Without affordable housing, Vancouver risks becoming an economic ghost town(business.financialpost.com)
business.financialpost.com
Without affordable housing, Vancouver risks becoming an economic ghost town
http://business.financialpost.com/entrepreneur/fp-startups/without-affordable-housing-vancouver-risks-becoming-an-economic-ghost-town
625 comments
Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be bankrupt by then. I don't see why the elderly should be any more immune to economic realities than everyone else. If you can't afford to live in your house or city any more, at least you had an opportunity to roll the dice and make the best of your life there. Others won't even get that. What about the people who will never afford to, people who might have made a positive net improvement to the economy if we weren't so concerned with protecting people. If it gets too expensive, let them sell their house and go live out their lives very comfortably in a low cost city and open the room for people who are going to contribute to the economy that has to pay for their entitlements.
It's insane. The people who don't work live close to the business districts collecting social security paid for by the people who do work who have to commute in from afar for the privilege. Then the people who don't work vote themselves favorable property tax rules so they don't have to pay their fair share of keeping up the city.
oligarchy at micro level, creating obstacle in path of hard working common people.
Prop 13 was created by these very elderly people only, and they are now reaping its benefits while the new generation suffers. Not saying all old people are like that, but this is what it is.
I disagree. If the housing costs shoot way up, why should those people suddenly pay more money? Did a real estate bubble suddenly make it more expensive to police the area? I don't think so. The city doesn't need more money, it needs to stick to its budget.
It's not about raising more money, it's about fairly apportioning the tax burden. Why should two homeowners with the same value of property pay different amounts of taxes just because one is old and has owned the house a long time?
On the other hand, why should your tax bill go up simply because other people are willing to spend increasingly large amounts of money to buy a house like yours?
It's not like income tax where your tax bill only goes up when you get more money to pay it with.
It's not like income tax where your tax bill only goes up when you get more money to pay it with.
Your tax value goes up with the value of your asset. There are no free lunches just because you showed up a generation or two earlier.
Because when their own bills go up, they have an incentive to vote for things that bring the cost of housing down. When they don't have to pay for the cost of housing, but instead personally benefit through increased housing value, they will of course vote for it.
One can argue that it should be the opposite of an income tax.
If the value of your house goes up because you remodel the kitchen, then it seems fair that you should be able to pocket that value. You did the work, so your taxes should not increase.
If the value of your house goes up because the government opens a new light rail station nearby, then you did nothing to earn this, so it seems fair that society should be able to get higher taxes from you.
In a speculative bubble, you did nothing to earn the extra value, but---arguably!---neither did the government, so it is less clear cut.
If the value of your house goes up because you remodel the kitchen, then it seems fair that you should be able to pocket that value. You did the work, so your taxes should not increase.
If the value of your house goes up because the government opens a new light rail station nearby, then you did nothing to earn this, so it seems fair that society should be able to get higher taxes from you.
In a speculative bubble, you did nothing to earn the extra value, but---arguably!---neither did the government, so it is less clear cut.
Agreed. The current system is controversial because there is a dichotomy between what entrenched residents and newcomers pay to that government.
I assert it's a problem with a non-trivial solution.
I assert it's a problem with a non-trivial solution.
The thing is, when the tax burden is evenly spread out, it will rise more in step with the amount of money needed by the city (as decided by voters), not so much the price of the house. Indeed, in a (largely mythical, I know) well-run city, the property tax (in pct) should go down as prices rise. Right now, many California cities are broke, and their only way of raising revenues is to soak the newcomers.
The taxes should indeed go up to optimize land use in general.
If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there.
Thus, you should either pay for your privilege (in taxes) or sell the lot (for a lot of money, presumably) to let other people use the space more efficiently.
However, I must say that a property tax itself is a wicked one and should be replaced by land value tax. Land is more valuable in the centre than in the outskirts of the city, so when properly taxed it creates the tendency to increase density of the highly taxed land and allows for more liberal land use where nobody else wants to build.
If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there.
Thus, you should either pay for your privilege (in taxes) or sell the lot (for a lot of money, presumably) to let other people use the space more efficiently.
However, I must say that a property tax itself is a wicked one and should be replaced by land value tax. Land is more valuable in the centre than in the outskirts of the city, so when properly taxed it creates the tendency to increase density of the highly taxed land and allows for more liberal land use where nobody else wants to build.
So, in what ways is land-value a better taxable asset than property-value?
Property value goes up if you build a bigger, better building on your lot so you might as well stick with the old one. That promotes stagnation and under-use: it might not make sense for an individual or a business to give the lot to better use and move further away to enjoy lower taxes if the location is not particularly important.
In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas.
Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.
In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas.
Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.
Your tax bill doesn't go up just because the value of your house goes up. Your municipality has to vote to spend that extra tax revenue instead of cutting property tax rates. If they do that (and remember old people are the dominant demographic of voters), why shouldn't people pay more?
Because the person who has owned the house a long time doesn't have higher income to make up for it, they're likely a retired person on a fixed income.
Since you want them to move out so bad, why don't you have the government pay them to move out? I never see these local governments offer to pony up $10k or so for the moving expenses for people priced out of their houses to move out. These people bought a house in a town thinking it'd be a good place to settle down, not that they'd be forced out of their house in a decade or two. It's really no better than forced relocation, which is a form of genocide.
Since you want them to move out so bad, why don't you have the government pay them to move out? I never see these local governments offer to pony up $10k or so for the moving expenses for people priced out of their houses to move out. These people bought a house in a town thinking it'd be a good place to settle down, not that they'd be forced out of their house in a decade or two. It's really no better than forced relocation, which is a form of genocide.
I think that's a stretch.
Being priced out of a market is not the same thing as genocide.
Population transfer is a different thing from gentrification is a different thing from eminent domain is a different thing from genocide.
Being priced out of a market is not the same thing as genocide.
Population transfer is a different thing from gentrification is a different thing from eminent domain is a different thing from genocide.
It's not as extreme, but it is similar. Forcing people out of their homes is usually frowned upon when it's some Natives being forced at gunpoint to pack their stuff and walk across the continent, but somehow when it's old retirees being forced to sell their house just to pay the taxes and then hope to find a new place to live somewhere, where they don't know anyone and are completely unfamiliar, that's somehow OK. It's really the same thing as gentrification, just that it's a different demographic.
Prices don't rise spontaneously (or not exactly). There's increased demand, which usually means more people living and working in the area. Therefore, in fact the cost of policing and everything else does increase.
Yes, they do rise spontaneously. There are not more people living and working in the area: the prices of the existing houses have risen, just because of speculation and flipping. It's not like there's more people getting packed into these houses (for the most part).
You only get more people living and working in the area if you build more houses. If you do that, then of course you're going to have more property tax, even if the existing house values don't change at all. New houses = new property taxes. That's how you pay for the extra policing, not by soaking the existing residents.
You only get more people living and working in the area if you build more houses. If you do that, then of course you're going to have more property tax, even if the existing house values don't change at all. New houses = new property taxes. That's how you pay for the extra policing, not by soaking the existing residents.
This is the argument of somebody who is profiting or care deeply about somebody who is profiting from this.
1% is less than the inflation (even more so is the real estate is shooting up), this means that city spending will increase by more than 1% and that other younger citizens will have to pick up the slack.
1% is less than the inflation (even more so is the real estate is shooting up), this means that city spending will increase by more than 1% and that other younger citizens will have to pick up the slack.
It does, actually. The police, like all the other things the city does, needs buildings for its work and housing for its employees.
No, it doesn't, actually.
The police can get their money from the property tax for any new residents who have built new houses.
If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.
The police can get their money from the property tax for any new residents who have built new houses.
If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.
Needs change and buildings age.
The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents.
(Not just police, of course. All public services.)
The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents.
(Not just police, of course. All public services.)
So why do they need more money for this?
When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it."
Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise.
So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary.
As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?
When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it."
Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise.
So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary.
As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?
You started by asserting that the police budget need not increase when there's a property boom.
Perhaps the town of Starnberg is an instructive example. It's a small town in Germany which hasn't grown much in terms of population, but its property market has boomed, BOOMED, enough that the city's employees had problems. Rents increase, their salaries don't.
Last time I was there the local newspaper reported that for several years, the only police officer who worked there voluntarily was the chief. The force hadn't had a single application to any of its job postings for years, and all the old police officers had gotten better-paying work or moved to lower-rent towns. German police can be ordered to serve for a while, and the Starnberg city police force was composed of newly educated police officers who had been ordered there by the state, lived on 10m² while they had to, and who left Starnberg as soon as they were legally able to.
I understand the city council was trying to find some way to solve this. To pay the employees a sizable extra to compensate for the high cost of living. (Haven't followed the news there.) Anyway what employees said wasn't "I need another new car, so I need a new raise", they said instead "I need another new car, so I got a better-paying job, goodbye" or "I need another new car, so I'm moving, goodbye".
Perhaps the town of Starnberg is an instructive example. It's a small town in Germany which hasn't grown much in terms of population, but its property market has boomed, BOOMED, enough that the city's employees had problems. Rents increase, their salaries don't.
Last time I was there the local newspaper reported that for several years, the only police officer who worked there voluntarily was the chief. The force hadn't had a single application to any of its job postings for years, and all the old police officers had gotten better-paying work or moved to lower-rent towns. German police can be ordered to serve for a while, and the Starnberg city police force was composed of newly educated police officers who had been ordered there by the state, lived on 10m² while they had to, and who left Starnberg as soon as they were legally able to.
I understand the city council was trying to find some way to solve this. To pay the employees a sizable extra to compensate for the high cost of living. (Haven't followed the news there.) Anyway what employees said wasn't "I need another new car, so I need a new raise", they said instead "I need another new car, so I got a better-paying job, goodbye" or "I need another new car, so I'm moving, goodbye".
You are attacking the wrong people. Prop 13 applies to business real estate as well. This is the true problem. Before Prop 13 business was paying 2/3 of the property taxes now business is paying less than 1/3.
The problem isn't the elderly, the problem is that Prop 13 includes commercial properties
The problem isn't the elderly, the problem is that Prop 13 includes commercial properties
An expensive house doesn't make you richer unless you're selling it and live somewhere cheaper. And in our society it's a given that predictability of costs is one of the benefits you get from buying a house.
Okay, and? So they can and should go and do that. Are you insinuating it is a hardship that they have the option to liquidate and easily move to a cheaper area and pocket a million dollars?
Yes, especially since it's not because of anything they've done. Being forced to leave where you've lived your life, where your friends and family is, because of money is definitely a hardship.
<They may have saw 100x gains on their house>
I can't imagine a single unimproved residence being anywhere in that neighborhood (even going all the way to 1978); examples are welcome.
I can't imagine a single unimproved residence being anywhere in that neighborhood (even going all the way to 1978); examples are welcome.
Not accounting for inflation, it's not hard to believe:
From: https://www.census.gov/hhes/www/housing/census/historic/valu...
Median Home Values: Unadjusted
2000 1990 1980 1970 1960 1950 1940
California $211,500 $195,500 $84,500 $23,100 $15,100 $9,564 $3,527
From: https://www.census.gov/hhes/www/housing/census/historic/valu...
You realize that somebody who bought in 1940 or earlier is over 100 years old now, right? (assuming becoming a homeowner at age 25). Not a significant demographic.
Beyond that, those numbers are fudged and do not reflect the changing value of the dollar. $3,537 in 1940 is $59,711 in 2015 dollars[0] (or $43,382 in 2000 dollars[0]), so your "two orders of magnitude" claim falls to a mere factor of less than 5 times, or < 5% of the "two orders of magnitude" claim.
And again, that isn't even a level comparison given that housing construction costs are far higher (well beyond the rate of inflation) due to more features, stricter building codes, modern appliances, permits, ...
[0] http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=3527&year1=1940...
Beyond that, those numbers are fudged and do not reflect the changing value of the dollar. $3,537 in 1940 is $59,711 in 2015 dollars[0] (or $43,382 in 2000 dollars[0]), so your "two orders of magnitude" claim falls to a mere factor of less than 5 times, or < 5% of the "two orders of magnitude" claim.
And again, that isn't even a level comparison given that housing construction costs are far higher (well beyond the rate of inflation) due to more features, stricter building codes, modern appliances, permits, ...
[0] http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=3527&year1=1940...
[deleted]
Parts of Palo Alto were very blue collar post WWII. I knew one nonagenarian who bought his house new in 1949 for $10k, and it sold, unimproved, for $2.2m on his death over a year ago. Also a centenarian still living in her original 1950 $10k house that Zillow now estimates at $2.3m. So, there's 220x gains. Clearly, all the value is in the land. Property tax in 2013 was about $1k in both cases; both have new neighbors in newly-built $4m houses on same-size lots paying $40k tax.
<So, there's 220x gains>
In nominal dollars.
<Property tax in 2013 was about $1k in both cases>
I really doubt that. I just checked a friend's house who has lived in PA since 1952, and they are paying $3200.
Anybody can look up what actual property taxes are paid here:
https://payments.sccgov.org/propertytax/Secured
In nominal dollars.
<Property tax in 2013 was about $1k in both cases>
I really doubt that. I just checked a friend's house who has lived in PA since 1952, and they are paying $3200.
Anybody can look up what actual property taxes are paid here:
https://payments.sccgov.org/propertytax/Secured
According to [1], $10k in 1950 corresponds to about $100k in 2015.
So the gain is 23x, which is still insane.
[1] http://www.usinflationcalculator.com/
So the gain is 23x, which is still insane.
[1] http://www.usinflationcalculator.com/
I was using the official Federal government site estimator as I indicated above:
http://data.bls.gov/cgi-bin/cpicalc.pl
http://data.bls.gov/cgi-bin/cpicalc.pl
[deleted]
Exactly the site I used. Exactly $1121.80 for 2013 (in both cases; same development, same lot size, so must have been same price).
So what you are saying is the person who just spent their entire life, 40+ years helping build the city they live in, should now move away to a small city that no one else wants to move to? And they should do that mainly because other people now want to enjoy the fruits of the elderly labor?
If they can't afford it, then yes, they should find other accommodations. How is that any different than the rest of us have to live? My wife lives in New York, while I live in SF because that's what we have to do.
It's probably not as much as you think it is, what is the constant dollar difference?
If a single-family home in Vancouver cost $150,000 in 1980 and now it's $1.8 million it looks like a difference of $1,650,000.
But that $150,000 is equivalent to $411,000 in 2015 dollars so the real difference is $1,389,000 still a lot but it's nothing to scoff at.
If a single-family home in Vancouver cost $150,000 in 1980 and now it's $1.8 million it looks like a difference of $1,650,000.
But that $150,000 is equivalent to $411,000 in 2015 dollars so the real difference is $1,389,000 still a lot but it's nothing to scoff at.
[deleted]
Nobody benefits from a bull market until they sell.
It's even worse in Australia, which most properties do not have a yearly property tax. So you pay a 'stamp duty' when you purchase the property, based on a % of the sale price.
This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k).
Furthermore, the state government has unpredictable revenue streams based on the ups and downs of the property market (you can have high prices but low volume) and the labor market is more calcified because people are unlikely to sell and move to access a new job.
The result is tightly held real estate, variable state government revenue and ever-higher prices. Adding fuel to the mess is a universal belief by local governments that housing development is evil and must be curtailed, so they concentrate on high density and infill development, which drives the prices of stand alone property ever higher.
Unsurprisingly, Australia just about outpaces Canada for the most severely unaffordable housing market.
And yet if you ask the average person in the street, they will blame 'interest rates' or 'Chinese buyers', and not once look at the ridiculous blockage on supply.
This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k).
Furthermore, the state government has unpredictable revenue streams based on the ups and downs of the property market (you can have high prices but low volume) and the labor market is more calcified because people are unlikely to sell and move to access a new job.
The result is tightly held real estate, variable state government revenue and ever-higher prices. Adding fuel to the mess is a universal belief by local governments that housing development is evil and must be curtailed, so they concentrate on high density and infill development, which drives the prices of stand alone property ever higher.
Unsurprisingly, Australia just about outpaces Canada for the most severely unaffordable housing market.
And yet if you ask the average person in the street, they will blame 'interest rates' or 'Chinese buyers', and not once look at the ridiculous blockage on supply.
> This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k).
I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the same order as your agent's commission!
I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the same order as your agent's commission!
Why isn't every house incorporated (bought by a company, then have that company bought/sold instead of the house) ? Note: this is how it's done for a lot of houses in western europe, and there it's a 100% legal way to avoid this tax.
The problem is that you're going to have to pay 30% company tax on profits, and it's hard to get a mortgage. However this can always be structured so there aren't any profits (e.g. by improving the house, saving up for another house, ...)
The problem is that you're going to have to pay 30% company tax on profits, and it's hard to get a mortgage. However this can always be structured so there aren't any profits (e.g. by improving the house, saving up for another house, ...)
Your primary owner-occupied residence is exempt from capital gains tax in Australia. If you put a corporation in the middle, that exemption might vanish? (I don't know too much about the legal shenanigans here.)
Correct plus you have corp fees and i dont think you can negative gear (claim losses aginst personal income tax) either if you decide to rent it out.
How does that work ? Do you have to pay capital gains on a house before you sell it ?
The point of this construction is to never sell the house, so that might be avoided here as well.
The point of this construction is to never sell the house, so that might be avoided here as well.
Good question. I don't know too much about Australia. Only moved here two years ago and don't plan on staying long term.
I've read that Californian municipalities say that transferring control of the company that owns a property results in the underlying property being valued at current market prices. They'll get their tax regardless.
Not sure how that would work for an owner occupier? Can a company provide free accomodation to it's director?
Because you can't trade like-for-like.
It's a tax on moving.
If you want to leave your 4 bedroom, 1 million dollar property and buy a 2 bedroom, 1 million dollar apartment, you have to forego 100k just to do this? Obviously most people choose to not move. They'd rather the money goes tax free to their kids, or to just borrow against the house and spend the money.
It's a strange attitude to suggest that paying $100k to the government is 'not a problem' just because your house is worth more. If you were in the same position I think your attitude would change somewhat.
It's a tax on moving.
If you want to leave your 4 bedroom, 1 million dollar property and buy a 2 bedroom, 1 million dollar apartment, you have to forego 100k just to do this? Obviously most people choose to not move. They'd rather the money goes tax free to their kids, or to just borrow against the house and spend the money.
It's a strange attitude to suggest that paying $100k to the government is 'not a problem' just because your house is worth more. If you were in the same position I think your attitude would change somewhat.
Its the exact same thing here in Vancouver, there are even protests because someone is going to tear down a small house that fits one family and build a bigger house on the same property that fits multiple families.
We have a low interest rate fuelled asset bubble and 1%'ers are complaining that they can't afford detached housing in Vancouver, never realizing that if everyone in Vancouver live in detached housing we'd need 150% of the available land in Vancouver (like no roads, offices, parks, pools, etc just detached housing)
It's stupid to expect to be able to live in detached housing in a world class city. The other thing is that Vancouver isn't really a 'city' in the way that many others are, the 'burbs are separate cities so we get this 'most unaffordable' label when its really much better than many other cities.
We have a low interest rate fuelled asset bubble and 1%'ers are complaining that they can't afford detached housing in Vancouver, never realizing that if everyone in Vancouver live in detached housing we'd need 150% of the available land in Vancouver (like no roads, offices, parks, pools, etc just detached housing)
It's stupid to expect to be able to live in detached housing in a world class city. The other thing is that Vancouver isn't really a 'city' in the way that many others are, the 'burbs are separate cities so we get this 'most unaffordable' label when its really much better than many other cities.
Its the exact same thing here in Vancouver, there are even protests because someone is going to tear down a small house that fits one family and build a bigger house on the same property that fits multiple families.
This is new - has the owner said that multiple families will live in that house?
It's stupid to expect to be able to live in detached housing in a world class city
Since when did Vancouver become a world class city? I don't mean that to be cruel; I live here myself. But Vancouver has neither the culture nor the power nor the money to be considered world class. The people are poor, the economy has a paucity of opportunities, and now the housing really is only marginally affordable, even if you go out somewhere crazy far like White Rock.
This is new - has the owner said that multiple families will live in that house?
It's stupid to expect to be able to live in detached housing in a world class city
Since when did Vancouver become a world class city? I don't mean that to be cruel; I live here myself. But Vancouver has neither the culture nor the power nor the money to be considered world class. The people are poor, the economy has a paucity of opportunities, and now the housing really is only marginally affordable, even if you go out somewhere crazy far like White Rock.
To be fair I agree with you on most of those points, however, Vancouver seems to think it's world class when really its quite provincial.
>The other thing is that Vancouver isn't really a 'city' in the way that many others are, the 'burbs are separate cities so we get this 'most unaffordable' label when its really much better than many other cities.
What are you comparing to? Here in the US, it's exactly the same. Every single "big city" is really a metro area with a core city that bears the famous name, and a slew of separate cities bordering it. "Phoenix" for instance is a collection of a bunch of cities: Phoenix, Mesa, Tempe, Chandler, Glendale, Scottsdale, Gilbert, Paradise Valley, Sun City, Peoria, etc. "Los Angeles" has more cities than I can count. "New York City" is a little more centralized (since the city annexed a bunch of the bordering cities back in the late 1800s, turning them into "boroughs"), but still has White Plains, Tarrytown, and cities in bordering states like Stamford, Jersey City, Newark, Bayonne, etc.
Maybe European cities are singular like that, but not here in the US.
What are you comparing to? Here in the US, it's exactly the same. Every single "big city" is really a metro area with a core city that bears the famous name, and a slew of separate cities bordering it. "Phoenix" for instance is a collection of a bunch of cities: Phoenix, Mesa, Tempe, Chandler, Glendale, Scottsdale, Gilbert, Paradise Valley, Sun City, Peoria, etc. "Los Angeles" has more cities than I can count. "New York City" is a little more centralized (since the city annexed a bunch of the bordering cities back in the late 1800s, turning them into "boroughs"), but still has White Plains, Tarrytown, and cities in bordering states like Stamford, Jersey City, Newark, Bayonne, etc.
Maybe European cities are singular like that, but not here in the US.
And yet if you ask the average person in the street, they will blame 'interest rates' or 'Chinese buyers', and not once look at the ridiculous blockage on supply.
I think that this is the other dimension to the Vancouver housing problem that no one is talking about yet. Vancouver is separated from the rest of the province by the Fraser river to the south-east, and regional development policy for about 30 years has been fashioned to make it difficult for anyone to live south of the Fraser.
If we put more bridges across the Fraser and built more highways, I think most of this problem would go away on its own.
I think that this is the other dimension to the Vancouver housing problem that no one is talking about yet. Vancouver is separated from the rest of the province by the Fraser river to the south-east, and regional development policy for about 30 years has been fashioned to make it difficult for anyone to live south of the Fraser.
If we put more bridges across the Fraser and built more highways, I think most of this problem would go away on its own.
Where will those highways feed into? Business district roadways north of the Fraser are close to saturation.
At this point they need to be widened and expanded.
What I'm advocating isn't simply a one-off highway and bridge expansion; rather I want the regional development plan scrapped and I want a new one that no longer treats Richmond/Delta/Surrey as a separate development region. Rather than fighting and antagonizing families who want to live south of the Fraser, we should try to integrate Delta and Surrey more completely with Vancouver and Burquitlam. Highways to bring people to their jobs in Vancouver, yes; but also a focus on encouraging businesses, perhaps through preferential taxes, to locate in Delta and Surrey. We should be planning, zoning, and developing to minimize the presence of the Fraser. That would include more bridges, but it would also include more mass transit.
And if we need to pay for this somehow, I can't think of a better way than a non-linear property tax on everyone west of Cambie. ;-)
What I'm advocating isn't simply a one-off highway and bridge expansion; rather I want the regional development plan scrapped and I want a new one that no longer treats Richmond/Delta/Surrey as a separate development region. Rather than fighting and antagonizing families who want to live south of the Fraser, we should try to integrate Delta and Surrey more completely with Vancouver and Burquitlam. Highways to bring people to their jobs in Vancouver, yes; but also a focus on encouraging businesses, perhaps through preferential taxes, to locate in Delta and Surrey. We should be planning, zoning, and developing to minimize the presence of the Fraser. That would include more bridges, but it would also include more mass transit.
And if we need to pay for this somehow, I can't think of a better way than a non-linear property tax on everyone west of Cambie. ;-)
Isn't most of the land sourth of the Fraser prone to flooding?
no, it's all diked appropriately for the most part. Of course some would like the diking to be improved as there has been some minor flooding every 20 years or so. But that flooding is typically limited to the lowest areas which are almost always agricultural land. It would be a huge stretch to say the area is prone to flooding.
I stand corrected.
This sounds like an excellent argument for getting rid of property taxes altogether.
Property taxes have some major fundamental problems, not least of which that using them to pay for local services tends to make such services better in more affluent areas and worse in less affluent areas. They produce potentially unbounded and unexpected expenses long after paying off the house itself (which impacts retirees and others trying to predict future expenses). And on top of that, as mentioned in the comments here, attempts to control the growth of property taxes can create major supply issues in the housing market.
So why not get rid of property taxes altogether? Most states/countries already have either income tax, sales tax, or both. Why not settle on one tax, either income or sales, and use that for all government expenses?
Property taxes have some major fundamental problems, not least of which that using them to pay for local services tends to make such services better in more affluent areas and worse in less affluent areas. They produce potentially unbounded and unexpected expenses long after paying off the house itself (which impacts retirees and others trying to predict future expenses). And on top of that, as mentioned in the comments here, attempts to control the growth of property taxes can create major supply issues in the housing market.
So why not get rid of property taxes altogether? Most states/countries already have either income tax, sales tax, or both. Why not settle on one tax, either income or sales, and use that for all government expenses?
You are proposing to remove taxation on a bull market (property)? This would inflate prices even more, as investors make a run for nice tax-free properties. It doesn't make sense, sorry.
You need to remove incentives to invest in property altogether. It's one of the worst and most unproductive markets, and not even a market in practice because everyone needs a home. My personal pope-emperor utopia would forbid companies from owning residential buildings, and tax individuals 10% of house value yearly on any house (with the first two exempted). Redevelopment should be allowed only when the area is in clear state of abandon, with strict rules on the amount of commercial space that can replace residential space.
The property market needs to die -- and I say that as a homeowner.
You need to remove incentives to invest in property altogether. It's one of the worst and most unproductive markets, and not even a market in practice because everyone needs a home. My personal pope-emperor utopia would forbid companies from owning residential buildings, and tax individuals 10% of house value yearly on any house (with the first two exempted). Redevelopment should be allowed only when the area is in clear state of abandon, with strict rules on the amount of commercial space that can replace residential space.
The property market needs to die -- and I say that as a homeowner.
I'm talking about taxes on personal residences, used as residences. I don't particularly want to argue in this post about what taxes might apply to second/third/fourth/investment/etc houses, or about the desirability of using excise taxes to control behavior.
In the context of property used as a residence, I'm suggesting that property taxes produce undesirable effects, and that other forms of taxation might potentially work better.
In the context of property used as a residence, I'm suggesting that property taxes produce undesirable effects, and that other forms of taxation might potentially work better.
But that's what inflates property markets -- investors buying and selling multiple properties, realtors identifying and driving growth in this or that neighbourhood. London, SF, Sydney or Vancouver are all awash in investment cash for properties, that's what drives prices.
"In the context of property used as a residence", most European countries do not tax first homes, end of story. It doesn't stop prices from growing.
"In the context of property used as a residence", most European countries do not tax first homes, end of story. It doesn't stop prices from growing.
> "In the context of property used as a residence", most European countries do not tax first homes, end of story.
I'm not talking about sales taxes on the sale price of a home; the US doesn't tax those either. I'm talking about property taxes, as in the taxes typically assessed by a local government to property owners as a percentage of the appraised value of their property. I'm saying that such property taxes produce various undesirable effects (as mentioned several comments up).
That's orthogonal to questions of how to deal with people owning, buying, or selling multiple homes. It may or may not make sense to apply different rules in those cases, such as not providing an exemption for sales taxes on such properties. (Though you'd have to be careful there to not cause problems with rental prices.)
I'm not talking about sales taxes on the sale price of a home; the US doesn't tax those either. I'm talking about property taxes, as in the taxes typically assessed by a local government to property owners as a percentage of the appraised value of their property. I'm saying that such property taxes produce various undesirable effects (as mentioned several comments up).
That's orthogonal to questions of how to deal with people owning, buying, or selling multiple homes. It may or may not make sense to apply different rules in those cases, such as not providing an exemption for sales taxes on such properties. (Though you'd have to be careful there to not cause problems with rental prices.)
> I'm not talking about sales taxes on the sale price of a home; the US doesn't tax those either.
Actually it is taxed as a capital gain ( subject to some deductions )
Actually it is taxed as a capital gain ( subject to some deductions )
Here's an idea. Make utility services scale with people density. Relax restrictions on how much they can profit off sqft. Single home dwellers are penalized with increased upkeep costs and higher density buildings are encouraged.
What? That's crap. Why should single home dwellers have to pay more for water and electricity and gas just because their house is bigger? Then you'll have apartment dwellers running the heat with the windows open.
Utilities should be paid per-use, just as it is now. People with bigger houses are naturally going to pay more because a bigger house usually needs more power/fuel for HVAC, unless their house is more efficient. Also, we need to incentivize making homes more energy-efficient, and regressive policies like yours discourage efficiency. Smaller isn't always better; crappy old small houses and apartments can easily use far more energy than new McMansions.
And that leads me to one big problem in the rental market is that landlords never spend a dime on improving or renovating homes for better energy-efficiency, because the tenant has to pay all the utilities.
Utilities should be paid per-use, just as it is now. People with bigger houses are naturally going to pay more because a bigger house usually needs more power/fuel for HVAC, unless their house is more efficient. Also, we need to incentivize making homes more energy-efficient, and regressive policies like yours discourage efficiency. Smaller isn't always better; crappy old small houses and apartments can easily use far more energy than new McMansions.
And that leads me to one big problem in the rental market is that landlords never spend a dime on improving or renovating homes for better energy-efficiency, because the tenant has to pay all the utilities.
Water and electricity and gas are generally less cost-efficient to provide to less-dense neighborhoods, as the length of wire & pipe (and maintenance overhead) needed to serve a given number of residences is significantly higher. This is likewise why electricity and phone service were not provided to rural areas until subsidized by the government by taxing urban dwellers.
To new neighborhoods, you're right. To existing neighborhoods, you're wrong: the infrastructure is already there. There's no reason to raise rates for people for something that's already paid for. That's like adding a toll to a road that's been there for 50 years; it's just profiteering.
Maintenance is not going to be any higher for lower density; it's not like you see electric utility workers in the suburbs constantly, repairing stuff. And access is more difficult in higher-density housing too: in a suburb, you just drive the truck up to the transformer, but in a large building, it isn't that easy.
As for rural areas, there's a huge difference between urban and rural areas (where houses are miles apart), and urban and suburban areas (where houses are 20 feet apart).
Maintenance is not going to be any higher for lower density; it's not like you see electric utility workers in the suburbs constantly, repairing stuff. And access is more difficult in higher-density housing too: in a suburb, you just drive the truck up to the transformer, but in a large building, it isn't that easy.
As for rural areas, there's a huge difference between urban and rural areas (where houses are miles apart), and urban and suburban areas (where houses are 20 feet apart).
> And that leads me to one big problem in the rental market is that landlords never spend a dime on improving or renovating homes for better energy-efficiency, because the tenant has to pay all the utilities.
If that were the case they could charge 'fixed utilities' at a reasonable price and then when they upgrade for energy efficiency they reap those gains.
If that were the case they could charge 'fixed utilities' at a reasonable price and then when they upgrade for energy efficiency they reap those gains.
You mean force the landlords to pay for the utilities? Doing that means the tenants then blast the heat with the windows and doors wide open: they have no incentive to be economical with their energy usage. All it takes is one bad tenant like that with $2000/month utility bills and the landlord has to declare bankruptcy.
Why not just have some kind of regulation requiring rental dwellings to meet certain energy efficiency standards? And combine this with some programs to help landlords upgrade, perhaps with low-interest loans or something.
Why not just have some kind of regulation requiring rental dwellings to meet certain energy efficiency standards? And combine this with some programs to help landlords upgrade, perhaps with low-interest loans or something.
I am not a proponent for taxes, most of my arguments centre around the idiocy of most taxes. And you are correct in your analysis, particularly as the improvement component on the land is already taxed by sales taxes for the materials and income taxes for the labour.
However, it's best to tax broadly and close to the generation of income.
I think land taxes couples with sales and income taxes is an efficient combination. Land taxes penalise land banking, and encourage the most efficient use of land.
Sales taxes penalise consumption, and encourage savings or investment.
Of all, income taxes penalise earnings, but earnings are unavoidable for most people. But they do incentivise investment income where there is a differential, which could be mildly beneficial.
The key to all these is uniform applicability and flat rates. The massive drag that tax minimisation has on an economy is underestimated routinely.
From the property front - land taxes should be paid annually, there should be more releases of land with fewer restrictions, and there should be no/minimal transaction taxes to go in/out of a property.
However, it's best to tax broadly and close to the generation of income.
I think land taxes couples with sales and income taxes is an efficient combination. Land taxes penalise land banking, and encourage the most efficient use of land.
Sales taxes penalise consumption, and encourage savings or investment.
Of all, income taxes penalise earnings, but earnings are unavoidable for most people. But they do incentivise investment income where there is a differential, which could be mildly beneficial.
The key to all these is uniform applicability and flat rates. The massive drag that tax minimisation has on an economy is underestimated routinely.
From the property front - land taxes should be paid annually, there should be more releases of land with fewer restrictions, and there should be no/minimal transaction taxes to go in/out of a property.
High property tax assumes an area is in high demand for land, presumably incentivizing more efficient use of land per square foot.
