early 2000s. When the 2005 Greenbelt Act was passed, developers across the country warned of a housing crisis in the future due to the effect the bill would have on the price and timelines for new construction. 17 years later we'd prefer to blame China or NIMBYs, but the reality is Canadians, and especially Ontarians, did this to themselves when they allowed politicians and environmentalists to ignore the concerns of land developers and engineers.
Its zoning and nimbyism.
It’s treating basic human needs as financial instruments.
Plenty of basic human needs are financialized - crops and water and electricity - and they don't have any problems.
Why is financializing land and real estate a cause for the problem?
I argue it's not financializing, but the lack of allowance for production of more, when the price signals a demand for more.
When crop prices are high, farmers grow more, or make use of more land to grow. Ditto with electricity or water. Why isn't more land opened up for development, when price of real estate is high?
Why is financializing land and real estate a cause for the problem?
I argue it's not financializing, but the lack of allowance for production of more, when the price signals a demand for more.
When crop prices are high, farmers grow more, or make use of more land to grow. Ditto with electricity or water. Why isn't more land opened up for development, when price of real estate is high?
How does your theory explain the difference in housing prices between San Francisco and Lubbock?
The "theory" relates to increase over time for a single location, not differences between 2 locations at a single point in time. But to stick to your example, investors are more likely to flock to a location with greater returns. At the same time, Lubbock hasn't exactly remained stagnant.
https://learn.roofstock.com/blog/lubbock-real-estate-market
https://learn.roofstock.com/blog/lubbock-real-estate-market
Why are you so sure the outsized returns don't have anything to do with zoning?
Which should’ve helped a whole bunch of hard-working regular people to buy their first-time homes, but that is not what is happening it seems?
> Which should’ve helped a whole bunch of hard-working regular people to buy their first-time homes, but that is not what is happening it seems?
This is false if you think about it.
What drives the price of a house is what people can pay on their monthly payments.
As rates go down prices go up as people can afford to pay more.
Unfortunately for home buyers this means the downpayment goes up. What you end up with is a bunch of first time home buyers who can in theory afford the mortgage payments but can't build up the $200,000 nest egg required as a 20% downpayment on a $1,000,000 home.
When rates go back up home prices will drop and so will the size of the downpayment required, even though the person will pay about the same monthly on their mortgage.
Lower rate help those with existing homes and therefor existing equity more than those without homes.
This is false if you think about it.
What drives the price of a house is what people can pay on their monthly payments.
As rates go down prices go up as people can afford to pay more.
Unfortunately for home buyers this means the downpayment goes up. What you end up with is a bunch of first time home buyers who can in theory afford the mortgage payments but can't build up the $200,000 nest egg required as a 20% downpayment on a $1,000,000 home.
When rates go back up home prices will drop and so will the size of the downpayment required, even though the person will pay about the same monthly on their mortgage.
Lower rate help those with existing homes and therefor existing equity more than those without homes.
It would have been true if the supply side of the market was working. Low interest rates have increased demand but the market has not been apply to increase the number of available homes to meet the demand, hence existing properties have increased in price.
Interest rates just went over 5% so I guess we'll test this hypothesis soon?
Nah, it’s the animal sprits
>> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians)
> Yeah the Right loves to blame poor foreigners while the Left prefers to blame rich foreigners but at the end of the day they at least agree that it is never the voters themselves who are to blame.
Generally speaking I think you're mostly correct, but there are exceptions, and nuances.
I am one of the odd outliers who believes that much of the blame lies with voters, but at the same time it is a bit of a chicken and egg problem. It's ~true that voters "should" "vote for better politicians", but consider:
- what if the particular flavour of democracy that we practice does not make this possible?
- what if the public's ability to make optimal decisions is a function of the quality of education they received, which is largely a consequence of government policy (and other things, like culture)?
Take HN for example: observe how many comments there are in this subthread (or the overall thread) asserting that "The problem is X", as if the causality behind the situation is due to a single variable. Might this error be to some degree (perhaps even a large degree) a consequence of causality (philosophy, epistemology, logic, etc) not being first class subjects in school (and culture/society), on par with science, math, and language?
And if one's answer to this question is something along the lines of "Oh, they didn't mean that literally, they were just speaking loosely, or expressing their opinion, etc", then I ask: why is it that we have ~culturally normalized (if not worse) speaking (and I would say: thinking) so inaccurately and imprecisely about so many matters that are extremely important, be it housing prices, immigration, war, politics, you name it? Might it be possible that we (~everyone) are "doing it wrong", at massive scale?
If I was forced to nominate a single variable that lies behind not just this problem, but perhaps ~all problems (mostly excluding natural disasters), it would be the inability of the population of this planet to think and speak/listen/conceptualize/understand at a level that is adequate to rise above the local optima we find ourselves stuck in (note: there's substantial unaddressed complexity here: some things are improving on a relative basis, etc - I am speaking in an absolute sense, which includes that which is beyond our current knowledge, or ability to know).
> Yeah the Right loves to blame poor foreigners while the Left prefers to blame rich foreigners but at the end of the day they at least agree that it is never the voters themselves who are to blame.
Generally speaking I think you're mostly correct, but there are exceptions, and nuances.
I am one of the odd outliers who believes that much of the blame lies with voters, but at the same time it is a bit of a chicken and egg problem. It's ~true that voters "should" "vote for better politicians", but consider:
- what if the particular flavour of democracy that we practice does not make this possible?
- what if the public's ability to make optimal decisions is a function of the quality of education they received, which is largely a consequence of government policy (and other things, like culture)?
Take HN for example: observe how many comments there are in this subthread (or the overall thread) asserting that "The problem is X", as if the causality behind the situation is due to a single variable. Might this error be to some degree (perhaps even a large degree) a consequence of causality (philosophy, epistemology, logic, etc) not being first class subjects in school (and culture/society), on par with science, math, and language?
And if one's answer to this question is something along the lines of "Oh, they didn't mean that literally, they were just speaking loosely, or expressing their opinion, etc", then I ask: why is it that we have ~culturally normalized (if not worse) speaking (and I would say: thinking) so inaccurately and imprecisely about so many matters that are extremely important, be it housing prices, immigration, war, politics, you name it? Might it be possible that we (~everyone) are "doing it wrong", at massive scale?
If I was forced to nominate a single variable that lies behind not just this problem, but perhaps ~all problems (mostly excluding natural disasters), it would be the inability of the population of this planet to think and speak/listen/conceptualize/understand at a level that is adequate to rise above the local optima we find ourselves stuck in (note: there's substantial unaddressed complexity here: some things are improving on a relative basis, etc - I am speaking in an absolute sense, which includes that which is beyond our current knowledge, or ability to know).
We can't even get people to consistently pass basic mathematics at a college 101 level, what you're asking is impossible. There is fundamentally a culture of anti-intellectualism in many American subcultures and the left tries to paper over it by shouting about racism and the right straight up supports it.
What of the errors in this comment section? Could the people here do no better? When the topic of discussion is related to computing, rarely do I see this many errors - assuming this observation is correct, is that interesting?
There are many likely reasons for the explosion in housing prices - but we can't pretend that immigration isn't one of them. A solution will likely need to be multi-factored, but reducing demand by reducing immigration will probably have to be part of that solution. To ignore that is to limit how effective your measures in reducing the cost of housing can be.
Or we could have seen this coming a mile away and built more houses and reduced the idiocy of city zoning.
But yeah it’s the immigrants fault. Lets reduce immigration while we are facing a labor shortage.
But yeah it’s the immigrants fault. Lets reduce immigration while we are facing a labor shortage.
Well, it's not the immigrants' fault - it's the government's fault. At the end of the day, this confluence of circumstances is its responsibility. The combination of low interest rates, no expansive public transport projects, no action on money-laundering, hurdles in supply (as you mentioned) - and yes, expansive immigration policies (Canada had the highest population growth in the G7, mostly due to immigration [0]).
The truth is, this problem has been growing for many years and public servants have allowed the issue to grow beyond any control (and actually profiting off it in some cases). Now, the rest of the population will suffer and it's become a hard problem to solve.
Finally, yes we have a labor shortage - but it may actually be a labor correction. Wages have been stagnant for years and inflation is running wild. Wages need to rise to catch up - artificially depressing wages with immigration is a recipe for disaster.
[0] https://www.cicnews.com/2022/02/canada-fastest-growing-count...
The truth is, this problem has been growing for many years and public servants have allowed the issue to grow beyond any control (and actually profiting off it in some cases). Now, the rest of the population will suffer and it's become a hard problem to solve.
Finally, yes we have a labor shortage - but it may actually be a labor correction. Wages have been stagnant for years and inflation is running wild. Wages need to rise to catch up - artificially depressing wages with immigration is a recipe for disaster.
[0] https://www.cicnews.com/2022/02/canada-fastest-growing-count...
Here where I live, the people who show up at hearings to stop homes from being built are all wealthy-ish local people. Not immigrants, not some faceless government, not BlackRock, but our neighbors.
I have a close family member who works in municipal planning, and it's exactly what you describe.
Wealthy-ish, semiretired older local people, or non-locals with vacation property who do everything they can to shut down any kind of housing project. Their methods include suing the town at great expense to the taxpayers and floating their own and sympathetic friends into town council.
It's extremely frustrating when a really well designed development that takes a year and millions to craft can get shut down in a single meeting by a very loud, adamant and group of busybodies.
Wealthy-ish, semiretired older local people, or non-locals with vacation property who do everything they can to shut down any kind of housing project. Their methods include suing the town at great expense to the taxpayers and floating their own and sympathetic friends into town council.
It's extremely frustrating when a really well designed development that takes a year and millions to craft can get shut down in a single meeting by a very loud, adamant and group of busybodies.
> Their methods include suing the town at great expense to the taxpayers and floating their own and sympathetic friends into town council.
Those very same people are the taxpayers. They have and should have the right to represent their interests in a court of law. If the town ends up being a victim of it, so be it.
Those very same people are the taxpayers. They have and should have the right to represent their interests in a court of law. If the town ends up being a victim of it, so be it.
Actually funny you should mention that because one of them actually is not a taxpayer in the municipality that she sued (and lost). So no, they are not all taxpayers, but some are, it is true.
Yes, of course they have this right, I don't dispute that. But when a single case like this eats up literally 10% of a small town's yearly budget, and the same small group of people repeatedly behave in this way, I also have the right to call them assholes.
Yes, of course they have this right, I don't dispute that. But when a single case like this eats up literally 10% of a small town's yearly budget, and the same small group of people repeatedly behave in this way, I also have the right to call them assholes.
The point is that this is only one part of the problem. "Wealthy-ish local people" protesting a condo development is not enough to explain this absolute explosion in home prices.
The government may be faceless, but there are lots of things that could have been done - including more "development-friendly" practices. However, there's always a cost - do you sacrifice environmental protections? Democratic government principles?
You can't just blame whatever out-group you dislike at the moment. If those neighbors you described vanished as of 5 years ago, the prices of houses would have risen just the same.
The reason that I blame government is because they explicitly had a responsibility to protect society from this. Officials have either neglected or outright contravened this responsibility.
The government may be faceless, but there are lots of things that could have been done - including more "development-friendly" practices. However, there's always a cost - do you sacrifice environmental protections? Democratic government principles?
You can't just blame whatever out-group you dislike at the moment. If those neighbors you described vanished as of 5 years ago, the prices of houses would have risen just the same.
The reason that I blame government is because they explicitly had a responsibility to protect society from this. Officials have either neglected or outright contravened this responsibility.
In the United States, by and large, zoning regulations are local, so they're set at the city level. Which makes it quite difficult to get rid of bad land use regulations that cause all kinds of problems. At a certain point, in a place like, say, Boulder, Colorado, it turns into a vicious circle: the only people who can afford to live there are wealthy boomer NIMBY types who will vote down anything to help housing affordability. For instance in that city it's illegal for more than 3 unrelated people to live in the same home. Local activists tried to get it overturned via an initiative, and it was voted down.
The US is a bit of a different animal (although it's comparable to Canada, which is what the original article discusses). To my understanding, there are no equivalent "town halls" that can block development - although it does seem to vary by province and municipality.
Also, immigrants to Canada usually move to one of its three main metro areas - Vancouver, Toronto and Montreal, which, coincidentally, have also seen the highest amount of housing increases.
Other places, like Calgary or Winnipeg, have not had housing explode in the same way (although prices have risen in smaller amounts there as well).
Keep in mind, the original article is focusing on Canadian housing, which, while complex, may be even simpler than the American model.
Also, immigrants to Canada usually move to one of its three main metro areas - Vancouver, Toronto and Montreal, which, coincidentally, have also seen the highest amount of housing increases.
Other places, like Calgary or Winnipeg, have not had housing explode in the same way (although prices have risen in smaller amounts there as well).
Keep in mind, the original article is focusing on Canadian housing, which, while complex, may be even simpler than the American model.
[deleted]
The level of immigration is over 1%. Pretending people are just blaming foreigners misses the reality.
[deleted]
I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all?
Sorry friend, but you're wrong. First, the issue of foreign ownership in the real estate market has already been studied. So, they have evidence supporting the moratorium. And second, this budget also announced that they are going to investigate the role of hedge funds, private capital, REITs, etc. Early actions could be announced before the end of the year.
Sorry friend, but you're wrong. First, the issue of foreign ownership in the real estate market has already been studied. So, they have evidence supporting the moratorium. And second, this budget also announced that they are going to investigate the role of hedge funds, private capital, REITs, etc. Early actions could be announced before the end of the year.
You need to provide evidence for this assertion. I've never seen any kind of analysis of this problem produce a clear signal that supports the idea that foreign ownership is a primary factor.
> I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all?
Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win?
Are you saying that foreigners who do not reside at all in Canada should be able to buy a primary home in Canada? Because that's what this bill is preventing. If you're a "foreigner" it's not relevant so long as you're actually a resident of Canada.
Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win?
Are you saying that foreigners who do not reside at all in Canada should be able to buy a primary home in Canada? Because that's what this bill is preventing. If you're a "foreigner" it's not relevant so long as you're actually a resident of Canada.
> Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win?
You can, and I specifically pointed out that I generally agree with what is being proposed, and certainly hope that it isn’t an attempt at diversion by throwing out the usual scapegoat.
You can, and I specifically pointed out that I generally agree with what is being proposed, and certainly hope that it isn’t an attempt at diversion by throwing out the usual scapegoat.
Action for home affordability needs to be taken, but I’m always weary of simply blaming foreigners, especially in Vancouver where there was always (since the 1800s) a lot of ethnically Chinese people. Way too many people use “foreigners” as a dog whistle term for “Chinese” and include Chinese Canadian ownership but exclude American foreign ownership (which is quite high if I remember correctly). I recall one controversial article from about 5 years ago that investigated “foreign ownership” by checking records for Chinese-sounding names since at the time citizenship wasn’t publicly available in real estate records. Clearly the wrong way to check, given that there are hundreds of thousands of ethnically Chinese Canadian people in the Vancouver area.
> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners”
As a Canadian, I agree with this.
Part of the problem is that the federal govt doesn't have jurisdiction over the actually issues causing the problem. I _think_ the provinces own it but delegate it to the cities. But for some reason, this isn't an issue in those elections. BC had an election less than a year ago and housing wasn't an issue outside of Reddit. And BC has the second worse housing market in the country (Vancouver).
EDIT: Actually, that BC election was a year and a half ago. I even looked that up before posting and got it wrong. The covid time warp strikes again.
As a Canadian, I agree with this.
Part of the problem is that the federal govt doesn't have jurisdiction over the actually issues causing the problem. I _think_ the provinces own it but delegate it to the cities. But for some reason, this isn't an issue in those elections. BC had an election less than a year ago and housing wasn't an issue outside of Reddit. And BC has the second worse housing market in the country (Vancouver).
EDIT: Actually, that BC election was a year and a half ago. I even looked that up before posting and got it wrong. The covid time warp strikes again.
I live in Canada. In Canada foreign investment is a massive problem. This is NOT the only problem. But it is a big part of the problem.
And arguably housing crisis in Canada started with foreign investment. Now domestic players and instituitional investors are also involved in housing market. Together there are enough parties involved not to let housing prices go down.
And arguably housing crisis in Canada started with foreign investment. Now domestic players and instituitional investors are also involved in housing market. Together there are enough parties involved not to let housing prices go down.
The problem with “capital” vs “foreign individuals looking to buy a home” in my mind - is that capital will find a way to camouflage as domestic capital if foreign capital is no longer allowed. It will move the money, register a subsidiary etc and buy a billion worth of housing while we are celebrating that a foreign family couldn’t buy a vacation home.
I am sure banning that wealthy family from China will do “something” to help alleviate the crisis, but I think putting restrictions on capital being used to buy up homes that aren’t primary-residence should be a priority and will have much larger effect.
And to be clear - as it stands with the situation in real estate being what it is right now, I am in favor of massive taxes on real estate investments that are to be used to finance affordable housing to be made available exclusively to first-time buyers and primary residents.
I am sure banning that wealthy family from China will do “something” to help alleviate the crisis, but I think putting restrictions on capital being used to buy up homes that aren’t primary-residence should be a priority and will have much larger effect.
And to be clear - as it stands with the situation in real estate being what it is right now, I am in favor of massive taxes on real estate investments that are to be used to finance affordable housing to be made available exclusively to first-time buyers and primary residents.
I mean it's a few percent in some cities. Is it a factor? Sure. Is the fact that housing debt is higher than it's ever been for Canadians themselves more important? Yes.
I hear about people pulling out equity in the form of HELOC's to put a downpayment on another home. That's a pretty big chunk of Canadian "investors". And that should scare the shit out of anyone considering that was a major problem in 2008 in the US. People vastly over-leveraging themselves under the assumption that housing only goes up.
I hear about people pulling out equity in the form of HELOC's to put a downpayment on another home. That's a pretty big chunk of Canadian "investors". And that should scare the shit out of anyone considering that was a major problem in 2008 in the US. People vastly over-leveraging themselves under the assumption that housing only goes up.
Did you know only 3% of Toronto properties are foreign owned. Are you sure it's a real problem or media invented cause?
Apparently you don't understand economics. Without the massive investments, housing will be even more expensive.
Others who have replied offered their point of view. Some agreed, some disagreed. You, though, shouldn’t have even bothered. Next time hit that downvote button and move on.
Your this reply is even worse, don’t you see it?
You nailed it. You don't need to be in the Canadian real estate to realize that the most people coming to open houses are in fact local Canadians (also from other provinces) looking to move to the warmest part of the country or add another property or two to their portfolio.
The landlords that run the real estate holdings companies are mostly White. They buy up the properties, apartments, condos when they are cheap with the sole purpose of renting them out. Guess who influences local media and politicians. It's not some rich Chinese communist fu er dai they could care less.
The fact is that Canada isn't the all shining socialist paradise that outsiders make out to be. In fact places like Vancouver almost gets a pass when race issues are mentioned because its automatically chalked up as a "social liberal progressive city" compared to other American cities that often get thrown into the "shithole conservative counties"
The landlords that run the real estate holdings companies are mostly White. They buy up the properties, apartments, condos when they are cheap with the sole purpose of renting them out. Guess who influences local media and politicians. It's not some rich Chinese communist fu er dai they could care less.
The fact is that Canada isn't the all shining socialist paradise that outsiders make out to be. In fact places like Vancouver almost gets a pass when race issues are mentioned because its automatically chalked up as a "social liberal progressive city" compared to other American cities that often get thrown into the "shithole conservative counties"
In Canada the landlords are of many colours. Many are Jewish.. would you hold that against them because they are white?
Why are you mentioning Jewish community here?
Because if you filter for only colour you miss diversity.
Lots of us are indigenous and Latino but often mistaken for white by people who judge race based on skin color.
I wouldn’t call it a paradise but it’s definitely communist
I wouldn’t call it a paradise but it’s definitely communist
> massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all?
If corporations buying houses was actually affecting the purchase market prices, then we'd see an equal effect on rental prices going down. A corporation can't live in a house, so they'd be renting it out. If these evvvill corporations were keeping houses vacant just to screw over regular hard working folks, resulting in no effect on the rental market prices, then we'd see it in the vacancy stats. But that's never actually mentioned by housing conspiracy theorists because the vacancy stats show that the areas with highest prices have extremely low vacancy rates, because demand for housing is so much higher than supply, because not enough housing has been built.
If corporations buying houses was actually affecting the purchase market prices, then we'd see an equal effect on rental prices going down. A corporation can't live in a house, so they'd be renting it out. If these evvvill corporations were keeping houses vacant just to screw over regular hard working folks, resulting in no effect on the rental market prices, then we'd see it in the vacancy stats. But that's never actually mentioned by housing conspiracy theorists because the vacancy stats show that the areas with highest prices have extremely low vacancy rates, because demand for housing is so much higher than supply, because not enough housing has been built.
In Toronto alone ~40% of new homes being built are being scooped up by investors that obviously have more cash on hand to pay above asking price. With interest rates so low and demand so high, why would they not be driving up the price? It works in their favor.
Given that pretty much everybody in Toronto rents because nobody can afford to buy, it's pretty circular. If they weren't buying to rent them out, then the people who can't afford to buy would have nothing to rent.
How on earth would higher home sale prices by corporations bidding housing up push rent down? It has the exact opposite effect, rents go up if a property costs more..