It's the land value tax that incentivizes more efficient use of land. A property tax is levied on both the land and the improvements built on top of it. By only taxing land, the land use tax incentivizes maximizing the improvements-to-land ratio.
Improved land tends to draw more from community resources. If we just tax the land, someone builds a huge apartment building, then it really sucks for the local schools.
Additionally, much speculation is in post improved land...e.g. apartments; they have to do something with their property also, not just build it up. Otherwise its a drain on the economy and distorts the real estate market.
Additionally, much speculation is in post improved land...e.g. apartments; they have to do something with their property also, not just build it up. Otherwise its a drain on the economy and distorts the real estate market.
An appropriate land value tax is proportionate to what improvements the community expects to be present on the land on average -- that is, how desirable the area is as a whole. That should scale pretty well on a school district level.
As for discouraging speculation, property and land tax schemes can both be used. However, in an environment in which other landowners are improving, the tax burden of a speculator just sitting on their property goes up under a land value tax.
As for discouraging speculation, property and land tax schemes can both be used. However, in an environment in which other landowners are improving, the tax burden of a speculator just sitting on their property goes up under a land value tax.
Aren't 'council rates' just a different name for 'property tax'?
http://www.cityofsydney.nsw.gov.au/live/residents/rates
http://www.cityofsydney.nsw.gov.au/live/residents/rates
Technically they're additional property tax.
Add to this the pension eligibility means test excludes your primary residence.
So if you sell your house to help fund your retirement then it is duely punished by missing out on money from the government.
Much better to refinance the house and live of that. Hence more tightly held homes.
So if you sell your house to help fund your retirement then it is duely punished by missing out on money from the government.
Much better to refinance the house and live of that. Hence more tightly held homes.
If only they would do high density! They could easily knock down all the small houses in eg Glebe and replace them with a few high rise condos.
How are property taxes calculated in [...] London?
The council tax ratios between the bands are fixed - so a band A property always pays one third the price of a band H property. The band a house is assigned to is essentially permanent, although you can appeal if it's not in line with equivalent properties in the same area.
This provides certain desirable properties - more expensive properties pay more, but your bill doesn't go up just because house prices in your area go up.
Disadvantages are your tax bill can still go up - just it goes up for everyone by the same percentage; if an area has become much nicer (or less nice) since 1991, the council doesn't make any more (or less) money; and valuations based on a government employee's estimate of a hypothetical sale don't have the idealogical purity needed to really get the support of voters.
Another disadvantage is that it's regressive because the bands are quite limited: "The poorest lose 8% of their income to the Council Tax system whilst the richest only lose 2%." ( https://www.equalitytrust.org.uk/how-regressive-our-tax-syst... )
"Europe tells UK to reform ‘regressive’ council tax system": http://www.localgov.co.uk/Europe-tells-UK-to-reform-regressi...
"Europe tells UK to reform ‘regressive’ council tax system": http://www.localgov.co.uk/Europe-tells-UK-to-reform-regressi...
Curious why you are getting down votes... Your post is good.
Seems HN group think favours regressive tax?
Seems HN group think favours regressive tax?
There is a very enjoyable irony to the notion that you would accuse a community of groupthink for a perceived lack of accepting your opinion as the one true way.
The only opinion I was expressing was that of surprise the down vote for a perfectly decent comment, it seemed to be related to the topic, rather than the comment. I admit, the group think statement is a hypothesis, but not an unreasonable one given the circumstance.
There isn't really any need for smugness here.
There isn't really any need for smugness here.
What part of the parent's post makes you think he/she agrees with the GP?
Prop 13 has nothing to do with real estate price inflation. If anything, shifting of property tax burdens from long-time homeowners to new homeowners would tend to suppress prices. Shifting that burden evenly across the population would tend to cause more churn as long-time homeowners get pushed out, but would do nothing to increase aggregate housing or lower aggregate prices.
Although, you can get pretty far into the weeds trying to evaluate the effect of housing stability on political economy - NIMBYism would be expected to be stronger in longer-tenure populations, for instance.
Stability of tax policy is a fantastic thing for encouraging long-term investment.
Although, you can get pretty far into the weeds trying to evaluate the effect of housing stability on political economy - NIMBYism would be expected to be stronger in longer-tenure populations, for instance.
Stability of tax policy is a fantastic thing for encouraging long-term investment.
A 4-bedroom house bought in the 70s is far more affordable than a 1-bedroom condo bought today, which creates a situation where no one can afford to move out of their homes. It's a massive tax benefit for themselves, their children, and grandchildren, that instantly and irrevocably goes away when they sell the house. No matter how high the market drives prices there is little incentive to sell.
I don't know how much this has to do with the shortage of supply in the bay area but I'd be very surprised if it has "nothing to do" with it.
I don't know how much this has to do with the shortage of supply in the bay area but I'd be very surprised if it has "nothing to do" with it.
Those houses are lived in though (ignoring the whole issue of unoccupied investment properties). You can have an illiquid market with a ton of housing stock. The Bay Area has a problem with insufficient total housing stock, not with tax policy. You can see this via rental market prices, which are not locked-in like property taxes are.
Imagine a Soviet grey-concrete apartment block. You get on the list when you're 18, and get your "free" apartment five years later, in which you are effectively stuck for the next 50 years. It's illiquid, there is high supply, there are low prices.
Now imagine you can swap apartments by paying a huge bribe. It's still illiquid, there is high supply, there are low average prices, there are high marginal prices.
Imagine a Soviet grey-concrete apartment block. You get on the list when you're 18, and get your "free" apartment five years later, in which you are effectively stuck for the next 50 years. It's illiquid, there is high supply, there are low prices.
Now imagine you can swap apartments by paying a huge bribe. It's still illiquid, there is high supply, there are low average prices, there are high marginal prices.
Not necessarily. I've been seeing several ex-rental units which have recently been passed down as part of an estate.
Inheriting a house doesn't result in a valuation event, and the seller has nothing encouraging them to sell. So, the house sits there empty - They're only paying $100/month in taxes, which is coffee money.
The combination of no capital gains on inheritance, no estate taxes and ancient property valuations creates a multi-generational issue where houses are kept locked up.
Inheriting a house doesn't result in a valuation event, and the seller has nothing encouraging them to sell. So, the house sits there empty - They're only paying $100/month in taxes, which is coffee money.
The combination of no capital gains on inheritance, no estate taxes and ancient property valuations creates a multi-generational issue where houses are kept locked up.
The problem is staying becomes increasing attractive over time. Retired people save money by staying put, young workers can't afford to move in. This breaks the housing market.
SF is not a housing market it's effectively a planned communist community with a few bribes on the open market.
SF is not a housing market it's effectively a planned communist community with a few bribes on the open market.
> Retired people save money by staying put, young workers can't afford to move in.
This is a problem of housing stock. If you build more housing, it's not going to be occupied by people who've been sitting on it for the last 50 years. That's impossible, because it's new.
This is a problem of housing stock. If you build more housing, it's not going to be occupied by people who've been sitting on it for the last 50 years. That's impossible, because it's new.
Well sort of. Consider a couple in a 4 bedroom house who's kids have moved out, but don't move into a smaller place (say 2 bedroom condo) because they would have to pay a bigger tax bill. So there are two bedrooms not being used because of taxes.
> Consider a couple in a 4 bedroom house who's kids have moved out, but don't move into a smaller place (say 2 bedroom condo)
This would theoretically deal with the problem of having young couples with many children who can only afford to live in a 2-bedroom condo, because all the bigger housing is occupied by old people with empty nests and the only new housing is 2-bedroom condos or smaller. But, if you're not interested in forcing the old people to leave, it doesn't solve the problem of housing supply -- you'll still need some housing for the old couple and some more, separate, housing for the new large family, and if you don't build additional housing to accommodate the incoming people you'll end up with a housing shortage, regardless of whether old people shift from their existing homes into smaller ones or not. As long as you're building housing for the people who move in, you might as well build it in the sizes they demand.
This would theoretically deal with the problem of having young couples with many children who can only afford to live in a 2-bedroom condo, because all the bigger housing is occupied by old people with empty nests and the only new housing is 2-bedroom condos or smaller. But, if you're not interested in forcing the old people to leave, it doesn't solve the problem of housing supply -- you'll still need some housing for the old couple and some more, separate, housing for the new large family, and if you don't build additional housing to accommodate the incoming people you'll end up with a housing shortage, regardless of whether old people shift from their existing homes into smaller ones or not. As long as you're building housing for the people who move in, you might as well build it in the sizes they demand.
That is not a fair assessment of the situation. There are a number of factors that have been put in place by the populace and government agencies to force this situation in the bay area:
1. Rent Control: This forces an incentive not to move. If you are in the 4-bedroom house at $1,500 a month for the past 15 years, a comparable 4-bedroom house is now $6,000. There is no incentive to move and owner's have little incentive to bring up to standard something they are not going to get an ROI on. In this instance, Prop 13 actually makes the situation bearable for the landlords, think if the costs went up and your return stayed static.
2. Building Restrictions: Between the historical board, local populace anger to building, and zoning enforcement, the bay area's supply has been static while demand has increased. There are workarounds, but they border on illegal (i.e. the guy who turned a storage closet into a baby's room for additional space); essentially sub-dividing up existing property.
Within the Bay area, the ability to move a demand curve down has not existed, so the prices have risen to meet the existing supply. Prop 13 has no direct effect on these two items except a positive effect for the landowners in reducing the tax burden that would have forced early bankruptcy for them because of the rent control.
1. Rent Control: This forces an incentive not to move. If you are in the 4-bedroom house at $1,500 a month for the past 15 years, a comparable 4-bedroom house is now $6,000. There is no incentive to move and owner's have little incentive to bring up to standard something they are not going to get an ROI on. In this instance, Prop 13 actually makes the situation bearable for the landlords, think if the costs went up and your return stayed static.
2. Building Restrictions: Between the historical board, local populace anger to building, and zoning enforcement, the bay area's supply has been static while demand has increased. There are workarounds, but they border on illegal (i.e. the guy who turned a storage closet into a baby's room for additional space); essentially sub-dividing up existing property.
Within the Bay area, the ability to move a demand curve down has not existed, so the prices have risen to meet the existing supply. Prop 13 has no direct effect on these two items except a positive effect for the landowners in reducing the tax burden that would have forced early bankruptcy for them because of the rent control.
If you think of the government as the "ultimate landlord", then property tax is just another form of rent and Prop 13 is just another form of rent control. It has most of the same positives and negatives as rent control:
> forces an incentive not to move
Check, if you move your property tax will go up
> and owner's have little incentive to bring up to standard something they are not going to get an ROI on
Check, the "landlord" (government) spending on residential infrastructure won't result in increased property tax income. This is partly why the peninsula cities invest so much in office space but refuse to build housing.
You're right that Prop 13 makes rent control possible, but overall I'm not sure that's a good thing.
> forces an incentive not to move
Check, if you move your property tax will go up
> and owner's have little incentive to bring up to standard something they are not going to get an ROI on
Check, the "landlord" (government) spending on residential infrastructure won't result in increased property tax income. This is partly why the peninsula cities invest so much in office space but refuse to build housing.
You're right that Prop 13 makes rent control possible, but overall I'm not sure that's a good thing.
<You're right that Prop 13 makes rent control possible>
Completely false; the Jarvis-Gann Amendment ("Prop 13") has nothing to do with rent control.
You may intend to instead argue that both JGA and rent control provide disincentives to move (and I would not disagree), but that's a different statement.
Completely false; the Jarvis-Gann Amendment ("Prop 13") has nothing to do with rent control.
You may intend to instead argue that both JGA and rent control provide disincentives to move (and I would not disagree), but that's a different statement.
You're being down-voted because Klipt is agreeing with GP that by holding down the costs of property owners Prop 13 makes the holding down of property revenues by rent control more tolerable for the owner.
No, I'm being downvoted as a protest proxy against Prop 13, which I didn't advocate or defend -- I just tried to clarify the history. (I wasn't even of voting age when it passed.)
Rent control existed in many CA cities well before Prop 13 and is orthogonal. The impetus for Prop 13 was that frequent and growing property tax rate (as well as assessment) increases during Willie Brown's control of the Assembly, combined with high mortgage interest rates, were driving longtime residents (especially seniors and others on fixed incomes) out of their homes.
Most rental property owners are not lifelong, continuous owners that benefit significantly from Prop 13, and I guarantee you that those who are aren't giving any rent "discounts" because of Prop 13 savings -- the market (and law) sets the rents.
Rent control existed in many CA cities well before Prop 13 and is orthogonal. The impetus for Prop 13 was that frequent and growing property tax rate (as well as assessment) increases during Willie Brown's control of the Assembly, combined with high mortgage interest rates, were driving longtime residents (especially seniors and others on fixed incomes) out of their homes.
Most rental property owners are not lifelong, continuous owners that benefit significantly from Prop 13, and I guarantee you that those who are aren't giving any rent "discounts" because of Prop 13 savings -- the market (and law) sets the rents.
Wouldn't it discourage long-time owners from selling, thereby limiting supply and raising prices?
It would, and it does.
In theory, yes.
In practice, if you own a currently 4+ million dollar home built in the 50's, you are paying at least 15-20k on it anyway.
Here's an example currently for sale:https://www.redfin.com/CA/Los-Altos-Hills/27446-Black-Mounta...
They are paying 18.2k.
If it was reassessed today, they'd be paying 40-45k.
If they do what most people who have lived in a home forever do, and are downsizing to something smaller (IE kids grew up, whatever), they will likely end up with either the same or less in taxes they pay now.
So it's not like right now they pay nothing, and they'd pay a ton, it's "they pay a lot, they'd pay more".
Here's an example currently for sale:https://www.redfin.com/CA/Los-Altos-Hills/27446-Black-Mounta...
They are paying 18.2k.
If it was reassessed today, they'd be paying 40-45k.
If they do what most people who have lived in a home forever do, and are downsizing to something smaller (IE kids grew up, whatever), they will likely end up with either the same or less in taxes they pay now.
So it's not like right now they pay nothing, and they'd pay a ton, it's "they pay a lot, they'd pay more".
Just a single data point, but my parents bought their single family home in sf in 1972. It's currently worth about $2M. They pay roughly 400/yr in taxes and as a result there is no incentive for them to ever leave.
Even the current taxes are over 1.5x what my mortgage is (including not only escrow payments for taxes but also PMI). Nuts
well that house was sold again 1990 so the taxable value was reassessed.
Yes, i did miss this.
But most of the value was added since then :)
wow- the price on this house was dropped $500K in the last 6 months. Looks like the bay area prices are finally crashing /s
That's quite the leap. How about you check out some broader data sets and then reassess your statement. There is less demand for homes at that price point. There is a MUCH bigger crunch for "entry-level" homes that doesn't look like it will go away any time soon.
In this discussion there are a lot of terminology considerations around "supply" (ie, housing stock) vs. "liquid supply" (ie, houses on the market) and "average prices" (ie, total RE value) vs. "marginal prices" (ie, expected home sales price).
> Prop 13 has nothing to do with real estate price inflation.
Its hard to imagine the current real estate inflation in the case where home owners had to pay taxes against the fair market value. In other words, home owners would at least see some value in new construction. As it stands now, there is only downside.
Its hard to imagine the current real estate inflation in the case where home owners had to pay taxes against the fair market value. In other words, home owners would at least see some value in new construction. As it stands now, there is only downside.
>Its hard to imagine the current real estate inflation in the case where home owners had to pay taxes against the fair market value.
Prop 13 exists in California because that's exactly what was happening. Prior to its passage you paid on the assessed value of you house, and it didn't stop prices from double digit percentage increases every year.
People who'd owned their homes for decades were being forced to sell because the assessed value of the house had gone up so much they could no longer afford to pay the taxes.
Prop 13 exists in California because that's exactly what was happening. Prior to its passage you paid on the assessed value of you house, and it didn't stop prices from double digit percentage increases every year.
People who'd owned their homes for decades were being forced to sell because the assessed value of the house had gone up so much they could no longer afford to pay the taxes.
While that sucks, that sort of self-correcting market pressure is in fact required for a healthy real estate market.
Yes, people would have been pushed out as prices increased. But as areas gentrify, there is no guarantee that the farmers and tradespeople who lived there get to stay forever. That's how other markets work.
It sucks to those pushed out, but eventually taxes increase to the point where demand for the area diminishes. Further, since you'd have increased liquidity without Prop 13, people could actually afford to move to other areas so there would be more inventory. As it stands, that isn't happening because people can't afford to move, so the market is locked up. If we didn't have Prop 13, my gut says that the broader Peninsula would not be impacted to nearly the degree it is now (although perhaps SF would because it is so much smaller).
People being forced to sell because their areas taxes increase substantially is an unfortunate, but very necessary thing.
Yes, people would have been pushed out as prices increased. But as areas gentrify, there is no guarantee that the farmers and tradespeople who lived there get to stay forever. That's how other markets work.
It sucks to those pushed out, but eventually taxes increase to the point where demand for the area diminishes. Further, since you'd have increased liquidity without Prop 13, people could actually afford to move to other areas so there would be more inventory. As it stands, that isn't happening because people can't afford to move, so the market is locked up. If we didn't have Prop 13, my gut says that the broader Peninsula would not be impacted to nearly the degree it is now (although perhaps SF would because it is so much smaller).
People being forced to sell because their areas taxes increase substantially is an unfortunate, but very necessary thing.
You say that's how other markets work, but I can't think of any other market where an increase in the price of something you already own can make owning it unaffordable. If I buy stocks, or gold, or a car, and it gets more valuable, I'm not taxed until I sell, right? Does the same argument hold for those?
I'm referring to other real estate markets in the country.
Also, in this case, if the price of your home appreciates, it is likely the price of other homes appreciated, so your gain may not actually amount to anything (particularly after realtor fees). Likewise, you are taxed every year on real estate.
Also, in this case, if the price of your home appreciates, it is likely the price of other homes appreciated, so your gain may not actually amount to anything (particularly after realtor fees). Likewise, you are taxed every year on real estate.
>Further, since you'd have increased liquidity without Prop 13, people could actually afford to move to other areas so there would be more inventory.
People over 55 can transfer the tax basis of their primary residence. In all cases if they move somewhere in the same county, and depending on local ordinances inter-county.
So retired people living in the Peninsula can afford to move to other areas.
People over 55 can transfer the tax basis of their primary residence. In all cases if they move somewhere in the same county, and depending on local ordinances inter-county.
So retired people living in the Peninsula can afford to move to other areas.
What you're leaving out of the equation though is that often times people that old who have lived here forever either have their home fully or mostly paid off. Sure it likely appreciated quite a bit, but depending on their savings, they may not be able to afford a new home in the area at market rates regardless of the tax situation, especially if they are retired and on fixed income. So instead they stay in their home and don't sell. Or they pass it on to the next generation who doesn't sell.
Eh, why would they not be able to afford a new home after selling the old one? Usually when people retire they're looking for a smaller home that's easier to take care of.
Prop 13 has been argued (I'd say convincingly) to reduce liquidity:
http://www.nber.org/papers/w11108
(Less churn - opposite of what you hypothesize)
http://www.nber.org/papers/w11108
(Less churn - opposite of what you hypothesize)
No doubt it reduces liquidity. Probably increases marginal prices as well. But I doubt it makes real estate more valuable in the aggregate except for maybe via second-order effects like policy stability or population composition.
Real estate has value because of the potential flows of rent that can be obtained. Property taxes fall on both land and improvements. While the taxes on improvements are passed on to the tenant, the taxes on land cannot be, as Adam Smith showed. The rent of land, being a case of a locational monopoly, is always as high as it can be.
Thus, taxing land simply reduces the flows of rent that can be kept from controlling a location, and thus reduces the purchase price.
This makes it easier for entrepreneurs to acquire land, since the up front costs are lower.
Thus, taxing land simply reduces the flows of rent that can be kept from controlling a location, and thus reduces the purchase price.
This makes it easier for entrepreneurs to acquire land, since the up front costs are lower.
I hadn't heard of this principle that it's impossible to pass tax increases on to tenants. I can't really believe Adam Smith has shown this to be impossible, when I know people who have said (paraphrasing), "The previous landlord has raised rents to match increases in taxes, water, garbage bills(the utilities are effectively costs of land), and we consider this reasonable".
I feel like you could even make a bet on it: There's a nearby trailer park with some mobile homes on it. This should have value solely in the land, since the homes can be removed from the property. I'm counting the availability of utilities in the land. The county tax assessment on both land and improvements is public information. Suppose the tax assessment as a whole goes up 1.7%. If the trailer park owner is able to secure a 1.7% increase over the next year from his tenants, you pay him $10,000. Otherwise, he pays you $10,000. Do you trust Adam Smith enough to take that bet? It should be impossible, since that 1.7% includes an increase of taxes on the land which you're saying cannot be passed onto the tenant.
I feel like you could even make a bet on it: There's a nearby trailer park with some mobile homes on it. This should have value solely in the land, since the homes can be removed from the property. I'm counting the availability of utilities in the land. The county tax assessment on both land and improvements is public information. Suppose the tax assessment as a whole goes up 1.7%. If the trailer park owner is able to secure a 1.7% increase over the next year from his tenants, you pay him $10,000. Otherwise, he pays you $10,000. Do you trust Adam Smith enough to take that bet? It should be impossible, since that 1.7% includes an increase of taxes on the land which you're saying cannot be passed onto the tenant.
How does Prop 13 work? The people who wrote that paper are saying that it is a subsidy; absolutely not. The tax rate is frozen, so as I understand it, the person simply pays a lower rate, it is not a system where a tax is paid and then has it refunded to them.
I am going to be highly critical of an economic research paper that looks at a tax as a subsidy, so here we go:
1. A tax rate lower because of a law than your neighbor is not a subsidy. A child deduction on an IRS form is not a subsidy.
2. The average length of stay for a home owner was increased by .11 years for Bakersfield, 2 years for Los Angeles, and 3 or more year for the Bay Area. Bakersfield, as far as I know, has no rent control, so there is an argument that this is essentially a rounding error. Los Angeles and the Bay Area are rent control cities, no where in the paper is this brought up as an externality forcing the longer periods of tenure ownership.
3. Table 1A shows that rental tenure increased from 4.30 to 5.25 years from 1970 to 2000, this is essentially the same increase as that of 10.76 years to 13.42 years for the home owners; 24.7% for the home owners and 22.1% for the renters. This should invalidate pointing to Prop 13 as the reason for longer owner stays.
4. Florida and Texas pass the same law and the paper simply says, forget them. The two states, Florida and Texas, go on to show that there is no impact from Prop 13, thus further invalidating their study.
5. Not one mention of rent control being a reason why people may not want to move out of their existing dwelling and purchase a home.
This may be a good paper to reference as a point, it is a horrible paper by ignoring externalities, comparable examples, and not examining differences between areas (Bakersfield vs. Los Angeles vs. San Francisco).
I am going to be highly critical of an economic research paper that looks at a tax as a subsidy, so here we go:
1. A tax rate lower because of a law than your neighbor is not a subsidy. A child deduction on an IRS form is not a subsidy.
2. The average length of stay for a home owner was increased by .11 years for Bakersfield, 2 years for Los Angeles, and 3 or more year for the Bay Area. Bakersfield, as far as I know, has no rent control, so there is an argument that this is essentially a rounding error. Los Angeles and the Bay Area are rent control cities, no where in the paper is this brought up as an externality forcing the longer periods of tenure ownership.
3. Table 1A shows that rental tenure increased from 4.30 to 5.25 years from 1970 to 2000, this is essentially the same increase as that of 10.76 years to 13.42 years for the home owners; 24.7% for the home owners and 22.1% for the renters. This should invalidate pointing to Prop 13 as the reason for longer owner stays.
4. Florida and Texas pass the same law and the paper simply says, forget them. The two states, Florida and Texas, go on to show that there is no impact from Prop 13, thus further invalidating their study.
5. Not one mention of rent control being a reason why people may not want to move out of their existing dwelling and purchase a home.
This may be a good paper to reference as a point, it is a horrible paper by ignoring externalities, comparable examples, and not examining differences between areas (Bakersfield vs. Los Angeles vs. San Francisco).
> Bakersfield, as far as I know, has no rent control, so there is an argument that this is essentially a rounding error.
Bakersfield is also a terrible place to live, from what I hear.
Bakersfield is also a terrible place to live, from what I hear.
Texas limits yearly increases to 10%. Yes in hot markets this suppressed the tax increases but your taxes will eventually catch up.
> Prop 13 has nothing to do with real estate price inflation. If anything, shifting of property tax burdens from long-time homeowners to new homeowners would tend to suppress prices.
As I see it, the long-term expected costs for a purchaser with an average expected time to hold are neutral compared to an equal-revenue scheme that didn't favor long-term property owners over newer property owners. (Given the same assessed value.)
OTOH, the future costs of holding property are lower compared to the same alternative for current property holders (since, even with a short holding period, some of the early, highest-relative-tax-burden years are sunk costs under Prop 13) under the same comparison.
So, rationally, people are just as likely to want to buy property, and less likely to want to sell it once they've already bought it. This reduces supply and increases market clearing price.
As I see it, the long-term expected costs for a purchaser with an average expected time to hold are neutral compared to an equal-revenue scheme that didn't favor long-term property owners over newer property owners. (Given the same assessed value.)
OTOH, the future costs of holding property are lower compared to the same alternative for current property holders (since, even with a short holding period, some of the early, highest-relative-tax-burden years are sunk costs under Prop 13) under the same comparison.
So, rationally, people are just as likely to want to buy property, and less likely to want to sell it once they've already bought it. This reduces supply and increases market clearing price.
> Prop 13 has nothing to do with real estate price inflation.
Yes, it does, because it incentivizes municipalities to encourage commercial development (which tends to change hands more often) over residential. It's a classic unintended consequence.
Yes, it does, because it incentivizes municipalities to encourage commercial development (which tends to change hands more often) over residential. It's a classic unintended consequence.
Corporations have been dodging taxes via Prop 13 for some time to the tune of potentially a $9 BILLION dollar windfall should they close some of those loopholes.
I've heard of things like companies buying businesses outright so they can get the property, without buying the property as a transaction with the other entity.
[1] http://www.sacbee.com/news/politics-government/capitol-alert...
I've heard of things like companies buying businesses outright so they can get the property, without buying the property as a transaction with the other entity.
[1] http://www.sacbee.com/news/politics-government/capitol-alert...
Yes, and corporate inversions are another example (and another effect of tax law enforcement).
The answer would be a Constitutional Amendment changing Jarvis-Gann protections to residences only, or even primary owner-occupied residences only. But the corrupt Legislature refuses to consider putting an LCA on the ballot to change this.
The answer would be a Constitutional Amendment changing Jarvis-Gann protections to residences only, or even primary owner-occupied residences only. But the corrupt Legislature refuses to consider putting an LCA on the ballot to change this.
[deleted]
While Prop 13 is terrible, it's the not cause of the housing shortage (or bubble).
Land use policy is the cause, preventing supply to meet demand.
California’s High Housing Costs: Causes and Consequences
http://www.lao.ca.gov/reports/2015/finance/housing-costs/hou...
"Building Less Housing Than People Demand Drives High Housing Costs. California is a desirable place to live. Yet not enough housing exists in the state’s major coastal communities to accommodate all of the households that want to live there. In these areas, community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction. A shortage of housing along California’s coast means households wishing to live there compete for limited housing. This competition bids up home prices and rents. Some people who find California’s coast unaffordable turn instead to California’s inland communities, causing prices there to rise as well. In addition to a shortage of housing, high land and construction costs also play some role in high housing prices."
Land use policy is the cause, preventing supply to meet demand.
California’s High Housing Costs: Causes and Consequences
http://www.lao.ca.gov/reports/2015/finance/housing-costs/hou...
"Building Less Housing Than People Demand Drives High Housing Costs. California is a desirable place to live. Yet not enough housing exists in the state’s major coastal communities to accommodate all of the households that want to live there. In these areas, community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction. A shortage of housing along California’s coast means households wishing to live there compete for limited housing. This competition bids up home prices and rents. Some people who find California’s coast unaffordable turn instead to California’s inland communities, causing prices there to rise as well. In addition to a shortage of housing, high land and construction costs also play some role in high housing prices."
Another thing to keep in mind regarding prop 13 is that it also affects commercial real estate - commercial landlords tend to set up a company to own/insure/maintain a building, and then rather than selling the building they just change the beneficial ownership of the company, preserving the low property tax rates.
As a homeowner myself I'm being a bit hypocritical here because we bought at a low point in the market and now pay a fairly low rate of tax relative to the change in the property value, but on the other hand that outcome was the result of years of waiting for an opportunity to time the market.
As a homeowner myself I'm being a bit hypocritical here because we bought at a low point in the market and now pay a fairly low rate of tax relative to the change in the property value, but on the other hand that outcome was the result of years of waiting for an opportunity to time the market.
Yeah, something to the tune of $9B in avoided commercial taxes from stuff like that [1].
[1] http://www.sacbee.com/news/politics-government/capitol-alert...
[1] http://www.sacbee.com/news/politics-government/capitol-alert...
How are property taxes calculated in... New Zealand.
1 The local government sets their budget.
2 Then a valuing company sets property values once every 3 years based on permits and local sales.
3 Then the mill rate (property tax percentage) is set at a rate to clear the budget.
Tax rates are stable as property prices increase. The only thing that wouldn't be under your democratic control would be if your neighborhood suddenly became very desirable, changing your house price substantially while leaving other areas unchanged.
If you cannot afford the tax bill, there are programs for low-income or retired persons to get debt forgiveness.
1 The local government sets their budget.
2 Then a valuing company sets property values once every 3 years based on permits and local sales.
3 Then the mill rate (property tax percentage) is set at a rate to clear the budget.
Tax rates are stable as property prices increase. The only thing that wouldn't be under your democratic control would be if your neighborhood suddenly became very desirable, changing your house price substantially while leaving other areas unchanged.
If you cannot afford the tax bill, there are programs for low-income or retired persons to get debt forgiveness.
Oslo, Norway where I live is a pretty expensive city, but we don't have property taxes so that is not an issue.
But like Vancouver we have serious issues with the housing market. We have a green area around Oslo were you can't build on (that is where everybody goes skiing and hiking).
And we have the extra problem that due to being so far north we can't build high rises otherwise we wouldn't get any sun in the city in winter time.
But they have started turning a lot of old villa areas in to 4-5 story buildings. So densification is definitely a strategy being followed in Oslo.
But like Vancouver we have serious issues with the housing market. We have a green area around Oslo were you can't build on (that is where everybody goes skiing and hiking).
And we have the extra problem that due to being so far north we can't build high rises otherwise we wouldn't get any sun in the city in winter time.
But they have started turning a lot of old villa areas in to 4-5 story buildings. So densification is definitely a strategy being followed in Oslo.
> My solution would be to jack up the real estate inheritance tax and allocate that money for public transportation and affordable housing.
In Silicon Valley product management there's the saying 'for every yes, there's a thousand no's."
In housing politics for every good idea, there's 100k people who will complain and sue.
The only policies implemented usually fall under the following categories
1) Irrational populism.
2) A backroom deal pushed by lobbyists and their political allies.
Sensible ideas usually don't fall into those categories.
In Silicon Valley product management there's the saying 'for every yes, there's a thousand no's."
In housing politics for every good idea, there's 100k people who will complain and sue.
The only policies implemented usually fall under the following categories
1) Irrational populism.
2) A backroom deal pushed by lobbyists and their political allies.
Sensible ideas usually don't fall into those categories.
A Canadian who invests in single-family homes recently told me that the U.S. state of Indiana charges double real-estate taxes if the home is not owner-occupied. As a Californian who owns rental property in Arizona, I am all in favor of this, provided that means my primary residence would be taxed less.
Real-estate taxes on your primary residence is the equivalent of paying rent. It has become so high in some states (e.g. Oregon) that it discourages home ownership.
Real-estate taxes on your primary residence is the equivalent of paying rent. It has become so high in some states (e.g. Oregon) that it discourages home ownership.
Oregon's real estate taxes are modeled after California's. They are capped at 3% increase per year (in taxable value, increases in individual levies can lead to more than a 3% increase year over year).
My house is about 10 years old and I pay ~1.5% of it's resale value in taxes annually. Granted, that's much higher than my neighbor who occupies his childhood home built in the 1960s but it's hardly outrageous compared to other parts of the country.
One difference in OR, in addition to selling a home, a significant improvement (ie adding an additional bedroom) can lead to a resetting of the taxable value at current market value.
My house is about 10 years old and I pay ~1.5% of it's resale value in taxes annually. Granted, that's much higher than my neighbor who occupies his childhood home built in the 1960s but it's hardly outrageous compared to other parts of the country.
One difference in OR, in addition to selling a home, a significant improvement (ie adding an additional bedroom) can lead to a resetting of the taxable value at current market value.
California does give a homeowners exemption on property tax; but it's in the constitution at $7000 of value, so it's only a $70/year discount, and there's a lot of rules to follow if the legislature wants to change it, it looks like they have to also increase the renters credit, and be revenue neutral for local governments; I don't expect it's likely to be increased by legislative action.
Most jurisdictions have a "homestead exemption" that reduces property taxes on owner-occupied property (though not to half, as this policy does).
Indiana also put a 2% cap on property tax into the constitution. Indy has some really nice Gilded Age mansions under $2 mil.
Renters pay property taxes, too - indirectly through their landlord.
This may actually not be true, if rent prices must be competitive.
Georgist taxes have the interesting feature that land rents taxation ( not rack rent, which is what you pay the landlord ) cannot be passed on.
Georgist taxes have the interesting feature that land rents taxation ( not rack rent, which is what you pay the landlord ) cannot be passed on.
Moreover, in most of California, the supply of housing has been artificially restricted using overly stringent zoning rules and laws. I'm in favor of reasonable zoning rules, but in my city the only justification for limiting new constructing seems to be existing homeowners who "want to live in a small town" and enrich themselves at the expense of newcomers who have little choice but to settle in the area for economic reasons.
"This is such a hard problem to solve, no one wants to force elderly people to move"
Not really, in Maryland property taxes are reduced for house holds making under 60k and are zero for people who make under 10k. There are limits on the value of the home so you can't buy a mansion and then live in it retired and tax free but it protects poor people and old people.
Not really, in Maryland property taxes are reduced for house holds making under 60k and are zero for people who make under 10k. There are limits on the value of the home so you can't buy a mansion and then live in it retired and tax free but it protects poor people and old people.
Most countries dont have such high property taxes that the USA does. In London I paid $2500 a year in council tax and thought that was a lot of money, even though that was about 0.25%. Meanwhile NYC suburbs I'm now paying that every two months.
Depends on the state.
My aunt and uncle used to live in Bronxville, a suburb of NYC (it's part of Eastchester, which is in turn part of Westchester... NY municipal areas are confusing). They moved out in 2003, in large part because they were paying $25k/year in property taxes and they were both retired empty-nesters.
When they told this to me and my mom, we both thought it was insane. I was born in Texas, and my mom has lived in Texas since 1979. I'm not a homeowner myself (I rent a townhouse), but my mom is, and her property taxes in Dallas are around the same as what you paid in London.
This is one of the reasons I intend to stay in Texas for the rest of my life. Northern coastal cities are just completely insane in terms of expenses. New York is a wonderful place to visit, but I'd never live there.
My aunt and uncle used to live in Bronxville, a suburb of NYC (it's part of Eastchester, which is in turn part of Westchester... NY municipal areas are confusing). They moved out in 2003, in large part because they were paying $25k/year in property taxes and they were both retired empty-nesters.
When they told this to me and my mom, we both thought it was insane. I was born in Texas, and my mom has lived in Texas since 1979. I'm not a homeowner myself (I rent a townhouse), but my mom is, and her property taxes in Dallas are around the same as what you paid in London.
This is one of the reasons I intend to stay in Texas for the rest of my life. Northern coastal cities are just completely insane in terms of expenses. New York is a wonderful place to visit, but I'd never live there.
Meanwhile, people like me would love to be able to live in Bronxville or Scarsdale for the school systems.
It makes no sense to live there when you have no school age children since you can move a few blocks away in one of the surrounding towns and still have the quality of life.
It makes no sense to live there when you have no school age children since you can move a few blocks away in one of the surrounding towns and still have the quality of life.
But I am sure you paid more in income taxes in London. Which policy do you prefer? In my opinion taxing wealth is always a better idea than taxing income..
Maybe sales tax (VAT) is higher, but overall its about the same - except in the UK I get free healthcare.
I am generally inclined to agree with your last point, however it is possibly to be wealthy but to have very little liquidity. It has been the case that folks in the US who are on a fixed income (e.g. Social Security or disability) end up losing their home simply because they can't pay their property taxes and eat at the same time. It's rare but it has happened and will continue to happen as long as property taxes remain the large source of revenue that they are for state and local governments.
Many jurisdictions have worked around this by allowing elderly homeowners to defer property taxes on their residence until they move/sell/die. It's a great concept, but can cause a liquidity issue should a large percentage of total property taxes be deferred for years or decades.
Where I live, you have to be 65+ and own 60+% equity in the home. The problem is that some old rich people are moving in, paying cash for property, and then deferring. They aren't exactly the intended beneficiaries of the scheme.
Where I live, you have to be 65+ and own 60+% equity in the home. The problem is that some old rich people are moving in, paying cash for property, and then deferring. They aren't exactly the intended beneficiaries of the scheme.
Why? Income taxes seems much more predictable. You don't suddenly get a hike in your taxes because your neighborhood got popular.
Taxing income makes it harder for first generation hard working high income earners to purchase a house, whereas real estate gets passed down from generation to generation and increasing its value along the way.. Only making rich people richer..
Then you get people paying far more in taxes just because their neighborhood became popular.
If you want to tax idle wealthy people, it's simple: tax their investments. This means a stock transaction tax, since so much wealth is tied up in stocks. You can also tax additional real estate properties (i.e. no property tax for a primary residence, but tax vacation homes, rental houses, etc.).
If you want to tax idle wealthy people, it's simple: tax their investments. This means a stock transaction tax, since so much wealth is tied up in stocks. You can also tax additional real estate properties (i.e. no property tax for a primary residence, but tax vacation homes, rental houses, etc.).
Prop 13 is certainly unfair policy, but is almost certainly not a causal factor.
New York is a great example of a place with runaway train property taxes and perennial housing shortages in the NYC Metro area.
Property tax escalation creates vicious cycles, vaporizing buying power and creating disincentives for property maintenance, especially in older houses and poor neighborhoods.
In those areas, government aid programs create a housing price floor, so property owners maintain the minimum requirements for habitability, run the property down to zero value, and walk away.
New York is a great example of a place with runaway train property taxes and perennial housing shortages in the NYC Metro area.
Property tax escalation creates vicious cycles, vaporizing buying power and creating disincentives for property maintenance, especially in older houses and poor neighborhoods.
In those areas, government aid programs create a housing price floor, so property owners maintain the minimum requirements for habitability, run the property down to zero value, and walk away.
> This is such a hard problem to solve
Actually, it's an easy problem to solve technically; the hard part is selling the solution politically.
All you have to do is, instead of capping the growth of the tax rate, you cap the growth of the required payment against the tax. If the tax is greater than the required payment in a given year, the locality gets a lien on the property for the difference; but, critically, that lien does not become due until the property is sold.
This system would let localities collect, in the steady state, as much property tax as they would have before; it's just that they wouldn't actually receive part of the tax on a given property until it was sold, so the money coming in would be a little lumpy. But that doesn't seem like a serious problem.
Anyway, the point is, if localities could still collect the amount of property tax on residential properties that they need, they would be more inclined to encourage residential construction.
It's been done in places, and it should have been done in California. Prop. 13 is destroying the state.
Actually, it's an easy problem to solve technically; the hard part is selling the solution politically.
All you have to do is, instead of capping the growth of the tax rate, you cap the growth of the required payment against the tax. If the tax is greater than the required payment in a given year, the locality gets a lien on the property for the difference; but, critically, that lien does not become due until the property is sold.
This system would let localities collect, in the steady state, as much property tax as they would have before; it's just that they wouldn't actually receive part of the tax on a given property until it was sold, so the money coming in would be a little lumpy. But that doesn't seem like a serious problem.
Anyway, the point is, if localities could still collect the amount of property tax on residential properties that they need, they would be more inclined to encourage residential construction.
It's been done in places, and it should have been done in California. Prop. 13 is destroying the state.
It would make the law more complicated, but I think the property tax should be recalculated annually based on your property value but it should also be capped to a percentage of income. You could set a floor of the existing prop-13 tax rate. And ideally only the land value is taxed, not the structure on top of it.
And this has exactly nothing to do with Vancouver..
<Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples)>
No, it sets your base tax value at purchase to 1% of the purchase/FMV price, and its increases from there are annual and limited to 2% of the previous tax.
e.g. assuming a purchase price in 2015 of $1 million:
Year Tax
1: $102,000 max
2: $104,040 max
etc. (initial * (1.02 ^ year#))
<Your tax gets re-calculated only if you sell your house>
Or any other change in majority ownership. It can also be triggered by improvements.
Note that local governments heap many additional taxes in the form of "parcel taxes" that are fixed amounts -- a regressive tax effect (a $20M estate and a $300K condo pay the same amount).
No, it sets your base tax value at purchase to 1% of the purchase/FMV price, and its increases from there are annual and limited to 2% of the previous tax.
e.g. assuming a purchase price in 2015 of $1 million:
Year Tax
1: $102,000 max
2: $104,040 max
etc. (initial * (1.02 ^ year#))
<Your tax gets re-calculated only if you sell your house>
Or any other change in majority ownership. It can also be triggered by improvements.
Note that local governments heap many additional taxes in the form of "parcel taxes" that are fixed amounts -- a regressive tax effect (a $20M estate and a $300K condo pay the same amount).
In Toronto it is based on assessed value. You get a letter each year with a fairly conservative estimate of the value of your home, and your tax is a flat percentage based on the line item in the budget (city, education and transit).
Calculator: http://wx.toronto.ca/inter/fin/tax.nsf/tax?openform
In Vancouver, property tax is based on calculating the cost of the provided services, then dividing the cost over all the homes based on home price and adjusted for and a few factors such as location. Every home is assessed annually, which becomes the basis for how much tax you pay. Theoretically, if the cost of providing the services were constant and all home values increased at the same rate, your property tax would never change.
One of the reasons I had heard for some people wanting it is that some local politicians had figured out that they could manipulate housing valuations to increase their tax revenue. It's not in the list on Wikipedia and I'm not sure of the validity of it all as I'm not aware of what the practices actually are in California; but I recall reading about it back when Arnold first ran for governor.
Incentive the use of land to facilitate more people.
Encourage / incentivize mixed use developments with affordable housing units.
Tax unused empty lots, empty apartments, low volume office buildings, etc..
Build affordable compact mobile homes.
Encourage / incentivize mixed use developments with affordable housing units.
Tax unused empty lots, empty apartments, low volume office buildings, etc..
Build affordable compact mobile homes.
Do you really think the housing problem in the Bay Area is the result of prop. 13?
The housing problem is multifaceted.
"Let's just get rid of prop. 13 today." Do you really think the price of realestate, or rentals will go down?
In my county, the county workers are already paid over $100k/yr. for picking up trash on our supposedly filthy trails. Our county workers are paid very well. Where I reside we have cops everywhere. You could remove 75 percent of them, and I don't think anyone would notice, except for the fees they bring in.
Howard Jarvis knew what government did with more money; they spent it on themselves.
O.k.--I'm not in the mood for this, but the housing crisis in the Bay Area is due to a lot of factors. It's a nice place to live. Your boss wants the best. I don't know why they picked the Bay Area. There's other nice places, with temperate climates? He wants only the best for himself, and his spawn. The best house. The best schools. The best car. And by golly, he only deserves the best?
San Francisco, and Marin county are not designed to scale. San Francisco has a better shot at growth than Marin, but I leave that alone. They can go up in S.F.? But I don't think that city will ever see real subways, and not because of money.
Some Bay Area residents are NIMBY'S. Some have good reason--look at 101 at 3:30 p.m. The sewers are old, and small. The streets are narrow. It's surrounded by oceans, federal parks, etc. It's not a vast area.
Local governments almost never approve variances. Sure they take the money, but never approve. It's very difficult to build in the Bay Area. It's almost like they go out of their way to curtail growth. I would love to build a small cabin. Twenty years ago my dreams were shattered when I tried. The kind lady at the planning department, said I'll take your money for the variance, but honestly-- they never approve.
When I was a kid Howard Jarvis wrote a book, called I'm Mad as Hell. My father was a new journeyman electrician, and when my father would look at that property tax bill yearly. My father was beyond disgusted looking at those rising numbers. Every year they took money, and spent it on Themselfs. My father was a conservative Rebublican, but was all for prop. 13, along with millions of Californians. Even though I was a kid, I could feel the anger among adults. The politicians had a little game back then; raise the assessed value one year, raise the tax rate the next. There was always the same loser in this games, and it was the guy who paid the taxes.
If you honestly think the housing crisis is due to prop. 13, read ISBN: 0-8129-0858-9 I'm Mad As Hell.
By the way, I'm disgusted with the housing situation along with everyone else. I don't blame prop. 13 though. A few weeks ago I heard a lady on the radio say, "I lowered my tenants rent $500 a month." Announcer, "Why?" Moral lady, "I was having a hard time looking at myself in the mirror."
The housing problem is multifaceted.
"Let's just get rid of prop. 13 today." Do you really think the price of realestate, or rentals will go down?
In my county, the county workers are already paid over $100k/yr. for picking up trash on our supposedly filthy trails. Our county workers are paid very well. Where I reside we have cops everywhere. You could remove 75 percent of them, and I don't think anyone would notice, except for the fees they bring in.
Howard Jarvis knew what government did with more money; they spent it on themselves.
O.k.--I'm not in the mood for this, but the housing crisis in the Bay Area is due to a lot of factors. It's a nice place to live. Your boss wants the best. I don't know why they picked the Bay Area. There's other nice places, with temperate climates? He wants only the best for himself, and his spawn. The best house. The best schools. The best car. And by golly, he only deserves the best?
San Francisco, and Marin county are not designed to scale. San Francisco has a better shot at growth than Marin, but I leave that alone. They can go up in S.F.? But I don't think that city will ever see real subways, and not because of money.
Some Bay Area residents are NIMBY'S. Some have good reason--look at 101 at 3:30 p.m. The sewers are old, and small. The streets are narrow. It's surrounded by oceans, federal parks, etc. It's not a vast area.
Local governments almost never approve variances. Sure they take the money, but never approve. It's very difficult to build in the Bay Area. It's almost like they go out of their way to curtail growth. I would love to build a small cabin. Twenty years ago my dreams were shattered when I tried. The kind lady at the planning department, said I'll take your money for the variance, but honestly-- they never approve.
When I was a kid Howard Jarvis wrote a book, called I'm Mad as Hell. My father was a new journeyman electrician, and when my father would look at that property tax bill yearly. My father was beyond disgusted looking at those rising numbers. Every year they took money, and spent it on Themselfs. My father was a conservative Rebublican, but was all for prop. 13, along with millions of Californians. Even though I was a kid, I could feel the anger among adults. The politicians had a little game back then; raise the assessed value one year, raise the tax rate the next. There was always the same loser in this games, and it was the guy who paid the taxes.
If you honestly think the housing crisis is due to prop. 13, read ISBN: 0-8129-0858-9 I'm Mad As Hell.
By the way, I'm disgusted with the housing situation along with everyone else. I don't blame prop. 13 though. A few weeks ago I heard a lady on the radio say, "I lowered my tenants rent $500 a month." Announcer, "Why?" Moral lady, "I was having a hard time looking at myself in the mirror."
It seems like many major cities of the world are experiencing this problem, and no city has been able to come up with a good solution. It always leads to displacement and newspaper articles about displacement, but no real solutions.
Here are a couple of solutions:
1. Build really tall. Hasn't worked out all that great in Hong Kong, though.
2. Rent control. This is often unfair and inflates price of non-rent controlled apartments.
3. Tax the living crap out of property speculation. Not sure if this has been tried anywhere, and I'm sure it would be unpopular among many middle class home owners as well. I'm still rooting for Georgism.
4. Accept that it's a lost cause and move on to the next underdog city that will stay un-gentrified for the next 10 years.
Here are a couple of solutions:
1. Build really tall. Hasn't worked out all that great in Hong Kong, though.
2. Rent control. This is often unfair and inflates price of non-rent controlled apartments.
3. Tax the living crap out of property speculation. Not sure if this has been tried anywhere, and I'm sure it would be unpopular among many middle class home owners as well. I'm still rooting for Georgism.
4. Accept that it's a lost cause and move on to the next underdog city that will stay un-gentrified for the next 10 years.
Singapore has a pretty good solution for this sort of thing. Socialize Housing (https://en.wikipedia.org/wiki/Housing_and_Development_Board), and then drop 10s of thousands of new units onto the market continuously, subsidize citizen ownership (with further subsidies if you live close to your parents), and further, create a culture of constantly wiping out the older (20-30+ year) apartment blocks that were lower density, and replacing them with taller, higher density buildings. (https://en.wikipedia.org/wiki/Selective_En_bloc_Redevelopmen... )
Pricing has stabilized, and, even is dropping a little bit.
Pricing has stabilized, and, even is dropping a little bit.
That requires the government to acknowledge there is a problem and come up with a clear strategy to solve the problem.
The BC Provincial Government is working very hard to ignore it as a problem, where they won't even commission studies to generate data on how bad the problem is (or isn't). The federal government has also signaled their distancing from the Vancouver housing issue.
Also, the real problem is foreign ownership. Canada has some of the loosest foreign ownership laws in the world, and provincial/federal governments do not punish foreign ownership with taxes or anything of the like. That means if you are making a lot of money in a corrupt country (China/Saudi Arabia), the Vancouver housing market is a great insurance policy.
The result is you have entire neighbourhoods with no available properties, but are virtually empty (Coal Harbour), and new buildings are built small and shoddy (meant for investment, not livability).
My wife and I make over 100k per year combined, and we will absolutely be leaving the city when we start a family. It all stems from the fact that the local government is willfully ignoring what can be compared to a cancer. It'll only get worse.
The BC Provincial Government is working very hard to ignore it as a problem, where they won't even commission studies to generate data on how bad the problem is (or isn't). The federal government has also signaled their distancing from the Vancouver housing issue.
Also, the real problem is foreign ownership. Canada has some of the loosest foreign ownership laws in the world, and provincial/federal governments do not punish foreign ownership with taxes or anything of the like. That means if you are making a lot of money in a corrupt country (China/Saudi Arabia), the Vancouver housing market is a great insurance policy.
The result is you have entire neighbourhoods with no available properties, but are virtually empty (Coal Harbour), and new buildings are built small and shoddy (meant for investment, not livability).
My wife and I make over 100k per year combined, and we will absolutely be leaving the city when we start a family. It all stems from the fact that the local government is willfully ignoring what can be compared to a cancer. It'll only get worse.
Also, the real problem is foreign ownership.
What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!".
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher. Some of the stats make Canada look even worse than the US did at it's peak[1].
[1]http://2oqz471sa19h3vbwa53m33yj.wpengine.netdna-cdn.com/wp-c...
What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!".
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher. Some of the stats make Canada look even worse than the US did at it's peak[1].
[1]http://2oqz471sa19h3vbwa53m33yj.wpengine.netdna-cdn.com/wp-c...
Unfortunately, the provincial/foreign governments refuse to even study the problem. So all we get is anecdotes and investigatory journalism[1], which do not make for good data points.
http://www.theglobeandmail.com/news/investigations/the-real-...
http://www.theglobeandmail.com/news/investigations/the-real-...
There actually is data.
Ian Young, who writes the Hongkouver blog for the South China Morning Post, said this in a recent interview with Vancouver Magazine:
> We’ve got peer-reviewed academic data from David Ley at UBC, who found what he called ‘an unusually decisive link’ between immigration and property prices in Vancouver, and this is going back over 25 years. We had Markus Moos and Andrejs Skaburskis who did another peer-reviewed piece of academic research that found that prices in Vancouver had become decoupled from local incomes by virtue of the fact that the home buying behavior of many recent immigrants was not tied to their local income. That cuts directly to the issue of foreign money.[1]
A quick google for those authors will turn up their studies.
1- http://vanmag.com/city/the-van-mag-qa-ian-young/
Ian Young, who writes the Hongkouver blog for the South China Morning Post, said this in a recent interview with Vancouver Magazine:
> We’ve got peer-reviewed academic data from David Ley at UBC, who found what he called ‘an unusually decisive link’ between immigration and property prices in Vancouver, and this is going back over 25 years. We had Markus Moos and Andrejs Skaburskis who did another peer-reviewed piece of academic research that found that prices in Vancouver had become decoupled from local incomes by virtue of the fact that the home buying behavior of many recent immigrants was not tied to their local income. That cuts directly to the issue of foreign money.[1]
A quick google for those authors will turn up their studies.
1- http://vanmag.com/city/the-van-mag-qa-ian-young/
Those studies are seriously flawed imo as their methodology is to filter on non-anglicized Chinese names and use that as a proxy for foreign money. That would describe a lot of people that aren't recent immigrants, like me.
If anything, those studies show that ethinic-Chinese people are more predisposed to buying a house than renting, even when renting is much cheaper.
If anything, those studies show that ethinic-Chinese people are more predisposed to buying a house than renting, even when renting is much cheaper.
The non-anglicized Chinese names study that you're referring to is by Andy Yan, an architect in Vancouver.
His data is interesting and adds to the conversation, but is not peer reviewed or an academic study[1].
The studies I refer to above are more rigorous in their approach and thus their results are, imho, more reliable.
http://www.vancourier.com/news/controversial-foreign-ownersh...
His data is interesting and adds to the conversation, but is not peer reviewed or an academic study[1].
The studies I refer to above are more rigorous in their approach and thus their results are, imho, more reliable.
http://www.vancourier.com/news/controversial-foreign-ownersh...
seriously flawed is an overstatement; there have been two studies done so far and while the researchers acknowledge the limitations of the method, in aggregate it is considered mostly sound by their peers.
But I agree - we should have something a bit more conclusive than 'Chinese names'. But the whole point is that the current provincial government is actively hostile to requiring real estate agents to collect this information. So last names are all we have.
But I agree - we should have something a bit more conclusive than 'Chinese names'. But the whole point is that the current provincial government is actively hostile to requiring real estate agents to collect this information. So last names are all we have.
One of the studies looked at the names of people purchasing in a pricy small neighbourhood. That hardly generalizes to all of vancouver.
Just looking at that neighbourhood on MLS, it really doesn't look any different than the rest of Vancouver-proper.
What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!".
It's pretty easy to find them. Google 'Andy Yan'; he's an economist at UBC who did the most recent study.
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher.
Vancouverites are going into unsustainable debt, but at this point mostly for condos, which remain expensive but affordable. The detached house market is long past being affected by CHMC policy and borrowing rules; not even doctors and lawyers can afford the $5-6 million dollar homes that are such a big part of the market here, not even with leverage.
This is part of what I try to tell people when they say that the Vancouver housing market is a 'bubble' - it isn't a bubble because it isn't being driven by leverage; it's being driven by regulatory differences in Canada and China; China has a punishing inheritance tax, and Canada has the most lax rules in the OECD for importing money and buying real estate. There simply is no 'bubble' here to burst. That's not to say that the situation isn't extremely unstable, but without leverage this simply isn't a 'bubble'.
It's pretty easy to find them. Google 'Andy Yan'; he's an economist at UBC who did the most recent study.
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher.
Vancouverites are going into unsustainable debt, but at this point mostly for condos, which remain expensive but affordable. The detached house market is long past being affected by CHMC policy and borrowing rules; not even doctors and lawyers can afford the $5-6 million dollar homes that are such a big part of the market here, not even with leverage.
This is part of what I try to tell people when they say that the Vancouver housing market is a 'bubble' - it isn't a bubble because it isn't being driven by leverage; it's being driven by regulatory differences in Canada and China; China has a punishing inheritance tax, and Canada has the most lax rules in the OECD for importing money and buying real estate. There simply is no 'bubble' here to burst. That's not to say that the situation isn't extremely unstable, but without leverage this simply isn't a 'bubble'.
China has a punishing inheritance tax, really? China has no inheritance tax, it also lacks a property tax or even a capital gains tax. Libertarians would love it here if it weren't for the police state...
Why Chinese buy abroad: to park money outside of China, to participate in real estate markets leased screwed up than their own (say what you want about Vancouver, it isn't anywhere near as bad as Beijing Shanghai Shenzhen), and to have an exit plan when they fall out of favor or things go to hell in China.
Why Chinese buy abroad: to park money outside of China, to participate in real estate markets leased screwed up than their own (say what you want about Vancouver, it isn't anywhere near as bad as Beijing Shanghai Shenzhen), and to have an exit plan when they fall out of favor or things go to hell in China.
China has a punishing inheritance tax, really? China has no inheritance tax
Sorry; proposed inheritance tax.
http://www.ibtimes.com/chinas-proposed-inheritance-tax-meets...
My point stands; Canadian interest rates could double and Vancouver house prices wouldn't budge; some Canadians would have their homes foreclosed on, but there's so much money in the market from China that homes here would still be unaffordable to people working in Canada and paying Canadian taxes.
This just isn't a 'bubble'.
China has no inheritance tax, it also lacks a property tax or even a capital gains tax. Libertarians would love it here if it weren't for the police state...
Nice! This sounds like a pretty good way to game the system; earn all your money in a tax-less free-wheeling libertarian wonderland, cash out, then bring your millions to a place with no wealth tax! The new place will have lots of social services and lots of burdensome income taxes for the locals to pay for them, but you made your money and you don't have income to tax! Win!
I should figure out how to get in on this.
Sorry; proposed inheritance tax.
http://www.ibtimes.com/chinas-proposed-inheritance-tax-meets...
My point stands; Canadian interest rates could double and Vancouver house prices wouldn't budge; some Canadians would have their homes foreclosed on, but there's so much money in the market from China that homes here would still be unaffordable to people working in Canada and paying Canadian taxes.
This just isn't a 'bubble'.
China has no inheritance tax, it also lacks a property tax or even a capital gains tax. Libertarians would love it here if it weren't for the police state...
Nice! This sounds like a pretty good way to game the system; earn all your money in a tax-less free-wheeling libertarian wonderland, cash out, then bring your millions to a place with no wealth tax! The new place will have lots of social services and lots of burdensome income taxes for the locals to pay for them, but you made your money and you don't have income to tax! Win!
I should figure out how to get in on this.
That is quite old. Anyways, taxes are not a problem in China yet.
Anyways we've seen is before with the Japanese in the 80s, and it eventually all crashed down, leaving the Vancouver/Seattle/California real estate markets in a rut for more than a decade! I'm guessing when the Chinese economy comes back down to earth, the exact same thing is going to happen again.
Anyways we've seen is before with the Japanese in the 80s, and it eventually all crashed down, leaving the Vancouver/Seattle/California real estate markets in a rut for more than a decade! I'm guessing when the Chinese economy comes back down to earth, the exact same thing is going to happen again.
Japan had 120 million people in the 80's. China is currently at 1.35 billion. There were a million new millionaires created in China in 2014. I'm not sure that the Japan situation compares to China very well.
The way things are going right now, it seems to be playing out exactly the same, just the scale is much larger given the increase in population (million of new millionaires were created in Japan also, of course, with a much smaller population base than China!).
I think the point is that if housing prices in Vancouver peak around $2M, the dust settles, and housing prices fall and equilibriate down to $1M, living in Vancouver doesn't really get any more realistic.
I too am skeptical of the Japan comparison. China is both a very densely populated but also an extremely populous country and I think its just natural that a lot of Chinese will want to leave for less-densely populated places. Just the number of people involved makes this a problem unlike any other we've seen in history; how many tens of millions of Chinese millionaires now have the option of picking up and leaving their homeland? The scale of the migration is larger but the size of west coast cities isn't; certainly not by a factor of 10.
I too am skeptical of the Japan comparison. China is both a very densely populated but also an extremely populous country and I think its just natural that a lot of Chinese will want to leave for less-densely populated places. Just the number of people involved makes this a problem unlike any other we've seen in history; how many tens of millions of Chinese millionaires now have the option of picking up and leaving their homeland? The scale of the migration is larger but the size of west coast cities isn't; certainly not by a factor of 10.
It depends on how much is speculation vs. how much it is Chinese from the mainland actually moving to Vancouver. How many Chinese can actually emigrate to Vancouver, or why would they go there when they can go elsewhere? I'm old enough to have seen Vancouver real estate go through boom and bust before, and I'm just a Seattleite.
Anyways, we've all heard "its different this time" before, and it never is.
Anyways, we've all heard "its different this time" before, and it never is.
I have a lot of love for Vancouver, but the strange insistence on low salaries in an expensive housing market, with serious traffic and physical natural barriers to transportation, is a real problem.
I know of several developers, whose advice and preference is to move out of the city (closer to skiing/biking/etc) and work remotely for a US company.
There is plenty of evidence of the foreign property issue, and the willful ignorance of the government. Besides everything else posted, here's an academic case study:
http://news.nationalpost.com/news/canada/in-a-six-month-peri...
http://www.slideshare.net/ayan604/ownership-patterns-of-sing...
I know of several developers, whose advice and preference is to move out of the city (closer to skiing/biking/etc) and work remotely for a US company.
There is plenty of evidence of the foreign property issue, and the willful ignorance of the government. Besides everything else posted, here's an academic case study:
http://news.nationalpost.com/news/canada/in-a-six-month-peri...
http://www.slideshare.net/ayan604/ownership-patterns-of-sing...
work remotely? TN visa effectively lets you earn US wages.
Vancouver (area) is still a wonderful place to live. Working remotely lets you do that while earning enough to enjoy it. :)
I have witnessed and seen the day to day effects of a city (albeit, a very small one) that did find a solution to this problem: Aspen, Colorado.
It's a tremendous outlier - both in population (8000 full time residents) and in pricing (even more expensive free market housing than any of the big markets that are typically discussed).
The solution was to build city-subsidized "resident housing" that actual residents (as opposed to seasonal) enter a lottery to win, which gives them the ability to purchase the property (again, subsidized) and become property owners inside Aspen. Although the property itself can appreciate with the market, the owner can only realize 2-4% appreciation per year - the rest goes back to the city.
It works. There is a legitimate, affordable path to actual home ownership for regular folks in Aspen, and it takes those people out of the "affordable" rental pool which softens the pricing pressure for people who aren't staying forever or who haven't won a lottery share yet.
It's a tremendous outlier - both in population (8000 full time residents) and in pricing (even more expensive free market housing than any of the big markets that are typically discussed).
The solution was to build city-subsidized "resident housing" that actual residents (as opposed to seasonal) enter a lottery to win, which gives them the ability to purchase the property (again, subsidized) and become property owners inside Aspen. Although the property itself can appreciate with the market, the owner can only realize 2-4% appreciation per year - the rest goes back to the city.
It works. There is a legitimate, affordable path to actual home ownership for regular folks in Aspen, and it takes those people out of the "affordable" rental pool which softens the pricing pressure for people who aren't staying forever or who haven't won a lottery share yet.
[deleted]
They already have this lottery system in various cities in the SF Bay Area. I'm sure it helps some, but it hasn't made a big dent in the housing problem.
"1. Build really tall. Hasn't worked out all that great in Hong Kong, though."
What do you mean when you say it hasn't worked out great in Hong Kong? Is it because prices are still high in a lot of neighborhoods there? I'd say the build-really-tall strategy has worked out quite well in HK. There is a range of affordability in close proximity with good transit, and lots of parks and open space. It's a remarkably livable city.
The fundamental problem is that real estate in major cities has become a scarce luxury good covered by the wealthy. Restrictions on building - rent control and aggressive property taxes basically fall into this category - only make things worse.
The only way to make Vancouver, SF, and anywhere else affordable is to radically increase supply relative to demand. In practice things aren't that simple.
The best bet for someone looking to live and raise a family is probably your fourth option. There are a lot of really nice cities out there.
What do you mean when you say it hasn't worked out great in Hong Kong? Is it because prices are still high in a lot of neighborhoods there? I'd say the build-really-tall strategy has worked out quite well in HK. There is a range of affordability in close proximity with good transit, and lots of parks and open space. It's a remarkably livable city.
The fundamental problem is that real estate in major cities has become a scarce luxury good covered by the wealthy. Restrictions on building - rent control and aggressive property taxes basically fall into this category - only make things worse.
The only way to make Vancouver, SF, and anywhere else affordable is to radically increase supply relative to demand. In practice things aren't that simple.
The best bet for someone looking to live and raise a family is probably your fourth option. There are a lot of really nice cities out there.
I'm basing my judgment on hearsay. I was under the impression that HK property prices were through the roof, so I stand corrected.
The price are through the roof, and you have to compare it to Median salary. The price per Square Feet / or Square Meter is expensive.
Of coz if you are working in Hong Kong as a wealthy individual you would have no problem enjoying everything HK has to offer. This is the same as any other place in the world.
https://twitter.com/FIVRE604/status/697822416894951424
You have to also include the City and State difference. Vancouver has a problem with Median Salary to Housing price at 10, and Sydney is at 12. Hong Kong is 19. Which means if HK property prices dropped by 50% it will still be around the same level as Vancouver.......
Of coz if you are working in Hong Kong as a wealthy individual you would have no problem enjoying everything HK has to offer. This is the same as any other place in the world.
https://twitter.com/FIVRE604/status/697822416894951424
You have to also include the City and State difference. Vancouver has a problem with Median Salary to Housing price at 10, and Sydney is at 12. Hong Kong is 19. Which means if HK property prices dropped by 50% it will still be around the same level as Vancouver.......
They certainly are in plenty of neighborhoods - especially compared to other cities in China. The thing is that despite the tall buildings there isn't actually that much supply on HK island itself because it's so tiny. Still, I think there's a much bigger range relative to overall quality of urban life compared to, say, SF. And things get a lot more affordable across the harbor in Kowloon and in the New Territories. Though, even there it's probably not cheap compared to most cities in mainland China.
I'm far from an expert on this though, and maybe I'm off base here. I've just spent time there and looked at real estate and been struck by how not impossible it was to find reasonable places at reasonable prices compared to the Bay Area.
I'm far from an expert on this though, and maybe I'm off base here. I've just spent time there and looked at real estate and been struck by how not impossible it was to find reasonable places at reasonable prices compared to the Bay Area.
[deleted]
I think it's a symptom of something else: the hyper-centralization of relevance and cultural center of gravity in only a few places.
When I was younger (1990s), I don't remember it mattering so much where you were located. I've spoken to older people and they concur: they've all said that when they were young being in, say, Indianapolis or Toledo was not a big deal.
Today, at least in the USA, there's a strong sense that you're nobody unless you are in one of about eight big coastal cities. Nothing happens anywhere else.
I'm talking about perception here. You can argue that this isn't really true, and that you can do anything most anywhere, but the cultural perception is that you're nobody and can't do anything unless you are in NYC, SF, LA, etc.
I'm a startup founder and have been told by several people on several occasions that we are doomed because we are not in the Bay Area. I'm in SoCal but apparently if we're not in SF or its Southern suburbs it's impossible to succeed as a tech company. Obviously I don't believe this, but the meme is strong. If enough people take this stuff seriously, it's going to contribute to a hell of a property bubble in SF/SV.
I still don't understand why this is the case, especially since the Internet was supposed to have the opposite effect. By making information globally available and communication easy, the Internet was supposed to flatten the world and make place less relevant. Instead I've noticed a strong and obvious trend in the opposite direction since circa 2000.