Seriously? What's the mechanism of this magical connection? Rental prices go up if there is more demand in the rental market.
Landlords don’t buy properties to rent at a loss. Before they buy they make sure they will be able to charge the rent they need to cover costs. Or at least I do.
Exactly. Corporations are buying houses because rents are high. Rents are not high because corporations are buying houses.
Rents are high because there are not enough houses on the rental market, because not enough houses are built.
Rents are high because there are not enough houses on the rental market, because not enough houses are built.
You talk about supply and demand in your comments, and then somehow the idea that corporations controlling the supply lets them manipulate and ignore demand just goes over your head. Strange.
This is a total and complete non sequitur. No reason rental prices would go down. I just looked at materials of one such company touting 50% increases.
nawgz(1)
> Freeland will introduce legislation that allows Canadians under the age of 40 to save as much as C$40,000 ($31,900) for a home downpayment within a new tax-exempt vehicle, the person said.
I'm not an economist but this seems pretty dumb? To the extent that it helps someone afford a home that they can save tax-free for it, the same is true of some of the people they're bidding against, driving up the price they ultimately pay for it. The government is just transferring their own future tax revenue to people who own homes, not people in the market for them.
It seems that governments have a reflex of dealing with a supply crisis by showering money on the demand side (see also: gas tax decreases, higher education subsidies, etc.), which just drives up prices further.
I'm not an economist but this seems pretty dumb? To the extent that it helps someone afford a home that they can save tax-free for it, the same is true of some of the people they're bidding against, driving up the price they ultimately pay for it. The government is just transferring their own future tax revenue to people who own homes, not people in the market for them.
It seems that governments have a reflex of dealing with a supply crisis by showering money on the demand side (see also: gas tax decreases, higher education subsidies, etc.), which just drives up prices further.
Ridiculous ageist policy. If you don't have a home and you're above 40, I'd argue you need the benefit even more.
Agreed, this should be a tax code line with a small number of ORed entry conditions.
- OR - at least one of
* First time home buyer
* Total homes owned plus being purchased will remain at one after the transaction is completed, and net-worth is under 20% the cost of a median home within the home's metro area.
* Qualified for a federal benefits program excluded from the upper 60% of society
The phrasing on the last one is specific, it's the wording required to select for economically disadvantaged individuals in a mechanically testable way. The exact number might be tweaked, this is just a back of the napkin ballpark. Other entry qualifiers can be added to the list. The second allows someone to move homes and if they need the benefit, not be locked out of assistance moving to an economically 'hotter' area that might have better jobs.
- OR - at least one of
* First time home buyer
* Total homes owned plus being purchased will remain at one after the transaction is completed, and net-worth is under 20% the cost of a median home within the home's metro area.
* Qualified for a federal benefits program excluded from the upper 60% of society
The phrasing on the last one is specific, it's the wording required to select for economically disadvantaged individuals in a mechanically testable way. The exact number might be tweaked, this is just a back of the napkin ballpark. Other entry qualifiers can be added to the list. The second allows someone to move homes and if they need the benefit, not be locked out of assistance moving to an economically 'hotter' area that might have better jobs.
The home ownership rate is already >70% for people 40+.
This is just pandering to young people in Vancouver & Toronto.
Any tax savings will be passed on to owners in the form of higher prices.
The only thing you'll do is pay higher property taxes and insurance.
This is just pandering to young people in Vancouver & Toronto.
Any tax savings will be passed on to owners in the form of higher prices.
The only thing you'll do is pay higher property taxes and insurance.
Just so you don't get angry for no reason: the actual policy says nothing about a specific age. You could be 60 and use it to buy a house.
It also doesn't have to be your first one. If you had a house than sold it and lived in an apartment for 4 years you are eligible again. If you own your house but your spouse doesn't they can use this for your next house.
It also doesn't have to be your first one. If you had a house than sold it and lived in an apartment for 4 years you are eligible again. If you own your house but your spouse doesn't they can use this for your next house.
What about no age discrimination at all?
> the same is true of some of the people they're bidding against
I think you're assuming that everyone bidding will be a first time home buyer under 40 years old. While that may be the bulk of buyers, there are also many investors also in the mix who are buying up houses to rent/flip them.
I think you're assuming that everyone bidding will be a first time home buyer under 40 years old. While that may be the bulk of buyers, there are also many investors also in the mix who are buying up houses to rent/flip them.
A house goes to the highest bidder, so if you decrease the cost of capital for some participants you increase the price for everyone. I agree that it’s not a perfect transfer, but I suspect it’s a pretty good one, on the assumption that first-time buyers represent most of the capital entering the system. E.g. someone buying a first house for $500k puts $500k in the market, whereas someone moving from a $500k house to a $600k house is only bringing $100k of new capital into the system.
I realize that people also leave the system, so maybe my logic is flawed.
I realize that people also leave the system, so maybe my logic is flawed.
They tried something like this in. nl and that was pretty much exactly what happened: make some of the cash-limited house buyers be able to pay more increased prices.
The desired effect typically is not achieved because such measures are aimed at the least affluent buyers. Giving those ways to bid more will not decrease prices. It just means someone else is now the least affluent buyer - typically not investors.
The desired effect typically is not achieved because such measures are aimed at the least affluent buyers. Giving those ways to bid more will not decrease prices. It just means someone else is now the least affluent buyer - typically not investors.
We have a similar scheme in the UK, where you can save £4000/yr and get a 25% top-up from the government if you use the pot to buy your first home. Everything invested in this scheme is tax free: income and growth.
You're completely right, it just drives up prices further... but they're vote winning policies and using these pots makes conveyencers a nice profit.
You're completely right, it just drives up prices further... but they're vote winning policies and using these pots makes conveyencers a nice profit.
I don't think these drive up prices higher.
LISA specifically mentions that it has to be your first house anywhere in the world, so it is targeted at home ownership. People speculating shouldn't be able to take advantage of this.
Though LISA is pretty much useless in London. Good luck finding even a good 1 BHK under 450k inside Zone 4
LISA specifically mentions that it has to be your first house anywhere in the world, so it is targeted at home ownership. People speculating shouldn't be able to take advantage of this.
Though LISA is pretty much useless in London. Good luck finding even a good 1 BHK under 450k inside Zone 4
>I don't think these drive up prices higher.
It's a demand-side policy to what is a supply-side problem. If the demand is already there, and you induce more demand by providing subsidies, prices will go up. If you want to reduce prices you must either increase supply (building housing) or decrease demand (remove someone, hopefully speculators, from the market).
However, given housing has become a defacto investment asset for Americans and Canadians, I don't see this issue ever being resolved without a political revolution or an economic depression.
It's a demand-side policy to what is a supply-side problem. If the demand is already there, and you induce more demand by providing subsidies, prices will go up. If you want to reduce prices you must either increase supply (building housing) or decrease demand (remove someone, hopefully speculators, from the market).
However, given housing has become a defacto investment asset for Americans and Canadians, I don't see this issue ever being resolved without a political revolution or an economic depression.
> housing has become a defacto investment asset for Americans and Canadians
Is there a major economy where this is not true? In fact it becomes comical in some developing countries.
Cities in India have NY/London like prices for much worse infrastructure and much lower purchasing power.
Is there a major economy where this is not true? In fact it becomes comical in some developing countries.
Cities in India have NY/London like prices for much worse infrastructure and much lower purchasing power.
Japan, Germany, arguably, Britain. I'm not saying these places don't have exorbitant housing costs, but housing is not the primary way of securing your retirement.
That doesn't matter. It increases the amount the first-time buyer can bid from $x to $y, which just means the investor has to bid $y + 1 instead of $x + 1. Since $y is higher than $x all that's happened is prices have risen.
Yeah, but the idea is to try to give buyers a leg up from investors. It is another story that most investors have way more money to be outbid this way.
You can't open a help to buy ISA any longer, the government honours existing accounts though.
Lifetime ISAs as a different scheme than help to buy ISAs and are still available https://www.moneysavingexpert.com/savings/lifetime-isas/
You can use a LISA for a first property.
It is not actually possible to increase the supply of good suburbia. The virtue of a suburban home is to be on a large plot of land with low-intensity neighbors and convenient vehicle access to places, and this genuinely can’t scale very far. Even if you have infinitely much land, you will never build enough roads or lanes.
We can increase the supply of other things which are also called “housing” but are fundamentally different products, and not what most people in North America are talking about when they talk about wanting to buy or own homes.
We can increase the supply of other things which are also called “housing” but are fundamentally different products, and not what most people in North America are talking about when they talk about wanting to buy or own homes.
> It is not actually possible to increase the supply of good suburbia.
Dallas seems to be doing it by organically creating a multi-core urban metropolis. Infinite suburbia only fails if you assume that each metropolitan area can only have a single urban core.
Dallas seems to be doing it by organically creating a multi-core urban metropolis. Infinite suburbia only fails if you assume that each metropolitan area can only have a single urban core.
In other words, people will be forced to weigh options and tradeoffs, just like they have to do with everything else. If you want a SFH very near to an urban core, then you'll have to pay what that's actually worth relative to alternative uses for that land.
One large reason for high priced real estate in some places is the geographically uneven distribution of disposable income. Historically, people moved to cities because the jobs were there (i.e., physical factories that had to exchange physical goods).
No commuting for work = much less need for roads. If commuting and working in a centralized location is viewed as exceptional rather than normal, society could easily switch to lower density living, which is highly beneficial to most mammalian species (reduced stress, reduced aggression).
If the most lucrative information-age jobs (tech, finance) become remote-first (or better, remote-only) and dominated by shape rotators, people will be able to move away from cities (and take the money with them). Only wordcels, who grift on social interactions, really need high density humanity to thrive.
No commuting for work = much less need for roads. If commuting and working in a centralized location is viewed as exceptional rather than normal, society could easily switch to lower density living, which is highly beneficial to most mammalian species (reduced stress, reduced aggression).
If the most lucrative information-age jobs (tech, finance) become remote-first (or better, remote-only) and dominated by shape rotators, people will be able to move away from cities (and take the money with them). Only wordcels, who grift on social interactions, really need high density humanity to thrive.
You actually could, basically, if you really wanted to do it. If there was an efficient high-speed corridor into the major metro area, suburbs could be much further out along it and it'd still work out well.
It is dumb and will likely add fuel to the fire and the politicians know this. Canada has like a 68% home ownership rate meaning actually doing something to lower housing prices would be political suicide.
Yes, but crucially it's actually land that's valuable, not the housing that sits on it. The worry that allowing more density will tank home values is misguided. Land prices will keep going up as long as the land underneath the houses remains desirable. In fact, upzoning means more allowed uses, which means higher land values, which means more money for landowners.
There are two implications of this: 1) NIMBYs need to realize that allowing more housing isn't going to tank prices; if you're worried about prices tanking, you need not be; 2) YIMBYs need to realize that NIMBYs aren't exclusively motivated by greed. When they tell you that they don't want their neighborhood to densify they actually mean it. It's not covering for racism or greed. People genuinely don't want their neighborhoods to change.
There's hope in this. If the state forces upzoning, then people are going to grumble about it. And some of them won't be happy no matter what. But the average homeowner isn't going to be that upset about it once they realize there's money to be made.
There are two implications of this: 1) NIMBYs need to realize that allowing more housing isn't going to tank prices; if you're worried about prices tanking, you need not be; 2) YIMBYs need to realize that NIMBYs aren't exclusively motivated by greed. When they tell you that they don't want their neighborhood to densify they actually mean it. It's not covering for racism or greed. People genuinely don't want their neighborhoods to change.
There's hope in this. If the state forces upzoning, then people are going to grumble about it. And some of them won't be happy no matter what. But the average homeowner isn't going to be that upset about it once they realize there's money to be made.
> NIMBYs need to realize that allowing more housing isn't going to tank prices. ... When they tell you that they don't want their neighborhood to densify they actually mean it.
Ya, a lot of NIMBYs don't care about housing prices since they aren't thinking about selling anytime soon, they just don't want the traffic and (perhaps) crime that goes along with density.
I get what they mean since I became home owner. I don't want my view to go away, and crime is already a problem (having some random person come into my drive way to check if my car doors are unlocked is quite unnerving when you can see it happen in real time through your cameras). I bought in an already upzoned area, however, so I'm more concerned if my son can get in the local choice school (which is heavily oversubscribed given the density).
Ya, a lot of NIMBYs don't care about housing prices since they aren't thinking about selling anytime soon, they just don't want the traffic and (perhaps) crime that goes along with density.
I get what they mean since I became home owner. I don't want my view to go away, and crime is already a problem (having some random person come into my drive way to check if my car doors are unlocked is quite unnerving when you can see it happen in real time through your cameras). I bought in an already upzoned area, however, so I'm more concerned if my son can get in the local choice school (which is heavily oversubscribed given the density).
> they just don't want the traffic and (perhaps) crime that goes along with density.
Something I've been trying to think through recently is that people clearly have some kind of proximity theory of crime. If there is a murder in the building next door to me, then that's going to make me uncomfortable, whether there is one family living in that building or 10. The obvious urbanist (or generic intellectual) response to this is to say, you know, obviously there will be more crimes in a neighborhood with more families, but you should only care about the per capita numbers, not absolute totals.
And increasingly I just think, yeah, obviously that's right, but that answer isn't good enough. Fear of interpersonal violence is lodged deep in our brains and I just don't think you can talk people out of it. You could make everybody in the city attend a class on crime statistics and quiz them at the end to make sure they understand per capita rates, but when those people get home that night they're still going to be worried about the murder that happened next door. And I don't think it's because they're dumb.
Something I've been trying to think through recently is that people clearly have some kind of proximity theory of crime. If there is a murder in the building next door to me, then that's going to make me uncomfortable, whether there is one family living in that building or 10. The obvious urbanist (or generic intellectual) response to this is to say, you know, obviously there will be more crimes in a neighborhood with more families, but you should only care about the per capita numbers, not absolute totals.
And increasingly I just think, yeah, obviously that's right, but that answer isn't good enough. Fear of interpersonal violence is lodged deep in our brains and I just don't think you can talk people out of it. You could make everybody in the city attend a class on crime statistics and quiz them at the end to make sure they understand per capita rates, but when those people get home that night they're still going to be worried about the murder that happened next door. And I don't think it's because they're dumb.
Our per capita property crime numbers are horrible, and it doesn't have much to do with our neighborhoods being dense so much as it has to do with Seattle being a welcoming place for unhoused neighbors (encampments and derelict RVs on the street drive much of the crime). So we get all the problems from a large region that isn't so welcoming.
in general, per capita crime is higher in cities though. some of that is misleading: truly random murders are rare pretty much everywhere. but you're a lot more likely to be the victim of crimes of opportunity (armed robbery, car/home break-ins, etc) when you live in a dense area.
Rural areas can have horrible crime, like rural New Mexico or the Mississippi delta. It is all very region specific. Alaska is one big example of a state where rural crime is greater than urban crime on a per capita basis.
In general, cities are more dangerous:
https://twitter.com/RyanRadia/status/1461904766238404611
https://twitter.com/RyanRadia/status/1461904766238404611
> 2) YIMBYs need to realize that NIMBYs aren't exclusively motivated by greed. When they tell you that they don't want their neighborhood to densify they actually mean it. It's not covering for racism or greed. People genuinely don't want their neighborhoods to change.
In my experience this is almost 100% the real truth. I haven't met many people that are looking at their house price when they think about changes to the neighborhood. First consideration is usually traffic. Second consideration is character. In neighborhoods where almost everyone owns, they very much don't want to see it become a rental neighborhood.
In my experience this is almost 100% the real truth. I haven't met many people that are looking at their house price when they think about changes to the neighborhood. First consideration is usually traffic. Second consideration is character. In neighborhoods where almost everyone owns, they very much don't want to see it become a rental neighborhood.
How does classicism differ from racism? The fact a neighbourhood association would welcome a Black cardiologist but not a white barista doesn't make it any less nefarious.
I don't think that's totally right. The idea is to give Canadians a leg up vs. foreign buyers (once the immediate 2 year foreign buyer ban expires, I assume). If your operating model is that foreign bidders are driving up the price and winning the marginal bid, then this is effectively a subsidy to allow Canadians to compete with the foreigners. Yes it will drive prices a bit higher and thus transfer more wealth to sellers. But the mix should be different, with more ownership ending up with Canadian purchasers than foreign ones (vs. today).
It is dumb.
It's an exersize in shifting money from relatively lower income renters who will never have enough money for a downpayment and who will never own a home, toward the relatively rich on the cusp of being able to buy.
Of course the main winner here is the home builder.
It's an exersize in shifting money from relatively lower income renters who will never have enough money for a downpayment and who will never own a home, toward the relatively rich on the cusp of being able to buy.
Of course the main winner here is the home builder.
Giving individual citizens/permanent residents a one time benefit to buy a house will at least give them an advantage over second home buyers or foreign speculators. It would definitely drive prices up (to be honest, tax exempt $31,900 isn't enough to do much though), but it should be a net win for those that have it vs. those that don't.
A more extreme version of this is the public housing Singapore sells at a subsidy to each citizen (as long as they get married, and there is still a waiting list since supply can't keep up with the benefit).
A more extreme version of this is the public housing Singapore sells at a subsidy to each citizen (as long as they get married, and there is still a waiting list since supply can't keep up with the benefit).
The data is public, less than 5% of homes are going to foreigners. Don't see how they even accomplish banning foreigners when there are free trade and free investment agreements. The problem is that bonds have negative yields. Retirement funds are forced into buying real estate, because housing is a safe investment right?
The federal government knows this and knows they can't do anything. If they targeted retirement funds like they should... what happens? Housing bubble pops, retirement funds lose tons of money. They are busy attacking the oil industry because they know they cant extract anything out of Finance, Real Estate, or insurance.
The federal government knows this and knows they can't do anything. If they targeted retirement funds like they should... what happens? Housing bubble pops, retirement funds lose tons of money. They are busy attacking the oil industry because they know they cant extract anything out of Finance, Real Estate, or insurance.
Price is set at the margin, especially in such an inelastic market as housing.
"supply 100, demand 99, price goes down. Supply 100, deman 101, price goes up."
5% isn't a lot, but it could have a disproportionate impact.
Housing isn't a federal responsibility, so the provinces are more to blame for the crisis. Ontario just totally whiffed implementing a report on how to reduce housing costs, so I expect the problem to continue.
"supply 100, demand 99, price goes down. Supply 100, deman 101, price goes up."
5% isn't a lot, but it could have a disproportionate impact.
Housing isn't a federal responsibility, so the provinces are more to blame for the crisis. Ontario just totally whiffed implementing a report on how to reduce housing costs, so I expect the problem to continue.
The bigger issue is the multitude of exceptions. A ban on foreign buyers except for permanent residents, students, and recreational properties isn't much of a ban at all. Canadian permanent residency is incredibly easy to obtain, and students are frequently used as straw purchasers for their foreign parents (just look at the number of UBC students who own multimillion dollar homes despite having zero income). It also doesn't address foreign citizens buying through Canadian shell companies, a strategy used in Vancouver to avoid their foreign buyer tax.
> Canadian permanent residency is incredibly easy to obtain
I don’t feel this is broadly true. I just watched a friend jump though ridiculous hoops and inefficient bureaucracies to get her PR. Is there a particular method for getting a PR that you feel is too easy?
I don’t feel this is broadly true. I just watched a friend jump though ridiculous hoops and inefficient bureaucracies to get her PR. Is there a particular method for getting a PR that you feel is too easy?
Just visit any forum or discussion board related to immigration and you will see Canada mentioned as the fallback for people who can't get into the US.
In particular, there has been pretty widespread abuse of investor visas, region-specific incentives, and student work visas. Investor visas have an extremely poor economic return, and most of the people who benefit from regional programs immediately move to the GTA. There are also a plethora of degree mill community colleges that count as "Canadian postsecondary institutions" for immigration purposes. In reality, their students do a few hours of academic work a week to keep their student work visa and moonlight as a trucker or in some other blue-collar field.
Canada's approach to immigration, with over 400k people last year, is to take whoever as long as it keeps wages down and property prices up.
In particular, there has been pretty widespread abuse of investor visas, region-specific incentives, and student work visas. Investor visas have an extremely poor economic return, and most of the people who benefit from regional programs immediately move to the GTA. There are also a plethora of degree mill community colleges that count as "Canadian postsecondary institutions" for immigration purposes. In reality, their students do a few hours of academic work a week to keep their student work visa and moonlight as a trucker or in some other blue-collar field.
Canada's approach to immigration, with over 400k people last year, is to take whoever as long as it keeps wages down and property prices up.
It is not easy. But it is varying levels of hard depending on your background. You are also required to spend over half the year every year in Canada and it expires every five years. I'm not sure why permanent residents shouldn't be exempt when they are literally mandated to be permanently based out of Canada.
The loopholes are well known, so we'll see the sincerity of the government by looking into the details of the implementation, which we might not get today.
I was about to post the same comment: price is set at the margin.
Also, if you look at the 5% in different ways, it becomes more significant. In your neighbourhood across Canada, 1 in 20 of the houses is owned by a foreigner. Now if you concentrate that in to Vancouver and Toronto... lets say 1 in 10 is owned by a foreigner... really starting to have an impact.
Also, if you look at the 5% in different ways, it becomes more significant. In your neighbourhood across Canada, 1 in 20 of the houses is owned by a foreigner. Now if you concentrate that in to Vancouver and Toronto... lets say 1 in 10 is owned by a foreigner... really starting to have an impact.
The demand for the housing drives the price, modulo short-term speculation. The investor buys it with an eye towards the cash-flow from renting, and by definition, it's rented to someone living there.
I don't know how real estate market works in Canada, but I can totally see how 5% of buyers could mess up the market in the U.S..
House pricing is set based on 'comps' (comparable homes and the price they sold for). That means that a small percentage of buyers can essentially bump (initial) pricing for all homes.
House pricing is set based on 'comps' (comparable homes and the price they sold for). That means that a small percentage of buyers can essentially bump (initial) pricing for all homes.
The problems of the housing market is the exact same as any other expensive city in the US or anywhere else. Home-owners with local power messing with zoning laws to limit supply and boost the price of their homes. It's always a supply issue.
https://www.youtube.com/watch?v=6OZJClSdZ28
https://www.youtube.com/watch?v=6OZJClSdZ28
The fundamental issue is the incentives. When someone who owns a home says no to increasing zoning, their net worth goes up. It's verrry hard to go upstream and fight that. I'm for those changes, and would vote for them, but the people incentivized to fight will gish gallop till the cows come home. If you shut down one, they will invent some other reason that zoning should not be increased.
The only way to fix this is to tax the land equal to what it's worth - occupying or not, foreign owned or not - such that the sale price of the home is equal to the cost to build the housing on top of it. Once that's true, and saying no means they pay more, they will only actually say no to things that actually make them happier, and I'm all for that if they are willing to pay for it. But the most likely cause is that they would suddenly vote to up-zone and would allow for denser housing, and over time the tax would drop.
The only way to fix this is to tax the land equal to what it's worth - occupying or not, foreign owned or not - such that the sale price of the home is equal to the cost to build the housing on top of it. Once that's true, and saying no means they pay more, they will only actually say no to things that actually make them happier, and I'm all for that if they are willing to pay for it. But the most likely cause is that they would suddenly vote to up-zone and would allow for denser housing, and over time the tax would drop.
Interestingly, I'm seeing a lack of zoning enforcement drive up prices locally.
Small-time investors are buying homes in residential zones to put on short-term rental sites, and because they generate revenue from the house, are able to offer a much higher amount and have it still make financial sense.
Small-time investors are buying homes in residential zones to put on short-term rental sites, and because they generate revenue from the house, are able to offer a much higher amount and have it still make financial sense.
>I don't know how real estate market works in Canada, but I can totally see how 5% of buyers could mess up the market in the U.S..
5% foreigner owned is not big enough to have an appreciable difference. How about funds buying real estate? What used to be around 10% went to 20% in 2020 and then went to 40% in 2021. Nobody will buy negative yielding bonds. It only leaves a couple other options.
5% foreigner owned is not big enough to have an appreciable difference. How about funds buying real estate? What used to be around 10% went to 20% in 2020 and then went to 40% in 2021. Nobody will buy negative yielding bonds. It only leaves a couple other options.
> 5% foreigner owned is not big enough to have an appreciable difference
I doubt it makes zero difference, but like you, it's just my feeling.
Real estate investing could be a price driver, certainly. I don't know what it's like in Canada, but I know that in my location even individuals are buying second and third homes and renting them out as short-term rentals. Doesn't seem to be sustainable to me, and certainly is affecting local housing prices.
One way I'd combat this is to ban short-term rental outside of hospitality zoned areas.
I doubt it makes zero difference, but like you, it's just my feeling.
Real estate investing could be a price driver, certainly. I don't know what it's like in Canada, but I know that in my location even individuals are buying second and third homes and renting them out as short-term rentals. Doesn't seem to be sustainable to me, and certainly is affecting local housing prices.
One way I'd combat this is to ban short-term rental outside of hospitality zoned areas.
It's amazing to me how some people are so entrenched in believing that foreigners are to blame that they will perform such mental gymnastics.
The Myth of 1.3 Million Vacant Investor Homes in Canada:
https://www.youtube.com/watch?v=evYOhpjMql0&t=6s
The Myth of 1.3 Million Vacant Investor Homes in Canada:
https://www.youtube.com/watch?v=evYOhpjMql0&t=6s
That's a great video, and I agree with the points made - essentially that affordability is mostly a supply problem. That said, I don't think your parent was blaming foreigners, but just noting that even if foreign buyers made up a small percentage of the total, reducing that demand could still impact prices.
Another great video, with a quick reference to Oh The Urbanity
https://youtu.be/6OZJClSdZ28
https://youtu.be/6OZJClSdZ28
>It's amazing to me how some people are so entrenched in believing that foreigners are to blame that they will perform such mental gymnastics.
Imagine you're a boomer who is about to retire. You told your advisor to go into safe investments but you're not going into savings accounts, money market, or bonds. Maybe you pick up some corporate bonds? But that's higher risk. Once you eliminate all these negative yielding options... you're really just left with real estate.
Then you look at Canada's economic breakdown. Oil/Gas industry is under constant attack by the federal government. Manufacturing in quebec and ontario has practically died.
The only things holding Canada together economically is Finance, Insurance, and Real Estate. FIRE. The only thing holding Canada's economy from being in a depression is banks and insurance on over priced real estate.
As a politician, you dont dare touch the housing market. If that explodes, you take the blame AND you have to actually fix the economy? lol!
Imagine you're a boomer who is about to retire. You told your advisor to go into safe investments but you're not going into savings accounts, money market, or bonds. Maybe you pick up some corporate bonds? But that's higher risk. Once you eliminate all these negative yielding options... you're really just left with real estate.
Then you look at Canada's economic breakdown. Oil/Gas industry is under constant attack by the federal government. Manufacturing in quebec and ontario has practically died.
The only things holding Canada together economically is Finance, Insurance, and Real Estate. FIRE. The only thing holding Canada's economy from being in a depression is banks and insurance on over priced real estate.
As a politician, you dont dare touch the housing market. If that explodes, you take the blame AND you have to actually fix the economy? lol!
I wonder how many homes are bought and sold through shell companies, family members, etc?
5% can do a lot of damage considering how prices are set based on "comps", and the fact that a lot of this foreign capital comes from illicit sources, and they are more than willing to pay above market rate to secure the purchase.
Canada has always been a paradise for rich crooks worldwide, and government has always chosen to turn a blind eye.
Canada has always been a paradise for rich crooks worldwide, and government has always chosen to turn a blind eye.
As far as I know, that oft-cited 5% number does not include "students" whose parents abroad suddenly gift them > $1 million in cash to buy one, two, or more properties.
Does the 5% stat include those kinds of situations, in which on paper it's not a "foreign investor" buying the property, but in reality it's just that?
Does the 5% stat include those kinds of situations, in which on paper it's not a "foreign investor" buying the property, but in reality it's just that?
In a real estate market (ie slow moving, most inventory turns over after several years) changing the demand of 5% of the buyers could have a massive impact.
> They are busy attacking the oil industry
What attack? Have they rolled back any of the billions of subsidies?
What attack? Have they rolled back any of the billions of subsidies?
Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.
This is not really guaranteed to solve the problem. It will only be a part of the solution.
In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.
In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.
>In many countries, including Europe, new properties are quickly snatched by investment
Demand for housing is not infinite, and supply of capital is not infinite. Building more units will always help. The quantity of units which are bought and then kept empty long term is tiny in relative terms.
Demand for housing is not infinite, and supply of capital is not infinite. Building more units will always help. The quantity of units which are bought and then kept empty long term is tiny in relative terms.
>> In many countries, including Europe, new properties are quickly snatched by investment
> Demand for housing is not infinite, and supply of capital is not infinite. Building more units will always help. The quantity of units which are bought and then kept empty long term is tiny in relative terms.
I think it's kind of pointless to argue over which one policy to pursue to fix this problem, why not try a multi-pronged approach?
1. Implement some policy to ban large investors from home-ownership (say no corporate ownership and a small cap on how many an individual/family can own). There are more reasons to do this than just supply.
2. Put an onerous tax on housing that is not occupied full-time.
3. Build more housing.
1 & 2 would help ease some (but not all) pressure that makes 3 less desirable.
> Demand for housing is not infinite, and supply of capital is not infinite. Building more units will always help. The quantity of units which are bought and then kept empty long term is tiny in relative terms.
I think it's kind of pointless to argue over which one policy to pursue to fix this problem, why not try a multi-pronged approach?
1. Implement some policy to ban large investors from home-ownership (say no corporate ownership and a small cap on how many an individual/family can own). There are more reasons to do this than just supply.
2. Put an onerous tax on housing that is not occupied full-time.
3. Build more housing.
1 & 2 would help ease some (but not all) pressure that makes 3 less desirable.
1 and 2 will essentially prevent any sort of a rental market, and rentals clearly play a valuable role for lots of society.
> 1 and 2 will essentially prevent any sort of a rental market, and rentals clearly play a valuable role for lots of society.
Not if the rule is scoped to single-family homes and individual units in multi-owner buildings. Purpose-built rental housing (e.g. apartment buildings) would be exempted for obvious reasons. The intent is to keep large investors out of markets where owner-occupancy is typical. Even in my original comment I did make allowances for single-family home rentals, but they'd have to be from small-scale landlords.
Also suggestion 2 wouldn't prevent a rental market anywhere there's demand for housing, it would just force landlords to drop rents aggressively to get units occupied.
And obviously, as is true for any internet comment suggestion of regulatory changes, actual implementation will be more complicated than can be expressed in a pithy comment that lays out the gist.
Not if the rule is scoped to single-family homes and individual units in multi-owner buildings. Purpose-built rental housing (e.g. apartment buildings) would be exempted for obvious reasons. The intent is to keep large investors out of markets where owner-occupancy is typical. Even in my original comment I did make allowances for single-family home rentals, but they'd have to be from small-scale landlords.
Also suggestion 2 wouldn't prevent a rental market anywhere there's demand for housing, it would just force landlords to drop rents aggressively to get units occupied.
And obviously, as is true for any internet comment suggestion of regulatory changes, actual implementation will be more complicated than can be expressed in a pithy comment that lays out the gist.
Investors in real estate make money by either selling or renting; either way, more homes still means lower prices. Keep providing more supply until it meets demand.
Right. Every new property bought by an investor is another rental property. As these are added, it will reduce rents, which makes renting more attractive compared to owning, as well as making rental properties less attractive to investors. On the margin these will reduce demand for properties to purchase, bringing down prices.
It shouldn't matter all that much. Rented homes are an excellent (not perfect but very close) substitute for purchased homes.
People don't like to rent because of instability or unpredictability of pricing. But a large and growing long term rental market where it's straightforward to find a new place and nobody has an incentive to kick you out or raise your rent is really just fine.
You might be thinking, right but if you rent you'd be giving up the ability to make all that money from appreciation that homebuyers get BUT THAT IS ACTUALLY THE PROBLEM WITH THE ENTIRE SYSTEM because you can't have affordable housing and also have housing as a guaranteed investment that always builds wealth the two concepts are fundamentally incompatible with each other and when you get that you're really starting to understand the problem.
People don't like to rent because of instability or unpredictability of pricing. But a large and growing long term rental market where it's straightforward to find a new place and nobody has an incentive to kick you out or raise your rent is really just fine.
You might be thinking, right but if you rent you'd be giving up the ability to make all that money from appreciation that homebuyers get BUT THAT IS ACTUALLY THE PROBLEM WITH THE ENTIRE SYSTEM because you can't have affordable housing and also have housing as a guaranteed investment that always builds wealth the two concepts are fundamentally incompatible with each other and when you get that you're really starting to understand the problem.
I like the conclusion, but I've created some elaborate financial models to compare buying versus renting (+ investing the difference in S&P500). And so have a few very intelligent friends.
It almost NEVER works out in favor of buying except for some crazy flukes like pandemic accelerating prices in Toronto.
I think it's largely cultural? Canadian's (more than any of my American friends) are fed the idea that owning a home is the best financial decision and the holy grail of life. It may happen to be the best financial decision for them, but because they lack the information that it's not and wouldn't otherwise invest very well.
Even in spite of that information, I still want to spend money and buy a house. I've been asked for vacate my apt for property sale more than once, and faced +800/mo rent spike (NYC...), and I'm over it.
It almost NEVER works out in favor of buying except for some crazy flukes like pandemic accelerating prices in Toronto.
I think it's largely cultural? Canadian's (more than any of my American friends) are fed the idea that owning a home is the best financial decision and the holy grail of life. It may happen to be the best financial decision for them, but because they lack the information that it's not and wouldn't otherwise invest very well.
Even in spite of that information, I still want to spend money and buy a house. I've been asked for vacate my apt for property sale more than once, and faced +800/mo rent spike (NYC...), and I'm over it.
> I've created some elaborate financial models to compare buying versus renting (+ investing the difference in S&P500) [...] It almost NEVER works out in favor of buying
I can't see how that's possible.
Rent is pissing away money, and from the rates I've seen, the monthly rent on a house is often very close to the monthly mortgage payment, so the "investing the difference ins S&P500" ends up being moot.
For my house, Zillow estimates the monthly rent value at $2,400/month, which is almost exactly what my mortgage payment (including property tax) is. And in 10 years, that payment will become ~$570 once the mortgage is paid off and all that's left is property tax. Meanwhile, if I chose to rent instead, after 10 years, my rent would probably be well $3,500/month.
Yeah, owning means I'm paying maintenance and repair costs, but those certainly don't add up to anywhere near what the rental payment would be.
I fully reject any claims that in the long term, renting could ever possibly be better than buying from a purely financial perspective. A mortgage is constant (Unless you fell for the scam that is an ARM) and eventually goes away. Rents perpetually go up and don't leave you with an asset.
I can't see how that's possible.
Rent is pissing away money, and from the rates I've seen, the monthly rent on a house is often very close to the monthly mortgage payment, so the "investing the difference ins S&P500" ends up being moot.
For my house, Zillow estimates the monthly rent value at $2,400/month, which is almost exactly what my mortgage payment (including property tax) is. And in 10 years, that payment will become ~$570 once the mortgage is paid off and all that's left is property tax. Meanwhile, if I chose to rent instead, after 10 years, my rent would probably be well $3,500/month.
Yeah, owning means I'm paying maintenance and repair costs, but those certainly don't add up to anywhere near what the rental payment would be.
I fully reject any claims that in the long term, renting could ever possibly be better than buying from a purely financial perspective. A mortgage is constant (Unless you fell for the scam that is an ARM) and eventually goes away. Rents perpetually go up and don't leave you with an asset.
Houses in the GTA are about 1.6M, resulting in about 7k/mo all-in. Chances are you're not paying 7k/mo as a renter, so it's a bit of apples-oranges. The house costs more, but you get more. You'd have to rent out part of your home and be a landlord to trade that extra space for cash flow. I value my time and privacy at a non-zero dollar amount :)
This source [0] states annual appreciation to be about 6.11% for real estate. In my models I use 6.5% as a safe return rate for the S&P500. In the long term, you are no longer leveraged so that's a fair comparison I believe.
anecdote: My parents bought a house 35 years ago in a suburb of the GTA. Purchase price was around 250K I think. It was a lot for the time, too! And now it's probably worth 1.8-2M. Amazing! Except 250k @ 6.5% over 35 years is just over 2.2M.
[0] https://precondo.ca/canada-real-estate-statistics/#:~:text=T...
This source [0] states annual appreciation to be about 6.11% for real estate. In my models I use 6.5% as a safe return rate for the S&P500. In the long term, you are no longer leveraged so that's a fair comparison I believe.
anecdote: My parents bought a house 35 years ago in a suburb of the GTA. Purchase price was around 250K I think. It was a lot for the time, too! And now it's probably worth 1.8-2M. Amazing! Except 250k @ 6.5% over 35 years is just over 2.2M.
[0] https://precondo.ca/canada-real-estate-statistics/#:~:text=T...
> anecdote: My parents bought a house 35 years ago in a suburb of the GTA. Purchase price was around 250K I think. It was a lot for the time, too! And now it's probably worth 1.8-2M. Amazing! Except 250k @ 6.5% over 35 years is just over 2.2M.
Right...but if you're using that to compare it to renting, the renter still comes out behind. WAYYYY behind.
The buyer (using your example) : Spends $250K on a house. After 35 years, they have a $1.8-2M asset, for a net gain of $1.55-1.75M.
The renter: Put $250K into the S&P500 which returned 6.5%/year. After 35 years, they have $2.2M. Meanwhile, they've been paying rent. How this ends up working out depends on the rent. $1,000/month is $12,000/year. For 35 years is $420,000. A net gain of $1.78M. That sounds good, but we all know the rent isn't $1,000/month. If the house is currently $1.8-2M, then the rent on that is going to be at least $4K.
I don't feel like doing the math on how much you would spend on rent if you had a 6% rent increase every year, but even if I'm generous and say that over the course of 35 years, your rent averaged $2K/month, the renter CLEARLY comes out way behind. They'll have made $1.95M in the stock market, but spent $840K in rent, for a net gain of only $1.11M.
Right...but if you're using that to compare it to renting, the renter still comes out behind. WAYYYY behind.
The buyer (using your example) : Spends $250K on a house. After 35 years, they have a $1.8-2M asset, for a net gain of $1.55-1.75M.
The renter: Put $250K into the S&P500 which returned 6.5%/year. After 35 years, they have $2.2M. Meanwhile, they've been paying rent. How this ends up working out depends on the rent. $1,000/month is $12,000/year. For 35 years is $420,000. A net gain of $1.78M. That sounds good, but we all know the rent isn't $1,000/month. If the house is currently $1.8-2M, then the rent on that is going to be at least $4K.
I don't feel like doing the math on how much you would spend on rent if you had a 6% rent increase every year, but even if I'm generous and say that over the course of 35 years, your rent averaged $2K/month, the renter CLEARLY comes out way behind. They'll have made $1.95M in the stock market, but spent $840K in rent, for a net gain of only $1.11M.
you're missing the part where the renter is continually investing the difference between their current rent and the mortgage they would be paying. but yeah, if you're prescient enough to know ahead of time that you're going to live in the same building for 35 years, you'd be foolish to rent.
Yeah but as you said in another comment, in some locales, the rent and a mortgage payment are equal. There would be no difference to invest.
And considering a mortgage payment is constant while rent continuously goes up, in a few years, rent would EXCEED the mortgage payment.
When I bought my house in the end of 2015, I paid $338K. Mortgage + property tax was $1800/month. Zillow estimated the rent value at $1700/month. It's now early 2022, 6 1/2 years later. Zillow estimates the house is worth $615K and has a rent value of $2500/month.
And considering a mortgage payment is constant while rent continuously goes up, in a few years, rent would EXCEED the mortgage payment.
When I bought my house in the end of 2015, I paid $338K. Mortgage + property tax was $1800/month. Zillow estimated the rent value at $1700/month. It's now early 2022, 6 1/2 years later. Zillow estimates the house is worth $615K and has a rent value of $2500/month.
Before you bought the house, were you renting previously at 1800/mo?
Rent and mortgage may be similar for the same exact space, but rarely in cities do people rent entire houses. There is usually significant lifestyle inflation that comes with buying.
In any case, where do you live? 615 is so cheap that I suspect the economics here aren't comparable to my situation. Maybe I'll move! Haha
Rent and mortgage may be similar for the same exact space, but rarely in cities do people rent entire houses. There is usually significant lifestyle inflation that comes with buying.
In any case, where do you live? 615 is so cheap that I suspect the economics here aren't comparable to my situation. Maybe I'll move! Haha
> Before you bought the house, were you renting previously at 1800/mo?
I was renting a 2-bedroom, 1 bath, 800 sq foot apartment for $900/month which would have been going up to $1,100/month if I had signed a new lease instead of buying the house.
The house is 3 bedroom, 2.5 bath, 1850 sq feet.
> In any case, where do you live? 615 is so cheap that I suspect the economics here aren't comparable to my situation. Maybe I'll move! Haha
Suburbs just outside of Portland, OR.
I was renting a 2-bedroom, 1 bath, 800 sq foot apartment for $900/month which would have been going up to $1,100/month if I had signed a new lease instead of buying the house.
The house is 3 bedroom, 2.5 bath, 1850 sq feet.
> In any case, where do you live? 615 is so cheap that I suspect the economics here aren't comparable to my situation. Maybe I'll move! Haha
Suburbs just outside of Portland, OR.
> Rent is pissing away money, and from the rates I've seen, the monthly rent on a house is often very close to the monthly mortgage payment, so the "investing the difference ins S&P500" ends up being moot.
this varies a lot locale to locale. in some places the rent is very close to the monthly mortgage payment. in some places, the mortgage is much higher.
https://www.investopedia.com/terms/p/price-to-rent-ratio.asp
if you're damn sure you want to live somewhere long enough to pay off a 15 year mortgage, then yeah, odds are it's better than renting. most people can't be 100% sure of that, so to make it a fair calculation you also have to include the costs of buying and selling. in theory, you should also have to price in the risk of having so much money concentrated in a single asset, but it seems to be a matter of policy that housing prices are never allowed to go down.
this varies a lot locale to locale. in some places the rent is very close to the monthly mortgage payment. in some places, the mortgage is much higher.
https://www.investopedia.com/terms/p/price-to-rent-ratio.asp
if you're damn sure you want to live somewhere long enough to pay off a 15 year mortgage, then yeah, odds are it's better than renting. most people can't be 100% sure of that, so to make it a fair calculation you also have to include the costs of buying and selling. in theory, you should also have to price in the risk of having so much money concentrated in a single asset, but it seems to be a matter of policy that housing prices are never allowed to go down.