I can only comment on the USA, but what I see elsewhere seems to support this being a global thing. London has gone totally insane for example. I wonder if the Internet is actually having a paradoxical centralizing effect here, allowing larger cities to broadcast their cultural "signal" and then have that signal amplified enough by network effects to make them appear exponentially more and more influential. This in turn drives a feedback loop in which talent and ambition is drawn increasingly to these cities, etc., and the rest of the country is hollowed out.
It's actually part of an even larger trend. Since 2000 everything seems to have gone increasingly power law: wealth distribution, geographic relevance, education, etc.
When I was younger (1990s), I don't remember it mattering so much where you were located. I've spoken to older people and they concur: they've all said that when they were young being in, say, Indianapolis or Toledo was not a big deal.
Today, at least in the USA, there's a strong sense that you're nobody unless you are in one of about eight big coastal cities. Nothing happens anywhere else.
I'm talking about perception here. You can argue that this isn't really true, and that you can do anything most anywhere, but the cultural perception is that you're nobody and can't do anything unless you are in NYC, SF, LA, etc.
I'm a startup founder and have been told by several people on several occasions that we are doomed because we are not in the Bay Area. I'm in SoCal but apparently if we're not in SF or its Southern suburbs it's impossible to succeed as a tech company. Obviously I don't believe this, but the meme is strong. If enough people take this stuff seriously, it's going to contribute to a hell of a property bubble in SF/SV.
I still don't understand why this is the case, especially since the Internet was supposed to have the opposite effect. By making information globally available and communication easy, the Internet was supposed to flatten the world and make place less relevant. Instead I've noticed a strong and obvious trend in the opposite direction since circa 2000.
I can only comment on the USA, but what I see elsewhere seems to support this being a global thing. London has gone totally insane for example. I wonder if the Internet is actually having a paradoxical centralizing effect here, allowing larger cities to broadcast their cultural "signal" and then have that signal amplified enough by network effects to make them appear exponentially more and more influential. This in turn drives a feedback loop in which talent and ambition is drawn increasingly to these cities, etc., and the rest of the country is hollowed out.
It's actually part of an even larger trend. Since 2000 everything seems to have gone increasingly power law: wealth distribution, geographic relevance, education, etc.
As far as I can see this is exactly what is happening. More powerful computers and communications are amplifying the power of individuals, and as a result making relationships even more important. And cities have always been the places of innovation and relationships. Just even more so now.
But it's not just cities. Philadelphia and Baltimore and Atlanta are big cities, but they aren't the right cities. It's a small number of them. It's not just urbanism, but also brand.
I think it may just depend on what it is you're trying to accomplish with your career. Take Atlanta since you bring it up. Atlanta already is the number one place to be globally for a career in Information Security which is a significant chunk of the tech community even though it's not nearly as flashy as social-web. Atlanta is also becomming a nexus for email-related startups (it's really not just Mailchimp there are several major ones here when you look at volume of email sent). Turner is headquartered in Atlanta, as is Coca Cola, Home Depot, CNN, and more.
Atlanta has become a really excellent city for graphic artists and design firms because companies such as Cartoon Network pull artists in from the global market, and then these artists stick around and end up engaging with the local startup community. In other words Atlanta is becoming a designer hub (and the city's close-enough proximity to Disney helps boost this effect)
In addition it's also a nexus for medical startups probably due to the fact that the CDC is here.
Atlanta has become a really excellent city for graphic artists and design firms because companies such as Cartoon Network pull artists in from the global market, and then these artists stick around and end up engaging with the local startup community. In other words Atlanta is becoming a designer hub (and the city's close-enough proximity to Disney helps boost this effect)
In addition it's also a nexus for medical startups probably due to the fact that the CDC is here.
Those are good points and I don't disagree at all, but I was talking about perception more than reality. There's still this immense perception that if you're not in the top five you don't exist, and I think that's one of the factors driving real estate hyperinflation in those places.
The other funny phenomenon I've noted is people assuming we are in SV and asking whether we are "down in the valley" or "up in the city." I say "we're waaaaaay down in the valley... like eight hours South." I bet companies in Atlanta will give an address in one of Atlanta's burbs and get asked "where's that? is that in the East bay?"
Maybe the whole thing is just real estate fund or bank propaganda.
The other funny phenomenon I've noted is people assuming we are in SV and asking whether we are "down in the valley" or "up in the city." I say "we're waaaaaay down in the valley... like eight hours South." I bet companies in Atlanta will give an address in one of Atlanta's burbs and get asked "where's that? is that in the East bay?"
Maybe the whole thing is just real estate fund or bank propaganda.
Yes, but there are others to choose from, depending on sector. Fintech startups, for example, can be based in Chicago rather than NYC, biotech has several hubs that are outside your list, etc.
True, but as someone from Europe, I can tell you the branding has always been the case. NYC, Boston, SF, and LA, were always the outstanding cities relative to those you mention above. We rarely heard of, rarely saw in movies and TV, many other cities outside of those few.
I'm not saying you're wrong -- far from it -- but the brand has been there for longer than the phenomenon we're discussing here. Perhaps the tech has just made it even more pronounced.
I'm not saying you're wrong -- far from it -- but the brand has been there for longer than the phenomenon we're discussing here. Perhaps the tech has just made it even more pronounced.
I agree with you that this a phenomenon that is taking place and yes when I was younger I don't remember it being so severe. Even mentioning you're live in a 'second tier city' makes some people think, well this persons not serious. Aside, I live in London UK and people are paying insane rents for pure garbage tear down style disgusting properties.
I agree that this is the status quo re: startups, but the high water mark was probably a couple of years ago, with the caveats that there have long been 'SV' startups that have or keep all or most of their engineering in an offshore location, say in Israel, with only the corporate office and upper management / sales moving to SV after VC investment.
However, now we're seeing two things happen:
* Several cities technically in 'flyover country' (eg. Boulder CO, Austin TX, etc.) have already built brands/ecosystems as startup hubs, and more cities are trying to copy their example rather than 'become the next SV'.
* Some fully geographically distributed companies (eg. Automattic, Buffer) are gaining visibility as success stories, and although they are still the exception, I expect more new startups to try and copy them, if only because Bay Area COL is now so ridiculously high.
However, now we're seeing two things happen:
* Several cities technically in 'flyover country' (eg. Boulder CO, Austin TX, etc.) have already built brands/ecosystems as startup hubs, and more cities are trying to copy their example rather than 'become the next SV'.
* Some fully geographically distributed companies (eg. Automattic, Buffer) are gaining visibility as success stories, and although they are still the exception, I expect more new startups to try and copy them, if only because Bay Area COL is now so ridiculously high.
> Rent control. This is often unfair and inflates price of non-rent controlled apartments.
There's the rub. Virtually all rent control schemes in North America only apply to a subset of properties (usually the shitty ones), which isn't fair and often doesn't work. Meanwhile, Germany has a long history of successful rent control, perhaps not coincidentally because it applies universally.
There's the rub. Virtually all rent control schemes in North America only apply to a subset of properties (usually the shitty ones), which isn't fair and often doesn't work. Meanwhile, Germany has a long history of successful rent control, perhaps not coincidentally because it applies universally.
They are crappy because of the rent control.
It is always and every time a terrible idea. It should never be implemented anywhere, at any time, for any reason.
Price fixing destroys markets and creates a tiny subset of winners at the expense of everyone else.
It is always and every time a terrible idea. It should never be implemented anywhere, at any time, for any reason.
Price fixing destroys markets and creates a tiny subset of winners at the expense of everyone else.
Singapore has been able to solve it to a certain extend. 90%+ of land is owned by the government and leased/purchased back to its residents at an affordable rate. This generates revenue the government can re-invest into the economy. It also reduces the impact of a small group of rent seekers siphoning billions out of the local economy.
https://en.wikipedia.org/wiki/Public_housing_in_Singapore
https://en.wikipedia.org/wiki/Public_housing_in_Singapore
Tough to employ that model if the government doesn't already own the land though.
German has some solutions: http://www.macrobusiness.com.au/2011/06/how-germany-achieved...
I think the conclusions drawn in this post are outdated.
The german real estate market was undervalued for a very long time. In the last 10 years there has been a very rapid (100%+) rent increase in the cities and a massive property rush from foreign investors in the in major cities (especially Berlin). Another factor to consider: seeing that 1.5million+ "refugees" came to Germany in 2015 alone, these increases will become even sharper over the next few years.
The german real estate market was undervalued for a very long time. In the last 10 years there has been a very rapid (100%+) rent increase in the cities and a massive property rush from foreign investors in the in major cities (especially Berlin). Another factor to consider: seeing that 1.5million+ "refugees" came to Germany in 2015 alone, these increases will become even sharper over the next few years.
5. Legalize and encourage squatting to make life difficult for speculators. Impractical, but fun :)
What's wrong with #3? Maybe it wouldn't have been popular 10 years ago, but after seeing the disastrous effects of a housing bubble, I for one would be perfectly happy to see property speculation taxed heavily. For instance, I think a simple solution would be to eliminate property taxes altogether for primary residences, but levy significant property taxes on investment properties and second/third homes. You'd have to design this bit well, though, because you don't want to kill the rental market: a lot of people aren't in a position to buy their own home. Perhaps a tax break for a first rental house, but jack up the rates if you own more than one rental house.
4. is the only solution.
Politicians can put as many fancy well-intended laws in place as they want. All these laws will have only have minimal effects on the underlying supply and demand market forces. In fact, chances are that those laws will even increase the overall average rent due to the added bureaucratic overhead und regulations that are indirectly passed on to the tenants.
Politicians can put as many fancy well-intended laws in place as they want. All these laws will have only have minimal effects on the underlying supply and demand market forces. In fact, chances are that those laws will even increase the overall average rent due to the added bureaucratic overhead und regulations that are indirectly passed on to the tenants.
You don't need to build tall to increase density.
Areas of Tokyo like Setagaya have population densities in excess of 14000 residents per square kilometer. There are few tall buildings; it is largely single-family homes.
Vancouver proper only has a density around 5000 residents per square kilometer. There's plenty of land to infill with housing without building tall.
Areas of Tokyo like Setagaya have population densities in excess of 14000 residents per square kilometer. There are few tall buildings; it is largely single-family homes.
Vancouver proper only has a density around 5000 residents per square kilometer. There's plenty of land to infill with housing without building tall.
Whenever I look at hong kong on google earth, I see a lot of empty green space that tall buildings could be built on. I also see an area in the north that isn't really dense, large open sports areas and green areas on the south island. HK the territory seems to be much larger than HK the city and it smells suspicious that prices are high but land is not being used.
And don't say, we need parks! I'm fairly certain that large amounts of that parkland is unused because you need to hike in pretty deep to enjoy it. And highrises can be built on mountains.
And don't say, we need parks! I'm fairly certain that large amounts of that parkland is unused because you need to hike in pretty deep to enjoy it. And highrises can be built on mountains.
>And don't say, we need parks! I'm fairly certain that large amounts of that parkland is unused because you need to hike in pretty deep to enjoy it.
So we should monitor how far people hike into these parks? And if the number of people in a remote part of a city park falls below X number of people a day for Y days we should just bulldoze that part of the park for buildings?
So we should monitor how far people hike into these parks? And if the number of people in a remote part of a city park falls below X number of people a day for Y days we should just bulldoze that part of the park for buildings?
It's one of the most populous, unaffordable and dense cities in the world, where people live in metal cage bunk beds because it is so unaffordable. On top of that, the majority of the land in HK is park land.
I think a few acres of park land can be developed to release pressure on the housing market so people are not forced by circumstance to live in such situations. And by developing on some park land, the deep park land will start to get some utilization.
Go look at singapore for example, they use a significantly larger amount of their land as actual city space.
I think a few acres of park land can be developed to release pressure on the housing market so people are not forced by circumstance to live in such situations. And by developing on some park land, the deep park land will start to get some utilization.
Go look at singapore for example, they use a significantly larger amount of their land as actual city space.
You do know this is the water catchment for Hong Kong?
If having essentially no affordable housing rendered a city an economic ghost town, then much of the Bay area and Manhattan would be "ghost towns" - which, in turn, would lower housing prices radically.
What might happen to Vancouver is probably similar to other major cities with housing crunches but an otherwise desirable economic climate: lower wage workers will be displaced further from the city and forced to commute, housing prices will remain astronomical and suck much of the gains from the area.
What might happen to Vancouver is probably similar to other major cities with housing crunches but an otherwise desirable economic climate: lower wage workers will be displaced further from the city and forced to commute, housing prices will remain astronomical and suck much of the gains from the area.
The problem in Vancouver is the house prices are not driven by economic activity in the city itself. Bay area and Manhattan prices are a product of the local economies. Vancouver prices are a product of speculation and wealthy people who live/have property there but don't work there.
Exactly this. A significant portion of the housing is being bought by foreign investors who don't even live here. Not only is it raising the pricing of the housing, but you don't get the economic benefit of said wealthy individuals living in the city.
I recall reading an article about a local coffee shop. A number of new buildings were built around it, all residential condo's. The condo's in the buildings were completely sold out, hundreds of units, yet it was a ghost town around there. The coffee shop, and I believe a local pub as well, ended up going out of business because despite all the units being purchased, nobody actually lived in them.
Similar experience, my office is in the heart of downtown, right on the water. A beautiful building went up beside us, all condo's for sale, starting at $1.5 million. They got bought up instantly. However, once the building opened, I looked out my window and into a building where 90% of the units remained completely empty (no curtains) for well over a year until I switched desks. Foreign investors buy up all this property and it just sits there...empty. Meanwhile everyone that lives and works here is being priced out.
I recall reading an article about a local coffee shop. A number of new buildings were built around it, all residential condo's. The condo's in the buildings were completely sold out, hundreds of units, yet it was a ghost town around there. The coffee shop, and I believe a local pub as well, ended up going out of business because despite all the units being purchased, nobody actually lived in them.
Similar experience, my office is in the heart of downtown, right on the water. A beautiful building went up beside us, all condo's for sale, starting at $1.5 million. They got bought up instantly. However, once the building opened, I looked out my window and into a building where 90% of the units remained completely empty (no curtains) for well over a year until I switched desks. Foreign investors buy up all this property and it just sits there...empty. Meanwhile everyone that lives and works here is being priced out.
A significant portion of the housing is being bought by foreign investors who don't even live here
What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!". Don't forget there is a ton of speculation going on by Canadian citizens as well.
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher. Some of the stats make Canada look even worse than the US did at it's peak[1].
[1]http://2oqz471sa19h3vbwa53m33yj.wpengine.netdna-cdn.com/wp-c...
What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!". Don't forget there is a ton of speculation going on by Canadian citizens as well.
Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of debt to buy housing, which is only pushing prices up even higher. Some of the stats make Canada look even worse than the US did at it's peak[1].
[1]http://2oqz471sa19h3vbwa53m33yj.wpengine.netdna-cdn.com/wp-c...
From the OP >> ...absentee foreign ownership and empty condos, which are said to account for nearly 25 per cent of units in certain neighbourhoods.
There are parts of Vancouver that are just dead. Rush hour now sees more carpenters and real estate agents commuting into these residential areas each morning than commute out. Places like the North Shore are essentially industrial zones manufacturing real estate prices. The people who live there (me) talk of empty neighborhoods populated only by retirees, every other house either under construction or sitting empty.
There are parts of Vancouver that are just dead. Rush hour now sees more carpenters and real estate agents commuting into these residential areas each morning than commute out. Places like the North Shore are essentially industrial zones manufacturing real estate prices. The people who live there (me) talk of empty neighborhoods populated only by retirees, every other house either under construction or sitting empty.
In the west end, it really is "yellow peril". I am asian myself, but I contribute to the economy as a job provider. Speculators are the reason for the impending ghost town that is Vancouver.
http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpo...
http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpo...
That is the worst "research" I think I've ever seen....
Chinese name? Foreigner!!! Despite Vancouver being almost 50% Asian.
Canada does not collect data on foreign ownership, and the citizenship of buyers in Yan’s study is not clear. But Yan established that 66 per cent of all buyers had “non-anglicized” Mainland China names.
Chinese name? Foreigner!!! Despite Vancouver being almost 50% Asian.
Canada does not collect data on foreign ownership, and the citizenship of buyers in Yan’s study is not clear. But Yan established that 66 per cent of all buyers had “non-anglicized” Mainland China names.
Today you learned!
The west end is the west part of downtown. You are talking about the west side, and in fact, not even the west side, but west of Alma, which is waaaay out there. Super west side.
This 'academic case study' you linked to is cited over and over however, no one really looks at the actual data in it, namely where the homes are. It's literally a tiny pocket, which has the most expensive homes in the whole city, so yes, it's primarily Asian buyers. Not that surprising.
Don't get me wrong - there is a real problem here but that study is repurposed over and over to show the extent of the problem and it's very misleading.
This 'academic case study' you linked to is cited over and over however, no one really looks at the actual data in it, namely where the homes are. It's literally a tiny pocket, which has the most expensive homes in the whole city, so yes, it's primarily Asian buyers. Not that surprising.
Don't get me wrong - there is a real problem here but that study is repurposed over and over to show the extent of the problem and it's very misleading.
This is all the dollars we blew out the trade deficit over the last 30 years coming home to roost. Those houses are essentially physical alternatives to treasury bills that pay zero interest or less with inflation.
When the market tips all those foreign investors are going to try to unload their investment property at the same time. If I lived in a market like that I probably wouldn't buy anything even assuming I had the money. There's a big hangover at the end of this party.
Except it's been this way for 30 years. Vancouver house prices have always been higher than Ontario, even back in the 80s when I lived there. So speculation is one thing, but 30 years isn't speculation. And back then they were saying it was foreigners too, especially from Hong Kong. But it's 30 years later, and the house prices haven't abated at all. That isn't speculation, that's a permanently high prices.
When my parents bought their house there it was $275,000 it was almost 75% higher than our house in Toronto. And they sold it for $1,300,000 a few years ago. Crazy, but it's only annualized 6% over 25 years, less than the stock market (but higher than normal real estate I'm assuming). However it's prime Vancouver real estate with fantastic schools, a case could be made that it's worth it if you compare to San Francisco.
The only difference is that no one knows where the money is coming from for the last 30 years. There is no industry in Vancouver, except tourism and the average salary is ~60k.
When my parents bought their house there it was $275,000 it was almost 75% higher than our house in Toronto. And they sold it for $1,300,000 a few years ago. Crazy, but it's only annualized 6% over 25 years, less than the stock market (but higher than normal real estate I'm assuming). However it's prime Vancouver real estate with fantastic schools, a case could be made that it's worth it if you compare to San Francisco.
The only difference is that no one knows where the money is coming from for the last 30 years. There is no industry in Vancouver, except tourism and the average salary is ~60k.
I mean, there's tech, professional trades, doctors, finance sector, real estate agents (lol), luxury services, etc.? That accounts for part of the money. How much? How did you determine it was insignificant, if I infer correctly from your post?
You should look more closely at Manhattan and SF. There is a ton of speculation, luxury highrises, and out-of-town wealthy buying second-, third- or fifth homes.
You really don't see any empty homes in SF...
Anecdotally I see a lot of empty apartments here in SF. Not as bad as London though. I basicslly had an entire massive luxury apartment complex to myself. I would walk around the halls drinking with friends carrying a prop ax pretending we were in the shining. Good times.
I don't think we have a lot of transparency on the how often the tenants and owners of luxury apartments are actually inhabiting them.
Bang on! At least if you made a reasonable wage it would be worth it, but everyone in Vancouver, including NHL superstars like the (Sedin) twins take a pay cut because they claim to love the opportunity to stay there. Every Vancouver employer I ever had gave me that line. "Sorry we can't pay you more, but you know, the rents! This is a great opportunity for you though". Later I found out that I made about 25-50% more than my colleagues, and I was vastly underpaid. It is a horrible work culture.
So why do speculators choose Vancouver of all places to speculate in?
1. Now-defunct Canadian Immigrant Investor program allowed you to buy permanent resident status in Canada, thus avoiding any potential future tax discrimination against foreigners. Unlike the US Green Card, Canadian PR status is permanent, affords all the privileges of citizenship except voting, and can never be revoked, even if you join a foreign army to fight Canada. A similar incarnation of this program still exists in Quebec (and allows you to move to Vancouver on day 1).
So not only can you buy property in Vancouver, but you can send your family over without worrying about any immigration troubles and always know you will be able to come live here if you desire.
2. Canada allows unlimited cash to be brought into the country tax-free as a gift to a relative.
3. Any gains from property speculation will be tax-free if a spouse or child claims the property is their residence. See (1) about ease of getting immigration status for your family.
So not only can you buy property in Vancouver, but you can send your family over without worrying about any immigration troubles and always know you will be able to come live here if you desire.
2. Canada allows unlimited cash to be brought into the country tax-free as a gift to a relative.
3. Any gains from property speculation will be tax-free if a spouse or child claims the property is their residence. See (1) about ease of getting immigration status for your family.
That explains why foreigners move to Canada. But why do they pick Vancouver among all Canadian cities?
Also note that provincial/federal governments are willfully ignorant about these issues.
>Canadian PR status is permanent.... and can never be revoked
That is incorrect. It can be revoked if the PR does not remain in Canada for at least 2 years of a 5 year period after it was issued. After the 5 year mark, most PRs have already transitioned to citizenship. http://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=727&...
That is incorrect. It can be revoked if the PR does not remain in Canada for at least 2 years of a 5 year period after it was issued. After the 5 year mark, most PRs have already transitioned to citizenship. http://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=727&...
You are correct. PRs must be in Canada for 2 of every 5 years, unless they obtain citizenship. I apologize for the error.
You forgot that, with the exception of 2008-2013, the CAD has been and is very cheap.
I can't answer that, but I can add that it is quite common in London too. I can see the allure of the "park my millions in property in the world financial capital" investment strategy, but I don't get the Vancouver version. That's not meant as a slight on Vancouver.
You can't buy a UK or US passport. You can buy a Canadian one.
http://www.immigration.ca/en/immigration-wiki2/151-updates/7...
http://www.immigration.ca/en/immigration-wiki2/151-updates/7...
What about an EB-5 visa? Isn't that somewhat similar? This doesn't directly buy a US passport, but it does allow for citizenship within a few years (and then, by extension, an American passport).
You don't get a passport, you get a Permanent Resident Card.
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Which then allows you to get a passport....
If you move to Canada and maintain residency for X number of years.
You just need to make it look like you actually are resident.
They ask for a list of trips you took outside of Canada and check that against your passport stamps. Canada has also started doing "exit checks".
Not saying they always dig into the data to see if you're lying, but they could...
Not saying they always dig into the data to see if you're lying, but they could...
Wasn't there that guy convicted in NS recently convicted of facilitated PRs staying outside Canada? As a Bayesian, that makes me think it is pretty widespread.
So it's not a home run, but it still sounds like a good deal to me - especially if I was an Oligarch keen to put distance between myself and the FSB
There's a large existing Chinese population and Canada has a stable legal system (e.g. no worry for property rights). Seattle has a similar phenomenon, though not as extensive because there is more local competition. NYC has one with Russia (though that is diminishing thanks to cheap oil).
because most of them are from china, and vancouver is on the west coast, has a large ethnic chinese population, and is for all social and economic intents and purposes the same as the US.
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When HK was getting turned back over to China, there was a lot of concern and Canada (Vancouver, Toronto etc.) became destinations of choice for many people.
This obviously isn't the only contributing factor but I know lots of people that have gone through this migration pattern.
This obviously isn't the only contributing factor but I know lots of people that have gone through this migration pattern.
As someone who grew up in Vancouver this sums up the problem.
As someone who moved from Vancouver to SF 4-5 years ago:
1. You can drive across a bridge to the east bay and find housing that is half price in semi decent neighborhoods. You can drive out for 2 hours and find housing that is the standard american price. In vancouver, driving for an hour just gives you a 100-200k discount on housing that is already over $1 million, there are no real affordable places to escape to unlike the USA.
2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners. Only a very small amount of people are in those professions, and those jobs are not concentrated in any specific area. You could go be a doctor in quebec, alberta or some other small town and still make a similar income but have a far lower housing cost. There is nothing unique or high powered economically about Vancouver, it's not the center of anything. Vancouver's economic climate is NOT desirable.
3. This affordability issue has been a problem for almost a decade, and the provincial & federal governments show no real signs of having any desire to fix it. The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage. Housing has increased in vancouver 1:1 with the GDP of the city last year, which is freaking insane. People who have owned houses have gained more than their incomes for years! For comparison, the crazy SF Bay Area is something around 1:6 with (house value increases):GDP.
4. If you're stuck in canada, then there are better places to go to as far as money:price ratios go.
I could go on and on about this, but you get the general idea. Vancouver is pretty much dead to me economically and it saddens me that it will never be a good idea to move back at this rate.
1. You can drive across a bridge to the east bay and find housing that is half price in semi decent neighborhoods. You can drive out for 2 hours and find housing that is the standard american price. In vancouver, driving for an hour just gives you a 100-200k discount on housing that is already over $1 million, there are no real affordable places to escape to unlike the USA.
2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners. Only a very small amount of people are in those professions, and those jobs are not concentrated in any specific area. You could go be a doctor in quebec, alberta or some other small town and still make a similar income but have a far lower housing cost. There is nothing unique or high powered economically about Vancouver, it's not the center of anything. Vancouver's economic climate is NOT desirable.
3. This affordability issue has been a problem for almost a decade, and the provincial & federal governments show no real signs of having any desire to fix it. The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage. Housing has increased in vancouver 1:1 with the GDP of the city last year, which is freaking insane. People who have owned houses have gained more than their incomes for years! For comparison, the crazy SF Bay Area is something around 1:6 with (house value increases):GDP.
4. If you're stuck in canada, then there are better places to go to as far as money:price ratios go.
I could go on and on about this, but you get the general idea. Vancouver is pretty much dead to me economically and it saddens me that it will never be a good idea to move back at this rate.
> 2. Nobody in vancouver makes an income over six figures unless you're in the standard professions that make that much, such as doctors, high level managers and successful business owners
Intermediate Software Developers these days made that much for a select few companies (thankfully large ones that hire more and more people).
Intermediate Software Developers these days made that much for a select few companies (thankfully large ones that hire more and more people).
"The only thing that makes it pseudo-affordable is the fact that rent is usually half price to a current mortgage."
That is an important point, and why some of my friends moved there despite knowing they won't be able to buy their own place. This also seems quite unique to Vancouver, in most other places, like SF, high housing prices implies high rental prices.
That is an important point, and why some of my friends moved there despite knowing they won't be able to buy their own place. This also seems quite unique to Vancouver, in most other places, like SF, high housing prices implies high rental prices.
The article's gist is that Vancouver lacks the "otherwise desirable economic climate" that makes the SFBA, Manhattan and London housing markets at least tolerable. Rather than being a side-effect of explosive economic growth as in SF, the housing prices are totally out-of-step with the local economy.
It's really painful.
Having average home price of $1.8m while the median salary is at $60k. Something really needs to be done to help out Vancouverites.
Having average home price of $1.8m while the median salary is at $60k. Something really needs to be done to help out Vancouverites.
Would it be as big a problem if people had a strong incentive to rent their property? I know most people like owning property, but renting often makes more economic sense. Especially when the cost to rent is significantly below a monthly mortgage.
As a city, Vancouver has the ability to vote for significant property tax increases. Which would encourage investors and speculators to rent out more of their (currently empty) property in order to offset the yearly cost of ownership. Right now, it probably is more expensive to sell property that currently has renters living in it, because evicting people is a messy, expensive and difficult process. But higher property taxes make it more expensive to own: a tax of 3% per year completely eats up a 3% yearly increase in property value. Unless you offset the tax through other income.
As a city, Vancouver has the ability to vote for significant property tax increases. Which would encourage investors and speculators to rent out more of their (currently empty) property in order to offset the yearly cost of ownership. Right now, it probably is more expensive to sell property that currently has renters living in it, because evicting people is a messy, expensive and difficult process. But higher property taxes make it more expensive to own: a tax of 3% per year completely eats up a 3% yearly increase in property value. Unless you offset the tax through other income.
I don't understand why everybody keeps talking about the "average home price" and comparing it to salaries. Homes in good neighborhoods in Vancouver are nowhere near that price unless you want to live in a little mansion. And I'm fairly certain that the median salary is largely comprised of the service industry.
The other thing I keep seeing is "in Quebec it's much more affordable..."
Yes, and your salary would be much lower and your taxes higher. Apple and oranges?
The other thing I keep seeing is "in Quebec it's much more affordable..."
Yes, and your salary would be much lower and your taxes higher. Apple and oranges?
Are you on MLS? Base house price west of Cambie is $2M (and it goes soooo much higher). Base house price in the rest of Vancouver is $1.5M. Base house price in Burnaby is now $1M. In Poco/Coquitlam/Port Moody you can find a few 'gems' for about $800k. I think the person you were responding to was pretty much spot-on.
I make about 100k. I've had job offers for Quebec that are 100k. Seriously - there's absolutely no payscale advantage or allowance for living in Vancouver. And provincial taxes in Quebec aren't much different at that tax bracket either.
I make about 100k. I've had job offers for Quebec that are 100k. Seriously - there's absolutely no payscale advantage or allowance for living in Vancouver. And provincial taxes in Quebec aren't much different at that tax bracket either.
Given that 91% of homes are now valued at > 1 million, I think you're quite wrong on this point.
Mansions do throw off the average, no doubt, but there's no denying that the typical house price for a typical Vancouverite is now north of a million dollars:
http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-...
Mansions do throw off the average, no doubt, but there's no denying that the typical house price for a typical Vancouverite is now north of a million dollars:
http://www.vancitybuzz.com/2016/01/vancouver-homes-valued-1-...
I have an anecdotal example of a friend living in SF complaining about high price of garbage disposal installation. To me it made sense, as anybody making living as a plumber is likely to be priced out of SF (unless they bought back in the 70s), so you're paying for guy's commute from Union City or Hayward or Fremont + garbage disposal installation + commute back.
Plot twist: most of the Bay Area is a ghost town, culturally.
As someone who just moved from Vancouver to the Bay Area, it's obvious the issue isn't housing. It's income. My apartment in trendy yaletown was $2350/month for a very nice 2 bed, 2 bath place within 10 mins of anything in downtown. Try finding something even remotely as nice around Silicon Valley.
The issue we should be tackling is the low wages seen in the area. The same developer who could make $100k USD in the valley makes $60k CAD in Vancouver.
The issue we should be tackling is the low wages seen in the area. The same developer who could make $100k USD in the valley makes $60k CAD in Vancouver.
San Francisco housing is expensive BECAUSE of the incomes. Vancouver housing is expensive DESPITE the incomes. It's more of a housing issue than an income one. If incomes were higher, rents would only go up as well.
I don't see why we have to separate the two. It sounds like Vancouver faces both increasingly high rent and abnormally low salary for tech jobs (although I recognize that we might not expect Silicon Valley level pay).
It's not just Vancouver that's experiencing abnormally low salaries for tech jobs, all of Canada is.
The brain drain is slow but inevitable.
The brain drain is slow but inevitable.
Alternatively, SF/the US have extremely better salaries for tech jobs. I don't think this is a problem unique to Canada (but presumably its much worse because of easier access to visas).
slow? they're all flocking down south ASAP with TN, if they haven't already.
I would argue the opposite, SF is expensive in spite of the incomes (consider across the board instead of just programmers).
I'm willing to bet if you were to map the relative rate of increase of income vs. property values over time that you would see that property values are increasing at a much higher rate than income.
I earn what could be considered a good salary, there's less than zero chance in hell that I could afford property in Marin today short of winning the lottery or massive liquidity event.
I'm willing to bet if you were to map the relative rate of increase of income vs. property values over time that you would see that property values are increasing at a much higher rate than income.
I earn what could be considered a good salary, there's less than zero chance in hell that I could afford property in Marin today short of winning the lottery or massive liquidity event.
Ding ding ding. We have a winner. While I've never ever considered moving to Vancouver, I get recruiter emails several times a month for companies in Vancouver looking for Senior programmers to move there and only offering 80k to 110k CAD at the most. That is not nearly enough money to live in Vancouver. Enough to exist but not enough to live.
The problem as I understand it is that a ton of Vancouver's housing is occupied by children of mega rich people from Asia (mostly China) who are rich enough to not care what rent costs which drives rent up for everyone else. There's such a huge l mismatch between housing costs and salaries in Vancouver.
The problem as I understand it is that a ton of Vancouver's housing is occupied by children of mega rich people from Asia (mostly China) who are rich enough to not care what rent costs which drives rent up for everyone else. There's such a huge l mismatch between housing costs and salaries in Vancouver.
I know a company that pays fresh-grad $70k-$75k base salary with 10-15% bonus almost guaranteed base on company performance (there's a calculation behind it but the bonus amount is part of your package).
Microsoft, Amazon, starting salary was 85-90k to 100k+ 2-3 years ago for 2 years - 5/7 years of experience.
Salesforce Intermediate/borderline Senior SDET (SDET typically make less than SDE) starts from 100k base with a bunch of plus plus that can boost their income to 120k-140k.
OpenDNS lurking well above $100k as well for intermediate developer.
Mogo.ca pays their front-end dev $100k base and this is a small-medium size company.
It's not the norm but thanks to US-based companies, salary is moving up and up.
Microsoft, Amazon, starting salary was 85-90k to 100k+ 2-3 years ago for 2 years - 5/7 years of experience.
Salesforce Intermediate/borderline Senior SDET (SDET typically make less than SDE) starts from 100k base with a bunch of plus plus that can boost their income to 120k-140k.
OpenDNS lurking well above $100k as well for intermediate developer.
Mogo.ca pays their front-end dev $100k base and this is a small-medium size company.
It's not the norm but thanks to US-based companies, salary is moving up and up.
That's in CAD, correct? The Canadian dollar isn't doing too well, and is expected to drop to around $.50 USD by year end.