> in theory, you should also have to price in the risk of having so much money concentrated in a single asset, but it seems to be a matter of policy that housing prices are never allowed to go down.
And the benefits of having it tied up in an asset covered by things like, in certain jurisdictions, generous bankruptcy homestead exemptions and, in certain jurisdictions, financed by a mortgage in a no-recourse jurisdiction; there are downside risk protections attached to owner-occupied housing that aren't available elsewhere.
And the benefits of having it tied up in an asset covered by things like, in certain jurisdictions, generous bankruptcy homestead exemptions and, in certain jurisdictions, financed by a mortgage in a no-recourse jurisdiction; there are downside risk protections attached to owner-occupied housing that aren't available elsewhere.
Many Europeans (including my aunt&uncle in Germany) rent for decades without any similar concerns about stability because the landlording laws are written better. And tenants can and do have their own kitchens and other improvements that are typically "perks" reserved for homeowners here.
Renting has a bad name in North America because it is associated with insecurity, low-income situation, exploitation, etc.
But in reality most people here are just paying rent to the bank. Housing prices in southern Ontario are so high that there's no way most of these people will ever truly "own" their home outright.
Renting has a bad name in North America because it is associated with insecurity, low-income situation, exploitation, etc.
But in reality most people here are just paying rent to the bank. Housing prices in southern Ontario are so high that there's no way most of these people will ever truly "own" their home outright.
Paying rent to the bank ends after 25 years though.
It won't for most of the young people buying today, because they'll have to keep refinancing to afford what they've bought.
In addition to thinking that banks should be smart and act in their own self interest of not lending money to people who can’t pay it back, there are government mandated stress tests for qualifying for mortgages at higher interest rates.
While rates are historically low and a return to the rates of the 80’s would cause a lot of defaults, I think the market has tuned itself for maximum extraction of labour from those buying houses. You will pay as much as you can afford out of the income of your career to live in a desirable place.
There are many undesirable places with cheap land, few jobs near by, no amenities, schools, restaurants, etc. so everyone pays as much as they can afford because it is worth it.
But they are only allowed to afford what they can pay off with a 30 year amortization and meeting the stress test.
I’m considering moving to the Yukon.
While rates are historically low and a return to the rates of the 80’s would cause a lot of defaults, I think the market has tuned itself for maximum extraction of labour from those buying houses. You will pay as much as you can afford out of the income of your career to live in a desirable place.
There are many undesirable places with cheap land, few jobs near by, no amenities, schools, restaurants, etc. so everyone pays as much as they can afford because it is worth it.
But they are only allowed to afford what they can pay off with a 30 year amortization and meeting the stress test.
I’m considering moving to the Yukon.
Yes, I think that's it. There's not many places to actually live in Canada, so demand is sky high anywhere within a few hours of the major city centres. Then long stretches of nothing.
Yukon is cool, but it's not super cheap if you were hoping so. Rent is high compared to home prices though, so being a landlord is easier.
Nonsense.
There's hundreds of thousands of square kilometres of places to live in Canada, it's primarily a humid temperate climate (in Ontario and southwestern Quebec) no different than the midwest or other parts more like the US northeast and with huge sections that are prairie or poplar "parkland" like the Dakotas etc. You have to go really far north to find anything "uninhabitable."
Southern Ontario (where almost half of Canadians live) alone is 139,931 km² -- about the size of all of England (130,279 km²), or half of all of Germany -- and almost all highly arable land with copious fresh water and developed highway and rail networks. And it's further south than most northern US states, sitting at about the same latitude as southern Oregon.
There's lots of room to build. Stereotypes of Canada as a barren northern land are laughable products of American ignorance or Toronto-centric myopia.
There's hundreds of thousands of square kilometres of places to live in Canada, it's primarily a humid temperate climate (in Ontario and southwestern Quebec) no different than the midwest or other parts more like the US northeast and with huge sections that are prairie or poplar "parkland" like the Dakotas etc. You have to go really far north to find anything "uninhabitable."
Southern Ontario (where almost half of Canadians live) alone is 139,931 km² -- about the size of all of England (130,279 km²), or half of all of Germany -- and almost all highly arable land with copious fresh water and developed highway and rail networks. And it's further south than most northern US states, sitting at about the same latitude as southern Oregon.
There's lots of room to build. Stereotypes of Canada as a barren northern land are laughable products of American ignorance or Toronto-centric myopia.
I didn't mean it's literally barren land or that it's impossible to inhabit.
I meant there are few desirable places to reside (to me and anyone I've ever known) on the basis of access to jobs, culture, major hospitals, higher education, etc.
Yes some people can live full and happy lives in Timmins, Ontario. But is anybody moving to Timmins from Vancouver because they're tired of housing prices? Not really. Thus, demand to live in places like the GTA are sky high (and I argue, deservedly so)
In the US there's at least one city in every state that I'd voluntarily live in. Most have several. The amount of choice there is insane.
I meant there are few desirable places to reside (to me and anyone I've ever known) on the basis of access to jobs, culture, major hospitals, higher education, etc.
Yes some people can live full and happy lives in Timmins, Ontario. But is anybody moving to Timmins from Vancouver because they're tired of housing prices? Not really. Thus, demand to live in places like the GTA are sky high (and I argue, deservedly so)
In the US there's at least one city in every state that I'd voluntarily live in. Most have several. The amount of choice there is insane.
No, I still think you're wrong, and the thing you're saying isn't happening (people relocating from major cities to remoter areas) is clearly happening in pretty much all Ontario and BC. At least right now because housing prices have skyrocketed everywhere, not just in the GTA or lower mainland. The pandemic actually drove people out of urban areas and drove up prices all over the province. Especially places like Squamish or Collingwood that already had cachet for upper middle class people (but were previously affordable because of the difficulty of commuting from them).
While this is most obviously the case for southern Ontario, I think you'll find actually Timmins or Sault Ste Marie, etc. have gone up at precipitous rates as well. And elsewhere in the country:. Lots of people relocated to Nova Scotia during the pandemic, because housing was cheaper there, they handled COVID better, and they figured they could work remote forever. Housing prices have skyrocketed there, too.
The only place where this didn't happen is in Alberta, where low oil prices and other factors. caused a bit of a net emigration and lower housing prices for a bit and things were quite affordable there. That's now changing as the price of oil goes up.
In the end, there's boatloads of places for people to live in Canada, those places are growing, in some ways regaining a bit of the demand they had prior flattening out in the 1990s & 2000s. The problem is in general that industry and good paying jobs aren't necessarily coming with the people and they're creating an affordability problem for the existing "locals".
In the past people concentrated in the GTA and the lower mainland BC because of jobs jobs jobs. Remote is changing that a bit. For now.
While this is most obviously the case for southern Ontario, I think you'll find actually Timmins or Sault Ste Marie, etc. have gone up at precipitous rates as well. And elsewhere in the country:. Lots of people relocated to Nova Scotia during the pandemic, because housing was cheaper there, they handled COVID better, and they figured they could work remote forever. Housing prices have skyrocketed there, too.
The only place where this didn't happen is in Alberta, where low oil prices and other factors. caused a bit of a net emigration and lower housing prices for a bit and things were quite affordable there. That's now changing as the price of oil goes up.
In the end, there's boatloads of places for people to live in Canada, those places are growing, in some ways regaining a bit of the demand they had prior flattening out in the 1990s & 2000s. The problem is in general that industry and good paying jobs aren't necessarily coming with the people and they're creating an affordability problem for the existing "locals".
In the past people concentrated in the GTA and the lower mainland BC because of jobs jobs jobs. Remote is changing that a bit. For now.
How many hours are you willing to drive to get to a crappy grocery store with no fresh produce?
Yeah that's basically where I'm at. The ability to not have to move and the ability to improve the place and keep the value of my improvements are worth a large premium to me.
Your models are almost certainly missing something.
In a perfect world that would be true but in the actual world where lending is subsidized and tax-preferenced and the supply of housing is artificially constrained buying is just clearly a better scenario if you can do it.
Some people do this by comparing a 5:1 leveraged portfolio of the S&P 500 against a home purchase or something but that's not a real comparison that exists as a choice in the real world.
In a perfect world that would be true but in the actual world where lending is subsidized and tax-preferenced and the supply of housing is artificially constrained buying is just clearly a better scenario if you can do it.
Some people do this by comparing a 5:1 leveraged portfolio of the S&P 500 against a home purchase or something but that's not a real comparison that exists as a choice in the real world.
I would love to find out what I'm missing (honestly, I spend a lot of time thinking about it). I'm working on publishing it as an interactive page. ETA soon.
The principal residence sale tax free thing is a huge deal in Canada, so as an individual I can see it in many cases (though you need to sell to access it).
That still doesn't help investors at all - which is confusing to me. It doesn't seem worth it to me to be a landlord of a standard duplex/triplex in Toronto.
The comparison against a leveraged portfolio is only true at day one. You are continually de-leveraging yourself. At the end of the mortgage term, it's comparable 1:1, no?
The principal residence sale tax free thing is a huge deal in Canada, so as an individual I can see it in many cases (though you need to sell to access it).
That still doesn't help investors at all - which is confusing to me. It doesn't seem worth it to me to be a landlord of a standard duplex/triplex in Toronto.
The comparison against a leveraged portfolio is only true at day one. You are continually de-leveraging yourself. At the end of the mortgage term, it's comparable 1:1, no?
Mortgage lending is not tax-preferenced in Canada like it is in the US.
But our housing market is ridiculously overheated for other reasons.
But our housing market is ridiculously overheated for other reasons.
I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market rates (read: more than I spent building them)? Then I can build 100 million more and keep collecting infinite money?
This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators.
https://allthatsinteresting.com/chinese-ghost-cities
https://allthatsinteresting.com/chinese-ghost-cities
It's a lot easier to build housing in the middle of nowhere USA; but there's not a large problem of ghost cities. There's certainly a lot of sprawl, but not large new construction ghost cities; although there was some overbuilding in some areas into the 2008 housing crash, and some areas where construction stalled or stopped mid-build as a result, since either the builder could no longer finance finishing or it didn't make economic sense to do so at that time. China has a lot of disconnected incentives that help it make economic sense for the participants to build and buy into a ghost city that I don't think are present in the US and Canada.
If ghost cities are a real concern, you could punitively tax vacant housing that's not offered for lease or sale, and limit housing starts when housing offered for sale or lease was above some threshold price. Or you could do something like a deposit per housing start, paid back over time to the owner or occupant while occupied.
If ghost cities are a real concern, you could punitively tax vacant housing that's not offered for lease or sale, and limit housing starts when housing offered for sale or lease was above some threshold price. Or you could do something like a deposit per housing start, paid back over time to the owner or occupant while occupied.
But I bet rent is pretty cheap in those cities no?
The other part should be a supertax on properties which are empty for more than 6 months.
Yes, because they can keep shifting their imaginary money around and hedging their risk on paper until someone notices the music has stopped and the govt/rest of us are left holding the bag of turds again. (Cf. 2008)
Are you claiming Blackstone would continue to buy houses at current prices even with a 16fold increase in supply? In 2008 the government artificially backstopped loans not a free market fwiw
Show me a country you’re talking about, and show me their housing starts per capita relative to Japan, a country which allows building
If well below, you haven’t an argument.
If well below, you haven’t an argument.
> This is not really guaranteed to solve the problem.
In Europe, new properties are not readily snatched up. Just look at Italy.
A growing supply that outpaces demand is literally the only solution. Every other solution will cause a black market.
Well investment companies buy to resell. If there is a glut of new houses prices will definitely go down in the medium term.
In Germany they mostly buy to rent out and I’m sure it’s happening in other places as well.
> If there is a glut of new houses prices will definitely go down
Given the billion of investment dollars and cheap loans avaliable, it might be physically impossible to build enough homes fast enougg for the prices to go down
Given the billion of investment dollars and cheap loans avaliable, it might be physically impossible to build enough homes fast enougg for the prices to go down
The 100 year old building I live in would never have been approved under current requirements; the approval meetings would be going in circles about how it has too many units, not enough parking, not enough green space etc.
Not sure if you mean "liberal" or "Liberal" but in BC for instance the provincial government is considering overriding municipalities that are not approving enough residential development. I don't know how much the federal government can do here? I'd appreciate any insight.
https://globalnews.ca/news/8641905/bc-local-governments-hous...
https://globalnews.ca/news/8641905/bc-local-governments-hous...
Folks here lean Bay Area, but I don't think Canada has the same issue of preventing construction.
For example, in Toronto, you get about 30-40k new housing starts a year in a city of 3M. https://ycharts.com/indicators/toronto_on_housing_starts. >1% / year isn't terrible.
Your statement isn't wrong, but I don't know how much it applies to Canada Real Estate particularly.
For example, in Toronto, you get about 30-40k new housing starts a year in a city of 3M. https://ycharts.com/indicators/toronto_on_housing_starts. >1% / year isn't terrible.
Your statement isn't wrong, but I don't know how much it applies to Canada Real Estate particularly.
Isn't Toronto a pretty unique case in North America? If I understand this [1] correctly, then they're 4x the next largest city in terms of construction cranes. I thought I remembered reading that part of the reason why is that there's a regulation that developers use that let's them construct condo towers with substantially less regulatory overhead, but I can't seem to find it.
[1] https://www.rlb.com/americas/insight/rlb-crane-index-north-a...
[1] https://www.rlb.com/americas/insight/rlb-crane-index-north-a...
This seems like the only real, market based solution. Various taxes that could be implemented (or bans like from this article) will either have no effect or unforeseen consequences.
The market, right now, is constrained by regulations. Adding more regulations is unlikely to fix things.
The market, right now, is constrained by regulations. Adding more regulations is unlikely to fix things.
It's very easy to build housing here in Montana but that hasn't stopped property prices from rising significantly.
Is it really easy to build more housing in a place like downtown Bozeman? Like if a developer wants to buy up a block of single family homes and replace it with a large condo building, can they do that?
Sure it's easy to build. As long as it's a single family home. The least efficient form of housing.
Idaho is the same way.
Maybe stop government mortgage insurance. It’s nothing but public liability for private gains.
> Liberal governments will do everything but the one thing that will solve the problem
Construction permitting is mainly a municipal issue, with a bit of provincial thrown in there. Municipal representatives are not aligned with particular parties, and provinces are mostly not governed by Liberals at the moment (7 conservative, 2 Liberal, 2 independent, 1 NDP, 1 Saskatchewan "we aren't conservative, pinky swear!" Party.
The federal Liberals don't have much control over the situation (though there are other specific actions I think they should take)
Construction permitting is mainly a municipal issue, with a bit of provincial thrown in there. Municipal representatives are not aligned with particular parties, and provinces are mostly not governed by Liberals at the moment (7 conservative, 2 Liberal, 2 independent, 1 NDP, 1 Saskatchewan "we aren't conservative, pinky swear!" Party.
The federal Liberals don't have much control over the situation (though there are other specific actions I think they should take)
Just like building roads can't reduce traffic, building houses can't either. It will just cause induced demand as more people will go to that area to live. Instead we should encourage people to carpool - live as roommates, or have small apartments, instead of each person getting their own single family home.
/s (sort of)
/s (sort of)
> Just like building roads can't reduce traffic, building houses can't either.
Mega tower condos could solve housing issues, but the NIMBY folks and local governments need to get out of the way - https://citylimits.org/2018/10/26/cityviews-proposed-mega-to...
Mega tower condos could solve housing issues, but the NIMBY folks and local governments need to get out of the way - https://citylimits.org/2018/10/26/cityviews-proposed-mega-to...
If you have all the cash you need and a bare lot in Vancouver with services set up, you're still two years away from getting shovels in the ground. The permitting is straight out of a Joseph Heller novel.
Federal Liberals can't do anything about that, it's a provincial responsibility.
The Ontario provincial Conservatives commissioned a report into how to make housing affordable, and then completely ignored almost everything it said.
This summer, I'm voting for whoever promises to actually implement the Housing Affordability Task Force report.
The Ontario provincial Conservatives commissioned a report into how to make housing affordable, and then completely ignored almost everything it said.
This summer, I'm voting for whoever promises to actually implement the Housing Affordability Task Force report.
It's only considered a provincial responsibility now because the Fed Liberals of the 1990s completely got out of housing involvement with their big austerity budgets of the era.
The Federal government was deeply involved in funding both for-profit and non-profit housing in the 1970s, the last era where Canada built a lot of housing.
The Federal government was deeply involved in funding both for-profit and non-profit housing in the 1970s, the last era where Canada built a lot of housing.
The comment I was referring to was talking about red tape and zoning, though.
[deleted]
I'm sure the conservatives are equally responsible NIMBY's as well.
It is full loopholes like people with 10 year visas, work visas, student visas are exempt. We have University students with $31million Vancouver mansions in their name. Our tax system is screwy where we have very low property taxes and high employment tax. The whole west side of Vancouver claims poverty level incomes on average (like qualifies for government tax rebates bad), yet it is the most expensive land in the country.
Astronaut families are a problem and I feel leach on the society. Paying very low taxes, using all the social services, yet making income outside of the country so not paying anything.
Astronaut families are a problem and I feel leach on the society. Paying very low taxes, using all the social services, yet making income outside of the country so not paying anything.
> Our tax system is screwy where we have very low property taxes and high employment tax
I agree, but I think we both know how well fixing that will go down with the absolutely massive voting group that is seniors.
I agree, but I think we both know how well fixing that will go down with the absolutely massive voting group that is seniors.
>very low property taxes and high employment tax
The US is the exception to that rule. Canada mirrors most of Europe.
The US is the exception to that rule. Canada mirrors most of Europe.
I’m mostly familiar with Vancouver since my wife has relatives there. About half a dozen years ago they imposed a 15% tax on foreign real estate investors. I heard 2015 figures suggesting foreign Chinese investors accounted for one third of the $29 billion market in 2015. Vancouver real estate prices had been rising a lot for a long time but I think they felt the foreign investors exacerbated the problem for locals, especially since a lot of investors would just buy homes and no one would live in them.
Well it's complicated. Foreign investors would be buying mansions that locals couldn't afford anyways. And the locals are just bidding against themselves for the cheaper stuff armed with low interest rates and bank of Ma and Pa. My statistic says that only 20% of RE is foreign owned.
That's not complicated, it's a second negative externality. Foreigners buying and not-occupying large amounts of valuable real estates drives up the cost of new housing, with no benefit the city, even if you squint really hard. A lack of new housing means high prices for the existing housing that the locals are "just bidding against themselves" on. It's a practice that should be taxed into oblivion.
Your argument makes no sense and its just playing into the xenophobic narrative.
There is nobody looking to buy a condo under $1MM mark competing to purchase the 8 digit figure homes in West Vancouver. The rich people selling and buying them aren't hurting at all.
Local Canadians are competing to expand their real estate portfolios and they aren't looking at homes in Langley because they sold their mansion in West Vancouver.
There is nobody looking to buy a condo under $1MM mark competing to purchase the 8 digit figure homes in West Vancouver. The rich people selling and buying them aren't hurting at all.
Local Canadians are competing to expand their real estate portfolios and they aren't looking at homes in Langley because they sold their mansion in West Vancouver.
housing markets aren't disjoint this way. people will consider moving up or down a couple tiers if it makes financial sense (or they don't have a choice). if the market for mansions is particularly tight, you will see rich people start buying condos instead, driving up prices in the midrange. some professionals that would otherwise be targeting those condos will be forced to consider more marginal homes in the low end, moving the price there as well. the same thing can happen in reverse if demand dries up at the high end, but you don't see that as often.
> if the market for mansions is particularly tight, you will see rich people start buying condos instead
a west vancouver home easily costs above $10 million, you think they are going to move into a penthouse in Yaletown as their primary residence and thus driving condo prices up?
this makes no sense, people aren't selling their west vancouver home to downsize they are in a position to get even more leverage from the bank and expand their portfolio and likely own homes in North Vancouver and/or abroad already.
the people selling their homes for ~$1MM are downsizing because they can't buy a home at that price range anymore
a west vancouver home easily costs above $10 million, you think they are going to move into a penthouse in Yaletown as their primary residence and thus driving condo prices up?
this makes no sense, people aren't selling their west vancouver home to downsize they are in a position to get even more leverage from the bank and expand their portfolio and likely own homes in North Vancouver and/or abroad already.
the people selling their homes for ~$1MM are downsizing because they can't buy a home at that price range anymore
It's not xenophobic, it's classist. I'd make a similar statement about domestic rich people, but at least they can make the argument that they contribute to the civics of the city in some way by actually being present and involved.
If you expropriated all of the unoccupied mansions and replaced them with normal-priced, mixed housing, the cost of housing in the city would broadly go down, as supply would massively increase. Pricing being bid up amongst specific classes of housing and people is a second order problem - the first order problem is that unoccupied mansions are a criminal misuse of land which must be remedied by taxation.
If you expropriated all of the unoccupied mansions and replaced them with normal-priced, mixed housing, the cost of housing in the city would broadly go down, as supply would massively increase. Pricing being bid up amongst specific classes of housing and people is a second order problem - the first order problem is that unoccupied mansions are a criminal misuse of land which must be remedied by taxation.
The crux of the issue are zoning laws that artificially suppress supply. in particular the city of vancouver have resisted rezoning to high density low rise homes because it hurts their voter base who are NIMBY multiple property home owning Canadians who turn around to sell them to whoever will buy them.
and then the masses turn around to blame that group. its straight up xenophobia one that has been in Vancouver for a very long time, anti-asian xenophobia in Vancouver is not new. 80s, it was the japanese, 90s, hong kong & koreans, 2000s, taiwanese and mainlanders.
and then the masses turn around to blame that group. its straight up xenophobia one that has been in Vancouver for a very long time, anti-asian xenophobia in Vancouver is not new. 80s, it was the japanese, 90s, hong kong & koreans, 2000s, taiwanese and mainlanders.
Yes, one group of people got rich and now a different group of have-nots are mad at the people left holding the land. That is not an uncommon historical trope. That has nothing to do with what I said - unoccupied mansions on valuable land are an economic crime against the average person. If you want to blame that on zoning laws, you’d probably be correct in many cases, but its also a taxation issue.
I’m not from Vancouver, so their xenophobia doesn’t apply to me. Vancouverites burned down their own city after losing the Stanley Cup Finals - I’m definitely not here to defend their character. You can stop going to that well, I only see this as land use issue.
I’m not from Vancouver, so their xenophobia doesn’t apply to me. Vancouverites burned down their own city after losing the Stanley Cup Finals - I’m definitely not here to defend their character. You can stop going to that well, I only see this as land use issue.
> Yes, one group of people got rich and now a different group of have-nots are mad at the people left holding the land.
Very much so and it probably stings even more for that have-not group, that its people from what they perceive to be of "third world origin". There's just no helping such people, instead of seeking ways to better themselves, they choose to live in a state of angst and anger and expect the government to somehow fix it.
Very much so and it probably stings even more for that have-not group, that its people from what they perceive to be of "third world origin". There's just no helping such people, instead of seeking ways to better themselves, they choose to live in a state of angst and anger and expect the government to somehow fix it.
You seem pretty obsessed with xenophobia, but its really just easier to target wealthy foreigners than wealthy domestics. This is a class and land use issue - the have nots don’t need to “better themselves” (nor do they need the implied patrimony in that statement), they need homes on affordable mortgages. The government can do that! We know they can, because they have before, you just need the land. Oh look, some unoccupied mansions…
when you aren't affected by it, you are more likely to discount it. the people aren't going after iranians or russian foreigners. they are literally singling out one group by race in Vancouver.
Again you don't live here and you don't fall in the category so you won't understand how sensitive this issue is here.
Again you don't live here and you don't fall in the category so you won't understand how sensitive this issue is here.
I dunno, it kind of seems like I do. My city has the same land use issues, without the alleged xenophobia and we still target foreign wealth way more than domestic. Its just easier.
> I dunno, it kind of seems like I do
how?
how?
>There is nobody looking to buy a condo under $1MM mark competing to purchase the 8 digit figure homes in West Vancouver. The rich people selling and buying them aren't hurting at all.
The reason it's worth 8 figures is because of demand. If there was rich people to buy it they'd have to sell it for a reasonable price that locals can afford.
The reason it's worth 8 figures is because of demand. If there was rich people to buy it they'd have to sell it for a reasonable price that locals can afford.
If developers are building "mansions" entirely for a foreign market, that is a very bad for local housing. It means that those houses actually purely speculation vehicles.
Also, "only" 20%? That's a massive number for housing.
Also, "only" 20%? That's a massive number for housing.
> Foreign investors would be buying mansions that locals couldn't afford anyways.
If nobody is around to buy that mansion, it would eventually be sold to a developer who either turns it into apartments, or tears it down and builds an apartment building there. I've seen this happen numerous times in my neighborhood.
Also 20% is huge.
If nobody is around to buy that mansion, it would eventually be sold to a developer who either turns it into apartments, or tears it down and builds an apartment building there. I've seen this happen numerous times in my neighborhood.
Also 20% is huge.
If the zoning laws allowed that yes, Vancouver(similar problems in CA) doesn’t want to rezone , so not lot of supply. It is immaterial what rich domestic or international buyers do as their class of property doesn’t change supply of the property you and I can buy. Same with commercial property no difference to us [1]
zoning makes each class of property non fungible between other classes , it is like price gold doesn’t much have impact on say price of diamonds.
Rezoning benefits the economy and improves the wealth of everyone, even if NIMBYs don’t see it, however it will affect the quality of life of people who don’t want to live in “cities” proper but want the sweet spot where enough density enables them to have niceties of civilization like say neighborhood coffee shops , good schools , hospitals, art /culture/social activists without all the negativities of large cities like homelessness/high crime / poor noise /environment/pollution etc.
There is a racist angle too typically people of color, immigrants and any economically disadvantaged groups will not be able to afford to live in these neighborhoods .
[1] not strictly true for commercial as it can impact demand even if supply is not impacted , i.e. a new big office building is going to draw a lot of workers want to live near by competing for the same housing .
zoning makes each class of property non fungible between other classes , it is like price gold doesn’t much have impact on say price of diamonds.
Rezoning benefits the economy and improves the wealth of everyone, even if NIMBYs don’t see it, however it will affect the quality of life of people who don’t want to live in “cities” proper but want the sweet spot where enough density enables them to have niceties of civilization like say neighborhood coffee shops , good schools , hospitals, art /culture/social activists without all the negativities of large cities like homelessness/high crime / poor noise /environment/pollution etc.
There is a racist angle too typically people of color, immigrants and any economically disadvantaged groups will not be able to afford to live in these neighborhoods .
[1] not strictly true for commercial as it can impact demand even if supply is not impacted , i.e. a new big office building is going to draw a lot of workers want to live near by competing for the same housing .
If Seattle can get mansions converted/replaced into apartments, I think Vancouver should be able to as well. They're not exactly worlds apart culturally.
Well my anecdotal evidence from certain real estate agent says otherwise. She told me she would regularly show foreign buyers around new low/high rise developments only to have them buy entire floors in the Vancouver area. There was once where she had a foreign buyer who didn't know what he wanted. She showed him around at houses, condos, etc... and got no visual indicators he was happy with anything. When she was done and finally asked him if there was any he was happy with he said he would take them all. All foreign buyers she worked with were from China (as she spoke fluent mandarin).
20% is a lot in a tight market.
There's pretty tight rules about leaving properties empty. Daily fines in the thousands.
https://vancouver.ca/home-property-development/empty-homes-t...
It looks like more in the "hundreds" given that it's 3%/year of the assessed value. But still, a good start I'd say.
It looks like more in the "hundreds" given that it's 3%/year of the assessed value. But still, a good start I'd say.
I don't know about Canada, but in the US there are some tax law changes that could drastically reduce 'land hoarding' and help encourage excess capital to flow into construction of new properties rather than rent seeking.
Right now 1031 exchanges mean real estate over many other types of investment are tax advantaged, (I can't do the same thing with my stock for instance) and doubly so for places that put caps on property taxes.
The US (and canada?) should heavily tax capital gains on land appreciation for all but your primary residence, at the same time it would give tax incentives on capital gains for constructing new units.
Right now excess capital is encouraged by multiple tax laws to just play the rent seeking game waiting for land appreciation while others do the hard work of causing an area's land to become more valuable.
Right now 1031 exchanges mean real estate over many other types of investment are tax advantaged, (I can't do the same thing with my stock for instance) and doubly so for places that put caps on property taxes.
The US (and canada?) should heavily tax capital gains on land appreciation for all but your primary residence, at the same time it would give tax incentives on capital gains for constructing new units.
Right now excess capital is encouraged by multiple tax laws to just play the rent seeking game waiting for land appreciation while others do the hard work of causing an area's land to become more valuable.
Tax law changes don't change zoning policies or other political obstacles to construction. People exist with money willing to invest into construction if they could. People also like to hate on politically-connected 'greedy developers' but they create an environment where that's the type of companies that are going to thrive.
Maybe people here would do better to visualize it in startup terms where people are willing to put excess capital to use. Imagine you needed to get approval of neighborhood committees and so on to do a startup. Would YCominator still look the same? I don't think it would. You would have VCs that more about forming cozy relationships with politicians and poker brokers.
Maybe people here would do better to visualize it in startup terms where people are willing to put excess capital to use. Imagine you needed to get approval of neighborhood committees and so on to do a startup. Would YCominator still look the same? I don't think it would. You would have VCs that more about forming cozy relationships with politicians and poker brokers.
We need to end or put limits on the Primary Residence Capital Gains Tax Exemption which is uncapped in Canada, unlike the cap of 200k in USA. It is unfair to renters and it is leading to insane housing prices.
It is unfair to renters because renters do not have an equivalent 100%, completely unlimited tax-free investment vehicle. We have Tax-Free Savings Accounts, limited to ~$5k contribution per year, and we have RRSP's with max contributions scaled to income, but homeowners have access to all those things too, and they are limited. Homeowners can take advantage of TFSA, RRSP, and then shove all of their remaining savings into maxing out their home purchase and enjoy all of their gains completely tax free. Renters have to start paying capital gains at an inclusion rate of 50% once they max out TFSA/RRSP.
This system is completely unfair and places a higher tax burden on renters who are, on average, less wealthy than homeowners. It encourages us to spend more than we should be on housing just to get around taxes, and discourages investing in actual productive things like innovation/companies.
It is unfair to renters because renters do not have an equivalent 100%, completely unlimited tax-free investment vehicle. We have Tax-Free Savings Accounts, limited to ~$5k contribution per year, and we have RRSP's with max contributions scaled to income, but homeowners have access to all those things too, and they are limited. Homeowners can take advantage of TFSA, RRSP, and then shove all of their remaining savings into maxing out their home purchase and enjoy all of their gains completely tax free. Renters have to start paying capital gains at an inclusion rate of 50% once they max out TFSA/RRSP.
This system is completely unfair and places a higher tax burden on renters who are, on average, less wealthy than homeowners. It encourages us to spend more than we should be on housing just to get around taxes, and discourages investing in actual productive things like innovation/companies.
In exchange we get population mobility; without this tax break homeowners would be very reluctant to ever sell their house and move someplace else. Also, housing capital gain isn't completely tax free; we all pay increasing amounts of property tax as the value appreciates. Although those taxes are baked into rents so maybe that's a wash depending on one's point of view.
Policy is hard and unintended consequences are around every corner. For example, I could see an argument for changing the scheme to a special rebate. So you pay your capital gain tax when you sell your primary residence but then get it all refunded when you buy another one. But then this scheme would wind up dinging senior citizens with a massive tax hit just when they're trying to put together cash for some end-of-life care.
Policy is hard and unintended consequences are around every corner. For example, I could see an argument for changing the scheme to a special rebate. So you pay your capital gain tax when you sell your primary residence but then get it all refunded when you buy another one. But then this scheme would wind up dinging senior citizens with a massive tax hit just when they're trying to put together cash for some end-of-life care.
But they cap tax free gains in the states at 200k, do we see mobility barriers in that jurisdiction?
Also, I believe what you're describing does exist in the states in the form of a "1031 exchange".
Also, I believe what you're describing does exist in the states in the form of a "1031 exchange".
You don't pay increasing property tax as the value appreciates. Property taxes on average increase with inflation, not with house prices. Only if your property appreciates more quickly than others do you end up paying more.
I think banning, or severely restricting, HELOCs is a better idea. Canada also doesn't have inheritance taxes or a wealth tax.
The problem with taxing primary residencies is that homeowners aren't usually selling their homes to exit the market, they're upgrading or downgrading.
The problem with taxing primary residencies is that homeowners aren't usually selling their homes to exit the market, they're upgrading or downgrading.
What exact problem are you trying to solve? I can think of a lot that this would cause.
Analyze any specific tax policy deeply enough and you’ll find that there is no way to fix something that starts off as unnecessary and harmful.
Analyze any specific tax policy deeply enough and you’ll find that there is no way to fix something that starts off as unnecessary and harmful.
The problem is that poorer people or renters generally are subsidizing richer people or homeowners generally. Depending on if your view is that Canadian governments are too big or too small, you'd say that renters are being unfairly overtaxed and should be given a break, or that homeowners are not paying their fair share and should be taxed more.
A lot of home owner occupant tax advantages were specifically introduced to disadvantage landlords. If you get rid of them, it may make the problem worse because there will be no way out of the rental trap. Separately, there are many tax laws that are written specifically to benefit landlords, and these disadvantage renters directly. The whole ‘fair share’ of taxes argument presumes that the aggrieved group would pay less if others paid more. This wholly unsupported. Government extracts what citizens will bear.
> The whole ‘fair share’ of taxes argument presumes that the aggrieved group would pay less if others paid more.
I don't think it does presume that. I can want another group to pay their fair share of taxes without necessarily wanting my own taxes lowered.
I don't think it does presume that. I can want another group to pay their fair share of taxes without necessarily wanting my own taxes lowered.
Well I guess in that framing, I as a renter am expressing that I am not willing to bear this tax burden, and so will be voting accordingly.
You should always vote for less taxes on yourself.
Voting for more taxes on other people does not reduce your taxes.
Voting for more taxes on other people does not reduce your taxes.
I would say that there are moral positions where you should vote for more taxes on yourself (and others like you), not less. Because always voting for less taxes for yourself is a zero sum game where everybody loses, since the government has to be funded somehow (and I prefer it to be done via taxes versus inflation, which is much more regressive).
1. Price inflation is almost unrelated to monetary inflation.
https://fred.stlouisfed.org/graph/?g=O2ZH
2. Tax collection does not change a governments ability or willingness to incur debt.
3. Government spending may not be related to ‘needs’ of the citizens.
It’s just a collection of organizations and employees. They get promoted based on spending. Effectiveness is impossible to measure.
https://fred.stlouisfed.org/graph/?g=O2ZH
2. Tax collection does not change a governments ability or willingness to incur debt.
3. Government spending may not be related to ‘needs’ of the citizens.
It’s just a collection of organizations and employees. They get promoted based on spending. Effectiveness is impossible to measure.
1. Sort of - the connector between the two is fiscal policy. We had tight fiscal policy in 2008 - that's why we saw no/muted general inflation after the crisis. We had comparatively loose fiscal in 2020 - hence the inflation now - it's not explained solely by supply chain problems and demand shifts from services to goods (though that's also a significant part of it).
Monetary inflation builds the potential for price/goods/CPI inflation - whether than potential is realized depends on fiscal policy and the supply response (more redistribution => more inflation - if productive capacity can't catch up, or if we limit supply - for example ESG / anti-oil stance).
2. Governments employ debt because of the political price of raising taxes. Issuing debt is basically taxing savers via inflation over the medium term - it's more "invisible", since the government will eventually have to devalue or default on its debt in real terms (the U.S. has done it twice in the last century - in 1934 and 1971, and it's possible that a third one is coming in the next decade. It's a little trickier since the currency is no longer gold backed, but it's de-facto oil-backed. If oil goes to $10K / barrel (hypothetically), that's as good as US defaulting on its debt as far as foreign creditors are concerned).
3. True, though there are transparency measures that monitor government spending and we have rough measures of effectiveness. Government is to people what the FED is to banks - the provider of needs of last resort. It might not give you the best service or work efficiently, but it will be there when everything else goes bankrupt or refuses to work. There are things that are unprofitable and unenviable to do in a capitalist system - and we rely on the government to do them.
Monetary inflation builds the potential for price/goods/CPI inflation - whether than potential is realized depends on fiscal policy and the supply response (more redistribution => more inflation - if productive capacity can't catch up, or if we limit supply - for example ESG / anti-oil stance).
2. Governments employ debt because of the political price of raising taxes. Issuing debt is basically taxing savers via inflation over the medium term - it's more "invisible", since the government will eventually have to devalue or default on its debt in real terms (the U.S. has done it twice in the last century - in 1934 and 1971, and it's possible that a third one is coming in the next decade. It's a little trickier since the currency is no longer gold backed, but it's de-facto oil-backed. If oil goes to $10K / barrel (hypothetically), that's as good as US defaulting on its debt as far as foreign creditors are concerned).
3. True, though there are transparency measures that monitor government spending and we have rough measures of effectiveness. Government is to people what the FED is to banks - the provider of needs of last resort. It might not give you the best service or work efficiently, but it will be there when everything else goes bankrupt or refuses to work. There are things that are unprofitable and unenviable to do in a capitalist system - and we rely on the government to do them.
1. Yes, broad redistribution of money (demand) and poor productivity growth (supply) creates price inflation. ‘Fiscal Policy’ seems like a meaningless term, so I can’t comment. But you know what is both designed to redistribute money and massively hampers productivity? Taxes.
2. You’re assuming that the budget is constant. It is not. Governments employ debt because they can. Governments tax because they can. If anything, the relationship is the opposite of the way you state it. Taxation allows them to take on more debt. Debt forces them to increase taxation.
3. Good theory. It is what I would have believed before spending over a decade in the bureaucracy. It’s neither right nor wrong, but irrelevant to the actual functioning of the system.
2. You’re assuming that the budget is constant. It is not. Governments employ debt because they can. Governments tax because they can. If anything, the relationship is the opposite of the way you state it. Taxation allows them to take on more debt. Debt forces them to increase taxation.
3. Good theory. It is what I would have believed before spending over a decade in the bureaucracy. It’s neither right nor wrong, but irrelevant to the actual functioning of the system.
This is terrible, people would just never sell their homes.
Real estate investors have to pay capital gains on properties they sell, do they never sell their properties?
That's not comparable. RE investors are buying with the intention of selling and realizing an after-tax profit. For most individual homeowners if they're selling, it's to buy another property. Say you own a $1M home, and when you sell you're going to face $100k in taxes based on the gains to date. Now if you're considering moving you can only afford a $900k home instead. That would present a disincentive to moving.
The ruling liberal party is out of touch here like many other things.
Key problem here is that the inventory is super low, part of it is due to everyone wants to settle in places like Toronto/Montreal/Vancouver due to high job concentration along with NIMBY attitude among the existing suburbs. There is an inflow of 400k immigrants every year who mainly tend to settle in the big cities such as Toronto/Montreal/Vancouver, putting upward pressures. On top of that, the liberal government flat out does not want to impose tax free capital gain from primary home sales, and wide availability of credits with as low as 5% downpayment which can be used with equities from first, second, third homes.
This is just a political move to show they did something. The liberal party minister once said they don't want to entertain any crush on house prices because that would be detrimental to new home buyers. When buyers get the signal that Government has their back and there will never be a crush [1].
[1] https://www.cbc.ca/news/business/housing-canada-policy-marke...
https://www.thestar.com/politics/federal-election/2021/08/24...
Key problem here is that the inventory is super low, part of it is due to everyone wants to settle in places like Toronto/Montreal/Vancouver due to high job concentration along with NIMBY attitude among the existing suburbs. There is an inflow of 400k immigrants every year who mainly tend to settle in the big cities such as Toronto/Montreal/Vancouver, putting upward pressures. On top of that, the liberal government flat out does not want to impose tax free capital gain from primary home sales, and wide availability of credits with as low as 5% downpayment which can be used with equities from first, second, third homes.
This is just a political move to show they did something. The liberal party minister once said they don't want to entertain any crush on house prices because that would be detrimental to new home buyers. When buyers get the signal that Government has their back and there will never be a crush [1].
[1] https://www.cbc.ca/news/business/housing-canada-policy-marke...
https://www.thestar.com/politics/federal-election/2021/08/24...
Capital gains on primary residence is a non-starter. 65% of households in Canada own their homes.
It would be political suicide.
It would be political suicide.
When the going gets tough the ruling party just scapegoats a minority group who they perceive to be socioeconomically advantaged. ex) Jews in Europe
I could sell my house (not in Canada) for so much more than I bought it two years ago. But then what? All of the houses around here are going to corporations who are squeezing money out of those who can't find a home to buy. Because they've all been bought up by corporations. I'm not "anti-corporate" by any stretch of the imagination, but this is definitely a problem that is hurting families. I would vote for something similar here.
[deleted]
I live in metro Vancouver. The market is stupid right now (has been for years I guess). Its fairly common for houses to sell 200-400K over asking price, with sometimes one or two dozen offers.
Also as the article says, this is just a bandaid, won't fix things.
How about ending the bizarre zoning restrictions that result in a sea of SFHs with little islands of super highrise condos around transit hubs? Maybe that would untap a huge repressed demand for missing middle housing?
Also as the article says, this is just a bandaid, won't fix things.
How about ending the bizarre zoning restrictions that result in a sea of SFHs with little islands of super highrise condos around transit hubs? Maybe that would untap a huge repressed demand for missing middle housing?
https://shapeyourcity.ca/vancouver-plan
They're trying to fix it, please join in the discussions and open houses... too many NIMBYs with free time available are participating.
They're trying to fix it, please join in the discussions and open houses... too many NIMBYs with free time available are participating.
New Zealand did that years ago. It did nothing for price increases but at least it shut up some of the populist screeching. Price increases seem to have finally stopped and you know how? The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore. Those people were the problem all along but nobody wanted to blame them. They were supposed to be the victims.