But we're talking about local issue so currency matters less for this topic.
Unfortunately, Vancouver housing is being driven by international currencies. A low Canadian dollar makes houses in Vancouver a bargain for outsiders and even more unaffordable for anyone earning Canadian dollars.
CAD 110k is definitely enough to get a decent place, live comfortably and save some money in Vancouver.
But then again 'decent' and 'comfortably' are subjective.
But then again 'decent' and 'comfortably' are subjective.
Yes, it's enough to rent in a decent place, live comfortably, and save ~20K/year.
A senior engineer in Seattle can do the same, and save ~100K/year.
A senior engineer in Seattle can do the same, and save ~100K/year.
I'd love to live in your world! How much do you think senior engineers earn?
Most people would do well to save 20% but even assuming people save 33% then you reckon senior engineers earn over 300k?
Most people would do well to save 20% but even assuming people save 33% then you reckon senior engineers earn over 300k?
Senior engineers at Microsoft/Amazon/Google earn ~200-400K USD. (All-in)
If you can 'live well' in the more expensive Vancouver at a 110K CAD salary, you could easily save an extra 100-200K USD by moving to Seattle.
If you can 'live well' in the more expensive Vancouver at a 110K CAD salary, you could easily save an extra 100-200K USD by moving to Seattle.
You're very wrong. I have actual wage data from all 3 of those companies.
Those companies are very much outliers. Does those 3 all have development operations in Seattle?
Your figures don't seem to stack up RE Google:
https://www.glassdoor.ca/Salary/Google-Seattle-Salaries-EI_I...
Your figures don't seem to stack up RE Google:
https://www.glassdoor.ca/Salary/Google-Seattle-Salaries-EI_I...
Those GlassDoor salaries are cash. Stock and bonus add another 50-100%. My anecdotal experience with Vancouver is that some employers will throw you 15%, on a good year.
Microsoft pays a bit less, but also employs ~30,000 people in the area.
Microsoft pays a bit less, but also employs ~30,000 people in the area.
50-100% sounds high for stock and bonus when you're on 200k+ but my main point was these companies are the exception, not the rule.
The stock and bonus are included in the 200-400k number.
Microsoft and Amazon are hardly an exception in Seattle - now that Boeing is leaving, they are by far the biggest employers in the region.
Microsoft and Amazon are hardly an exception in Seattle - now that Boeing is leaving, they are by far the biggest employers in the region.
Yes, Amazon and Microsoft HQ are both in the Seattle area. Google has 2 locations here in Fremont and Kirkland. $200K+ for senior engineers sounds about right from people I've known who went to those companies.
Housing is getting expensive, but you can still buy a small 3br for about $400K in my neighborhood just south of Bellevue, so saving $100K does sound plausible.
Housing is getting expensive, but you can still buy a small 3br for about $400K in my neighborhood just south of Bellevue, so saving $100K does sound plausible.
"All-in" means total compensation (stock and bonus included), not just salary.
The problem there is the >90% of people in Vancouver who aren't in high paying tech fields. It's pretty difficult to say "just triple their wages and they'll afford houses no problem."
The real issue is property owners know someone will eventually come along and pay whatever they're asking. If wages were to dramatically increase, they'd never stop and think, "Yeah, I think I'll cap rent at $3000/month because I'm a nice guy." They'll gladly take $4000 if they can and never settle for less once they hit that point. Instead of considering lowering rents, they'll ask why you just don't get paid more.
The real issue is property owners know someone will eventually come along and pay whatever they're asking. If wages were to dramatically increase, they'd never stop and think, "Yeah, I think I'll cap rent at $3000/month because I'm a nice guy." They'll gladly take $4000 if they can and never settle for less once they hit that point. Instead of considering lowering rents, they'll ask why you just don't get paid more.
"Eventually" Looked at three houses a couple of weekends ago, all sold by Monday. Two were unlivable, one nice, but way over budget, all out in the burbs.
Every other post in this thread starts with "No, the real issue is..."
Can you guys all start up a shared google doc and hash this out to figure out which one of you is right and why the others are all wrong?
Can you guys all start up a shared google doc and hash this out to figure out which one of you is right and why the others are all wrong?
This!
The tech salaries are absurdly low. The tech CEOs who pay poor wages and are complaining about their inability to retain talent are the same ones blaming real estate.
The tech salaries are absurdly low. The tech CEOs who pay poor wages and are complaining about their inability to retain talent are the same ones blaming real estate.
The taxes are also high https://simpletax.ca/calculator
Select BC and enter in the typical income for an experienced developer in Vancouver which is 75k. Your take home salary is $59,000 plus you aren't offered any options usually just straight pay. This doesn't include all the other deductions such as EI and CPP.
Now convert CAD to USD and you're a professional experienced developer making $42,000 USD per year, in one of the highest cost cities on earth.
Select BC and enter in the typical income for an experienced developer in Vancouver which is 75k. Your take home salary is $59,000 plus you aren't offered any options usually just straight pay. This doesn't include all the other deductions such as EI and CPP.
Now convert CAD to USD and you're a professional experienced developer making $42,000 USD per year, in one of the highest cost cities on earth.
According to that calculator my taxes would be less in Ontario, Canada than California. In reality they aren't because I do married filing jointly and my wife has no income. But were I a single person it seems that it's not true that the taxes are higher there. In fact I'd be paying $5,000 less in tax in Ontario than in California (assuming wages were the same).
I don't know if EI and CPP would add up to $5,000, but certainly it would be much less if you throw Health Insurance into the the calculation.
I don't know if EI and CPP would add up to $5,000, but certainly it would be much less if you throw Health Insurance into the the calculation.
Don't forget to factor in health care. In BC, standard care that would be the bargain basement cost would likely cost you < $1500 a year. Better care not much more than $2500 tops.
I don't really remember paying for health care separately in Ontario (where I'm from originally) anyway... At least there was an option for it but it was more like "In case you become disabled and can't work" or something like that
Interesting, my take home would be about the same if I was making the same amount in Vancouver (ignoring exchange rate).
neat.
Now I just need to find a job paying that amount... oh wait. :/
neat.
Now I just need to find a job paying that amount... oh wait. :/
59k for BC,
58k for Ont,
54k for QC,
etc.
The taxes are not really higher in BC. I do agree that the cost of living is however a lot higher.
The taxes are not really higher in BC. I do agree that the cost of living is however a lot higher.
Isn't that a housing issue, though? Paying for a $2350/mo place on $60k is... pretty ridiculous.
That's a lifestyle issue.
No fresh grad ($60k) should live in "trendy" Yaletown district with 2 BR + 2 Bath.
No fresh grad ($60k) should live in "trendy" Yaletown district with 2 BR + 2 Bath.
Fresh grads are making a lot more than $60k these days. But yes, you're spot on.
A lot of fresh grads (from UBC) in Vancouver are living around Kitsilano where you can get a one bedroom place for <$1000/month. Right now I live in a two bedroom flat in the heart of Kits where I'm paying $825 and my flatmate $725.
Previously to that in Vancouver I lived in the heart of Yaletown in a 550sqft studio costing about $1300/month, and started living there on a salary of about $62k.
I've never had financial struggles living in Vancouver with salaries ranging from $42-85k, and have generally had enough disposable income to afford to travel quite a bit, ski at Whistler every weekend, and eat out and go out regularly.
That said, it's totally a renter's market. It's unaffordable for me to buy anything that I'd want to live in for the longer term, unless I go to Surrey or somewhere else in greater Vancouver, which would completely take away or hinder a lot of the benefits I see to living in Vancouver.
Previously to that in Vancouver I lived in the heart of Yaletown in a 550sqft studio costing about $1300/month, and started living there on a salary of about $62k.
I've never had financial struggles living in Vancouver with salaries ranging from $42-85k, and have generally had enough disposable income to afford to travel quite a bit, ski at Whistler every weekend, and eat out and go out regularly.
That said, it's totally a renter's market. It's unaffordable for me to buy anything that I'd want to live in for the longer term, unless I go to Surrey or somewhere else in greater Vancouver, which would completely take away or hinder a lot of the benefits I see to living in Vancouver.
I'd argue its impossible since $2350 is almost half your monthly salary before tax!
I split it with a roommate. I lived 10 mins from my work, which vastly improved my quality of life and saved me money on transit.
I estimated I was paying $100 more to live in downtown, but that was almost equivalent to the savings in transit fares.
I estimated I was paying $100 more to live in downtown, but that was almost equivalent to the savings in transit fares.
Vancouver salaries seem exceptionally low. I live in the middle of nowhere USA, and devs start out at from school over $60k USD, and I live on an acre in a 3 bed 3 bath, 6 minutes from downtown and 4 minutes from work. At $2350/month my house would have been paid off in 5 years.
I'm curious if dev salaries in Canada aren't competitive with the US due to more immigration. When I recently visited a large tech company in Canada, I was struck by how much of the team was from everywhere but US and Canada.
My theory is it seems like lots of people want to live in Vancouver, which makes salaries and housing much more competitive. Whereas where I live, people have to be enticed to move here.
Chicken and egg. Partially because of low/competitive salaries in Canada, all of the Canadians are in the US on TN visas, leaving the Canadian tech industry staffed with non-citizens.
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Those salaries are low and that's a problem, but a nice 2 bed place in SF 10 min from downtown is what - $5000-7000/mo? The rent relative to income seem similar/worse in SF?
Agreed - the last job offer I got was for 95k CAD and they would not budge higher.
Currently working remotely for about 115k CAD with a number of other perks.
I moved from Dublin, Ireland to Vancouver. Dublin rents are very high - probably as bad as Vancouver. The cost of living here is slightly lower though.
Currently working remotely for about 115k CAD with a number of other perks.
I moved from Dublin, Ireland to Vancouver. Dublin rents are very high - probably as bad as Vancouver. The cost of living here is slightly lower though.
I agree with your point in genera but in my experience as a developer who works in Vancouver, but has also worked in SF and NY, the salaries are about the same in number if not in currency. The CAD has dropped 30% in a couple of years though which does mean we effectively are getting less.
I think Vancouver actually pays tech workers pretty well because there is a high demand, a few big companies and lots of smaller innovative ones.
Vancouver doesn't have the typical jobs that pay for $1m houses and yachts though. Opportunities in finance and corporate HQ positions are minuscule compared to big US cities and Toronto.
I think Vancouver actually pays tech workers pretty well because there is a high demand, a few big companies and lots of smaller innovative ones.
Vancouver doesn't have the typical jobs that pay for $1m houses and yachts though. Opportunities in finance and corporate HQ positions are minuscule compared to big US cities and Toronto.
This is just anecdotal, but that price point at the quality you want is possible in downtown San Jose.
Vancouver real-estate is like buying gold for foreign investors, without paying tax.
"suggesting the typical wealthy foreign family buying Vancouver real estate pays little or no income or capital gains tax"
http://www.theglobeandmail.com/report-on-business/economy/ho...
"suggesting the typical wealthy foreign family buying Vancouver real estate pays little or no income or capital gains tax"
http://www.theglobeandmail.com/report-on-business/economy/ho...
This is the best response I've seen so far. Real estate is actually a great export for cities and countries, at least properly considered: http://www.slate.com/articles/business/billion_to_one/2013/1....
Seattle has a bunch of similar articles about "outsiders" supposedly driving up housing costs. Which is absurd: steel frame construction and elevators are very old technologies that allow humans to build just about as many housing units as can be desired.
Seattle has a bunch of similar articles about "outsiders" supposedly driving up housing costs. Which is absurd: steel frame construction and elevators are very old technologies that allow humans to build just about as many housing units as can be desired.
I'm not sure if you're familiar with Vancouver but outside of the small downtown core, there isn't much zoning for density. Government policy has created a supply shortage.
However, condos come with their own issues as well. There has been a building boom in Toronto that has it owns issues.. http://www.cbc.ca/news/canada/toronto/fears-that-shoddy-toro....
I think urban planning is more complicated than simply increasing supply.
However, condos come with their own issues as well. There has been a building boom in Toronto that has it owns issues.. http://www.cbc.ca/news/canada/toronto/fears-that-shoddy-toro....
I think urban planning is more complicated than simply increasing supply.
And yet 100% of major US cities that built a lot of housing between 1990 and 2013 have low housing costs:
http://www.spur.org/sites/default/files/wysiwyg/asking.price...
http://www.spur.org/sites/default/files/wysiwyg/asking.price...
Well, correct. There are lots of other expensive things you can buy which don't have any issue with price increases no matter now many people want to buy. Boats, for example. If lots of people start buying boats, then the number of boats being made increases, but the price of boats doesn't really change.
We can build units quickly and relatively cheaply (certainly the cost of building has fallen over time, certainly on a like-for-like quality basis. As you say, steel frame buildings with lift access can create housing units quickly and cheaply.
The issue is restrictions on supply caused by government policies and nimbly-ism, plus a general desire to shelter parts of the community from market forces.
It wouldn't matter how many Chinese investors wanted to buy apartments if supply kept up with demand.
We can build units quickly and relatively cheaply (certainly the cost of building has fallen over time, certainly on a like-for-like quality basis. As you say, steel frame buildings with lift access can create housing units quickly and cheaply.
The issue is restrictions on supply caused by government policies and nimbly-ism, plus a general desire to shelter parts of the community from market forces.
It wouldn't matter how many Chinese investors wanted to buy apartments if supply kept up with demand.
London has had an influx of foreign property investment over the past 20 years. Now you need an income in the region of $120,000 and a $150,000 deposit to buy your first home. Even our members of parliament are struggling to buy anything[1].
Foreign property investment is very bad for the long term prospects of a city.
[1] http://www.theguardian.com/housing-network/2016/feb/12/tory-...
Foreign property investment is very bad for the long term prospects of a city.
[1] http://www.theguardian.com/housing-network/2016/feb/12/tory-...
And yet London's population continues to grow at an astonishing rate, and businesses continue to move into London. Doesn't seem like the high prices are doing any harm to me.
People live in worse and worse conditions.
A single bedroom, that when built as the spare room for kids to play in or a visitor, costs £400/month.
Myself and several friends have left London. Perhaps I've been replaced by a 21 year old British graduate, but this seems less likely than 10 years ago.
https://www.gumtree.com/single-room-flatshare/london
A single bedroom, that when built as the spare room for kids to play in or a visitor, costs £400/month.
Myself and several friends have left London. Perhaps I've been replaced by a 21 year old British graduate, but this seems less likely than 10 years ago.
https://www.gumtree.com/single-room-flatshare/london
Well, someone's replaced you, since the population is growing rather than shrinking. I've only been here 7 years (since graduation) but more and more of my similarly-aged friends are coming to London. I think it's young people rather than retirees, graduates rather than not, and I'm not sure I care whether British (though I think most are).
I lived in London for 10½ years, from when I started university.
Most incomers are young people, but not all are graduates — many come from Eastern and Southern Europe and work low-skill jobs. I put "British", but probably meant someone one would expect to live in London for a long time. I got to know a few construction workers from Poland and Romania, and none of them had any intention to stay — they were in London to make money, and several had wives/children 'at home'.
This can make a functioning city, but it's a change from London of 20 years ago, when it would be artists and musicians taking some of these cheap houses and I think fewer people were there to make some money and leave.
A good part of why I left is because it wasn't as interesting as it used to be. I wondered if I was getting old, but then, "of the 430 music venues that traded in London between 2007 and 2015, only 245 are still open" [1]. I certainly noticed that there were fewer gigs I wanted to see, and they'd moved from Friday/Saturday to weekdays.
The other part: I was working for a scientific charity, with charitable pay. I wasn't saving much money, even with living in a shared house, so decided I needed a new job. I wanted to continue writing software for science, so there weren't all that many jobs that interested me in London.
I now live in Copenhagen.
[1] http://www.theguardian.com/cities/2015/sep/09/the-slow-death...
Most incomers are young people, but not all are graduates — many come from Eastern and Southern Europe and work low-skill jobs. I put "British", but probably meant someone one would expect to live in London for a long time. I got to know a few construction workers from Poland and Romania, and none of them had any intention to stay — they were in London to make money, and several had wives/children 'at home'.
This can make a functioning city, but it's a change from London of 20 years ago, when it would be artists and musicians taking some of these cheap houses and I think fewer people were there to make some money and leave.
A good part of why I left is because it wasn't as interesting as it used to be. I wondered if I was getting old, but then, "of the 430 music venues that traded in London between 2007 and 2015, only 245 are still open" [1]. I certainly noticed that there were fewer gigs I wanted to see, and they'd moved from Friday/Saturday to weekdays.
The other part: I was working for a scientific charity, with charitable pay. I wasn't saving much money, even with living in a shared house, so decided I needed a new job. I wanted to continue writing software for science, so there weren't all that many jobs that interested me in London.
I now live in Copenhagen.
[1] http://www.theguardian.com/cities/2015/sep/09/the-slow-death...
> Most incomers are young people, but not all are graduates — many come from Eastern and Southern Europe and work low-skill jobs. I put "British", but probably meant someone one would expect to live in London for a long time. I got to know a few construction workers from Poland and Romania, and none of them had any intention to stay — they were in London to make money, and several had wives/children 'at home'.
There's always been people coming to London for a few years to make money. Ten years ago maybe it was the Australians coming over here to work in bars and restaurants. I think construction workers would always have been moving around (certainly my dad did); there are probably more of them now than ten years ago but more construction is hardly a bad thing. I certainly don't think there are fewer skilled jobs for graduates than there were: the City has been adding more and more jobs and sprawling down to London Bridge, tech has boomed in Shoreditch, Bloomsbury and elsewhere, there's that huge new medical campus effort around King's Cross. The BBC has sadly been driven away for political reasons, but I don't think there's ever been a better time to be a graduate moving to London.
Where is cheap has changed. Music, indie theatre and groundbreaking art have been pushed further out, to Camden and Highbury and Shoreditch and Hackney and Brixton and Clapham. Soho is halfway to being Knightsbridge. But that's always been the way of these things.
> "of the 430 music venues that traded in London between 2007 and 2015, only 245 are still open"
I have no idea what the real numbers are, but I can tell that's a line designed to mislead, to make you think there has been a decline in the number of music venues without actually giving any evidence for it. How long did those 430 last, on average? What proportion of the music venues that traded between 1999 and 2007 were open in 2007? Indeed, how many music venues were open in 2007? What's the betting it was less than 245?
> The other part: I was working for a scientific charity, with charitable pay. I wasn't saving much money, even with living in a shared house, so decided I needed a new job. I wanted to continue writing software for science, so there weren't all that many jobs that interested me in London.
You pays your money, you takes your choice. Some jobs and some people are surely getting priced out of London. But the city as a whole is doing very well thank you.
There's always been people coming to London for a few years to make money. Ten years ago maybe it was the Australians coming over here to work in bars and restaurants. I think construction workers would always have been moving around (certainly my dad did); there are probably more of them now than ten years ago but more construction is hardly a bad thing. I certainly don't think there are fewer skilled jobs for graduates than there were: the City has been adding more and more jobs and sprawling down to London Bridge, tech has boomed in Shoreditch, Bloomsbury and elsewhere, there's that huge new medical campus effort around King's Cross. The BBC has sadly been driven away for political reasons, but I don't think there's ever been a better time to be a graduate moving to London.
Where is cheap has changed. Music, indie theatre and groundbreaking art have been pushed further out, to Camden and Highbury and Shoreditch and Hackney and Brixton and Clapham. Soho is halfway to being Knightsbridge. But that's always been the way of these things.
> "of the 430 music venues that traded in London between 2007 and 2015, only 245 are still open"
I have no idea what the real numbers are, but I can tell that's a line designed to mislead, to make you think there has been a decline in the number of music venues without actually giving any evidence for it. How long did those 430 last, on average? What proportion of the music venues that traded between 1999 and 2007 were open in 2007? Indeed, how many music venues were open in 2007? What's the betting it was less than 245?
> The other part: I was working for a scientific charity, with charitable pay. I wasn't saving much money, even with living in a shared house, so decided I needed a new job. I wanted to continue writing software for science, so there weren't all that many jobs that interested me in London.
You pays your money, you takes your choice. Some jobs and some people are surely getting priced out of London. But the city as a whole is doing very well thank you.
Housing cost has very little to do with construction and everything to do with location.
Real estate as an export is .. well, it's a response to circumstances, I suppose, but is it really sustainable? After all, you can't just make more land with the property "within 1km of Central Park".
What happens when the majority of a city is owned by foreign landlords? Do you think that might distort its politics?
Real estate as an export is .. well, it's a response to circumstances, I suppose, but is it really sustainable? After all, you can't just make more land with the property "within 1km of Central Park".
What happens when the majority of a city is owned by foreign landlords? Do you think that might distort its politics?
> There are already enough houses and condos in the city with no lights on because no one actually lives in them.
To me, there seems to be a pretty obvious public policy response. Institute a very high property tax, which is abated on some kind of curve according to the amount of time the owner or tenants spend living in a property, with no tax being due if the property is legitimately occupied for more than, say, ten months.
It might not solve the problem entirely, but at least you would reduce the effect of a diminution of housing supply that is driven by these kinds of absentee owners, and that must be driving up rents, at least.
To me, there seems to be a pretty obvious public policy response. Institute a very high property tax, which is abated on some kind of curve according to the amount of time the owner or tenants spend living in a property, with no tax being due if the property is legitimately occupied for more than, say, ten months.
It might not solve the problem entirely, but at least you would reduce the effect of a diminution of housing supply that is driven by these kinds of absentee owners, and that must be driving up rents, at least.
This is normally done via a "Homestead" tax exemption, where if your vacation home is assessed at $100K, you get taxed on all $100K, but if you live on it, you only get taxed on $100,000-N, where N is the exemption. This is meant to encourage owners occupying their homes, which is a great thing. I don't know if they have it in Vancouver.
In California, the exemption is a measly $7000. Which is essentially nothing, given home prices in the Bay Area. What they need to do is increase that number 10-20X or make it a percentage of the home's value. This would greatly help solve the problem of foreign "investors" buying up all the housing, leaving it vacant, and essentially just treating homes like bars of gold in a safe.
And don't even get me started on Prop 13, which is essentially mechanism to transfer wealth from younger, newer residents to older residents.
In California, the exemption is a measly $7000. Which is essentially nothing, given home prices in the Bay Area. What they need to do is increase that number 10-20X or make it a percentage of the home's value. This would greatly help solve the problem of foreign "investors" buying up all the housing, leaving it vacant, and essentially just treating homes like bars of gold in a safe.
And don't even get me started on Prop 13, which is essentially mechanism to transfer wealth from younger, newer residents to older residents.
I'd like to just see a return to homesteading period. If a property goes unused / unoccupied for a year, anyone can move in. No more land squatting to drive up real estate prices and use it as a store of wealth.
Yes, this kills real estate as a long term investment. No, that is a good thing, we should collectively much rather see capital invested in the stock market rather than being thrown into precious metals or property as a store of value.
Yes, this kills real estate as a long term investment. No, that is a good thing, we should collectively much rather see capital invested in the stock market rather than being thrown into precious metals or property as a store of value.
Homesteading is giving unclaimed land new residents. What you're talking about is squatter's rights.
Except I'm not - there already exist squatters rights to occupy someones elses property and eventually claim it their own if they can avoid detection long enough.
All that takes is the minimum effort to police the property you own to insure nobody is squatting. What I'm saying is that unconditionally whether or not someone is illegally occupying your property you only have a fixed amount of time to make use of it before it effectively becomes unclaimed land again.
All that takes is the minimum effort to police the property you own to insure nobody is squatting. What I'm saying is that unconditionally whether or not someone is illegally occupying your property you only have a fixed amount of time to make use of it before it effectively becomes unclaimed land again.
My recollection of squatter's rights is that the owner has to know you are there, and do nothing for <X> years. If you are hiding, you can't lay claim.
No developed country supports anything remotely like squatter's rights.
Try the UK: https://www.gov.uk/squatting-law/squatters-rights-to-propert...
I suspect several other European countries have similar rights.
I suspect several other European countries have similar rights.
From that site:
"Land Registry will decide if your application is valid and will let the property owner know. The owner has 65 days to object - your application will usually be automatically rejected if they do."
So basically you'll only get to stay if the property is effectively abandoned.
"Land Registry will decide if your application is valid and will let the property owner know. The owner has 65 days to object - your application will usually be automatically rejected if they do."
So basically you'll only get to stay if the property is effectively abandoned.
Which is what squatting is...
Adverse possession is one mechanism to seize property from absentee owners that is already on the books.
That takes forever and if you try it you can get arrested for trespass.
And how much do your 'Occupancy Police' cost to administer such a system ? If it relies on a property owner filling in a form, they're just going to lie to avoid the cost and without someone going round to every single house and monitoring it for weeks and months of the year, you have no way to detect people avoiding the tax.
Super high property tax when I'm not there? Simple, employ a cleaner on some minimal wage and let them stay there when I'm not in town. When I'm in town, put them up in a hotel. I'll probably still save money on the property tax and I can claim to be a caring employer, helping with employment in town. The city council are evil job destroyers by sticking me with huge taxes.
Scotland implements a 'second home' variant of their 'council tax' [a weird name for property tax]. Depending on area, it's a locally chosen multiple of the standard tax. But that's based on whether people declare another property and there's a lot of overhead in policing it. I doubt if it actually raises any extra net income.
But what if your empty property is actually from a relative who recently died and the estate is being finalized? Does that get hit too?
It always sounds simple to just slap extra taxes on rich people (who always happen to be defined as someone other than yourself), but that often leads to unfairness to decidedly non-rich people.
Rich people always find a way round these things - they pay lawyers and accountants to make sure they can. No public policy will ever fix that.
Super high property tax when I'm not there? Simple, employ a cleaner on some minimal wage and let them stay there when I'm not in town. When I'm in town, put them up in a hotel. I'll probably still save money on the property tax and I can claim to be a caring employer, helping with employment in town. The city council are evil job destroyers by sticking me with huge taxes.
Scotland implements a 'second home' variant of their 'council tax' [a weird name for property tax]. Depending on area, it's a locally chosen multiple of the standard tax. But that's based on whether people declare another property and there's a lot of overhead in policing it. I doubt if it actually raises any extra net income.
But what if your empty property is actually from a relative who recently died and the estate is being finalized? Does that get hit too?
It always sounds simple to just slap extra taxes on rich people (who always happen to be defined as someone other than yourself), but that often leads to unfairness to decidedly non-rich people.
Rich people always find a way round these things - they pay lawyers and accountants to make sure they can. No public policy will ever fix that.
I used to live in Florida and amazingly enough the homestead exemption works pretty well. I'm sure there are some people abusing it, but it's effective overall. You can only have it on one home and it doesn't apply to businesses so the only real fraud angle would be to live out of state and take the exemption on a single Florida property. You have to be a citizen or permanent alien resident which weeds out foreign buyers looking to park money. You'll also need to be able to access its mailbox, be registered to vote at the address, etc etc. A lot of potential legal trouble for a $50,000 valuation haircut on your tax bill.
The fact that Florida has no state income tax is an even bigger incentive to actually reside in Florida if you have a lot of passive income coming your way.
The fact that Florida has no state income tax is an even bigger incentive to actually reside in Florida if you have a lot of passive income coming your way.
You can purchase Canadian permanent residency for $800,000 through Quebec's Immigrant Investor Program. This has a big impact on Canadian tax policy because there is no way you can discriminate between foreign and domestic ownership - foreign investors can simply buy a PR card and avoid punitive taxation of foreigners. There are still foreigners in the normative sense of the word, as in they don't and have never lived in Canada, but in the eyes of the law, they are the same as an permanent immigrant.
You can require presence in the country to a homestead exemption. If you aren't in the country for a large amount of time (say, 180 days) you don't get your exemption. Between that and having it only apply to a single property the incentives to park cash in an empty Vancouver apartment are diminished.
> Super high property tax when I'm not there? Simple, employ a cleaner on some minimal wage and let them stay there when I'm not in town. When I'm in town, put them up in a hotel. I'll probably still save money on the property tax and I can claim to be a caring employer, helping with employment in town. The city council are evil job destroyers by sticking me with huge taxes.
Doesn't that kind of help the problem though? Because now someone who would have to rent an expensive apartment is now basically living rent-free in a home. If enough people did this, it would help alleviate the issue.
I agree with your point though, and know people who do this. They are "caretakers" who basically live rent-free to make sure the place doesn't fall apart. The occupancy idea sounds good, but it seems like a logistical, administrative pain to enforce.
Doesn't that kind of help the problem though? Because now someone who would have to rent an expensive apartment is now basically living rent-free in a home. If enough people did this, it would help alleviate the issue.
I agree with your point though, and know people who do this. They are "caretakers" who basically live rent-free to make sure the place doesn't fall apart. The occupancy idea sounds good, but it seems like a logistical, administrative pain to enforce.
Why have taxes at all if rich people always find a way around these things? Or laws, for that matter?
Council tax in the UK is not really comparable to property taxes in other countries like the US.
It's a highly regressive tax, and utterly negligible when considering prime real estate in areas like London.
It's a highly regressive tax, and utterly negligible when considering prime real estate in areas like London.
Well let's just abandon all taxation by that argument
Why would you? Tax is a very effective mechanism to control economy. And don't have to think on extremes even! Very wealthy people are buying condos there just because it's the best (passive) investment for their cash. If you increase tax for vacant property it will incentivize selling over time,or at least renting.. more offer with less cost.
In a macro economical sense Canada already profited from getting foreign $ invested in buying those properties anyway, time to make Vancouver livable.
In a macro economical sense Canada already profited from getting foreign $ invested in buying those properties anyway, time to make Vancouver livable.
No, let's be smart about it; when designing tax policy, take into account what's easy to measure and what's hard to.
What you're describing is similar to the approach south Florida takes - assume many purchasers are non-residents, and therefore rely on property taxes rather than income taxes to fill the coffer
https://southfloridaforbeginners.wordpress.com/2012/04/04/th...
https://southfloridaforbeginners.wordpress.com/2012/04/04/th...
I would be careful here. Laws like this are close to demonstrating a lack of respect for property rights and that is not a good direction for any democracy.
We have always had areas where the cost of housing was too high but the reactionary idea of taxing it to death is in effect the idea of that some property rights are important but others are not.
If any such idea was pushed then be sure that protection is applied to citizens of the country involved. Even this is dangerous as it tells foreigners that their money is welcome but their rights are subject to the whims of the times.
The real solution is, build more places to live. What is preventing the building of affordable housing? Find that and fix that. The response is far more proper and rewarding than trying to force someone out of their property because you think they don't deserve to own it if they don't live in a set amount of time
We have always had areas where the cost of housing was too high but the reactionary idea of taxing it to death is in effect the idea of that some property rights are important but others are not.
If any such idea was pushed then be sure that protection is applied to citizens of the country involved. Even this is dangerous as it tells foreigners that their money is welcome but their rights are subject to the whims of the times.
The real solution is, build more places to live. What is preventing the building of affordable housing? Find that and fix that. The response is far more proper and rewarding than trying to force someone out of their property because you think they don't deserve to own it if they don't live in a set amount of time
You have things upside down. Property rights only exist because of law. Also, when did property rights become vital to democracy?
It became vital back when economies first started to specialize.
If you take the net the fisherman wants to use and string it up as a hammock, you're going to eat fewer fish later. If you take the blacksmith's tongs and use them to crack walnuts, you're not going to get that handful of nails that you wanted to build your house.
Property rights alleviate the tragedy of the commons, by taking resources with multiple possible uses out of the commons and dedicating them to uses other than just the one with the highest immediate value.
It should be obvious that you can't plant a field on the same land footprint as the foundation of your house. You can't build a road over it at the same time that it's under an apartment building. Property rights are part of our system for resolving the conflicts behind multiple competing exclusive uses for any particular thing.
They are not absolutely essential to democracy, but they are the best solution we have yet tried for resource allocation in a specialized economy, and democracies tend to fare better when there is enough prosperity to spread around to everyone.
If you take the net the fisherman wants to use and string it up as a hammock, you're going to eat fewer fish later. If you take the blacksmith's tongs and use them to crack walnuts, you're not going to get that handful of nails that you wanted to build your house.
Property rights alleviate the tragedy of the commons, by taking resources with multiple possible uses out of the commons and dedicating them to uses other than just the one with the highest immediate value.
It should be obvious that you can't plant a field on the same land footprint as the foundation of your house. You can't build a road over it at the same time that it's under an apartment building. Property rights are part of our system for resolving the conflicts behind multiple competing exclusive uses for any particular thing.
They are not absolutely essential to democracy, but they are the best solution we have yet tried for resource allocation in a specialized economy, and democracies tend to fare better when there is enough prosperity to spread around to everyone.
In this case democracy and capitalism are at odds.
In all your examples, you're talking about tools that would be finding direct use. How do you reconcile your allegories with empty houses purchased solely as stable investment vehicles instead of actually housing people?
That's just like the fishing net used as a hammock instead of catching fish. A house used for housing is a productive purpose. It is generating value to the economy every minute that it is being used as shelter for humans. That value diffuses out to more people through trade. When used for speculation, it is not producing value, but simply storing it for later use. Meanwhile, those who would otherwise produce value from it are producing less value in aggregate because they are denied access to at least one house.
If you put gold in a vault, it retains its value. But it cannot be used productively. If you instead loan the same gold out, you can charge interest, and some of the value generated by the gold performing its productive function as money will diffuse back to you via trade.
As a whole, the entire economy would prefer that all tools be put to productive use 24 hours a day. But the individual Nash equilibrium strategy is to selectively employ or withhold the use of those tools for greater personal benefit to the tool owner.
In the government's role as cartel enforcer, it would be in the interest of the whole cartel for the enforcer to levy a vacancy tax on investment properties. That reduces the personal benefit of idling the productive tool, but the enforcer then also has the burden of returning that value to the economy in a productive way.