Because there’s no reason for prices to drop yet. There’s 3 issues. Foreigners buying houses. Locals buying multiple properties. And supply. 1 of those issues is resolved.
The government promised 10k houses. It’s done something like 500? There’s no houses on the cheap for people to buy to push prices down. But many people trying to buy and rent that sellers and landlords are upping prices.
Atleast locals will haggle a price. The foreigners buying were paying above market prices despite never setting foot in the country.
The government promised 10k houses. It’s done something like 500? There’s no houses on the cheap for people to buy to push prices down. But many people trying to buy and rent that sellers and landlords are upping prices.
Atleast locals will haggle a price. The foreigners buying were paying above market prices despite never setting foot in the country.
No, it really was locals buying a house. Of course there are now more locals than before, and I think our lifestyle has us less willing to share houses, and construction and relaxed zoning lagged, but it's still locals pushing up prices. If we weren't so obsessed with having our own little castle, we would buy apartments or rent instead. Everyone does still live somewhere, it's just often not as luxury as they desire so they want to pay more for more luxury.
No cheap houses to push prices down? That doesn't make sense. Prices are falling now, so houses are getting cheaper.
No cheap houses to push prices down? That doesn't make sense. Prices are falling now, so houses are getting cheaper.
> The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore.
I know nothing about the situation in New Zealand, but taking what you say at face value, they are the victims. It's just that now, as opposed to bidding high on houses they could barely afford, they can't afford to enter the market at all. So things are even worse for them.
I know nothing about the situation in New Zealand, but taking what you say at face value, they are the victims. It's just that now, as opposed to bidding high on houses they could barely afford, they can't afford to enter the market at all. So things are even worse for them.
[deleted]
>> The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore.
Agree, but don't single out first time buyers. Easy money is what causes the prices to rise regardless of who is buying. In the US lower interest rates lead to tons of ads for refinancing, and some people refi AND take out some cash to spend.
Home prices vary inversely to interest rates.
Agree, but don't single out first time buyers. Easy money is what causes the prices to rise regardless of who is buying. In the US lower interest rates lead to tons of ads for refinancing, and some people refi AND take out some cash to spend.
Home prices vary inversely to interest rates.
It will be interesting to see what happens but I don't think it will do much as most of the people buying property are Canadians. And New Zealand, which has a similar policy, has skyrocketing house prices right now:
https://www.globalpropertyguide.com/Pacific/New-Zealand/Pric...
https://www.globalpropertyguide.com/Pacific/New-Zealand/Pric...
The Beaverton's take on this story:
"Canada to ban foreign homebuyers who refuse to set up dummy corporations"
https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...
"Canada to ban foreign homebuyers who refuse to set up dummy corporations"
https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...
I know HN is not the place for glibness, but literally: just build more homes. Everything else is rearranging deck chairs on the Titanic. Zoning reform is the answer.
The feds don't really get a say in home building, it's up to the provinces like Ontario who aren't really feeling the pressure to do anything, after rejecting the most impactful recommendations from a recent task force on affordability [1].
The NIMBY mayors of cities such as Mississauga pushed back [2] and the province has effectively backed down.
[1] - https://www.cbc.ca/news/canada/toronto/ontario-doug-ford-hou...
[2] - https://twitter.com/BonnieCrombie/status/1507080290602299392
The NIMBY mayors of cities such as Mississauga pushed back [2] and the province has effectively backed down.
[1] - https://www.cbc.ca/news/canada/toronto/ontario-doug-ford-hou...
[2] - https://twitter.com/BonnieCrombie/status/1507080290602299392
and also build more jobs, nicer neighborhoods and everything else that makes some areas more expensive than others
Problem is urban sprawl has reached its limit so more homes means more apartments. And millennials accustomed to freestanding houses in suburbs will continue to rent houses and ignore the new apartments while claiming there is still a housing crisis.
I think millennials would happily adjust to condo living if they were affordable and large enough to comfortably live in with room to spare like in a house (1400+ Square feet, 3+ bedrooms)
That only works if people are living in all the homes.
Focusing on foreign buyers is a distractionary tactic. The primary cause of housing value spiking comes down to investors and speculators. Combat those, and the marketplace will return to sane valuations:
• Speculation tax of 50% of the assessed or sold home value (whichever is greater) of any home held for less than two years, decreasing on a daily basis to 0% over years 3 through 8. Exemptions can be had due to extenuating circumstances (military or police redeployment, divorce, death of co-holder of title, etc.). Because most pre-sales are snatched up by investors before ground has even been broken, only to be sold for two or three times its original value upon completion.
• Businesses (and by proxy, business owners that own multiple businesses) cannot own more than one rental residence per municipal district. This prevents speculators from buying up entire neighbourhoods just to jack up rents. There is a valid case for a business to own a residence (to host guests of the business), but anything more than the occasional guest can be put up in a hotel.
• Individual non-business landlords cannot derive more than 50% of their income from rental properties. Another method is to have taxes on rental income on a sliding scale depending on what proportion of their entire personal income rent is a part of, starting at normal rates up to 20% of income and rising to 100% taxation at the point where 100% of income is rental income.
The last one alone ought to protect people for whom landlording is NOT a full time job in of itself, such as people with mortgage helper suites or second homes that they upgraded from.
The point being, those with just one or three units are far less likely to be predatory than slumlords who own entire apartment blocks or institutional investors that own a significant block of rental units in a city.
And such a progressive taxation scheme ought to materially prevent rentals from being dominated by a handful of investors.
• Speculation tax of 50% of the assessed or sold home value (whichever is greater) of any home held for less than two years, decreasing on a daily basis to 0% over years 3 through 8. Exemptions can be had due to extenuating circumstances (military or police redeployment, divorce, death of co-holder of title, etc.). Because most pre-sales are snatched up by investors before ground has even been broken, only to be sold for two or three times its original value upon completion.
• Businesses (and by proxy, business owners that own multiple businesses) cannot own more than one rental residence per municipal district. This prevents speculators from buying up entire neighbourhoods just to jack up rents. There is a valid case for a business to own a residence (to host guests of the business), but anything more than the occasional guest can be put up in a hotel.
• Individual non-business landlords cannot derive more than 50% of their income from rental properties. Another method is to have taxes on rental income on a sliding scale depending on what proportion of their entire personal income rent is a part of, starting at normal rates up to 20% of income and rising to 100% taxation at the point where 100% of income is rental income.
The last one alone ought to protect people for whom landlording is NOT a full time job in of itself, such as people with mortgage helper suites or second homes that they upgraded from.
The point being, those with just one or three units are far less likely to be predatory than slumlords who own entire apartment blocks or institutional investors that own a significant block of rental units in a city.
And such a progressive taxation scheme ought to materially prevent rentals from being dominated by a handful of investors.
This will just create complicated sales contracts, and advantage bigger landlords. The simple solution is market-valued property tax, because it’s basically unavoidable.
The solution is land value tax. Nobody deserves to own a SFH in a large city when that land could be used for more housing - you want to live in a SFH, move to the countryside (or pay an exorbitant tax rate which will fund other development).
It's also why LA is such a mess.
It's also why LA is such a mess.
Seems anachronistic to me. There are many resources other than land which define an economy and a nation state.
I see you put a lot of thought into tag issue and yet, i much be that guy and tell you that it will just add a lot of bureaucracy and those who have resources and knowledge will be able to circumvent those restrictions.
And it does not solve the problems of:
- there is just too much cash out there
- land is limited. once it's gone, it's gone
- when you die, your kids get your house and land
And it does not solve the problems of:
- there is just too much cash out there
- land is limited. once it's gone, it's gone
- when you die, your kids get your house and land
> Individual non-business landlords cannot derive more than 50% of their income from rental properties
Properties are one of the top income generator for (pure) retirees. How would you ensure they can retire and still have income via properties?
I guess you can add clausal to exclude {retirement_age} ownership? Hopefully nobody uses them as proxy. Tricky huh?
Properties are one of the top income generator for (pure) retirees. How would you ensure they can retire and still have income via properties?
I guess you can add clausal to exclude {retirement_age} ownership? Hopefully nobody uses them as proxy. Tricky huh?
> Properties are one of the top income generator for (pure) retirees
Yes, and that's part of the problem - holding property shouldn't be a viable retirement plan. If they want retirement income they could sell the houses and buy an annuity or invest in productive enterprises (or buy government bonds back in the day - which is no longer an option, unfortunately).
Extracting surplus income from workers via property rent-seeking should not be a way to fund retirement in the first place.
Yes, and that's part of the problem - holding property shouldn't be a viable retirement plan. If they want retirement income they could sell the houses and buy an annuity or invest in productive enterprises (or buy government bonds back in the day - which is no longer an option, unfortunately).
Extracting surplus income from workers via property rent-seeking should not be a way to fund retirement in the first place.
> Yes, and that's part of the problem - holding property shouldn't be a viable retirement plan
It's how many retirees in high living cost around the world fetch their income (when their retirement < standard of living cost of the city).
I don't see that as a problem for those who work hard and made good decisions throughout their life.
> If they want retirement income they could sell the houses and buy an annuity or invest in productive enterprises (or buy government bonds back in the day - which is no longer an option, unfortunately).
Riskier. Why should they?
Blaming them for holding one or two properties for retirement income is pretty much scapegoating the victim of the situation given for them: they made the best investment choice and they're being told that they're part of the problem.
I see many people blaming "shareholder's" greed too when it comes to investment.
The truth is that majority of people are just trying to secure their future and it's hard to blame them because their choices are guided by their surrounding (what's given to them).
I would look into the Government (specifically the cities, municipalities, and urban planners). They have the power to shape our environment.
It's how many retirees in high living cost around the world fetch their income (when their retirement < standard of living cost of the city).
I don't see that as a problem for those who work hard and made good decisions throughout their life.
> If they want retirement income they could sell the houses and buy an annuity or invest in productive enterprises (or buy government bonds back in the day - which is no longer an option, unfortunately).
Riskier. Why should they?
Blaming them for holding one or two properties for retirement income is pretty much scapegoating the victim of the situation given for them: they made the best investment choice and they're being told that they're part of the problem.
I see many people blaming "shareholder's" greed too when it comes to investment.
The truth is that majority of people are just trying to secure their future and it's hard to blame them because their choices are guided by their surrounding (what's given to them).
I would look into the Government (specifically the cities, municipalities, and urban planners). They have the power to shape our environment.
What about people who inherited a property and then can retire off the rent that someone pays for it? Do they deserve it for the work their parents put in? How many generations does that extend to?
The point is that this eventually devolves into a feudal system of landowners and workers - it's been tried in Europe, and while it's great for the landowning class, it's not as great for the workers.
> Riskier. Why should they?
Yes, my point is the fact that owning/renting houses is the safest retirement option is a political choice, not a law of nature. And that political choice is specifically benefitting retires as a whole at the cost of the working population.
I believe that people should be able to finance their own retirement, but via real contribution to society - yes, I have problems with stocks and other methods of passive income as well. I think they should exist, but that they should be much less advantageous than they are now.
The fact that these methods are the ones chosen to promote to achieve financial independence is a large part of what leads to moral rot in America today. People see that hard work is not rewarded - financial speculation, holding real estate and other unproductive work is what is really rewarded, and that calls into question the whole American dream.
So yes, I believe things need to change - and a land value tax is a step in the right direction. Also increasing capital gains to the level of the income tax.
I understand how to play the current system, but I interact with lots of people (and have friends) at different income scales from the homeless to middle class to centi-millionaires and so I've seen how unfair the system is and how unequal the opportunities at the different ends are. There's also way less options for making big money in a moral way - as a society, we seem to have chosen to reward inherently immoral actions higher than moral ones.
The point is that this eventually devolves into a feudal system of landowners and workers - it's been tried in Europe, and while it's great for the landowning class, it's not as great for the workers.
> Riskier. Why should they?
Yes, my point is the fact that owning/renting houses is the safest retirement option is a political choice, not a law of nature. And that political choice is specifically benefitting retires as a whole at the cost of the working population.
I believe that people should be able to finance their own retirement, but via real contribution to society - yes, I have problems with stocks and other methods of passive income as well. I think they should exist, but that they should be much less advantageous than they are now.
The fact that these methods are the ones chosen to promote to achieve financial independence is a large part of what leads to moral rot in America today. People see that hard work is not rewarded - financial speculation, holding real estate and other unproductive work is what is really rewarded, and that calls into question the whole American dream.
So yes, I believe things need to change - and a land value tax is a step in the right direction. Also increasing capital gains to the level of the income tax.
I understand how to play the current system, but I interact with lots of people (and have friends) at different income scales from the homeless to middle class to centi-millionaires and so I've seen how unfair the system is and how unequal the opportunities at the different ends are. There's also way less options for making big money in a moral way - as a society, we seem to have chosen to reward inherently immoral actions higher than moral ones.
At this point it seems largely to be a performative gesture so that the Feds can say they're doing something.
The two biggest jurisdictions where there has been evidence of notable foreign investment in housing has been Vancouver and Toronto, and foreign buyer taxes were already introduced in those places years and years ago.
Prices certainly haven't gone down, but these taxes have had substantial impact in changing the sort of products that house developers are making. There's been a significant pivot by developers toward building purpose built entirely rental apartments whereas prior to the taxes developers rarely built these, instead favouring condominiums (multi-unit buildings where the apts are sold).
Seems like the government should provide some sort of evidence that foreign buying remains a problem. They haven't to date though perhaps they'll drop some numbers as part of the budget.
The two biggest jurisdictions where there has been evidence of notable foreign investment in housing has been Vancouver and Toronto, and foreign buyer taxes were already introduced in those places years and years ago.
Prices certainly haven't gone down, but these taxes have had substantial impact in changing the sort of products that house developers are making. There's been a significant pivot by developers toward building purpose built entirely rental apartments whereas prior to the taxes developers rarely built these, instead favouring condominiums (multi-unit buildings where the apts are sold).
Seems like the government should provide some sort of evidence that foreign buying remains a problem. They haven't to date though perhaps they'll drop some numbers as part of the budget.
Notable in Toronto is 3%
Why can't we increase property taxes for businesses that own homes? And, for individuals who own more than, let's say, two homes?
Put an exponent in the property tax calculation based on number of properties owned (by individual or business) within a jurisdiction.
ex. taxes are [rate * appraisedValue * 1.1 ^ numPropertiesOwned]
Needs some sort of mechanism to prevent corporations from spinning up subsidiaries to use as a tax shield in these calculations though.
ex. taxes are [rate * appraisedValue * 1.1 ^ numPropertiesOwned]
Needs some sort of mechanism to prevent corporations from spinning up subsidiaries to use as a tax shield in these calculations though.
This is how Singapore addressed the housing crisis and I think it would be a great idea for Canada to follow suit. It levels the playing field between the 30 year old couple looking to start a family and massive REITs/corporations with billions in capital.
Singapore has a few ways to address housing crisis no?
HDB and a few restrictions on who can purchase it. etc.
HDB and a few restrictions on who can purchase it. etc.
Because lots of government make a lot of money and have multiple homes.
It's a fine black of pretending to do something, but just not enough to hurt your friends.
It's a fine black of pretending to do something, but just not enough to hurt your friends.
Property tax is on the property, not on the owner. The municipality doesn't know and can't know who actually pays the taxes on a property. To have each municipality create their own spy agency to determine who is making the e-transfer for each roll number on their list will cause more problems than it solves.
Rental properties are also in extremely low supply. I'm not confident we should see corporations owning housing as a bad thing, given they can get rental housing built in bulk. Plus every new rental that's built will also indirectly put downward pressure on prices as well.
Read the small print:
The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.
They did this stunt here in New Zealand too, where "foreigners" excluded Australian Citizens, Singaporean citizens, and permanent residents.
Anyway, prepare for the media (and public, because the media determines how we talk) to use the term "foreign buyer ban" forever.
The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.
They did this stunt here in New Zealand too, where "foreigners" excluded Australian Citizens, Singaporean citizens, and permanent residents.
Anyway, prepare for the media (and public, because the media determines how we talk) to use the term "foreign buyer ban" forever.
They couldn’t exclude Australia and Singapore due to existing trade agreements.
Having lived in singapore for 10 years tho people there seem far more interested in moving to australia to live.
Having lived in singapore for 10 years tho people there seem far more interested in moving to australia to live.
I'm not talking about what the justifications are. I'm talking about how the media decided it was a 'foreign buyer ban' despite very obviously not being one.
I don’t see how it’s not? Just because 2 countries couldn’t be included in the ban due to trade agreements doesn’t change the fact people can no longer go on a website and buy a house in nz without ever setting foot in the country.
I guess it depends on what your definition of foreign is. For me, clearing customs doesn't make you a local.
My wife is a permanent resident, FWIW.
My wife is a permanent resident, FWIW.
Canada used to be a really good place for foreign investment buying and renting/flipping houses pre-2008. My dad had around 50 properties in the Nova Scotia region just before the crash and the income from that was barely taxable (as a UK citizen, although I don’t remember specifics of how that worked). I can totally see why countries want to avoid foreign investment like that inflating local prices for citizens. Tbf he was renting them specifically to those with criminal records because most landlords used to have background checks, so there was a bit of a market, and it’s probably a little better than the general flipping price inflation.
This is called “Blockbusting”. Wonderful.
I think it was a little more altruistic than that - he just found people with criminal backgrounds were struggling to find places and on the whole were just as reliable to pay rent on time because they appreciated the opportunity
Altruism might be believable if:
1. He lived in the same neighborhood as his renters, and not 1000s of miles away in the UK
2. He didn’t kick them out after a few years by flipping it.
3. It was a slow, long-term acquisition of rentals for income rather than flipping profit.
Sorry; the facts indicate a scheme. I don’t begrudge him personally; there is always some government program that makes this chicanery profitable at the expense of the working class, and somebody else would have done it.
1. He lived in the same neighborhood as his renters, and not 1000s of miles away in the UK
2. He didn’t kick them out after a few years by flipping it.
3. It was a slow, long-term acquisition of rentals for income rather than flipping profit.
Sorry; the facts indicate a scheme. I don’t begrudge him personally; there is always some government program that makes this chicanery profitable at the expense of the working class, and somebody else would have done it.
Short anecdote to give a quick feel for things here:
I grew up in Waterloo. The home my parents bought in 1989 went up by about 2000% since then. I make more than both combined then, inflation adjusted, and can’t afford that home.
I bought a home down the road in a small blue collar city for 525k. It took 24 months for it to _double_ in value.
I hate this. It needs to stop. The bubble need to be popped.
I grew up in Waterloo. The home my parents bought in 1989 went up by about 2000% since then. I make more than both combined then, inflation adjusted, and can’t afford that home.
I bought a home down the road in a small blue collar city for 525k. It took 24 months for it to _double_ in value.
I hate this. It needs to stop. The bubble need to be popped.
The student exemption makes this decree useless. I live in the Bay Area and in my personal life cross paths with Mainland Chinese living their personal lives. I have more than once attended birthday parties at high-end houses that are sparsely furnished and inhabited except for a single “student”.
As a non-affluent person, I don’t know if rich Americans do the same thing. However, enrolling your child in a Master’s program, who takes the minimum number of credits per semester, may pencil in as a good property management option for someone with no ties to the U.S. otherwise and only wants capital appreciation.
As a non-affluent person, I don’t know if rich Americans do the same thing. However, enrolling your child in a Master’s program, who takes the minimum number of credits per semester, may pencil in as a good property management option for someone with no ties to the U.S. otherwise and only wants capital appreciation.
Limit ownership to only 1 property for international students and foreign workers.
Increase Property Taxes and channel this money to better services in the community and increase infrastructure for new housing developments. Build 20 minute neighbors where people do not depend so much on their cars.
https://www.eugene-or.gov/1216/What-is-a-20-Minute-Neighborh...
It will also help to keep the prices lower.
It will also help to keep the prices lower.
Housing Policy Nirvana:
1. ban supply (1920s - today)
2. ban demand (today - future)
problem fixed!
Srsly, why can't we concentrate on policies that unlock supply. nothing else matters.
problem fixed!
Srsly, why can't we concentrate on policies that unlock supply. nothing else matters.
"Supply is a lie".
You know who calls for "more supply"? Real estate developers, speculators and investors.
This is how they distract from fixing the real issues in housing prices.
Adding more supply won't bring house prices down, it will just give housing stock for investors to buy.
You know who calls for "more supply"? Real estate developers, speculators and investors.
This is how they distract from fixing the real issues in housing prices.
Adding more supply won't bring house prices down, it will just give housing stock for investors to buy.
Why do you think this? Is housing immune from Econ 101 supply and demand?
A populist policy that amounts to pissing into the wind. Canada's rising real estate prices has a simple cause: demand far outstrips supply. The demand isn't driven by foreign investors. It's driven by a 1.1% annual population growth rate, the majority of which is immigration.
I am one of these migrants. Canada's immigration system recruits high-skilled workers and many of the fast track programmes require that you demonstrate a minimum proof of funds in the tens of thousands of dollars (multiples of the average Canadian's liquid savings).
High-skilled workers aren't moving to Canada to live in the abundant land of northern Manitoba. They're moving here to live in areas with relatively high opportunity: Toronto, Vancouver, and Montreal if they speak French. Housing demand is concentrated in those areas and surrounding regions.