If you put gold in a vault, it retains its value. But it cannot be used productively. If you instead loan the same gold out, you can charge interest, and some of the value generated by the gold performing its productive function as money will diffuse back to you via trade.
As a whole, the entire economy would prefer that all tools be put to productive use 24 hours a day. But the individual Nash equilibrium strategy is to selectively employ or withhold the use of those tools for greater personal benefit to the tool owner.
In the government's role as cartel enforcer, it would be in the interest of the whole cartel for the enforcer to levy a vacancy tax on investment properties. That reduces the personal benefit of idling the productive tool, but the enforcer then also has the burden of returning that value to the economy in a productive way.
It's perhaps a small step in a direction away from the pure capitalist conception of how property rights should be structured, but such a movement is no more a sign of lack of respect for property rights than the move to the capitalist model of such rights from prior models was.
It's not like God handed down the capitalist model of property rights carved on stone tablets...that model is just one stage in the continuous historical evolution of the concept of property rights.
It's not like God handed down the capitalist model of property rights carved on stone tablets...that model is just one stage in the continuous historical evolution of the concept of property rights.
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>To me, there seems to be a pretty obvious public policy response. Institute a very high property tax, which is abated on some kind of curve according to the amount of time the owner or tenants spend living in a property, with no tax being due if the property is legitimately occupied for more than, say, ten months.
This punishes newcomers and rewards staying in the same property, just like California Prop 13. Have a kid and need a new place with more space? Prepare to pay punishing property taxes for that luxury. You grew up in the area and it's time to move out? Enjoy your tax! Moving from the countryside for better employment opportunities? Tax please!
Because of the strong disincentive to move, there's now going to be fewer units on the market than would otherwise be expected. House prices go up, not down, and the moving tax is likely to be regressive.
>It might not solve the problem entirely, but at least you would reduce the effect of a diminution of housing supply that is driven by these kinds of absentee owners, and that must be driving up rents, at least.
In this case it will exacerbate it, just like Prop 13. It's really a moving tax disguised as a property tax.
There is, however, a tax that will punish absentee owners but also not create distortions: a land value tax.
It's similar to a normal property tax, except it's on the value of the land only, not land and improvements or improvements only. A single family home on a particular lot is taxed the same as a skyscraper or an empty lot sitting on that same lot.
This punishes land speculators and NIMBY types, cannot be passed on in rent (normally taxes decrease the supply somewhat, so some of the tax can be passed on, but land is fixed in value and a tax cannot reduce its supply), and does not punish building like a standard property tax does. It allows cities to capture value from infrastructure improvements, such as running a new transit line.
The practical concerns are similar to a standard property tax: how do we do assessments? The great thing about it is that land is easier to compare than buildings are.
This punishes newcomers and rewards staying in the same property, just like California Prop 13. Have a kid and need a new place with more space? Prepare to pay punishing property taxes for that luxury. You grew up in the area and it's time to move out? Enjoy your tax! Moving from the countryside for better employment opportunities? Tax please!
Because of the strong disincentive to move, there's now going to be fewer units on the market than would otherwise be expected. House prices go up, not down, and the moving tax is likely to be regressive.
>It might not solve the problem entirely, but at least you would reduce the effect of a diminution of housing supply that is driven by these kinds of absentee owners, and that must be driving up rents, at least.
In this case it will exacerbate it, just like Prop 13. It's really a moving tax disguised as a property tax.
There is, however, a tax that will punish absentee owners but also not create distortions: a land value tax.
It's similar to a normal property tax, except it's on the value of the land only, not land and improvements or improvements only. A single family home on a particular lot is taxed the same as a skyscraper or an empty lot sitting on that same lot.
This punishes land speculators and NIMBY types, cannot be passed on in rent (normally taxes decrease the supply somewhat, so some of the tax can be passed on, but land is fixed in value and a tax cannot reduce its supply), and does not punish building like a standard property tax does. It allows cities to capture value from infrastructure improvements, such as running a new transit line.
The practical concerns are similar to a standard property tax: how do we do assessments? The great thing about it is that land is easier to compare than buildings are.
> This punishes newcomers and rewards staying in the same property, just like California Prop 13. Have a kid and need a new place with more space? Prepare to pay punishing property taxes for that luxury. You grew up in the area and it's time to move out? Enjoy your tax! Moving from the countryside for better employment opportunities? Tax please!
Can you explain why this would be a moving tax?
Obvious, property taxes only apply to the fraction of the year that you own a place. Are you worried about the overlapping period where you have the house on the market but haven't sold it yet?
I suppose that would be an issue, but I assume for most people, that's a relatively small fraction of time. It's not like there aren't already lots of other expenses associated with moving.
Can you explain why this would be a moving tax?
Obvious, property taxes only apply to the fraction of the year that you own a place. Are you worried about the overlapping period where you have the house on the market but haven't sold it yet?
I suppose that would be an issue, but I assume for most people, that's a relatively small fraction of time. It's not like there aren't already lots of other expenses associated with moving.
>Can you explain why this would be a moving tax?
>Obvious, property taxes only apply to the fraction of the year that you own a place. Are you worried about the overlapping period where you have the house on the market but haven't sold it yet?
The proposal was to create a property tax that phases out once the owner has lived there for X period of time. Naturally, every time you sell and move you then reset this clock, so you'd pay the property tax only if you keep moving. The most monetarily rational strategy is to buy and hold forever if at all possible.
In short, the only way to trigger this tax is to move.
>Obvious, property taxes only apply to the fraction of the year that you own a place. Are you worried about the overlapping period where you have the house on the market but haven't sold it yet?
The proposal was to create a property tax that phases out once the owner has lived there for X period of time. Naturally, every time you sell and move you then reset this clock, so you'd pay the property tax only if you keep moving. The most monetarily rational strategy is to buy and hold forever if at all possible.
In short, the only way to trigger this tax is to move.
I think the OP meant ten months per year, or in general, a fixed fraction of the period that the property tax is assessed over.
Trouble with a land value tax is that most cities have severe restrictions on redeveloping properties at a higher density, so you have to design all sorts of exceptions or end up with the family living in the poky little flat in a historic building on the edge of the city centre paying more in tax than the property speculators who've bought the penthouse suite in that new multistorey apartment in the exclusive riverfront district.
It blows my mind that the internety tech industry, of all industries, is so heavily concentrated in a handful of physical locations around the world. There's this vicious cycle where companies think they need to be in one of these places to attract the best talent, and employees think they need to live in one of these places to have the best career options.
Sometimes when I'm at Red Door in SOMA, overhearing twenty different conversations about startups, I want to scream "We have this thing, it's called the internet, it makes it super easy to communicate from anywhere! Let's go! Let's disperse across the globe!"
I mean, I get it. Face-to-face in-person communication is powerful for building trust, and the valley runs on trust, but still.
Sometimes when I'm at Red Door in SOMA, overhearing twenty different conversations about startups, I want to scream "We have this thing, it's called the internet, it makes it super easy to communicate from anywhere! Let's go! Let's disperse across the globe!"
I mean, I get it. Face-to-face in-person communication is powerful for building trust, and the valley runs on trust, but still.
It's easy to complain about zoning, tax policies, NIMBY-ism, lack of investment in public transit, etc. etc. But the reality is that you could turn all sorts of dials to increase the supply of available housing over the course of years and decades and you'd still have a situation where not everyone could live in an affordable condo/apartment in whatever $TRENDY_CITY.
I suspect that the current concentration of certain sectors of the tech industry in the Bay area is just unsustainable. There's an upper limit to how much companies can afford to pay for employees relative to other areas, how much employees can afford to pay for housing, and how long commutes they'll tolerate.
I suspect that the current concentration of certain sectors of the tech industry in the Bay area is just unsustainable. There's an upper limit to how much companies can afford to pay for employees relative to other areas, how much employees can afford to pay for housing, and how long commutes they'll tolerate.
For sure. And the reality also is that people can take job offers and/or move to new cities a lot faster than builders can build housing.
I don't think building more is a panacea that would suddenly mean two-bedrooms in Cow Hollow rent for $1,000 in 2017. That said, restricting market rate construction certainly only makes things worse. And building more would help at least a little.
I don't think building more is a panacea that would suddenly mean two-bedrooms in Cow Hollow rent for $1,000 in 2017. That said, restricting market rate construction certainly only makes things worse. And building more would help at least a little.
I live in Vancouver. Well, Burnaby.
Like many Vancouverites on HN I am studying for a comp sci degree, and want to work as a developer.
I accept that I have to make sacrifices to keep living in Vancouver, such as:
-Living in a suburb (like Burnaby) -Getting roommates/a shared room -Living on a bus route instead of being a 5 minute walk from Skytrain
With those sacrifices, I can find rents for $750-1000/month. $750 is the lowest one will get for a place relatively close to Skytrain, not too far from downtown (e.g. Burnaby/New West), and in a clean, low property crime area.
More and more companies are paying $70K+ for new grads (something I wouldn't have admitted in say 2012), which is about $45-50K take home assuming you max out your RRSPs. Assuming a "35% of take home salary on housing" rule, you can afford rent of $1350-1450/month (higher if you gross more).
You can get a lot for that kind of money, like a big 1 bedroom (full lease) that's 15 minutes to downtown by transit. I dare you to find something similar in the Bay Area or Seattle, especially with commutes as short and crime rates as low as Vancouver's.
If you absolutely must live in the downtown core, studios start at $1000-1200/month in the West End. There is lots of shared accommodation in Yaletown for <$1000.
I was watching CBS This Morning on Wednesday on the Seattle channel (KIRO), and there was a story about the nuns having the rent on their soup kitchen in San Francisco increased by 50%. In BC, the provincial government restricts annual increases to 2.7% (for 2016) and Vancouver does not have a ward-based system of city councillors, limiting the influence of NIMBYs far more than in SF.
Like many Vancouverites on HN I am studying for a comp sci degree, and want to work as a developer.
I accept that I have to make sacrifices to keep living in Vancouver, such as:
-Living in a suburb (like Burnaby) -Getting roommates/a shared room -Living on a bus route instead of being a 5 minute walk from Skytrain
With those sacrifices, I can find rents for $750-1000/month. $750 is the lowest one will get for a place relatively close to Skytrain, not too far from downtown (e.g. Burnaby/New West), and in a clean, low property crime area.
More and more companies are paying $70K+ for new grads (something I wouldn't have admitted in say 2012), which is about $45-50K take home assuming you max out your RRSPs. Assuming a "35% of take home salary on housing" rule, you can afford rent of $1350-1450/month (higher if you gross more).
You can get a lot for that kind of money, like a big 1 bedroom (full lease) that's 15 minutes to downtown by transit. I dare you to find something similar in the Bay Area or Seattle, especially with commutes as short and crime rates as low as Vancouver's.
If you absolutely must live in the downtown core, studios start at $1000-1200/month in the West End. There is lots of shared accommodation in Yaletown for <$1000.
I was watching CBS This Morning on Wednesday on the Seattle channel (KIRO), and there was a story about the nuns having the rent on their soup kitchen in San Francisco increased by 50%. In BC, the provincial government restricts annual increases to 2.7% (for 2016) and Vancouver does not have a ward-based system of city councillors, limiting the influence of NIMBYs far more than in SF.
As an established middle-aged software developer with a family living in Burnaby who cannot move now because of custody issues, I'm going to give you the same advice I give to all of the engineering co-ops I work with. You should move out of the
Vancouver area as soon as you get your degree.
I don't think that you're ever going to have a problem finding 1 bedroom accommodations in Vancouver because that's what developers predominantly build. Eventually you'll probably want to get married and have kids, and then you'll realize that the GVRD has nothing for you.
The detached home market now largely belongs to rich Chinese immigrants who made their millions outside the country; you'll never be able to compete with these folks working in the Canadian economy and paying Canadian taxes. That will largely rule out Vancouver, Burnaby, and by the time you graduate, New West, Coquitlam, Poco, and Port Moody. This isn't even a matter of stretching anymore - this market is completely isolated from CHMC policy now because the prices are beyond what Canadian home buyers could ever leverage.
Developers have little incentive to build 3 bedroom family-friendly condos, so you'll have a hard time finding those, too. I wanted to buy one recently and it was going to cost about $700000. My current 2 bedroom would sell for about $400k, but I don't think that I want to stretch that far on a single income, even though it would mean I could get my kids their own rooms.
And really, is Vancouver so great? The mountains are nice, and the downtown is nice if you're young. But it's a trap for the young - through well-intentioned tolerance and bad public policy we've created a city that is hostile to young families. Live anywhere else in North America and you'll enjoy a more favourable cost of living and/or a better lifestyle.
I'd leave in a minute if I could.
I don't think that you're ever going to have a problem finding 1 bedroom accommodations in Vancouver because that's what developers predominantly build. Eventually you'll probably want to get married and have kids, and then you'll realize that the GVRD has nothing for you.
The detached home market now largely belongs to rich Chinese immigrants who made their millions outside the country; you'll never be able to compete with these folks working in the Canadian economy and paying Canadian taxes. That will largely rule out Vancouver, Burnaby, and by the time you graduate, New West, Coquitlam, Poco, and Port Moody. This isn't even a matter of stretching anymore - this market is completely isolated from CHMC policy now because the prices are beyond what Canadian home buyers could ever leverage.
Developers have little incentive to build 3 bedroom family-friendly condos, so you'll have a hard time finding those, too. I wanted to buy one recently and it was going to cost about $700000. My current 2 bedroom would sell for about $400k, but I don't think that I want to stretch that far on a single income, even though it would mean I could get my kids their own rooms.
And really, is Vancouver so great? The mountains are nice, and the downtown is nice if you're young. But it's a trap for the young - through well-intentioned tolerance and bad public policy we've created a city that is hostile to young families. Live anywhere else in North America and you'll enjoy a more favourable cost of living and/or a better lifestyle.
I'd leave in a minute if I could.
Solid advice.
I moved to Vancouver shortly before the .com crash. Worked for a number of companies, primarily doing low-level system programming, climbing from 50K to 120K in 5 or so years and periodically trying to do my own thing. One of the attempts worked, got a good exit, at which point started looking at upgrading from our pretty decent Burnaby condo to a house.
Being a true nouveau riche, we scouted everything, including most expensive areas like UBC, Point Gray and West Vancouver, talked to the agents, looked at the building lots, spoke with architects - the whole shebang. It became absolutely crystal clear that the Vancouver real estate is just one big parking lot for Chinese money. And they don't just park them there, they also bring their gambling habits with them, constantly flipping what they have and perpetually warming up the prices. It is in-your-face obvious once you take a close look at what's going on. You don't even have to prompt agents to relay the stories of how they guide groups of Chinese government suits through dozens of properties, all of which they end up buying above asking. It is absolutely INSANE. As it is ultimately disgusting.
In any case, we looked around once again, said "fuck it" and moved elsewhere. Mountains and good restaurants can't offset the fact that you feel like a lower middle class even when you don't have to work ever again in your life.
It's a nice place when you are young, renting and have no attachments, but I would strongly discourage from trying to settle there on a more permanent basis.
I moved to Vancouver shortly before the .com crash. Worked for a number of companies, primarily doing low-level system programming, climbing from 50K to 120K in 5 or so years and periodically trying to do my own thing. One of the attempts worked, got a good exit, at which point started looking at upgrading from our pretty decent Burnaby condo to a house.
Being a true nouveau riche, we scouted everything, including most expensive areas like UBC, Point Gray and West Vancouver, talked to the agents, looked at the building lots, spoke with architects - the whole shebang. It became absolutely crystal clear that the Vancouver real estate is just one big parking lot for Chinese money. And they don't just park them there, they also bring their gambling habits with them, constantly flipping what they have and perpetually warming up the prices. It is in-your-face obvious once you take a close look at what's going on. You don't even have to prompt agents to relay the stories of how they guide groups of Chinese government suits through dozens of properties, all of which they end up buying above asking. It is absolutely INSANE. As it is ultimately disgusting.
In any case, we looked around once again, said "fuck it" and moved elsewhere. Mountains and good restaurants can't offset the fact that you feel like a lower middle class even when you don't have to work ever again in your life.
It's a nice place when you are young, renting and have no attachments, but I would strongly discourage from trying to settle there on a more permanent basis.
Despite your persuasive argument, I like it here.
The US is broken, politically and socioeconomically. The Senate will block any bills for a constitutional amendment to get money out of politics, and a Constitutional Convention will mean all amendments will be on the line, including the 1st Amendment (libertarians will cry "freeze speech") and 2A (gun owners will cry "the gubmint is taking our guns away"). I really don't see a bright side to America's future. Canada has been a well-run country, even under Harper, and I am optimistic about what Trudeau Jr. will be able to accomplish.
Calgary represents everything that I think is wrong with Canada--sorry, Nenshi, I like you, but the people of your city are holding Canada back. (the CPC, putting the economic eggs into the oil basket, and so on.) Plus, Calgary has less dev opportunities than Vancouver since everything is dependent on oil and gas.
I don't like the weather in eastern Canada. The winters are too cold, the summers are too hot and humid. By the way, it's much more common to have sleet, ice storms and hard-packed dirty slush/ice than freshly fallen snow. The rain keeps everything green and the temperatures in summer rarely gets above 25 degrees. So much better than 30 degrees (with 40 humidex).
Toronto too sprawling of a city, and amalgamation (just like it did in Ottawa and Halifax) has pitted suburbanites against urban dwellers, as manifested in Rob Ford and John Tory. Also, the 905 belt carried Mike Harris (Ontario PCs) in the 90s, and his "Common Sense Revolution" permanently sabotaged Toronto's public transportation infrastructure.
Quebec is a beacon of corruption. Remember that SQ officer who wasn't charged for a fatal hit-and-run with his cruiser? Montreal is owned by the Mob. Mr. Sidewalk, the Big Owe, etc. The infrastructure is literally crumbling (like the Highway 19 overpass collapse in Laval in 2006) because of how corrupt the city of Montreal is.
I'm young and I don't want kids. I do not believe that yellow peril is the driving factor in housing costs. Certainly it's a factor, but no one can say how much of a factor it is without solid data. I'm staying, and you can't stop me!
The US is broken, politically and socioeconomically. The Senate will block any bills for a constitutional amendment to get money out of politics, and a Constitutional Convention will mean all amendments will be on the line, including the 1st Amendment (libertarians will cry "freeze speech") and 2A (gun owners will cry "the gubmint is taking our guns away"). I really don't see a bright side to America's future. Canada has been a well-run country, even under Harper, and I am optimistic about what Trudeau Jr. will be able to accomplish.
Calgary represents everything that I think is wrong with Canada--sorry, Nenshi, I like you, but the people of your city are holding Canada back. (the CPC, putting the economic eggs into the oil basket, and so on.) Plus, Calgary has less dev opportunities than Vancouver since everything is dependent on oil and gas.
I don't like the weather in eastern Canada. The winters are too cold, the summers are too hot and humid. By the way, it's much more common to have sleet, ice storms and hard-packed dirty slush/ice than freshly fallen snow. The rain keeps everything green and the temperatures in summer rarely gets above 25 degrees. So much better than 30 degrees (with 40 humidex).
Toronto too sprawling of a city, and amalgamation (just like it did in Ottawa and Halifax) has pitted suburbanites against urban dwellers, as manifested in Rob Ford and John Tory. Also, the 905 belt carried Mike Harris (Ontario PCs) in the 90s, and his "Common Sense Revolution" permanently sabotaged Toronto's public transportation infrastructure.
Quebec is a beacon of corruption. Remember that SQ officer who wasn't charged for a fatal hit-and-run with his cruiser? Montreal is owned by the Mob. Mr. Sidewalk, the Big Owe, etc. The infrastructure is literally crumbling (like the Highway 19 overpass collapse in Laval in 2006) because of how corrupt the city of Montreal is.
I'm young and I don't want kids. I do not believe that yellow peril is the driving factor in housing costs. Certainly it's a factor, but no one can say how much of a factor it is without solid data. I'm staying, and you can't stop me!
As a person who moved from Victoria to Seattle and then SF, that kind of stuff doesn't actually matter in practice.
What the gods of Mt.Olympus do does not matter to the common folk. Macro policy decisions to do things like go to war in Afghanistan only indirectly effect your tax bill, and if the news didn't report it and if refugees didn't immigrate, would you even know it was happening. That is real effect of what your worrying about.
Go live & work in Seattle for a year and you'll quickly come to learn there is no real difference between there and Vancouver. If you change the street signs and some brands, you wouldn't be able to tell the difference. If you really don't like it, you can always move back. But as a learning experience, you'll find it valuable for your world view, your career back in Vancouver and your wallet. If you have student loans, that exchange rate will be amazing to pay them off, and you could collect a down payment for a Vancouver 1 bedroom condo far faster. I used charles schwab debit cards and I paid no exchange fees paying off my canadian student loans.
Bread and Circus crap like guns and such are an entertainment sideshow and policy makers will do whatever they actually care about without much fanfare. In practice you will never see a gun on a civilian in NYC, SF or Seattle and people speak whatever is on their mind. The weather is also amazing in SF.
What the gods of Mt.Olympus do does not matter to the common folk. Macro policy decisions to do things like go to war in Afghanistan only indirectly effect your tax bill, and if the news didn't report it and if refugees didn't immigrate, would you even know it was happening. That is real effect of what your worrying about.
Go live & work in Seattle for a year and you'll quickly come to learn there is no real difference between there and Vancouver. If you change the street signs and some brands, you wouldn't be able to tell the difference. If you really don't like it, you can always move back. But as a learning experience, you'll find it valuable for your world view, your career back in Vancouver and your wallet. If you have student loans, that exchange rate will be amazing to pay them off, and you could collect a down payment for a Vancouver 1 bedroom condo far faster. I used charles schwab debit cards and I paid no exchange fees paying off my canadian student loans.
Bread and Circus crap like guns and such are an entertainment sideshow and policy makers will do whatever they actually care about without much fanfare. In practice you will never see a gun on a civilian in NYC, SF or Seattle and people speak whatever is on their mind. The weather is also amazing in SF.
I'm young and I don't want kids. I do not believe that yellow peril is the driving factor in housing costs. Certainly it's a factor, but no one can say how much of a factor it is without solid data. I'm staying, and you can't stop me!
:-)
Fair enough; its a nice city if you're young and you don't have kids. I think a lot of your criticism of other places has to do with things that don't affect you on a day to day basis; America's lax gun laws aren't going to have nearly the same impact on your life as the much better software dev work you'll find there, the higher pay your work will garner, and better housing opportunities you'd have in the US.
I just hope you don't wind up like me; 20 years of C/C++ dev experience in desktop and embedded, and I have no idea what I would do if my current company here in Vancouver went under. There just aren't a lot of job opportunities here, and moving would mean giving up custody of my kids.
:-)
Fair enough; its a nice city if you're young and you don't have kids. I think a lot of your criticism of other places has to do with things that don't affect you on a day to day basis; America's lax gun laws aren't going to have nearly the same impact on your life as the much better software dev work you'll find there, the higher pay your work will garner, and better housing opportunities you'd have in the US.
I just hope you don't wind up like me; 20 years of C/C++ dev experience in desktop and embedded, and I have no idea what I would do if my current company here in Vancouver went under. There just aren't a lot of job opportunities here, and moving would mean giving up custody of my kids.
> I think a lot of your criticism of other places has to do with things that don't affect you on a day to day basis;
When Obama was running for president in 2008, his stump speech included this line (paraphrased): "If a child can't read, that matters to me, even if it's not my child. If a senior citizen can't afford his prescription drugs, that makes my life poorer, even if he's not my grandparent."
I would be be living in a city (SF, Portland, Seattle, SD, Austin, Boston, NYC, Chicago, take your pick) with massive social, racial, and economic disparities that make Vancouver look like one of those Nordic wundercountries. I would be living in a city, and a state, and a country, with levels of political dysfunction and gridlock only seen in countries like Korea or Chile. That dysfunction is holding the country back in overall quality-of-life. The rich have magnificent lives, but for the poor, it's hell to live in America. That makes my life poorer, even if I'm making $100K and drive a Tesla P90D with Ludicrous Mode. (That is if I live in a state that hasn't banned Tesla sales!)
When Obama was running for president in 2008, his stump speech included this line (paraphrased): "If a child can't read, that matters to me, even if it's not my child. If a senior citizen can't afford his prescription drugs, that makes my life poorer, even if he's not my grandparent."
I would be be living in a city (SF, Portland, Seattle, SD, Austin, Boston, NYC, Chicago, take your pick) with massive social, racial, and economic disparities that make Vancouver look like one of those Nordic wundercountries. I would be living in a city, and a state, and a country, with levels of political dysfunction and gridlock only seen in countries like Korea or Chile. That dysfunction is holding the country back in overall quality-of-life. The rich have magnificent lives, but for the poor, it's hell to live in America. That makes my life poorer, even if I'm making $100K and drive a Tesla P90D with Ludicrous Mode. (That is if I live in a state that hasn't banned Tesla sales!)
Why does / did the Canadian government let so many Chinese come in and buy property like that?
1. http://www.cic.gc.ca/ENGLISH/immigrate/business/investors/in...
2. Proxy companies that maintain RE portfolios for overseas clients
3. Complete unwillingness of the government to do anything about this. That's the root of the problem.
2. Proxy companies that maintain RE portfolios for overseas clients
3. Complete unwillingness of the government to do anything about this. That's the root of the problem.
I'm not sure that the problem has ever been how many Chinese have immigrated, but how many rich people who happen to be Chinese have immigrated. For starters, we have an entirely misguided and wrong-headed 'immigrant investor program' that allows rich people to jump the immigration queue.
I think the problem is deeper than this, though. Most people in Vancouver actually want prices to stay high; there are a whole lot of home owners in Vancouver who are counting on that $3M cheque for their house to pay for their retirement. Its the provincial government that wields the legislative cudgel here, and they're going to listen to those home-owners waiting for their Chinese-exit. Worse, much of the BC economy is now based on real-estate; selling it, buying it, rebuilding it, and renovating it. We've built our economy on selling rich Chinese people our homes. If the provincial government intervenes and fixes house prices, it would probably harm the construction and real estate business; it would be political suicide.
I think the problem is deeper than this, though. Most people in Vancouver actually want prices to stay high; there are a whole lot of home owners in Vancouver who are counting on that $3M cheque for their house to pay for their retirement. Its the provincial government that wields the legislative cudgel here, and they're going to listen to those home-owners waiting for their Chinese-exit. Worse, much of the BC economy is now based on real-estate; selling it, buying it, rebuilding it, and renovating it. We've built our economy on selling rich Chinese people our homes. If the provincial government intervenes and fixes house prices, it would probably harm the construction and real estate business; it would be political suicide.
Money
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I lived in Vancouver (proper) for many years and as a developer $70k is a joke. Even moreso now that the Canadian dollar is hovering around 70 cents.
I now live in a city where the cost of living is substantially lower, and I make substantially more (about 100k). I could make more, but I don't have to. I spend about half my time traveling, something every Vancouver person aspires to do and yet never does. Leaving that city was the best choice I ever made.
Certainly I will visit in the future but I will never move back.
I now live in a city where the cost of living is substantially lower, and I make substantially more (about 100k). I could make more, but I don't have to. I spend about half my time traveling, something every Vancouver person aspires to do and yet never does. Leaving that city was the best choice I ever made.
Certainly I will visit in the future but I will never move back.
May I ask where you live?
1BR inventory is not really an issue. Most of the new builds consist of small 1BRs so that developers can maximize their $ per square foot. rents on 2 or 3BR places have shot through the roof because there's very little supply being added.
The real problem is that prices have become decoupled from incomes. The median home price is 10x more than the median household income (this includes condos and townhomes).
The only reason for this is outside capital driving up prices.
The real problem is that prices have become decoupled from incomes. The median home price is 10x more than the median household income (this includes condos and townhomes).
The only reason for this is outside capital driving up prices.
> The only reason for this is outside capital driving up prices.
Also known as inflation OR debt issued by your govt returning home.
Also known as inflation OR debt issued by your govt returning home.
This is an insufficient explanation. Canada's debt to GDP ratio is in the 60-70% range where that of the US is in the 90% range. Yet the situation in Vancouver is significantly more acute than those of New York and San Francisco.
I live as a developer in Seattle. Right now I live 45 min from downtown on a bus route with a roommate and I pay more rent for half an apartment than you do for your full one.
I'm a developer in Seattle that moved here from Vancouver. While rent isn't much cheaper here, the cost of living is lower and my net income is 50% higher now than it was in Vancouver, not taking the exchange rate into account at all.
After 3 years here I've now purchased a townhouse in Cap Hill. I could have never afforded the house I just purchased in a comparable Vancouver neighborhood.
After 3 years here I've now purchased a townhouse in Cap Hill. I could have never afforded the house I just purchased in a comparable Vancouver neighborhood.
I want to ask you, do you think that there are wider class divides in Seattle than in Vancouver? I hear all the time about BLM marches, May Day riots, anti-gentrification/anti-Amazon vandalism, no-whites-allowed yoga, SPD brutality, etc. in Seattle. Whereas in Vancouver, our local Occupy Vancouver movement dissipated quickly. Someone once told me that in Seattle (and SF), there are a lot of desperate people because class is divided in a way that I (as a Canadian) am not used to.
Also in the Seattle metro area; rent here is just massively out of balance. There is a total lack of regional urban planning and competition in the form of sufficiently available housing to keep prices low.
All of that development went to the improperly supported suburban exodus movement of the 80s and 90s.
All of that development went to the improperly supported suburban exodus movement of the 80s and 90s.
I hear that even in the more conservative suburbs, support for rail is increasing, just because the traffic in Seattle is so bad. Is this true?
I think Washington state's regressive tax pyramid and dependence on plebecites will still stymie progress, though; in Canada, provincial and federal governments have much more centralized power to levy taxes and spend.
I think Washington state's regressive tax pyramid and dependence on plebecites will still stymie progress, though; in Canada, provincial and federal governments have much more centralized power to levy taxes and spend.
I think that is a more nuanced neighborhood by neighborhood issue. NIMBY is always a thing, and no one wants to live right next to any sort of transit.
There are various reasons for this, part of those reasons is that, disproportionately, the poor tend to be relegated to mass transit. Part of that is that transit doesn't make sense if you get on/off work outside of peek hours; most of the Seattle metro system is biased around serving /Seattle/. Transit systems in the counties to the north and south serve even less, have much tighter budgets, and therefore also have much less service. This is one of those self-re-enforcing loops.
With the HOV Toll Lane revealing just how horrid traffic on I-405 is (again absolute lack of urban planning), I think that you'd find many would agree about doing /something/, /anything/, except for taxing them in any way. Little do they realize that you pay 'taxes' in other ways, like having daily commutes of hell and a poor environment for their children to enter the workforce within. I know that my own career development is still severely hampered by having grown up in a suburb, without a car, and thus also with less access to the scarce jobs in the area that many (but not all) of my peers took up. I suspect that there probably weren't enough 'after school' jobs to go around though, so those who did get experience early got a head start on learning how to handle interacting with employers.
There are various reasons for this, part of those reasons is that, disproportionately, the poor tend to be relegated to mass transit. Part of that is that transit doesn't make sense if you get on/off work outside of peek hours; most of the Seattle metro system is biased around serving /Seattle/. Transit systems in the counties to the north and south serve even less, have much tighter budgets, and therefore also have much less service. This is one of those self-re-enforcing loops.
With the HOV Toll Lane revealing just how horrid traffic on I-405 is (again absolute lack of urban planning), I think that you'd find many would agree about doing /something/, /anything/, except for taxing them in any way. Little do they realize that you pay 'taxes' in other ways, like having daily commutes of hell and a poor environment for their children to enter the workforce within. I know that my own career development is still severely hampered by having grown up in a suburb, without a car, and thus also with less access to the scarce jobs in the area that many (but not all) of my peers took up. I suspect that there probably weren't enough 'after school' jobs to go around though, so those who did get experience early got a head start on learning how to handle interacting with employers.
>There are various reasons for this, part of those reasons is that, disproportionately, the poor tend to be relegated to mass transit.
I agree with that in most cases, especially in low density wealthy cities, where people would avoid using transit even if it were more convenient, just to avoid the general population.
But in the case of several Bay Area neighborhoods the opposite is true. All else equal, in the urban core people pay a premium to live near a major mass transit station.
I guess you need a critical mass of upper middle class working people, good enough transit, and terrible traffic for this to happen. I certainly never saw transit access marketed as a selling point before moving here from flyover country in the dot-com days.
I agree with that in most cases, especially in low density wealthy cities, where people would avoid using transit even if it were more convenient, just to avoid the general population.
But in the case of several Bay Area neighborhoods the opposite is true. All else equal, in the urban core people pay a premium to live near a major mass transit station.
I guess you need a critical mass of upper middle class working people, good enough transit, and terrible traffic for this to happen. I certainly never saw transit access marketed as a selling point before moving here from flyover country in the dot-com days.
Yes, support for light rail is increasing. Construction is now starting on a new rail line from Seattle to Bellevue/Redmond, although it won't open for many years.
I attended many government planning meetings in the 1990's, and people were definitely anticipating the steadily increasing road congestion we've been experiencing since then. One of the big issues is that the topography in this region drives up costs. The densest urban areas are wedged between Puget Sound, Lake Washington, and Lake Sammamish, and in between there are steep hillsides and environmentally sensitive areas. Transit expansion therefore involves building bridges, purchasing land in areas with expensive view homes, and tunneling. We could raise taxes to pay for more rail expansions, but higher taxes combined with the rapidly increasing housing costs would price out many people, especially families.
I attended many government planning meetings in the 1990's, and people were definitely anticipating the steadily increasing road congestion we've been experiencing since then. One of the big issues is that the topography in this region drives up costs. The densest urban areas are wedged between Puget Sound, Lake Washington, and Lake Sammamish, and in between there are steep hillsides and environmentally sensitive areas. Transit expansion therefore involves building bridges, purchasing land in areas with expensive view homes, and tunneling. We could raise taxes to pay for more rail expansions, but higher taxes combined with the rapidly increasing housing costs would price out many people, especially families.