There isn't a matching desire to build homes at a pace that outstrips immigration. Interestingly, total number of dwellings in Canada has grown by ~1% annually over the last 5 years. On the surface, that looks to match the immigration rate (1.1%), but both those numbers are for the whole of Canada. The majority of immigrants move to one of the main cities, whereas new homes are much more geographically spread.
TL;DR: increase homes or decrease people, everything else is pointless.
I am one of these migrants. Canada's immigration system recruits high-skilled workers and many of the fast track programmes require that you demonstrate a minimum proof of funds in the tens of thousands of dollars (multiples of the average Canadian's liquid savings).
High-skilled workers aren't moving to Canada to live in the abundant land of northern Manitoba. They're moving here to live in areas with relatively high opportunity: Toronto, Vancouver, and Montreal if they speak French. Housing demand is concentrated in those areas and surrounding regions.
There isn't a matching desire to build homes at a pace that outstrips immigration. Interestingly, total number of dwellings in Canada has grown by ~1% annually over the last 5 years. On the surface, that looks to match the immigration rate (1.1%), but both those numbers are for the whole of Canada. The majority of immigrants move to one of the main cities, whereas new homes are much more geographically spread.
TL;DR: increase homes or decrease people, everything else is pointless.
[deleted]
My anger about housing prices led me to create Real Estate Rebellion:
https://www.reddit.com/r/realestaterebellion/
https://www.reddit.com/r/realestaterebellion/
Why do you think real estate shouldn't be an investment? Time, money, and effort to secure land, materials, labor in order to build real estate. This is the same economic principle for any other commodity.
[deleted]
Good.
The way countries allow the ultra-wealthy to park money in real estate and pay almost no taxes on it while it drives up the price of a necessary resource for everyone else has to stop. Period.
In an ideal world, this wouldn't be a ban per se. I'd prefer to see that owning a property anyywhere allows that jurisdiction to tax your worldwide income and assets of the beneficial owner as if they were a resident.
Double taxation treatires exist and can handle that case.
New York City (as one example) should be for New Yorkers, not Russian oligarchs, nonresident billionaires and corrupt heads of state.
The way countries allow the ultra-wealthy to park money in real estate and pay almost no taxes on it while it drives up the price of a necessary resource for everyone else has to stop. Period.
In an ideal world, this wouldn't be a ban per se. I'd prefer to see that owning a property anyywhere allows that jurisdiction to tax your worldwide income and assets of the beneficial owner as if they were a resident.
Double taxation treatires exist and can handle that case.
New York City (as one example) should be for New Yorkers, not Russian oligarchs, nonresident billionaires and corrupt heads of state.
They aren't buying homes where you would live, they own vacation homes in 8 digit figure mansions that low liquidity. How do ppl keep making this mental gymnastics here?
You want to ban REITs, institutional money and local landlords with access to near 0% debt buying up and flipping homes. The average immigrant that buys homes from them aren't here to start a portfolio, they can't
By your argument, New Iroquais should be owned by the original people that lived there.
You want to ban REITs, institutional money and local landlords with access to near 0% debt buying up and flipping homes. The average immigrant that buys homes from them aren't here to start a portfolio, they can't
By your argument, New Iroquais should be owned by the original people that lived there.
I see a lot of possible root causes being mentioned, e.g., blind bidding, zoning, foreign buyers, corporate buyers, and the vested interests of existing home owners.
Here's two more: income inequality, and the construction skills crisis.
Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle of friends, you may know someone who owns 2, 3 or 4 homes or one over-sized home. It is not uncommon, just not usually discussed openly. They buy or retain homes and then rent them rather than selling. Why horde houses? Some people just like to see a tangible asset. Most upper middle class people have most of their assets in stocks. But with stocks up significantly in 2020 and 2021, a lot of people are ready to diversify into real estate. And those who own homes can watch them appreciate even if the home sits empty.
Construction skills crisis: At least in the US, there just aren't enough construction workers to fill construction jobs. You could open up zoning rules, but that won't make housing starts instantly increase, because there are not enough workers. A generation of people has been taught that knowledge worker jobs are the best. I think that is a largely correct. Even with construction salaries up, I think that it is tough to have a long career doing physical labor in the trades.
Here's two more: income inequality, and the construction skills crisis.
Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle of friends, you may know someone who owns 2, 3 or 4 homes or one over-sized home. It is not uncommon, just not usually discussed openly. They buy or retain homes and then rent them rather than selling. Why horde houses? Some people just like to see a tangible asset. Most upper middle class people have most of their assets in stocks. But with stocks up significantly in 2020 and 2021, a lot of people are ready to diversify into real estate. And those who own homes can watch them appreciate even if the home sits empty.
Construction skills crisis: At least in the US, there just aren't enough construction workers to fill construction jobs. You could open up zoning rules, but that won't make housing starts instantly increase, because there are not enough workers. A generation of people has been taught that knowledge worker jobs are the best. I think that is a largely correct. Even with construction salaries up, I think that it is tough to have a long career doing physical labor in the trades.
The housing market in Toronto is a hot mess at the moment. When I told my friends in US that even for renting a condo, I had to put an offer that was more than the asked monthly rent they were surprised and wouldn't believe me!
The excessive imbalance in demand Vs supply also means that the owners have > 10 offers for each house and the prospective buyers/renters are just putting blind offers in the hope that their offer is more than most of the other offers.
The excessive imbalance in demand Vs supply also means that the owners have > 10 offers for each house and the prospective buyers/renters are just putting blind offers in the hope that their offer is more than most of the other offers.
The blind offer thing is particularly enraging. If our real estate market has degraded to being auction-based, that's awful, but fine, let's regulate it like an actual auction and demand transparency in pricing. Hell, make it a second price auction (second highest bid + $1 or so). Put in some sane rules, like an actual auction.
Right now it's just awful.
Right now it's just awful.
No one wants to talk about the elephant in the room.
Canada has 'housing' but no one wants to live in anything other than a detached house close to the city.
Lots of condos, semi-detached, and townhouse, however no one wants them because you have to have a detached home to have made it in life.
I can't remember in my twenties obsessively wanting a detached house.
GenX is buying up all the houses after selling their condos and townhouse they bought as first homes.
Same people who's first car needs to be a 2022 BMW.
Canada has 'housing' but no one wants to live in anything other than a detached house close to the city.
Lots of condos, semi-detached, and townhouse, however no one wants them because you have to have a detached home to have made it in life.
I can't remember in my twenties obsessively wanting a detached house.
GenX is buying up all the houses after selling their condos and townhouse they bought as first homes.
Same people who's first car needs to be a 2022 BMW.
> however no one wants them
This is completely made up. Look at the prices they fetch. If you build it, they will come; zoning heavily restricts the level of mixed development, hence you mostly see detached homes or very large condo buildings with little in between like triplexes. There's a reason Montreal has generally been more affordable for years than other large Canadian cities (population notwithstanding).
This is completely made up. Look at the prices they fetch. If you build it, they will come; zoning heavily restricts the level of mixed development, hence you mostly see detached homes or very large condo buildings with little in between like triplexes. There's a reason Montreal has generally been more affordable for years than other large Canadian cities (population notwithstanding).
Are foreigners responsible for house price increases? Is it companies? Is it locals?
Who make up the buyers? Is there a breakdown? Ie foreign companies?
I would also like to know for Australia too.
Who make up the buyers? Is there a breakdown? Ie foreign companies?
I would also like to know for Australia too.
There’s an exception for students and a lot of other loopholes here. I think it’s an excuse to give up after 2 years with “proof” that it was a bad idea.
Those exceptions -- for people who live and work in Canada but aren't citizens -- look to me like basic requirements for this to have any chance at being a reasonable policy. Excluding noncitizen permanent residents from home ownership would be a great way to make sure approximately zero high income (thus high tax) people want to migrate to Canada.
Canada's immigration rate is over 1% it is very easy to get citizenship. There are already tons of front people with citizenship buying real estate on behalf of foreign investment pools. These measures are just PR, with 68% home ownership rate any measures that cooled home prices would be political suicide.
Would've been better to just implement a land value tax.
To avoid the problem of the tax just being passed on to renters, you would presumably make the tax "progressive" (i.e. marginal), or only apply after a certain threshold, right?
I think that one mathematically appealing structure for such a tax is to work out what the median (inhabited, primary) property size is (including garden etc.) and set that as the tax-free threshold. Any land tax paid by the top half can then be distributed to those in the lower half.
This would be similar to (and is based on the same logic as) Thomas Paine's proposal for what we would now call a Universal Basic Income.
https://basicincometoday.com/thomas-paines-centuries-old-arg...
I think that one mathematically appealing structure for such a tax is to work out what the median (inhabited, primary) property size is (including garden etc.) and set that as the tax-free threshold. Any land tax paid by the top half can then be distributed to those in the lower half.
This would be similar to (and is based on the same logic as) Thomas Paine's proposal for what we would now call a Universal Basic Income.
https://basicincometoday.com/thomas-paines-centuries-old-arg...
How would this be any different to what we have now (a property tax)?
A land value tax targets the land only, not the structures on top of it, so nobody is penalized for improving their property. It also means that within an expensive metro vacant lots are taxed at the same rate as dense residential buildings, making land speculation unprofitable. Rather, landowners are incentivized to either put their land to productive use or sell to somebody else who can.
Well for one, it would be higher than low < 1% tax rates that exist now. That is just asking for foreign investors. And it would be based on the the land value, not the property (house) value.
I don't think companies buying up homes are acting in the public's best interests.
I think we should require companies like zillow to build the homes they sell. They shouldn't be allowed to buy existing homes unless it is to repair low income homes for low income buyers.
This won't do anything. Dr Andy Yan (https://twitter.com/Ayan604) has a pretty interesting take on all of this: "It still leaks. It may make a bit of a difference, but at the same time it doesn’t deal with the issue at hand, which is foreign capital, not foreign people" https://archive.ph/OcSYX
For those interested in how crazy this is in Canada, journalist Sam Cooper (https://twitter.com/scoopercooper) has done some awesome reporting.
For those interested in how crazy this is in Canada, journalist Sam Cooper (https://twitter.com/scoopercooper) has done some awesome reporting.
It's just theatre. They don't want to do anything. Foreign buyers are not the source of the price inflation. If they did want to cool prices, they'd make a move to curb demand by forcing borrowing products to be more stringent, among other actions. According to plenty of analysis I've read Canada's problems are not primarily supply related. The price inflation is caused in large part by low interest rates and the ease of purchasing mortgage debt along with psychological willingness to pay more, and the dubious regulations around the real estate industry here.
Canada (especially Ontario and BC) has become so addicted to real estate inflation, so convinced in the inevitability of "number go up" when it comes to housing prices that it would be a toxic pill for any political party or government that actually cooled this market.
Hundreds of thousands of baby boomer upper middle class Liberal voters would freak out. People who have banked their entire retirement on expecting a payout on their home. And an entire generation of people who think this is just what housing does, and don't remember the early 90s housing price slump.
It's toxic, really. Get a group of adults together at a party in any home in Toronto etc. and the conversation veers into banal banter about housing prices and people live in their houses like they live in a product not a home -- what reno can I do to increase its value? What did the neighbour's place sell for? What could I get? Blah blah. It's been like this for so long.
Meanwhile, industrial / manufacturing cities like Hamilton, Windsor etc. have become unaffordable to the people who actually work in the manufacturing jobs. A poison pill for the actual, real, productive secondary industry on which Ontario and Quebec were traditionally built.
Canada (especially Ontario and BC) has become so addicted to real estate inflation, so convinced in the inevitability of "number go up" when it comes to housing prices that it would be a toxic pill for any political party or government that actually cooled this market.
Hundreds of thousands of baby boomer upper middle class Liberal voters would freak out. People who have banked their entire retirement on expecting a payout on their home. And an entire generation of people who think this is just what housing does, and don't remember the early 90s housing price slump.
It's toxic, really. Get a group of adults together at a party in any home in Toronto etc. and the conversation veers into banal banter about housing prices and people live in their houses like they live in a product not a home -- what reno can I do to increase its value? What did the neighbour's place sell for? What could I get? Blah blah. It's been like this for so long.
Meanwhile, industrial / manufacturing cities like Hamilton, Windsor etc. have become unaffordable to the people who actually work in the manufacturing jobs. A poison pill for the actual, real, productive secondary industry on which Ontario and Quebec were traditionally built.
Why not just have occupancy requirements / vacancy tax?
That’s a ridiculous amount of regulation to enforce and frankly is very restrictive. Why shouldn’t people have two homes.
Because there is not enough for everyone and the property should not be treated as an investment.
BC/Vancouver did this. Wasn't a silver bullet that made housing affordable overnight, but it add thousands of units to the market and there's evidence that it influenced the sort of housing that developers built more toward apartments for renters.
They do! This is in addition to that.
> Trudeau’s party also proposed a ban on “blind bidding” for houses
Blind bidding is so clearly biased towards sellers I couldn't believe it was legal in the first place.
Blind bidding is so clearly biased towards sellers I couldn't believe it was legal in the first place.
What about companies?
Or a Trust at a bank.
I don't think foreigners can buy land in Mexico either, but you can open trust at a bank in Mexico and the trust can own the property.
I don't think foreigners can buy land in Mexico either, but you can open trust at a bank in Mexico and the trust can own the property.
Where will Chinese/Russian/Saudi millionaires and billionaires now offshore their wealth if they can't do it in Canadian real estate?
They are buying properties that is well outside what locals can afford.
Banning them won't stop local Canadians with access to literally free debt to leverage their real estate portfolios and rental properties.
Neither will their investments in REIT companies that snap up new properties to flip them to those groups.
Banning them won't stop local Canadians with access to literally free debt to leverage their real estate portfolios and rental properties.
Neither will their investments in REIT companies that snap up new properties to flip them to those groups.
The law is so toothless it won't do much. Foreign investors will just find a local conduit to "buy" the house.
> The foreign-buyer ban won’t apply to students
People will send their kid to college and buy them a 5 million dollar house to live in while they are there. And presumably they won't be forced to sell once the student leaves.
> The foreign-buyer ban won’t apply to students
People will send their kid to college and buy them a 5 million dollar house to live in while they are there. And presumably they won't be forced to sell once the student leaves.
Do this in the US too, please. Also farmland.
How about we just make it easier to build more houses on the vast amount of land we have in the US?
Do you have data that makes you think banning foreign buyers would actually make a significant impact? I haven’t seen any indications that this is the case in the city I live in.
Do you have data that makes you think banning foreign buyers would actually make a significant impact? I haven’t seen any indications that this is the case in the city I live in.
Housing in the US is already relatively cheap outside of coastal urban centers, there’s just far less demand.
Would this solve anything except to make current farmland owners essentially landlords to the same huge corporations working the land?
> The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.
Not sure if HN or OP removed the "some" in the title. It is quite important here, since the average foreigner in Canada is unlikely to be impacted directly.
Not sure if HN or OP removed the "some" in the title. It is quite important here, since the average foreigner in Canada is unlikely to be impacted directly.
I put this here. Tricon owns 30,000 homes.
https://www.reddit.com/r/toronto/comments/tpym75/toronto_lan...
https://www.reddit.com/r/toronto/comments/tpym75/toronto_lan...
This is window dressing:
1. Many foreign buyers buy through a child studying in Canada or numbered company.
2. Canada’s immigration (~400,000/year) far outpaces housing completions (~200,000/year, of which only 50,000 are single family homes). Many of these are replacing existing housing stock, too.
1. Many foreign buyers buy through a child studying in Canada or numbered company.
2. Canada’s immigration (~400,000/year) far outpaces housing completions (~200,000/year, of which only 50,000 are single family homes). Many of these are replacing existing housing stock, too.
I'm really doubtful. Foreigners are an easy group to blame, and they don't vote. I think the real problem is a supply crunch being exasperated by domestic speculators looking to invest money and not having a whole lot of good places to put it.
It sounds they're not forcing the "Mom and pop landlords" to sell though their hoard though, so they're just making it easier for them to continue their leeching. They're just as big, if not bigger, of a problem.
Here in the UK I've been saying for years that we should be taxing or banning sales to anyone who isn't a full-time owner-occupier.
The situation we have here with average property prices, reaching 10x median income, is simply untenable.
The situation we have here with average property prices, reaching 10x median income, is simply untenable.
This ban will not fix the issue by itself, but it should reduce some pricing pressure.
I bet that the short-term rental market is also somewhat involved.
With any legislative approach to solving a problem, I wonder if enforcement is possible and likely to happen.
I bet that the short-term rental market is also somewhat involved.
With any legislative approach to solving a problem, I wonder if enforcement is possible and likely to happen.
Will Canada ban > 50% foreign ownership of all state property? If not, then this will be the most useless ban ever. All you have to do as a foreigner is register a Canadian company and have the company buy the real estate.
"Some believe that secret bidding forces each potential buyer to offer as much as they can."
... Isn't that the whole point of an auction. Offer as much money as you can to get an thing that's worth that amount of money?
... Isn't that the whole point of an auction. Offer as much money as you can to get an thing that's worth that amount of money?
A standard auction finds (approximately) the minimum price that no one else is willing to beat, a secret bid auction finds the highest price anyone is willing to pay. The latter is better for sellers, the former is better for buyers.
Secret bidding is designed to get the buyers bidding not just against other actual buyers and what you think they might have bid, but also against imaginary buyers that might also be out there.
In a hot market this is playing on the FOMO for people looking for a place to live.
Such shenanigans should never be allowed in basic necessities: shelter, food, water, medical care.
In a hot market this is playing on the FOMO for people looking for a place to live.
Such shenanigans should never be allowed in basic necessities: shelter, food, water, medical care.
I’m glad it does not apply to foreign workers or PRs because I’ve met awesome people over my academic career that I 100% want to be my neighbours and fellow Canadians.
Unfortunately none of them are loaded enough to buy a place, so…
Unfortunately none of them are loaded enough to buy a place, so…
They also need to encourage provinces to change zoning laws to encourage mixed-use zoning and denser development. Suburban sprawl isn't going to be the best long-term answer to supply shortage.
the UK also need to do this asap. But problem here is normal people obsessing over the need to have a property empire. Its so so strange. The outlook on housing in the UK really needs to change
The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring).
Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high immigration and you'll see huge appreciation in RE (CA, AU, NZ, etc).
You will also see a huge decline in birth rates in those same countries.
[0] https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri... [1] https://betterdwelling.com/canadas-economy-hits-a-new-record...
Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high immigration and you'll see huge appreciation in RE (CA, AU, NZ, etc).
You will also see a huge decline in birth rates in those same countries.
[0] https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri... [1] https://betterdwelling.com/canadas-economy-hits-a-new-record...
It's fine for demand to go up as long as supply can keep up -- which unfortunately hasn't for decades thanks to NIMBYs
https://financialpost.com/news/economy/ontario-alberta-and-m...
https://www.livabl.com/2021/05/canada-housing-market-most-un...
Look at any satellite or aerial view of Vancouver or Toronto and it's basically all SFH
https://www.reddit.com/r/toronto/comments/twj89s/yonge_st_fr...
https://financialpost.com/news/economy/ontario-alberta-and-m...
https://www.livabl.com/2021/05/canada-housing-market-most-un...
Look at any satellite or aerial view of Vancouver or Toronto and it's basically all SFH
https://www.reddit.com/r/toronto/comments/twj89s/yonge_st_fr...
Everyone's got their pet theory on what's behind Canada's housing crisis. In reality it's probably a combination of different factors.
The NIMBY theory is probably part of it, but definitely not the full story. For one, Toronto and Vancouver's population density is on par with major european cities (Toronto is about the same as Berlin, and Vancouver same as London). Arguably most european cities have similar affordability problems, but if NIMBYism is an issue, it's not particular to Canadian cities.
My pet theory is it all comes down to money supply. All that money generated out of nothing through quantitative easing over the last decade+ had to end up somewhere, and it's settled in real estate and equities. If that's the case, then the end of QE and "balance sheet pruning" is going to put a stop to this... and likely pop a giant bubble in the process. That's a scary prospect for countries like Canada and New Zealand, where RE has played such a huge part in inflating wealth.
The NIMBY theory is probably part of it, but definitely not the full story. For one, Toronto and Vancouver's population density is on par with major european cities (Toronto is about the same as Berlin, and Vancouver same as London). Arguably most european cities have similar affordability problems, but if NIMBYism is an issue, it's not particular to Canadian cities.
My pet theory is it all comes down to money supply. All that money generated out of nothing through quantitative easing over the last decade+ had to end up somewhere, and it's settled in real estate and equities. If that's the case, then the end of QE and "balance sheet pruning" is going to put a stop to this... and likely pop a giant bubble in the process. That's a scary prospect for countries like Canada and New Zealand, where RE has played such a huge part in inflating wealth.
I agree NIMBY is definitely not a Canada-exclusive thing. I would say that it's far more prevalent in western countries.
Japan's zoning laws are at the federal level so despite growing population in Tokyo metro, they have comparatively less affordability issues. It's crazy (as a Canadian) to think that Tokyo's central wards have roughly 3x the population and same land area as Toronto but are still able to have sub $1 million detached homes.
Japan's zoning laws are at the federal level so despite growing population in Tokyo metro, they have comparatively less affordability issues. It's crazy (as a Canadian) to think that Tokyo's central wards have roughly 3x the population and same land area as Toronto but are still able to have sub $1 million detached homes.
I live in a small-mid sized city in Ontario. The biggest issue with our lack of housing is a hugely corrupt local government that has introduced a TON of extra fines and red tape to the building process. Plus there's a tremendous amount of "I'll scratch your back, you scratch mine" with the local building companies (of which there are functionally two). This all means that it's prohibitively difficult and expensive for any new developers to enter the scene and the best margins exist in the $500k+ range for new houses. It's a nightmare.
"Canadian economy is almost entirely dependent on real estate"
This is a myth, real estate makes no contribution to (ironically) the Real Economy.
Think about it, if rents in London double, then the % of GDP in real estate doubles! Everyone's life has just gotten worse because they have to earn money elsewhere and pump it into real estate whether they like it or not.
The greater is your housing shortage, the more the people are suffering, the greater is the share of realestate in the economy.
It affects you negatively even if you own a house, you pay someone's rent every time you need a plumber or buy a coffee.
The housing shortage is a giant vampire squid sucking the first world dry. i am not a PhD economist, but institutional investors are definately contributing to the problem.
This is a myth, real estate makes no contribution to (ironically) the Real Economy.
Think about it, if rents in London double, then the % of GDP in real estate doubles! Everyone's life has just gotten worse because they have to earn money elsewhere and pump it into real estate whether they like it or not.
The greater is your housing shortage, the more the people are suffering, the greater is the share of realestate in the economy.
It affects you negatively even if you own a house, you pay someone's rent every time you need a plumber or buy a coffee.
The housing shortage is a giant vampire squid sucking the first world dry. i am not a PhD economist, but institutional investors are definately contributing to the problem.
Currently, more than 10 per cent of Canada’s GDP is derived from residential real estate activity: renovations, ownership transfer costs and real estate commissions. [1]
[1] https://nationalpost.com/news/canada/canadas-unhinged-housin...
[1] https://nationalpost.com/news/canada/canadas-unhinged-housin...
Renovations are actually a tangible benefit, while ownership transfer costs and real estate fees are more of an indicator of high liquidity, but they don't actually provide value for people seeking housing.
Is 10% == "almost entirely"?
Jun 2021: Canada Is Now 50% More Dependent On Housing Than The US At Peak Bubble:
https://betterdwelling.com/canada-is-now-50-more-dependent-o...
The S&P was flat for 6 years following 2007 in the US. Doesn't seem like a good path to follow.
https://betterdwelling.com/canada-is-now-50-more-dependent-o...
The S&P was flat for 6 years following 2007 in the US. Doesn't seem like a good path to follow.
> The Canadian economy is almost entirely dependent on real estate[0][1].
Umm your link says real-estate is 13%. How can you justify calling that "almost entirely dependent".
I would agree Real-estate in Canada s too large for Canada's own good
Umm your link says real-estate is 13%. How can you justify calling that "almost entirely dependent".
I would agree Real-estate in Canada s too large for Canada's own good
That, or, like in the old country, the law to be passed will have built-in exceptions or riders that will be exploited on arrival. It is possible that I have become a little too cynical, but even if I thought it was a good idea ( I don't ), I just don't see it actually happen.
People with money will find a way in; like they always do.
People with money will find a way in; like they always do.
A friend of mine recently bid on a house and came 2nd highest in the bids. The winning bid was $75,000 more than his...
That's a good example of blind bidding driving up overall prices.
That's a good example of blind bidding driving up overall prices.
[deleted]
That's a start. Next we need to ban the Chinese from buying more than the $2B worth of farmland they already own in the US.
$2B of farmland doesn’t sound like much for a continent.
maybe but it's more than enough :)
I expect Canada to become prime real estate as climate change worsens. This is smart to start getting in front of it now.
This won't change much. They'll just send their children instead. It's already happening anyway.
I don't expect prices to go down, but it gets rid of one of the boogeymen that the NIMBYs can point to.
It is about time. With today's the majority can not hope to ever own their place.
Well then,talk about free market. It looks like the world is just circling back
Zero teeth. Why would it? Everyone here is a rich homeowner. Anyone who thinks anything will be done about housing is absolutely dreaming. Build more homes, housing gets cheaper, boomers lose their HELOC's, and we're in for a world of hurt. It's over.
Why is foreign investment in Canada real estate so big vs the US? Is it just a pyramid scheme or something, or are investors actually making use of the properties?
My guess is the property tax rates are lower. If you have tons of money and want to store it in property, you will naturally pick the place that offers the lowest % fee.
My takeaway after reading all the other comments is that nobody knows, but everybody has someone to blame.
No.
Awesome, when can we get that in the US?
Would it ever make sense to have a tiered purchasing system? First prioritize first time homebuyers then if no first time homebuyers are bidding then open the net wider and wider. It's probably a very socialist idea and would never be given a serious though in Canada.
"fuck!!" - someone who just bought a home before this was announced.
This hurts a lot to the homeowners willing to sell the house.
Want an exodus to reduce housing demand? Let the unvaccinated flee the country.
Some Canadian needs to step up and become the unvaxxed Moses. “Let my people go, Eh?”
Some Canadian needs to step up and become the unvaxxed Moses. “Let my people go, Eh?”
Landlords are the biggest issue.
Where else can you buy a house for $x/mo , slap a rental on it for $1.5x/mo , and keep .5x/mo AND get equity?
That's a fucking scam no matter how you look at it. And they're adding in NOTHING to the economy. They're parasites that inject themselves on reasonable costing houses and arbitrarily inflate them for their own profit.
And who's predominantly doing this scam? Boomers are. They're the ones who have access to this kind of money and equity.
And who's getting screwed? Millenials and GenZ are.
Where else can you buy a house for $x/mo , slap a rental on it for $1.5x/mo , and keep .5x/mo AND get equity?
That's a fucking scam no matter how you look at it. And they're adding in NOTHING to the economy. They're parasites that inject themselves on reasonable costing houses and arbitrarily inflate them for their own profit.
And who's predominantly doing this scam? Boomers are. They're the ones who have access to this kind of money and equity.
And who's getting screwed? Millenials and GenZ are.
About time
I've been looking at the Toronto real estate prices a bit, and I'm convinced the real issue is primarily interest rates, not immigration, or construction. Don't take my word for it, ofc:
Immigration:
- Rent has not increased like real estate: https://www.zumper.com/rent-research/toronto-on
- In 2020, immigration dropped by half to 184,500. Real Estate prices went up. https://www.canada.ca/en/immigration-refugees-citizenship/ne...
Construction constraints:
- This is probably hyper-local, but in Toronto for example, they are building over 1 new housing start per year for every 100 residents (https://ycharts.com/indicators/toronto_on_housing_starts). That's not bad, it's not the CA Bay Area's situation.
- Anyone in Toronto can tell you there is a lot of home building going on with construction everywhere.
Canadian mortgages don't have the typical 30-year fixed rate that a lot of US mortgages do. Instead, typical mortgages reset every 5 years, and in fact many are month-to-month variable rates. In fact, the percentage of new mortgages originating as these variable rates in Canada has been rising and recently broke 50%. The majority of homes are now financed using a month-to-month variable rate which is set to some profit above Bank of Canada prime rate.
Until March, it was possible to get a mortgage with a 1% or even lower interest rate in Canada. Take a look at the average: https://www.ratehub.ca/5-year-variable-mortgage-rate-history
In Mar 2020, Canada dropped the short term bond rate from 1.75% to 0.25% overnight. In 2008, they did something similar from 4% down to nearly zero, and had only just started raising them back towards 1.75% right before Covid. Only in March 2022 did we see the first rate hike and it was very mild.
Canada Real estate is basically a bubble driven by aggressively low interest rates. The problem now is that inflation is causing the interest rates to rise, and that could pop this bubble, so we might be seeing some of these laws designed to shift the blame.
More sources:
- https://en.m.wikipedia.org/wiki/Canadian_property_bubble
- https://www.bloomberg.com/news/articles/2021-06-15/world-s-m...
- https://betterdwelling.com/the-toronto-real-estate-bubble-no...
- https://seekingalpha.com/article/4477223-canadian-housing-ma...
- https://financialpost.com/executive/executive-summary/postha...
Immigration:
- Rent has not increased like real estate: https://www.zumper.com/rent-research/toronto-on
- In 2020, immigration dropped by half to 184,500. Real Estate prices went up. https://www.canada.ca/en/immigration-refugees-citizenship/ne...
Construction constraints:
- This is probably hyper-local, but in Toronto for example, they are building over 1 new housing start per year for every 100 residents (https://ycharts.com/indicators/toronto_on_housing_starts). That's not bad, it's not the CA Bay Area's situation.
- Anyone in Toronto can tell you there is a lot of home building going on with construction everywhere.
Canadian mortgages don't have the typical 30-year fixed rate that a lot of US mortgages do. Instead, typical mortgages reset every 5 years, and in fact many are month-to-month variable rates. In fact, the percentage of new mortgages originating as these variable rates in Canada has been rising and recently broke 50%. The majority of homes are now financed using a month-to-month variable rate which is set to some profit above Bank of Canada prime rate.
Until March, it was possible to get a mortgage with a 1% or even lower interest rate in Canada. Take a look at the average: https://www.ratehub.ca/5-year-variable-mortgage-rate-history
In Mar 2020, Canada dropped the short term bond rate from 1.75% to 0.25% overnight. In 2008, they did something similar from 4% down to nearly zero, and had only just started raising them back towards 1.75% right before Covid. Only in March 2022 did we see the first rate hike and it was very mild.
Canada Real estate is basically a bubble driven by aggressively low interest rates. The problem now is that inflation is causing the interest rates to rise, and that could pop this bubble, so we might be seeing some of these laws designed to shift the blame.
More sources:
- https://en.m.wikipedia.org/wiki/Canadian_property_bubble
- https://www.bloomberg.com/news/articles/2021-06-15/world-s-m...
- https://betterdwelling.com/the-toronto-real-estate-bubble-no...
- https://seekingalpha.com/article/4477223-canadian-housing-ma...
- https://financialpost.com/executive/executive-summary/postha...
I've been watching it a while and I agree that the last 2 years are all interest rate driven.
But before that, and after the rates rise again, we will still see incredibly expensive home prices compared to the salaries of Canadians. There are lots of possible factors that make up this "floor price", all throughout this thread.
In the end I think it's just that Toronto is _the_ large city of Canada, and there aren't many others to choose from, AND in my experience Canadians won't relocate as readily as Americans do. So the demand to live in Toronto is VERY high. I don't see this changing.
But before that, and after the rates rise again, we will still see incredibly expensive home prices compared to the salaries of Canadians. There are lots of possible factors that make up this "floor price", all throughout this thread.
In the end I think it's just that Toronto is _the_ large city of Canada, and there aren't many others to choose from, AND in my experience Canadians won't relocate as readily as Americans do. So the demand to live in Toronto is VERY high. I don't see this changing.
good first step, but now ban corporate landlords if you're really serious.
A corporation can have economies of scale, which could (in a free market) mean lower costs to renters, and also be less subject to the landlord's personal circumstances, which should make rental agreements more stable.
Obviously the property market isn't functioning like a free market, but why do you think that having more private landlords would make things better?
Do you just want a limit on the share of the property market in a given location that one entity can own? That would definitely make sense.
Obviously the property market isn't functioning like a free market, but why do you think that having more private landlords would make things better?
Do you just want a limit on the share of the property market in a given location that one entity can own? That would definitely make sense.
I posted this earlier - https://news.ycombinator.com/item?id=30945227. And no, it’s not supposed to be a tongue in cheek.
First of all, this “ban” is for 2 years. Secondly, majority of the homes bought, as in the stark-fucking-majority, are by investment firms. This ban doesn’t apply to them.
This is just another reshuffling of money that’s going to be pocketed by the government cronies. What are they going to spend $10B on? They aren’t the ones building houses and residencies, that’s for sure.
Other commenters in here are spot on. First they tried to swindle us by saying oh no no it’s not the foreigners, you’re just being racist and xenophobic. Now fucking what.
First of all, this “ban” is for 2 years. Secondly, majority of the homes bought, as in the stark-fucking-majority, are by investment firms. This ban doesn’t apply to them.
This is just another reshuffling of money that’s going to be pocketed by the government cronies. What are they going to spend $10B on? They aren’t the ones building houses and residencies, that’s for sure.
Other commenters in here are spot on. First they tried to swindle us by saying oh no no it’s not the foreigners, you’re just being racist and xenophobic. Now fucking what.
We all know that on an intuitive level, housing can never be affordable again in the West. At least in the areas that are currently out of reach for most people. The outlands, maybe, remain inhabitable but far removed from major cities. There’s no policy out there that will, by the time you wake up tomorrow, bridge the twenty-fold gap between what majority of people in the country make and what an apartment (never mind a house) costs.
This isn’t a matter of supply and demand, of investors taking 80% of all new houses, of foreigners laundering money, or of NIMBYs. These are all red herrings. These are all secondary effects of a bigger problem. These are all ways to ignore the real problem.
No amount of policy will slash house prices in Toronto by half, and no policy will double your income to match the increasing prices.
I suggest you stop looking for policies, because by the time any of them take effect and reverb through society, long enough time would have passed that you’d spend your whole life renting and paying off someone else’s mortgage anyway.
Now ask yourself if that’s the future you want, and act accordingly.
This isn’t a matter of supply and demand, of investors taking 80% of all new houses, of foreigners laundering money, or of NIMBYs. These are all red herrings. These are all secondary effects of a bigger problem. These are all ways to ignore the real problem.
No amount of policy will slash house prices in Toronto by half, and no policy will double your income to match the increasing prices.
I suggest you stop looking for policies, because by the time any of them take effect and reverb through society, long enough time would have passed that you’d spend your whole life renting and paying off someone else’s mortgage anyway.
Now ask yourself if that’s the future you want, and act accordingly.
Nonsense. It is simple supply and demand. If we build on a scale not seen for generations, and eliminate tax benefits to owning (the principal residence tax exemption), then prices will come down.
That’s not going to happen. We have had this discussion on HN for a decade now. People are misled by “it’s simple, solve for X.”
> These are all ways to ignore the real problem.
> I suggest you stop looking for policies […] you’d spend your whole life renting and paying off someone else’s mortgage anyway.
> Now ask yourself if that’s the future you want, and act accordingly.
Sorry? I don’t speak in vagueries.
> I suggest you stop looking for policies […] you’d spend your whole life renting and paying off someone else’s mortgage anyway.
> Now ask yourself if that’s the future you want, and act accordingly.
Sorry? I don’t speak in vagueries.
Pressure will go down as the baby boomers die off.
This is nothing but pandering for votes before an election for those who don't understand this won't have any significant impact on affordability of houses for Canadians.
There's a reason why we still also pay the highest telecommunications bills in the world - industrial complexes have captured our government, and even it's far worse that that; regulatory capture.
Edit to add: 3 points down to 0 points; downvotes are an embarrassment to civil and critical conversation, and you should be embarrassed if you use them.
There's a reason why we still also pay the highest telecommunications bills in the world - industrial complexes have captured our government, and even it's far worse that that; regulatory capture.
Edit to add: 3 points down to 0 points; downvotes are an embarrassment to civil and critical conversation, and you should be embarrassed if you use them.
We just had a Federal election though? :/
Unless you are referring to this toothless promise made prior to the election in question, and now they're happy to follow that as it won't actually change anything.
Unless you are referring to this toothless promise made prior to the election in question, and now they're happy to follow that as it won't actually change anything.
Only 20% of Canadians voted for Trudeau, and the majority of Canadians are being misled by our mass media channels - CBC which got $1.2 billion of government funding last year, and they are now being rewarded with an additional $100 million per year for the next 4 years.
E.g. our electoral system is designed to be unfairly balanced towards the duopoly, so we've been stuck in a cycle of voting for the lesser of two evils - instead of who we actually want to vote for.
E.g. our electoral system is designed to be unfairly balanced towards the duopoly, so we've been stuck in a cycle of voting for the lesser of two evils - instead of who we actually want to vote for.
I agree with you that the voting system is letting down Canadians, but I also think you are using an unfair framing with your "20%" figure which risks undermining the legitimacy of coalition governments (and thus efforts to introduce a more representative voting system where coalitions between smaller parties might become more common).
In particular, I want to point out that the NDP have agreed to help the Liberal government to pass its legislative agenda, which presumably includes this ban, as the NDP had pushed for a tax for non-resident home purchases, which is a similar policy.[0]
Considering the government as a two party coalition, therefore, and with the NDP getting close to half the number of votes as the Liberals, that would mean that 30% of Canadians voted for the current government. That's somewhere between Biden's numbers[1] and Boris Johnson's[2], to compare it to other major recent Western FPTP elections.
[0] https://www.theglobeandmail.com/business/article-ottawa-face...
[1] 34% = 81m / (158m / 66.2%)
[2] 29% = 14.0m / 47.6m
In particular, I want to point out that the NDP have agreed to help the Liberal government to pass its legislative agenda, which presumably includes this ban, as the NDP had pushed for a tax for non-resident home purchases, which is a similar policy.[0]
Considering the government as a two party coalition, therefore, and with the NDP getting close to half the number of votes as the Liberals, that would mean that 30% of Canadians voted for the current government. That's somewhere between Biden's numbers[1] and Boris Johnson's[2], to compare it to other major recent Western FPTP elections.
[0] https://www.theglobeandmail.com/business/article-ottawa-face...
[1] 34% = 81m / (158m / 66.2%)
[2] 29% = 14.0m / 47.6m
And 30% making decisions for all of Canada is being argued as a good thing and fair, that my framing is unfair?
Thank Goodness we have the Senate that requires passing these measures, these harmless ones like this one because it basically does nothing, but thankfully would have voted down the Emergency Act being extended for a month - which is why Trudeau the night before revoked it himself.
I hope you're against Bill C-11 - the internet censorship bill as well? Did you hear their illogical conclusion for why they're doing it?
Thank Goodness we have the Senate that requires passing these measures, these harmless ones like this one because it basically does nothing, but thankfully would have voted down the Emergency Act being extended for a month - which is why Trudeau the night before revoked it himself.
I hope you're against Bill C-11 - the internet censorship bill as well? Did you hear their illogical conclusion for why they're doing it?
> And 30% making decisions for all of Canada is being argued as a good thing and fair, that my framing is unfair?
I'm not claiming it's a good thing, just that your headline figure of 20% makes it sound like coalition governments are somehow less good and less fair than single-party governments.
Anyway, yes, you'll be glad to know that I'm against permanent "emergency" powers, and concerned about Canada's internet censorship bill, which seems to be an attempt to control social media as tightly as (government-approved) broadcast media[0].
[0] https://reclaimthenet.org/canadas-internet-censorship-bill-i...
I'm not claiming it's a good thing, just that your headline figure of 20% makes it sound like coalition governments are somehow less good and less fair than single-party governments.
Anyway, yes, you'll be glad to know that I'm against permanent "emergency" powers, and concerned about Canada's internet censorship bill, which seems to be an attempt to control social media as tightly as (government-approved) broadcast media[0].
[0] https://reclaimthenet.org/canadas-internet-censorship-bill-i...
I was shocked and alarmed at the cellphone bills when I moved to the US from a third world country, and then my classmate who had moved to Canada sent me his bill...
I know this is probably naive thinking but I don't understand how we can have so much land and still have unaffordable homes and concentrated populations.
Exactly: it's the policy, it's captured by for-profit industrial complexes - and if you want to get into deeper conspiracy hypothesis, it's also foreign influence laundering $100s of billions into our real estate market, not only buying up/owning our most valuable land and properties, but at the same time making the costs of every Canadian go up and quality of life going down - making us weaker as a society, and more vulnerable to takeover; there's a whole book written on this called "Wilful Blindness: How a Network of Narcos, Tycoons and CCP Agents Infiltrated the West" by Sam Cooper; Canada is one of the richest countries in the world, resource and spring water wise with our lakes, and especially per capita with only 38 million population - we're a prime target, rich and relatively easy, and our systems are clearly captured.
Most of the land is useless and completely unviable for building anything. Seriously.
Almost all of British Columbia is mountain. We flooded many of the river valleys for hydro power in the 1950s. Can't build on the side of the mountain that easy.
Huge swathes of Canada are muskeg bog and tundra. etc.
Almost all of British Columbia is mountain. We flooded many of the river valleys for hydro power in the 1950s. Can't build on the side of the mountain that easy.
Huge swathes of Canada are muskeg bog and tundra. etc.
IMO British Columbia is way under-developed. There is literally 15 or so Switzerlands worth of some of the most beautiful and desirable real estate North of Vancouver that could be developed in similar way to the cities in the Swiss Alps. The Okanogan is not really all that mountainous but is basically unpopulated, etc.
Funny thing about the Okanagan is that given that it's pretty much the only land in Canada where you can make decent red wine, a lot of that land is more worthwhile for agriculture than housing.
Feel bad for the farmers that happened to be born on the wrong side of the border in the US side of the valley. In the USA there's heaps of places where wine can be made and their land isn't worth anywhere nearly as much.
Feel bad for the farmers that happened to be born on the wrong side of the border in the US side of the valley. In the USA there's heaps of places where wine can be made and their land isn't worth anywhere nearly as much.
Cause we don't build homes.
Canada just had an election and the Liberals are secure in power from their deal with the NDP. This isn't pandering, it's them trying to advance their agenda. (Whether you agree with it or not)