Whenever I return to Seattle on visits, I find the traffic to be quite reasonable. Also, the housing market seems much more sane than where I live now (Bejing).
Washington state is the worst state for taxes and governance, except when compared to all the other states. It works out well.
Washington state is the worst state for taxes and governance, except when compared to all the other states. It works out well.
Sorry, to be clear, I'm not renting. It was just an example.
> assuming you max out your RRSPs
As a side note, this shouldn't really factor into your calculations. Either way you're paying the tax
As a side note, this shouldn't really factor into your calculations. Either way you're paying the tax
Are these amounts expensive for a developer there? I pay $1150 monthly rent ($1600 CAD) for a so-so house outside of Houston.
I'd say $750-1000 CAD is per month is on the low end. In general I find that renting near the train system is about $1200-1300 CAD for 1 bedroom, but that's on eastmost side of the city which is about 15-20 mins out of downtown (by train). Average dev salaries are maybe 60k CAD?
If you extend your search to Burnaby/New West, you can easily find 1 bedrooms for $700-1000 that are close to a frequent bus route (e.g. 106, 123). You're not paying a premium to live close to Skytrain, but commuting to downtown doesn't take an hour by transit either.
There's actually not a lot of data on Vancouver dev salaries out there. I've heard ranges from $50K to 70K depending on the source.
There's actually not a lot of data on Vancouver dev salaries out there. I've heard ranges from $50K to 70K depending on the source.
glassdoor is accurate and actually under shoots reality.
also https://docs.google.com/spreadsheets/d/18UwaThgGikSXzinnLNHx...
tldr lol if you only start out at 70k
also https://docs.google.com/spreadsheets/d/18UwaThgGikSXzinnLNHx...
tldr lol if you only start out at 70k
You can live downtown or close to it without spending half your (dev) salary on rent. And you don't have to worry about gas, being stuck in traffic, etc.
I'm curious how this problem is unique to Vancouver. Berlin's real-estate values have risen some 40% in just the last 7 years or so. New York City, in the 10 years I lived there, had an enormous escalation in what you get for the same rent payment, even adjusted for inflation. Big cities deal with this all over, so how do they deal with this "problem," or is Vancouver somehow unique in other ways?
That was going to be my question.
I mean, look at the Bay Area. They command some of the highest rents in the country, and many tech-sector workers are able to "get by" because of higher salaries from their employers. Of course, if you're not in the tech sector, you're forced to live in more affordable outskirts, like East Bay.
In NYC, they have fantastic transit, so if you don't live in Manhattan, you can still get to work relatively easily. That infrastructure investment has helped NYC maintain its desirability.
Meanwhile, Toronto has a similar problem to Vancouver, except we're building tons of condos. As long as you adjust your outlook to realize that you may only be able to afford a condominium (to buy or rent), you can make it work. Otherwise, you can move to the suburbs, but our transit is garbage, so good luck with that.
Of course, I've simplified my points and glossed over the nuances. But I think the solution is really: 1) Higher density housing (i.e. high-rise residential) 2) Much better transit 3) Options for affordable rent-subsidized housing in these developments
If you do those things, I think you'll make it easier for millenials to choose to stay, and still encourage a diverse community that's not made up of just high-income tech or finance workers. Places like Hong Kong, Tokyo, NYC, Singapore, and many more seem to be thriving cities, and I think those are the factors they have in common.
I mean, look at the Bay Area. They command some of the highest rents in the country, and many tech-sector workers are able to "get by" because of higher salaries from their employers. Of course, if you're not in the tech sector, you're forced to live in more affordable outskirts, like East Bay.
In NYC, they have fantastic transit, so if you don't live in Manhattan, you can still get to work relatively easily. That infrastructure investment has helped NYC maintain its desirability.
Meanwhile, Toronto has a similar problem to Vancouver, except we're building tons of condos. As long as you adjust your outlook to realize that you may only be able to afford a condominium (to buy or rent), you can make it work. Otherwise, you can move to the suburbs, but our transit is garbage, so good luck with that.
Of course, I've simplified my points and glossed over the nuances. But I think the solution is really: 1) Higher density housing (i.e. high-rise residential) 2) Much better transit 3) Options for affordable rent-subsidized housing in these developments
If you do those things, I think you'll make it easier for millenials to choose to stay, and still encourage a diverse community that's not made up of just high-income tech or finance workers. Places like Hong Kong, Tokyo, NYC, Singapore, and many more seem to be thriving cities, and I think those are the factors they have in common.
On a weekday, Caltrain stops going south between midnight and 5 AM. Bart going east shuts down around the same time.
In Manhattan, subways run all night to the different boros, Metro-north, the LIRR, PATH, NJ transit etc. run through the night.
People say NYC is expensive, and living on the upper east side or west village can be expensive. But plenty of safe, cheaper places are a 20 minute train ride from Manhattan, and even more are a 30 minute train ride (and so on). You don't get options like that in the Bay Area.
In Manhattan, subways run all night to the different boros, Metro-north, the LIRR, PATH, NJ transit etc. run through the night.
People say NYC is expensive, and living on the upper east side or west village can be expensive. But plenty of safe, cheaper places are a 20 minute train ride from Manhattan, and even more are a 30 minute train ride (and so on). You don't get options like that in the Bay Area.
Manhattan is very atypical of mass transit systems just about anywhere and, even in New York, not all service is 24 hour.
Toronto's transit is indeed pretty trash. I want to move down to the city but I'm split on whether to put in a down-payment for a condo or piss away my equity by renting. They say the condo market is very volatile right now. Not sure how true this is because I am not very well versed on the subject.
Hey there, I used to work in the condo industry in Toronto. If you had asked me 5-10 years ago if buying a condo was the right decision, I would have said yes. But now, absolutely not.
What changed is the respect the builders have for the people buying and living in their buildings. 5-10 years ago, condos were a bit more rare, so a construction company had to try really hard to make their condo appealing. They worked slower and the architecture was much more livable. Spacious units, sensible parking and elevators, and catchy amenities like pools and fitness rooms.
Now, they pump out condos like a sweatshop. Instead of 8 units on a floor, there are now 12. Instead of a pool, you get a gym, and instead of a fitness room, you get a yoga studio. Elevators that serve more than 30 floors are too expensive, so those 50+ storey condos need 2 elevators; one to take you from 1-30, and another to take you to from 30-50. Every single new condo in the last 5 years is in litigation with the developer due to issues with the building. Contractors like plumbers and electricians know the game now too, so every bill from a contractor will be $999 (regardless of work done) because anything over $1000 requires board approval. Without a strong property management team, I expect half of the condos will be bankrupt within a decade.
If you want to buy a condo, buy one in a building that is more than 10 years old. They will have sorted out the engineering problems by then and their budgets will be inline.
What changed is the respect the builders have for the people buying and living in their buildings. 5-10 years ago, condos were a bit more rare, so a construction company had to try really hard to make their condo appealing. They worked slower and the architecture was much more livable. Spacious units, sensible parking and elevators, and catchy amenities like pools and fitness rooms.
Now, they pump out condos like a sweatshop. Instead of 8 units on a floor, there are now 12. Instead of a pool, you get a gym, and instead of a fitness room, you get a yoga studio. Elevators that serve more than 30 floors are too expensive, so those 50+ storey condos need 2 elevators; one to take you from 1-30, and another to take you to from 30-50. Every single new condo in the last 5 years is in litigation with the developer due to issues with the building. Contractors like plumbers and electricians know the game now too, so every bill from a contractor will be $999 (regardless of work done) because anything over $1000 requires board approval. Without a strong property management team, I expect half of the condos will be bankrupt within a decade.
If you want to buy a condo, buy one in a building that is more than 10 years old. They will have sorted out the engineering problems by then and their budgets will be inline.
Heh,
Things I've heard about recently in Toronto new-build condos:
1) Mailboxes are in the basement, so you can't check on your way in.
2) Each unit having a loud spaceship/heat pump instead of one central one. Heat pump is leased, not owned by the unit, so you're paying $45/month in perpetuity. Maintenance not included.
3) Submetering of electricity, where a quarter to half of your bill is in the delivery charge from a random power company (times x units of the building, instead of one for the whole building and incl. it in condo fees)
4) New condo board isn't allowed to fix/improve various promised things until the builder fixes it. Builder waits for it to time-out for 3 years and then the Board has to arbitrate/mediate it with the Builder. Meanwhile, condo board can't touch it.
5) Builders signing exclusive contracts with telecoms, so you can't get service from anyone else.
6) Locks not keyed right, so residents' keys can open mechanical rooms/rooftop access
7) Gym on the second floor, so residents below feel like they're living in a bowling alley
1) Mailboxes are in the basement, so you can't check on your way in.
2) Each unit having a loud spaceship/heat pump instead of one central one. Heat pump is leased, not owned by the unit, so you're paying $45/month in perpetuity. Maintenance not included.
3) Submetering of electricity, where a quarter to half of your bill is in the delivery charge from a random power company (times x units of the building, instead of one for the whole building and incl. it in condo fees)
4) New condo board isn't allowed to fix/improve various promised things until the builder fixes it. Builder waits for it to time-out for 3 years and then the Board has to arbitrate/mediate it with the Builder. Meanwhile, condo board can't touch it.
5) Builders signing exclusive contracts with telecoms, so you can't get service from anyone else.
6) Locks not keyed right, so residents' keys can open mechanical rooms/rooftop access
7) Gym on the second floor, so residents below feel like they're living in a bowling alley
Well, thank you for your perspective - I guess I won't be buying any property any time soon - or at least not until I do extensive homework. Thing is - as bad as the situation may look like now compared to 5-10 years ago - I'm just thinking of how much higher real estate prices will be 5-10 years from now. So if I want to reap any future benefits now looks to be the time. I just feel it would be really unlikely to get deals as good as we had a decade ago. I'd like for the bubble to just pop a little bit before I start thinking about purchasing a condo seriously though.
Vancouver is unique simply in the degree of unaffordability. After Hong Kong, its housing is the most unaffordable in the world.
The elephant in the room is why this happened. Everyone talks about "foreign speculation" but in fact most of it is not speculation at all. In mainland China, Vancouver is widely viewed as a nice, quiet small city, good for students and the elderly. It's not a place for "real" work. So they buy homes there to live in part-time. It is quite normal to have the mother and child live in Vancouver while the father continues to work overseas. They pay almost no Canadian tax as they have no Canadian income. With their child in school, the parents can eventually claim permanent resident status thanks to the family reunification program and they can expect to retire in Canada. It's a big win for them and they see nothing wrong with it.
To summarize: introducing vast income inequality has distorted the Vancouver housing market and drastically altered the demographics of the city, making it unaffordable for the people who actually work and pay taxes there.
The elephant in the room is why this happened. Everyone talks about "foreign speculation" but in fact most of it is not speculation at all. In mainland China, Vancouver is widely viewed as a nice, quiet small city, good for students and the elderly. It's not a place for "real" work. So they buy homes there to live in part-time. It is quite normal to have the mother and child live in Vancouver while the father continues to work overseas. They pay almost no Canadian tax as they have no Canadian income. With their child in school, the parents can eventually claim permanent resident status thanks to the family reunification program and they can expect to retire in Canada. It's a big win for them and they see nothing wrong with it.
To summarize: introducing vast income inequality has distorted the Vancouver housing market and drastically altered the demographics of the city, making it unaffordable for the people who actually work and pay taxes there.
I think Vancouver's problem is that they don't have a strong economy otherwise. Berlin and new York are bad but at least they offer well paying jobs. That's what I gathered from a coworker who used to live in Vancouver.
Exactly, the best job you can get in Vancouver right now is... Real Estate Agent. And you have to speak Mandarin.
Exactly. I'm currently working as a software engineer here, and the average wage is significantly lower than what Seattle companies offer (even if you ignore the difference in exchange rate). This combined with the housing affordability crisis makes it easy to leave.
> Big cities deal with this all over, so how do they deal with this "problem,"
As far as I can tell, they simply don't. I don't think there is any city that "deals with it", or even tries to, in any way.
Every city I can think of that has value in living in, is experiencing explosive bubble-like growth in them. Even the supposedly "cheap" or "low cost of living" cities are undergoing this process.
I think most cities secretly want this to happen, since it leads to higher property taxes and drives out members of their community they consider less desirable.
As far as I can tell, they simply don't. I don't think there is any city that "deals with it", or even tries to, in any way.
Every city I can think of that has value in living in, is experiencing explosive bubble-like growth in them. Even the supposedly "cheap" or "low cost of living" cities are undergoing this process.
I think most cities secretly want this to happen, since it leads to higher property taxes and drives out members of their community they consider less desirable.
Berlin's values have risen to the point where rents are on average 10 euros per square meter.
You can rent a 100 sqm for only 1000 euros per month!!!!
You can't get 40 sqm for that same amount in Paris.
You can rent a 100 sqm for only 1000 euros per month!!!!
You can't get 40 sqm for that same amount in Paris.
I moved to Berlin recently from Sydney. My rent is 60% of what I was paying in Sydney, and for a nicer apartment. I can't believe more people aren't moving here.
(Maybe I shouldn't say so. Keep the secret to those who know.)
(Maybe I shouldn't say so. Keep the secret to those who know.)
It's not much of a secret? Berlin has been growing fast these past few years, as are real estate prices:
http://www.thelocal.de/20150707/politicians-struggle-to-keep...
And while rents are still cheap compared to other large western cities, they went (and are going) through about the same curve as these more expensive cities - it simply started lower here.
http://www.thelocal.de/20150707/politicians-struggle-to-keep...
And while rents are still cheap compared to other large western cities, they went (and are going) through about the same curve as these more expensive cities - it simply started lower here.
Well, as someone who's considering Australia and NZ as potential destinations, both language and visa situations are big hurdles to clear for moving to Berlin.
Maybe you have an European or U.S. citizenship, but they're harder towards South Americans. Also, software development salaries weren't something to write home about last time I checked (that was some a long time ago admittedly).
Edit: According to Glassdoor, Berlin Software Engineer Salary: €48000 (average)
Sydney Software Engineer Salary: $80000 (average)
Maybe you have an European or U.S. citizenship, but they're harder towards South Americans. Also, software development salaries weren't something to write home about last time I checked (that was some a long time ago admittedly).
Edit: According to Glassdoor, Berlin Software Engineer Salary: €48000 (average)
Sydney Software Engineer Salary: $80000 (average)
I wouldn't touch a Software Engineering job in Sydney at $80,000. That doesn't buy much of a lifestyle in one of the world's most expensive cities.
Visas are pretty easy to come by in Berlin - google "EU Blue Card".
Visas are pretty easy to come by in Berlin - google "EU Blue Card".
Thanks, that's a relatively new development, I wasn't aware of it.
$80k AUD is €50k, sounds pretty close to me.
So, not worth jumping through all the extra inmigration hoops compared to Australia or New Zealand, not to mention the language barrier.
My grandfather was German-born and they didn't grant the citizeship to him, and I remember the ridiculous requirements he faced trying to get it (and he was more German than most actual Germans, a Fischer Reuter Spangemberg and more German surnames all the way down)
http://www.spiegel.de/international/germany/skilled-immigran...
"The paperwork is nightmarishly complex and requires a wealth of information, with endless pages and extra documents. Sometimes translations are required, sometimes not. In fact, she no longer sends the papers off without consulting an expert. Anders works as the human resources manager for Adidas. She is looking for skilled workers in Europe, the Middle East and Africa. These days, even a company like Adidas rarely finds new employees in Germany, especially IT experts and designers."
My grandfather was German-born and they didn't grant the citizeship to him, and I remember the ridiculous requirements he faced trying to get it (and he was more German than most actual Germans, a Fischer Reuter Spangemberg and more German surnames all the way down)
http://www.spiegel.de/international/germany/skilled-immigran...
"The paperwork is nightmarishly complex and requires a wealth of information, with endless pages and extra documents. Sometimes translations are required, sometimes not. In fact, she no longer sends the papers off without consulting an expert. Anders works as the human resources manager for Adidas. She is looking for skilled workers in Europe, the Middle East and Africa. These days, even a company like Adidas rarely finds new employees in Germany, especially IT experts and designers."
Yeah I guess it depends on your situation. For us it was a lot easier due to EU freedom of movement laws. It just sounded funny ("funny") cause it always seemed so much easier than moving to the US when I looked into it.
I also know a lot of Israelis who got German citizenships via their grandparents, but there might be special rules that make it easier for victims of the nazis (and their descendants) or people that fled the country.
Either way the salary is probably never a reason to move to Germany (I don't think wages are higher than in any other western country), I meant more like that it's not a reason NOT to move in that particular example.
I also know a lot of Israelis who got German citizenships via their grandparents, but there might be special rules that make it easier for victims of the nazis (and their descendants) or people that fled the country.
Either way the salary is probably never a reason to move to Germany (I don't think wages are higher than in any other western country), I meant more like that it's not a reason NOT to move in that particular example.
However, after taxes, you're looking at about €29k, as opposed to $60k (€38k).
Not sure where you got that number, I've never paid 40% tax on my income in Germany (despite earning more than €48k per year).
Berlin seems like an amazing value for a capital city with rich culture.
Here in Boston I'm paying 3700 euros for (poorly maintained) 90 sqm, of course split with five people. Maybe it is time to consider a stint in Berlin.
Are there any resources you would recommend to learn more about the city, and the tech scene?
Here in Boston I'm paying 3700 euros for (poorly maintained) 90 sqm, of course split with five people. Maybe it is time to consider a stint in Berlin.
Are there any resources you would recommend to learn more about the city, and the tech scene?
I've lived in Boston, DC, NYC and London for extended periods of time, and spent a stint in Berlin. It's tech scene is awesome - if you find the right group of people it feels like CCC year round. It's art, music and food scene was an amazing value for the money when I was there circa 2011.
I'm guessing the equivalent of their hipsters got wise to it and drove up prices a la the gentrification you saw (compare the between the dirty-grimy NYC of the "Taxi Driver" 1970s vs the clean power-tie NYC of the 1980s bond-trading years, or the early 2000s Williamsburg where the rent was somewhat reasonable vs 2010 where anything on the L costed literally 3 times as much because every white kid with a fixie had his parents pay his $2600 rent, etc. $800/mo on a split isn't too bad for Boston if you're anywhere close to a decent spot on the T, considering the supply/demand (it's arguably the biggest college region in the US - between Cambridge, Boston and BC in Newton it's probably the densest student:non-student ratio in the US). Berlin had that vibrant feeling that's hard to explain but yeah the tech scene was (and hopefully still is) spectacular, especially re: the hardware hacking scene when I was there and it's certainly worth a visit.
Edit: http://ccc.de/ In math if you solve something major, odds are you'll wait till that years AMS Symposium to present; if you crack the PS3, CCC is where fail0verflow went to present. (Don't write them off because of their l33t-name, these guys aren't script kiddies -- these hacks are worthy of PhD theses if you see the detail of reverse engineering they go into.).
I'm guessing the equivalent of their hipsters got wise to it and drove up prices a la the gentrification you saw (compare the between the dirty-grimy NYC of the "Taxi Driver" 1970s vs the clean power-tie NYC of the 1980s bond-trading years, or the early 2000s Williamsburg where the rent was somewhat reasonable vs 2010 where anything on the L costed literally 3 times as much because every white kid with a fixie had his parents pay his $2600 rent, etc. $800/mo on a split isn't too bad for Boston if you're anywhere close to a decent spot on the T, considering the supply/demand (it's arguably the biggest college region in the US - between Cambridge, Boston and BC in Newton it's probably the densest student:non-student ratio in the US). Berlin had that vibrant feeling that's hard to explain but yeah the tech scene was (and hopefully still is) spectacular, especially re: the hardware hacking scene when I was there and it's certainly worth a visit.
Edit: http://ccc.de/ In math if you solve something major, odds are you'll wait till that years AMS Symposium to present; if you crack the PS3, CCC is where fail0verflow went to present. (Don't write them off because of their l33t-name, these guys aren't script kiddies -- these hacks are worthy of PhD theses if you see the detail of reverse engineering they go into.).
CCC?
Chaos Computer Club - Europe's largest association of hackers (https://en.wikipedia.org/wiki/Chaos_Computer_Club)
Over the last five years, the Canadian Dollar has declined more against the Yuan than the Euro or USD. It is mentioned in the article. I think that explains why Chinese investors purchase more property in Vancouver than say, Seattle.
The trend of foreign investment in the Vancouver market has been occurring well before the slide of the CAD. The immigration regime in Canada is much friendlier to foreign nationals, and especially so if they are wealthy. Until 2014, the federal government had an investor visa program that offered a route to permanent residence and citizenship in exchange for $800,000 investment (not in real estate) and demonstrable assets of $1.6 million.
http://www.cic.gc.ca/ENGLISH/immigrate/business/investors/in...
http://www.cic.gc.ca/ENGLISH/immigrate/business/investors/in...
I live in the Maryland suburbs of Washington, DC. Real estate in DC is very high and did not suffer as much in the Great Recession, due to the extremely limited supply of available housing. But I don't think our problem is foreign investors. Many people who moved into the burbs in the 80s and 90s now want to move back, as DC becomes more desirable. I see young people everywhere, even though it's hard for someone just starting out to buy here. But because DC can't physically grow as a city, it becomes harder and harder to find places for new housing.
Out here in the burbs, it's a different story. A development just down the road from me suffered very badly in the downturn, with houses losing as much as 50% of their value. Some of those owners will never be above water on their houses. I'm very glad I chose not to move from my townhouse into a single family home a decade ago, as prices soared, even though I really wanted a place with a mad scientist basement workroom. And as my friends retire, most are moving to warmer and/or cheaper places.
Out here in the burbs, it's a different story. A development just down the road from me suffered very badly in the downturn, with houses losing as much as 50% of their value. Some of those owners will never be above water on their houses. I'm very glad I chose not to move from my townhouse into a single family home a decade ago, as prices soared, even though I really wanted a place with a mad scientist basement workroom. And as my friends retire, most are moving to warmer and/or cheaper places.
DC also has height restrictions due to the 1899 Height of Buildings Act (amended in 1910 to effectively restrict buildings to no taller than 13 stories - http://www.welovedc.com/2009/05/19/dc-mythbusting-the-height...).
Berlin is in a pretty unique situation. It was a city where most buildings stood empty and with few jobs, especially in the high paying sector. The only pull factors were low cost. This changed only slowly after it became the capital again.
I'm in London now but used to be in Auckland. 40% over 7 years sounds blissfully slow after the insanity of Auckland - a city facing a very similar situation to Vancouver.
Berlin is unique in that this city has some very tough housing laws. You're better off being a renter than an owner. Because of that flippers and investors have shied away.
I can't remember where I heard but the city controls the rental rates. Don't want to pay more for a property than you can recoup. And you don't want to leave it unoccupied less you come back to find it squatted; and they have rights as well.
Because it is so highly regulated its not a great investment.
I can't remember where I heard but the city controls the rental rates. Don't want to pay more for a property than you can recoup. And you don't want to leave it unoccupied less you come back to find it squatted; and they have rights as well.
Because it is so highly regulated its not a great investment.
Low avg income in Vancouver is unique vs the other cities you cite. Much lower. Apparently ~$44k in 2009[1]
[1] http://www.theglobeandmail.com/life/home-and-garden/real-est...
[1] http://www.theglobeandmail.com/life/home-and-garden/real-est...
London is also suffering from gentrification (https://en.wikipedia.org/wiki/Gentrification)
Vancouver is not unique. Similar problems exist in many cities around the world. Vancouver today is a more vibrant and economically diverse city than it has ever been. The conversation over the direction of the city is contentious pitting the old guard against the new guard, the haves vs the have nots. I would say San Francisco and Seattle have similar issues. And like you say, Berlin and Munich probably have similar problems. Although I'm not sue if Germany is seeing similar large inflows of Chinese capital and immigration.
I live in Vancouver. I rent half an old house built in 1941 on a big lot.
It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out.
First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish primary residence exemption on capital gains when the house is sold. They make it look like that person is living there, when it's actually being rented. Two untaxed sources of income: undeclared cash rental income and the inevitable capital gains on the sale.
As far as investments go, its a sure win. And I have reason to believe I'm renting one of these properties. It happens to work out well for me though cause rents pretty reasonable.
It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out.
First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish primary residence exemption on capital gains when the house is sold. They make it look like that person is living there, when it's actually being rented. Two untaxed sources of income: undeclared cash rental income and the inevitable capital gains on the sale.
As far as investments go, its a sure win. And I have reason to believe I'm renting one of these properties. It happens to work out well for me though cause rents pretty reasonable.
> are warning that it’s going to be nearly impossible to develop this business into anything meaningful unless the affordability question is addressed.
one way to address it, and I know this is crazy guys just bear with me, is that these tech leaders could start paying more money. No hope to afford a condo at 75k a year? how about at 150?
Vancouver is simply not that much better than Seattle that I would go back. The salary difference is just too high, especially with the favorable tax situation in washington and the lousy dollar.
one way to address it, and I know this is crazy guys just bear with me, is that these tech leaders could start paying more money. No hope to afford a condo at 75k a year? how about at 150?
Vancouver is simply not that much better than Seattle that I would go back. The salary difference is just too high, especially with the favorable tax situation in washington and the lousy dollar.
I lived in Vancouver briefly and worked as a developer. The salaries are horrible when you factor in living costs. You can get a much higher salary in Toronto, Ottawa, or Waterloo.
Come to Montreal! It's great here. No way would I want to pledge the rest of my life to a bank in exchange for the right to exist. Rent controls here.
It's odd: it's like the state understands that banks are bastards.
Montreal has some issues with organised crime but nothing compared to the organised crime of banking / money laundering through land. I don't have to pay some gangster $1MM for a shack.
Leave the boomers to their trinkets kids. Walk away. They need your labour, the rest is just paper.
It's odd: it's like the state understands that banks are bastards.
Montreal has some issues with organised crime but nothing compared to the organised crime of banking / money laundering through land. I don't have to pay some gangster $1MM for a shack.
Leave the boomers to their trinkets kids. Walk away. They need your labour, the rest is just paper.
- It has some ridiculous language issues. We have the OQLF which goes from business to business to fine anyone not adhering to the French language laws. We once got fined for having the accent the wrong way in our signage, and again for having the wrong verb conjugation in our tagline.
- Dumbfounding Bureaucratic issues. Once when I went to University, I was able to prove to the Provincial Gov, that I lived in Quebec, but the same documents were not accepted by the Federal Gov to prove that I lived in Canada. Meaning I could prove that I lived in Quebec, but not that I lived in Canada.
- And it was named the most corrupt Province in Canada. http://www.macleans.ca/news/canada/the-most-corrupt-province...
- Dumbfounding Bureaucratic issues. Once when I went to University, I was able to prove to the Provincial Gov, that I lived in Quebec, but the same documents were not accepted by the Federal Gov to prove that I lived in Canada. Meaning I could prove that I lived in Quebec, but not that I lived in Canada.
- And it was named the most corrupt Province in Canada. http://www.macleans.ca/news/canada/the-most-corrupt-province...
I'm pretty sure that the OQLF works on a complaint basis.
Pretty sure no one complained about this.
http://www.cbc.ca/news/canada/montreal/burgundy-lion-oqlf-1....
Also, as soon as my friend's company who does most of her business to the States got to a certain amount of employees, they had their agents come in to switch out all of the keyboards and software into French, and advised to make internal emails communications in French as well.
http://www.cbc.ca/news/canada/montreal/burgundy-lion-oqlf-1....
Also, as soon as my friend's company who does most of her business to the States got to a certain amount of employees, they had their agents come in to switch out all of the keyboards and software into French, and advised to make internal emails communications in French as well.
From that article:
>A spokesman for the OQLF said the letter is only for information purposes, and there are no penalties involved. The agency's goal, Jean-Pierre Le Blanc said, is to let business owners know that French-language versions of such promotional stickers exist.
>"This is one of about 300 to 400 letters we sent this month to businesses," said Le Blanc. "It's not an investigation. It's not a complaint. It's an incentive."
I suspect that the keyboard anecdote is inflated.
However, the official work language is French, but that is only because we don't want the majority to become second-class citizens..
>A spokesman for the OQLF said the letter is only for information purposes, and there are no penalties involved. The agency's goal, Jean-Pierre Le Blanc said, is to let business owners know that French-language versions of such promotional stickers exist.
>"This is one of about 300 to 400 letters we sent this month to businesses," said Le Blanc. "It's not an investigation. It's not a complaint. It's an incentive."
I suspect that the keyboard anecdote is inflated.
However, the official work language is French, but that is only because we don't want the majority to become second-class citizens..
EDIT - Removed Original Comment
You know what, I'm getting emotional on the Internet.
I'm going to stop arguing here. It's not productive, and there's nothing to prove.
You know what, I'm getting emotional on the Internet.
I'm going to stop arguing here. It's not productive, and there's nothing to prove.
As I said when they rack up $500K corruption I'll have equivalent living costs to Vancouver.
Part of why Montreal is still reasonably priced is because the French-language barrier to entry keeps a lot of jobseekers out.
The vast majority of Canadians outside of Quebec and the Ottawa region do not speak French. Sure, they all took French in high school, but most wouldn't be able to hold a conversation let alone conduct business in the language. Perhaps in some types of jobs with a lax rules about French proficiency, it would be OK, but you are unlikely to find a job listing in Montreal that doesn't state a requirement or "strong preference" for high-level French communication skills.
The vast majority of Canadians outside of Quebec and the Ottawa region do not speak French. Sure, they all took French in high school, but most wouldn't be able to hold a conversation let alone conduct business in the language. Perhaps in some types of jobs with a lax rules about French proficiency, it would be OK, but you are unlikely to find a job listing in Montreal that doesn't state a requirement or "strong preference" for high-level French communication skills.
I visited Montreal a few years ago. I really really enjoyed it.
The city was a great mix. Big enough to wow a hick like me, but also felt accommodating, friendly, and cosy.
Great leisurely bicycling next to the river and canals.
All the french makes it feel like I'd traveled much further. I also tried making an effort to speak it, and unlike when visiting France, people actually had the good taste (or angelic patience) to indulge me.
It was somewhat expensive, but not obnoxiously so.
I know tourist experience a place differently than residents, but I can totally get it why it's a desirable place.
I did this with my wife for an anniversary. We're most certainly coming back when hitting a nice round number again.
The city was a great mix. Big enough to wow a hick like me, but also felt accommodating, friendly, and cosy.
Great leisurely bicycling next to the river and canals.
All the french makes it feel like I'd traveled much further. I also tried making an effort to speak it, and unlike when visiting France, people actually had the good taste (or angelic patience) to indulge me.
It was somewhat expensive, but not obnoxiously so.
I know tourist experience a place differently than residents, but I can totally get it why it's a desirable place.
I did this with my wife for an anniversary. We're most certainly coming back when hitting a nice round number again.
Consider Quebec City as well - it is significantly more romantic for an anniversary occasion!
There has been a MASSIVE exodus to Quebec by Vancouver game developers. When the recession hit, it hit game development hard, and tons of companies shuttered, downsized, or disappeared overnight. Due to the stupid generous tax incentives to tech companies in Quebec, a lot of game studios remained open there, and developers followed.
The industry in Vancouver has since recovered, but with long-term stressor's like the housing issue; another jerk of the economic chain might catalyze another exodus.
The industry in Vancouver has since recovered, but with long-term stressor's like the housing issue; another jerk of the economic chain might catalyze another exodus.
I wonder how much climate is playing a factor in Vancouver's issues. Just from my perspective, I'd love to move to Vancouver, but would never, ever consider Montreal, not because it's not a beautiful city, but because of the harsh winters.
Other people don't seem to really care about weather extremes or scenery, etc. I have no insight into these real estate investors dumping money into property, sure if they aren't living there, there's some other factors involved.
Other people don't seem to really care about weather extremes or scenery, etc. I have no insight into these real estate investors dumping money into property, sure if they aren't living there, there's some other factors involved.
I'd argue climate plays a bigger factor for people who actually want to live in Vancouver, rather than absentee investors.
That said, having grown up in Vancouver, I'd consider Montreal - seeing the sun in the fall/winter is a really nice concept I've gotten used to. I've gotten used to harsh cold of the east coast, but I never got used to the dreary vast grayness even though I spent most of my childhood in it.
That said, having grown up in Vancouver, I'd consider Montreal - seeing the sun in the fall/winter is a really nice concept I've gotten used to. I've gotten used to harsh cold of the east coast, but I never got used to the dreary vast grayness even though I spent most of my childhood in it.
Keep in mind that some people also like the climate of places like Vancouver. I would count myself among them. I moved from Dublin to San Diego (supposedly known for nice weather, somehow) and the weather here is awful; I can't do anything outside without becoming a sweaty mess 9 months of the year. Apparently it's been like this the last several years in a row, possibly indicating a substantial change in the norm, but people lie to themselves about how it's always pleasant here even while it's 90F.
I moved from Israel to Berlin and love the weather here (somewhere between oceanic and continental).
Don't. I'm seriously thinking about moving to Toronto right now. I have a Soft. Eng. degree from McGill and I can't find any business in this city that will pay me minimum wage.
Wat? Are you even trying? I didn't even finish my comp-sci degree at Concordia and since I've started working I've never had to go unemployed between jobs. If you're a skilled developer there is no reason why you should be unemployed right now.
E-mail me.
Problem is salary in Montreal are ridiculously low, and taxes in Quebec are higher than Ontario/British Colombia. Higher taxes should come with the benefit of more services: the health system is clogged and for non-french speaking families, the education system isn't the most friendly.
> Higher taxes should come with the benefit of more services
Daycare services in the province are absurdly cheap compared to anywhere else in the country.
Daycare services in the province are absurdly cheap compared to anywhere else in the country.
Indeed. I love Montreal but the health care system in Quebec is absolutely ridiculous. It's not unusual to wait 12-15 hours at the ER. In Vancouver, without an appointment, you have to wait about 10 minutes to see a competent doctor.
Actually it is. Unless you are the kind of person to go to the ER for having sneezed once in the last 24 hours...
"They need your labour, the rest is just paper."
I'm going to reuse that! I wish this kind of thinking about economy is more main stream.
I'm going to reuse that! I wish this kind of thinking about economy is more main stream.
The only issue with Montreal is, not speaking French will disqualify you from a few different kinds of jobs.
The forecast high temps for Montreal this weekend are -5F/-21C and 0F/-18C. The forecast high temps for Vancouver, BC this weekend are 48F/9C and 49F/11C. I suspect this is a bigger contributor to housing prices than "money laundering" -- it's one of the only places in Canada with a reasonable climate.
This is almost certainly one of the issues with Bay area real estate as well. Yes, especially of late it's been driven up a lot by tech. But it also has what many people consider just about a perfect climate (SF admittedly less so than the South Bay)--as well as great access to recreational opportunities.
How's the tech scene in MTL?
Probably second to only SF in North America for the game industry, SFX for the film industry is also big here.
what site(s) should I be using to look for jobs in Montreal in software? My background is in mechatronics but a ton of the embedded engineering jobs I've seen require some French language skills.
If you are not interested in learning French you'll have a hard time finding a job in Montreal.
Is that really accurate? I've heard that the tech sector in Montreal is actually pretty lenient about English, and there's ways startups get around bilingual regulations by mainly catering to American/Anglophone markets, which is a loophole they can use. Have seen a good amount of commentary saying that programmers in Montreal don't need to speak a lick of French for their jobs.
I'm not saying it is impossible, however bilingualism is often required in Montreal. Also, once the startup gets to a certain size(I'm not sure if it is over 30 or 50 employees) they have additional restrictions imposed by the OQLF.
I'd love to improve my French, but would probably like to do it while working at a new job, not before a job
If you are in Quebec once, try to speak French even if you struggle. You'll see most people will go pretty far to help you.
In any cases, feel free to message me in French if you need practice.
In any cases, feel free to message me in French if you need practice.
[deleted]
are games even that big in SF?
but I don't want to live in Quebec.
i think i love you
Back in the mid/late 90s as Hong Kong was returning to China, the spike in prices started. I recall Condos in Kits for $200k or so, new build later in the 90s was still sub $300k. The victorians around there were still reasonable as well.
In a few short years it went nutty and prices spiked and they've only been going up since.
Those retiring age sold their places in Van, moved to the Okanagan and prices there spiked as well.
Weather is maybe part of it, setting and scenery certainly are too. Easy access to the Pacific Rim is also part of it.
In a few short years it went nutty and prices spiked and they've only been going up since.
Those retiring age sold their places in Van, moved to the Okanagan and prices there spiked as well.
Weather is maybe part of it, setting and scenery certainly are too. Easy access to the Pacific Rim is also part of it.
This is me. I left Vancouver for Toronto 5 years ago. What is not mentioned (that I saw) is that salaries in Vancouver are also much lower than Toronto for the same job. Montreal is even cheaper than Toronto and is probably more fun (if you are bilingual)
Salaries are also much lower in Montréal. If you are willing to learn French, you will be very welcome.
I am from NB (Anglo). So I have very rusty French. I am sure it would come back if I used it. Montreal is a great city. My salary doubled for the same industry (programmer with CS) going from Van to TO. Vancouver is beautiful if you like playing in the mountains. I miss the snowboarding and hiking very much. But I was almost homeless I was so poor out there.
If apartments are 25% vacant on speculation grounds, that's quite a bubble.
I don't intend to do it, but for curiosity's sake: How does one go short on houses?
"I'll pay you to let me borrow your house and sell it to someone else. Later, I'll get you an equivalent house." Never heard of anyone doing such a thing, but at the right up-front payment, I bet someone would take the deal.
I don't intend to do it, but for curiosity's sake: How does one go short on houses?
"I'll pay you to let me borrow your house and sell it to someone else. Later, I'll get you an equivalent house." Never heard of anyone doing such a thing, but at the right up-front payment, I bet someone would take the deal.
In practice you can't, but you can short the banks lending into this bubble. Also building companies can be shorted.
The problem with going short on something like housing is the market can stay irrational longer than you can stay solvent. This bubble is being pushed by buyers who are not looking to make money, but to get money out of certain countries and providing a safe haven to flee to. Unless this changes then things won't get more rational.
If you had enough money you could short the banks and then whip up a media campaign of anti-foreign investment and xenophobia. Scare the market enough and you might get it to crash.
The problem with going short on something like housing is the market can stay irrational longer than you can stay solvent. This bubble is being pushed by buyers who are not looking to make money, but to get money out of certain countries and providing a safe haven to flee to. Unless this changes then things won't get more rational.
If you had enough money you could short the banks and then whip up a media campaign of anti-foreign investment and xenophobia. Scare the market enough and you might get it to crash.
Looks like people are already doing that: http://www.cnbc.com/2015/10/30/why-investors-are-shorting-ca...
Vancouver and cities like it became popular because of the critical mass of fun, interesting, creative, hard working young people who moved there and created communities. Once priced out, they will just go elsewhere. Other young people will follow and recreate the same communities with a lower price tag. Depending on local land use restrictions, some amount of gentrification then follows. In other words, this is a problem that takes care of itself, to some extent. Visit Austin or Nashville today and you will see this in action.
San Francisco is an outlier given the extremely dense concentration of high paying jobs which drove housing into orbit. This makes it much ''stickier''. However, this entire model is dependent upon the public markets giving tech companies sky high valuations, which could change. Already I see many of the more proactive venture firms scouring outside of SF for deal flow, particularly in these gentrifying second tier cities like Austin, Nashville, Minneapolis, Kansas City, etc.
San Francisco is an outlier given the extremely dense concentration of high paying jobs which drove housing into orbit. This makes it much ''stickier''. However, this entire model is dependent upon the public markets giving tech companies sky high valuations, which could change. Already I see many of the more proactive venture firms scouring outside of SF for deal flow, particularly in these gentrifying second tier cities like Austin, Nashville, Minneapolis, Kansas City, etc.
San Francisco is an outlier given the extremely dense concentration of high paying jobs which drove housing into orbit
San Francisco's housing policies drove housing into orbit: http://techcrunch.com/2014/04/14/sf-housing/. There are numerous other discussions of this: http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp....
We have the technology to build lots of units (steel-frame construction, elevators): http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valle.... "We" just choose not to use them.
San Francisco's housing policies drove housing into orbit: http://techcrunch.com/2014/04/14/sf-housing/. There are numerous other discussions of this: http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp....
We have the technology to build lots of units (steel-frame construction, elevators): http://www.slate.com/blogs/moneybox/2013/05/03/silicon_valle.... "We" just choose not to use them.
Would that actually solve the problem? Is there anywhere in America where steel frame construction + concrete walls + elevators is affordable to regular people? Is there even one example of this happening in the real world?
I haven't found any examples, except in already hyper-wealthy neighborhoods, or in 40+ yr old buildings in cities that became significantly less desirable, due to very high crime/poverty/etc. (Detroit, parts of Chicago, etc)
---
> (From the Slate.com article you linked to) What should be happening in Silicon Valley is an enormous construction boom. There should be oodles of blue-collar jobs knocking down suburban-style single-family detached homes and replacing them with attached townhouses. Right by Caltrain stations, there should be huge apartment towers going up. Some people might get dispaced out of the individual house they live in, but generally should be able to afford to stay in the area
Is that a thing that has ever actually happened -- even just once? It sounds like a false narrative.
In the real world, the creation of the Highrise adds more units (increases supply) but does not reduce demand -- because the presence of the new building makes the neighborhood more attractive, so demand rises even more than the supply was increased, driving prices even higher. If a hypothetical high rise has 20 units, the act of constructing it increases demand by 40 units (20 of which the building absorbs, 20 of which are dumped back into the already-high-demand neighborhood.
I'm in the "low cost of living" Midwest, and even here this occurs. A developer pays $150k for a single family 4bed home. Tears it down, and builds 3 condos on the site, each condo lists for $250k - $300k and is only 2bed each. The previous occupants are guaranteed to be displaced -- even if they could downsize their space needs, they can't afford to double their housing costs.
Where is this hypothetical place where these brand new condos cost equal-or-less than the old single family house that was just torn down?
I haven't found any examples, except in already hyper-wealthy neighborhoods, or in 40+ yr old buildings in cities that became significantly less desirable, due to very high crime/poverty/etc. (Detroit, parts of Chicago, etc)
---
> (From the Slate.com article you linked to) What should be happening in Silicon Valley is an enormous construction boom. There should be oodles of blue-collar jobs knocking down suburban-style single-family detached homes and replacing them with attached townhouses. Right by Caltrain stations, there should be huge apartment towers going up. Some people might get dispaced out of the individual house they live in, but generally should be able to afford to stay in the area
Is that a thing that has ever actually happened -- even just once? It sounds like a false narrative.
In the real world, the creation of the Highrise adds more units (increases supply) but does not reduce demand -- because the presence of the new building makes the neighborhood more attractive, so demand rises even more than the supply was increased, driving prices even higher. If a hypothetical high rise has 20 units, the act of constructing it increases demand by 40 units (20 of which the building absorbs, 20 of which are dumped back into the already-high-demand neighborhood.
I'm in the "low cost of living" Midwest, and even here this occurs. A developer pays $150k for a single family 4bed home. Tears it down, and builds 3 condos on the site, each condo lists for $250k - $300k and is only 2bed each. The previous occupants are guaranteed to be displaced -- even if they could downsize their space needs, they can't afford to double their housing costs.
Where is this hypothetical place where these brand new condos cost equal-or-less than the old single family house that was just torn down?
Seattle is currently enjoying falling rents, and is the kind of hip coastal city that people care about: http://www.bizjournals.com/seattle/blog/2015/11/bad-timingas...
For more dramatic numbers, including low prices and a booming population for many years, you should look at Houston, Texas, Hero Of Housing Capitalism.
For more dramatic numbers, including low prices and a booming population for many years, you should look at Houston, Texas, Hero Of Housing Capitalism.
> Seattle is currently enjoying falling rents.
But that's not true, according to your own article.
From your link: "in the core of Seattle, rents went up 3.9 percent year-over-year in September."
But that's not true, according to your own article.
From your link: "in the core of Seattle, rents went up 3.9 percent year-over-year in September."
The next sentence, about how growth was 8 percent the year before, is also meaningful. This is a better/more clear article on the same thing: http://www.bizjournals.com/seattle/morning_call/2015/12/repo...
> rents dropped this quarter in all but South Lake Union, with the average decline hitting $59 a month. Further, when all of these submarkets are considered, the average vacancy rate increase was nearly a full percentage point.
2015 new construction was huge, the biggest since the late eighties/early nineties, and construction for the next couple years, based on filings, looks like it's going to continue that way. So it's likely that apartment prices will continue fall or hold still.
> rents dropped this quarter in all but South Lake Union, with the average decline hitting $59 a month. Further, when all of these submarkets are considered, the average vacancy rate increase was nearly a full percentage point.
2015 new construction was huge, the biggest since the late eighties/early nineties, and construction for the next couple years, based on filings, looks like it's going to continue that way. So it's likely that apartment prices will continue fall or hold still.
Does Vancouver have rent control? I thought rent control was one of the big causes of the SF housing crisis... or so people say. For me, at least, it's the only way I can afford to live in the city!
Yes, BC sets sensible maximum rates that rent can be increased per year (usually on the order of inflation, ~2%).
Only if you rent month-to-month. And if a month-to-month tenant leaves, you increase rent by any amount you want.
Source: http://www.vancouversun.com/business/Daphne+Bramham+tier+sys...
Where does the youth diaspora in Vancouver lead to? The suburbs? Other cities in Canada or the US?
The suburbs?
There's a lot of this, yes. And the suburbs aren't necessarily very suburban: I live in a 30 floor condo tower in Burnaby, and within 2 block radius there's a dozen similar towers and twenty more 30-60 floor towers in various stages of zoning hearings (8) / building approval (7) / digging big holes (2) / towers going up (3).
There are two major phenomena at play in Vancouver:
1. Across Metro Vancouver, the supply of land for single family detached houses is very constrained; this is pushing prices of detached houses up dramatically.
2. The City of Vancouver proper is very hostile to development, due to a toxic combination of NIMBYism, height restrictions to maintain "view corridors" of the nearby mountains, and social activists who think that building more housing will somehow make housing less affordable.
But if you're willing to live in a condo and you don't mind living a 20 minute train ride away from downtown, the cost of housing is far more reasonable than hysterical media reports would have you believe; and unlike detached houses, prices of condos have barely kept up with inflation over the past decade.
There's a lot of this, yes. And the suburbs aren't necessarily very suburban: I live in a 30 floor condo tower in Burnaby, and within 2 block radius there's a dozen similar towers and twenty more 30-60 floor towers in various stages of zoning hearings (8) / building approval (7) / digging big holes (2) / towers going up (3).
There are two major phenomena at play in Vancouver:
1. Across Metro Vancouver, the supply of land for single family detached houses is very constrained; this is pushing prices of detached houses up dramatically.
2. The City of Vancouver proper is very hostile to development, due to a toxic combination of NIMBYism, height restrictions to maintain "view corridors" of the nearby mountains, and social activists who think that building more housing will somehow make housing less affordable.
But if you're willing to live in a condo and you don't mind living a 20 minute train ride away from downtown, the cost of housing is far more reasonable than hysterical media reports would have you believe; and unlike detached houses, prices of condos have barely kept up with inflation over the past decade.
How confident are you of not getting a multi hundred thousand dollar assessment when the condo starts leaking or otherwise falling apart? Owning a condo worries me, no control over the maintenance, no ability to do any changes to it, no space to start a family.
The roof on your house can suddenly start leaking, too.
Vancouver was plagued by "leaky condos" in the 1980s and early 1990s, but that's over now: This happened due to a rapid expansion of condo construction using building designs suited for a drier climate. There have been no signs of problems in newer buildings.
Stata corporations are normally supposed to have depreciation reports prepared in order to identify upcoming costs; unfortunately these can be waived with a vote of unit holders, and most do. The best remedy here is to not buy a unit which doesn't have a recent depreciation report.
no space to start a family
In terms of $ per unit floor area, condos are cheaper than detached houses. Sure, you don't get a lawn... but you get access to lots of other amenities. I'm not convinced that raising kids in a condo is as hard as people think.
Vancouver was plagued by "leaky condos" in the 1980s and early 1990s, but that's over now: This happened due to a rapid expansion of condo construction using building designs suited for a drier climate. There have been no signs of problems in newer buildings.
Stata corporations are normally supposed to have depreciation reports prepared in order to identify upcoming costs; unfortunately these can be waived with a vote of unit holders, and most do. The best remedy here is to not buy a unit which doesn't have a recent depreciation report.
no space to start a family
In terms of $ per unit floor area, condos are cheaper than detached houses. Sure, you don't get a lawn... but you get access to lots of other amenities. I'm not convinced that raising kids in a condo is as hard as people think.
I went to UBC, Vancouver from my undergrad. A large part of my friends moved to the US (since the exchange rate works in your favor). Calgary and Toronto are also popular.
A lot of the young people go back to Asia for better jobs after graduating. Silicon Valley and Seattle are popular destinations. Also some move to Toronto or Montreal.
After ubc I went back to the states along with everyone else who got the chance - otherwise calgary, Toronto and montreal, or asia. Kids in Asia who have ubc/northamerican degrees are treated like golden children from what I hear. A former roommate from jakarta said he applied to langara cause even that's prestigious lol
Suburbs of Toronto for me and several of my friends from my time at UBC. A lot of us were transplants from across the country, tried to hack it professionally in Vancouver before eventually being driven elsewhere by job and housing prospects.
I'm an hour outside of Vancouver in Abbotsford. Housing is still high, 300k for a single detached unit, but it's very liveable.
A modest house in the suburbs of Victoria is 400K now so that's not too bad, really.
Price is reasonable, but an hour outside Vancouver is damn far.
I grew up in the region and went to school there. Left for Ottawa. I'd say most of my friends left. I still read the Georgia straight and follow the news. It is kind of home after all but one I will never go back to.
Loads go to the US. TN is easy to get and you can get close to (or more than) 50% higher salary (not including exchange rate, before tax).
You have to lie and say you're a systems analyst to get a TN visa. (Been there, done that, got the t-shirt.)
Correct, although it's a small lie as you still submit paperwork which states what your job actually entails (albeit with an emphasis on design and such over actual programming every day).
This is becoming increasingly true of LA too. Unless you're rent controlled and have been there for a while the price for an apartment is further and further out of reach.
There's construction everywhere but the price of living in those new buildings is even more than the increasingly expensive older areas and a lot of new construction has begun with what seems like little to no consideration for its impact on traffic.
Perhaps developers and the city expect people to use the limited metro system and other public transit but few people, in practice do.
I can't be that upset though, my wife and I are leaving for the suburbs soon with no plans to come back.
There's a lot happening in LA in terms of the tech scene, but it's not enough to outweigh the overwhelming cost of attempting to put down roots there (home ownership is a largely unobtainable goal, insurance of all kinds is expensive, every neighborhood suffers from traffic congestion and on and on).
There's construction everywhere but the price of living in those new buildings is even more than the increasingly expensive older areas and a lot of new construction has begun with what seems like little to no consideration for its impact on traffic.
Perhaps developers and the city expect people to use the limited metro system and other public transit but few people, in practice do.
I can't be that upset though, my wife and I are leaving for the suburbs soon with no plans to come back.
There's a lot happening in LA in terms of the tech scene, but it's not enough to outweigh the overwhelming cost of attempting to put down roots there (home ownership is a largely unobtainable goal, insurance of all kinds is expensive, every neighborhood suffers from traffic congestion and on and on).
I wonder how much of this and similar cases are based on low interests. You can't keep your money in the bank because you won't get any interests and at the same time leveraging your money and buying housing is cheaper. So maybe the solution to housing prices is significantly higher interest rates?
I think that's one of the causes, the other is the excessive money supply:
https://positivemoney.org/issues/house-prices/
The issue described is not unique to Vancouver, it's a worldwide phenomenon, lots of desirable locations across the globe are facing the same (from Auckland to London to Sydney to Zurich), even in my hometown in Montevideo, Uruguay, houses are going for ridiculous prices.
A good measure on whether housing is overvalued (IMO) is how many salaries it takes to buy a house. A good salaries to house ratio was something like 4 yearly salaries, it's currently over 10 for England, with some places going to 20 yearly salaries for a house:
http://www.theguardian.com/money/2015/aug/06/average-house-p...
As someone who doesn't own any property, I really hope the housing bubble explodes. OTOH there are people who have gotten very wealthy just by inheriting and holding property, who must dread the same scenario, but where can they safely store their value? As mentioned, interest rates are very low or negative.
https://positivemoney.org/issues/house-prices/
The issue described is not unique to Vancouver, it's a worldwide phenomenon, lots of desirable locations across the globe are facing the same (from Auckland to London to Sydney to Zurich), even in my hometown in Montevideo, Uruguay, houses are going for ridiculous prices.
A good measure on whether housing is overvalued (IMO) is how many salaries it takes to buy a house. A good salaries to house ratio was something like 4 yearly salaries, it's currently over 10 for England, with some places going to 20 yearly salaries for a house:
http://www.theguardian.com/money/2015/aug/06/average-house-p...
As someone who doesn't own any property, I really hope the housing bubble explodes. OTOH there are people who have gotten very wealthy just by inheriting and holding property, who must dread the same scenario, but where can they safely store their value? As mentioned, interest rates are very low or negative.
>As someone who doesn't own any property, I really hope the housing bubble explodes.
Where were you 5-7 years ago?
Where were you 5-7 years ago?
I was sitting on large bank and calling real estate agents in the Bay Area ... who either committed suicide or left the industry. So no house for me.
Starting an expensive tech MBA instead of putting the money for a down payment on a house... bad move.
Vancouver's problem isn't the house prices. The problem is to a large extent caused by the author of this piece, the Hootsuite CEO. The few tech companies in vancouver don't pay. They expect the city to provide them a steady flow of over-educated 20-somethings willing to work long hours for only slightly more than rent. For the last 15 years the city has provided just that. The complaints now are that those 20-somethings want to own stuff. They want a house. They want to own a dog that isn't left alone 10+ hours every day. They want families. So it is time to let them go and demand the city provide a new flock.
What every company in Vancouver seems to want is an employee who is desperate for work but also independently wealthy. That might seem a conflict but in Vancouver it is normal. There are thousands of young people here who are supported by parents who have enjoyed the rise in house prices. They are desperate for work, but don't much care about the pay because they have support. Hootsuite's problem is that many of those kids are now in their thirties, mom and dad have moved, and they want to have an actual life of their own. That cannot happen at 30k in a city like Vancouver.
(Lets see how long it takes for this comment to hit a nerve. Hoot is a social media company with eyes everywhere.)
What every company in Vancouver seems to want is an employee who is desperate for work but also independently wealthy. That might seem a conflict but in Vancouver it is normal. There are thousands of young people here who are supported by parents who have enjoyed the rise in house prices. They are desperate for work, but don't much care about the pay because they have support. Hootsuite's problem is that many of those kids are now in their thirties, mom and dad have moved, and they want to have an actual life of their own. That cannot happen at 30k in a city like Vancouver.
(Lets see how long it takes for this comment to hit a nerve. Hoot is a social media company with eyes everywhere.)
This goes for Canadian employers in general, not just those in Vancouver. I'm not sure how they expect to retain talent when they offer on average about half the salary of similar positions in the US when adjusted for currency (and I'm not even talking about SF... Seattle is a 3 hour drive from Vancouver and moving there can easily double your salary with a comparable cost of living), especially since the barrier to entry into the US is practically non-existent for citizens.
Understandably, employers in Canada want to save money by competing only with their Canadian neighbors in terms of salaries, but this attitude seems extremely shortsighted to me, and results in a vicious negative feedback loop: companies offer lower salaries -> low availability of higher tier talent -> companies under-compete -> companies can now only afford lower salaries -> rinse and repeat. I believe this has been having a profound effect on competitiveness of the Canadian tech industry as a whole (see Blackberry/RIM as a prime example of this phenomenon).
As a recent Waterloo grad, I've witnessed the brain-drain first hand. Everyone I know from school who's any good has left for lucrative US positions, and I'll probably be joining them soon.
Understandably, employers in Canada want to save money by competing only with their Canadian neighbors in terms of salaries, but this attitude seems extremely shortsighted to me, and results in a vicious negative feedback loop: companies offer lower salaries -> low availability of higher tier talent -> companies under-compete -> companies can now only afford lower salaries -> rinse and repeat. I believe this has been having a profound effect on competitiveness of the Canadian tech industry as a whole (see Blackberry/RIM as a prime example of this phenomenon).
As a recent Waterloo grad, I've witnessed the brain-drain first hand. Everyone I know from school who's any good has left for lucrative US positions, and I'll probably be joining them soon.
The US, even Seattle, can be a culture shock for many Canadians. It is a very different country. I know of several people who have fled the US after only a couple years. It generally boils down to race, religion and guns, all of which are radically different on either side of the boarder. It's not that one is better than the other, but that a person raised in one environment can be taken aback by the immediacy of the change.
There's virtually no religion or guns in Seattle. And I'm not sure what race you're talking about, but I can only guess Asian (since Canadian isn't a race!) and even growing up in the 80s half my friends were Asian.
We're not talking about Oklahoma here.
We're not talking about Oklahoma here.
>>> but I can only guess Asian (since Canadian isn't a race!)
That's a perfect example. You've assumed that I meant "race" as meaning there where different races in either country. I mean to speak about the concept of race generally. American's are obsessed with race. It is part of nearly every discussion and aspect of life. In Canada it isn't such a big deal. You don't hear Canadian politicians ever speak of wining "the black vote" or caring that someone is "the first jewish person to win a primary." As a canadian I find such phrases impolite, almost difficult to type.
Look at the new defense minister. If he was named to head the US DOD FoxNews would scream 24/7. In Canada, barely anyone noticed. Those that did did so only because the guy looks like the toughest defense minister on the planet atm.
http://www.readoo.in/2015/11/meet-canadas-new-badass-defence...
That's a perfect example. You've assumed that I meant "race" as meaning there where different races in either country. I mean to speak about the concept of race generally. American's are obsessed with race. It is part of nearly every discussion and aspect of life. In Canada it isn't such a big deal. You don't hear Canadian politicians ever speak of wining "the black vote" or caring that someone is "the first jewish person to win a primary." As a canadian I find such phrases impolite, almost difficult to type.
Look at the new defense minister. If he was named to head the US DOD FoxNews would scream 24/7. In Canada, barely anyone noticed. Those that did did so only because the guy looks like the toughest defense minister on the planet atm.
http://www.readoo.in/2015/11/meet-canadas-new-badass-defence...
throws up hands Well, you're the one who brought up race, so I'm not sure what you expected.
I think the problem is that you experience US culture via the media, and you experience Canadian culture in real life AND via the media. I don't feel that everything is about race in the US, but obviously it's a pretty damn big deal in the media right now because of globally-known events that have happened really recently. Would you have said the same even 5 years ago?
In a bar in France one time, a group of drunk Canadian women started chatting me up, and the more drunk of the group kept going on and on about how terribly obsessed with celebrities all of us Americans were. She went on and on for 20 minutes about how it's all we care about and all we talk about. Leaving aside the irony of the situation, she refused to listen when I said I simply don't care, it's not a part of my life, and it's not a part of the lives of anyone I know.
But that's what you get when your biggest impression of a place is from its media. That's not to say that it doesn't reflect something real, just that it's not the whole picture.
I think the problem is that you experience US culture via the media, and you experience Canadian culture in real life AND via the media. I don't feel that everything is about race in the US, but obviously it's a pretty damn big deal in the media right now because of globally-known events that have happened really recently. Would you have said the same even 5 years ago?
In a bar in France one time, a group of drunk Canadian women started chatting me up, and the more drunk of the group kept going on and on about how terribly obsessed with celebrities all of us Americans were. She went on and on for 20 minutes about how it's all we care about and all we talk about. Leaving aside the irony of the situation, she refused to listen when I said I simply don't care, it's not a part of my life, and it's not a part of the lives of anyone I know.
But that's what you get when your biggest impression of a place is from its media. That's not to say that it doesn't reflect something real, just that it's not the whole picture.
There's a bit more religion. I haven't been able to walk through Seattle downtown without some angry person with a sign and a megaphone threatening infidels with hellfire, unless they repent, and accept the Lord as their saviour.
Other then that, it's not too bad.
Other then that, it's not too bad.
Yeah, I walked through Super Bowl city in SF last week and found these megaphone people. You forget they exist until a big event comes up, then they come out of the woodwork.
San Francisco's jarring if you're black and not homeless. In Toronto our panhandlers have the decency to be not black.
EDIT> It's demoralizing.
EDIT> It's demoralizing.
> The few tech companies in vancouver don't pay.
The tech companies in Vancouver haven't increased pay in step with skyrocketing housing. If you can find data on employee pay in the tech industry (good luck) you'd find it'd be fairly consistent. Compared to housing prices in Vancouver, you'd likely be looking at hockey stick growth. That's the disconnect.
If Hootsuite paid minimum wage, but cost-to-live was free, then it's a really good deal for developers.
Besides, you're ignoring the rest of the local economy. Tech is only a small part, and fixing it for one small sector isn't going to do much on a macro scale.
The tech companies in Vancouver haven't increased pay in step with skyrocketing housing. If you can find data on employee pay in the tech industry (good luck) you'd find it'd be fairly consistent. Compared to housing prices in Vancouver, you'd likely be looking at hockey stick growth. That's the disconnect.
If Hootsuite paid minimum wage, but cost-to-live was free, then it's a really good deal for developers.
Besides, you're ignoring the rest of the local economy. Tech is only a small part, and fixing it for one small sector isn't going to do much on a macro scale.
>>> Tech is only a small part, and fixing it for one small sector isn't going to do much on a macro scale.
Very convenient. Not attempting to fix a problem until everyone else is onboard is a great way of not doing anything. If tech companies want to retain talent, pay for it. Don't lambaste the city or the economy. There is nothing more hypocritical than a CEO of a profitable company complaining about retention. If you are profitable then you can afford to pay your people more. Complain about the city when you cannot find the people needed to make ends meet, not when they are inconveniently expensive.
Very convenient. Not attempting to fix a problem until everyone else is onboard is a great way of not doing anything. If tech companies want to retain talent, pay for it. Don't lambaste the city or the economy. There is nothing more hypocritical than a CEO of a profitable company complaining about retention. If you are profitable then you can afford to pay your people more. Complain about the city when you cannot find the people needed to make ends meet, not when they are inconveniently expensive.
Wow, I don't know what that comment has a greater supply of, ignorance or cynicism. Being paid more =/= fixing housing crisis.
>> Being paid more =/= fixing housing crisis.
It solve the crisis for the people you pay. It allows them to live rather than move elsewhere. If all employers did the same, then it wouldn't really be a crisis.
It solve the crisis for the people you pay. It allows them to live rather than move elsewhere. If all employers did the same, then it wouldn't really be a crisis.
Man, lots of parallels to game-dev here. You see an almost similar problem, albiet that it means the average career is ~3 years instead of being a geographical migration.
I used to work in the Vancouver film industry. I remember an interview with some of the Stargate people where they laughed at the fact that most of the CG guys working on the shows final years (SG Atlantis) were in diapers when SG1 started. As soon as the novelty wore off and they wanted pay, everyone left. Anyone who thinks actresses age quickly in Hollywood, look at the teenagers who work in CG.
Incidentally, there is also a lot of game dev in Vancouver.
Just realized that a lot of people in this thread may be Canadians looking to shift around.
If you're interested in working on cool engineering problems in Toronto, e-mail me.
If you're interested in working on cool engineering problems in Toronto, e-mail me.
I lived in Vancouver from 2000 - 2005. Left when I got married and worked as a software engineer in southern California until the end of 2010. Got fed up waiting for the green card so moved to Australia (my wife is an Aussie) and currently live in Melbourne. Reading articles like this I'm very, very glad I chose not to move back to Vancouver. Sure it's expensive to buy a house in Australia, but rent is relatively cheap. We're paying $1700/month for a 3-bedroom house in a nice neighbourhood 15 minutes by train from downtown Melbourne. Now that we have 3 boys I would never consider moving back to Vancouver. Low salaries, very high housing costs and non-stop rain in winter. Makes no sense at all if you have kids.
Meh... article is pushed by special interest groups. Their concerns could be addressed very quickly by raising their employees salaries. Especially since vast majority of companies sell services to the US, and get more CADs than before with the current exchange rate.
The Vancouver economy is not 100% tech, there are many, many businesses (logistics, banking, retail, etc.) that have no exports to the US. Can I ask where you are getting your data?
Thats true, but did you read the article though? It addresses tech industry in several paragraphs at the very beginning. The older tech industries might be CAD-orientied, but any new startup aspires to be global and charges in USD.
sure, you can't buy a house in Vancouver anymore on a normal salary, but nothing prevents you from living in Surrey, there are plenty of towers going up around the skytrain at Surrey central and King George where you can get an apartment for less than 200k
Yes, it's not Vancouver city, and yes, it's not a house, however via skytrain you can be downtown in a little over 40 minutes and get work done on your laptop in the meantime.
You don't need a house to survive, it is nice, yes, but many many many millions of people live and bring up families in apartments in Europe, so it is definitely doable.
Of course it's annoying to think that 12 years ago you could get a nice house in kits for 400k, or a 1000+ sqf condo downtown for 200k, but what can you do, same deal as buying a lottery ticket or joining a startup that makes it vs one that doesn't. The mountains and nature and weather are available whether you live in vancouver or in one of the suburbs
Metro Vancouver is over 2m people, Surrey is the largest city in the metro area actually, even if Vancouver proper becomes a "haven for the rich" there's plenty of other areas where one can live, the problem is that a lot of tech companies can't seem to see beyond "gastown is trendy" or "let's go to yaletown" or "downtown is where it's at", when they could easily set up in other skytrain-served area and attract more folks that don't like the commute downtown.
It is true, what you could do 10-15 years ago, buy a house within 30 minutes of downtown on a normal salary is not possible anymore (just like it wasn't possible back then to do that for a house in Point Grey) but it is still quite possible to live here, given the amount of immigration that the area is still getting.
Townhouses and condos in Surrey or Langley are still very affordable, the commute is annoying, but from what I hear from friends in the valley it's not like traffic there is that great either, at least up here you can sit on the skytrain and get things done or read a book rather than be stuck in traffic and have no alternatives because there's no decent public transit.
Yes, it's not Vancouver city, and yes, it's not a house, however via skytrain you can be downtown in a little over 40 minutes and get work done on your laptop in the meantime.
You don't need a house to survive, it is nice, yes, but many many many millions of people live and bring up families in apartments in Europe, so it is definitely doable.
Of course it's annoying to think that 12 years ago you could get a nice house in kits for 400k, or a 1000+ sqf condo downtown for 200k, but what can you do, same deal as buying a lottery ticket or joining a startup that makes it vs one that doesn't. The mountains and nature and weather are available whether you live in vancouver or in one of the suburbs
Metro Vancouver is over 2m people, Surrey is the largest city in the metro area actually, even if Vancouver proper becomes a "haven for the rich" there's plenty of other areas where one can live, the problem is that a lot of tech companies can't seem to see beyond "gastown is trendy" or "let's go to yaletown" or "downtown is where it's at", when they could easily set up in other skytrain-served area and attract more folks that don't like the commute downtown.
It is true, what you could do 10-15 years ago, buy a house within 30 minutes of downtown on a normal salary is not possible anymore (just like it wasn't possible back then to do that for a house in Point Grey) but it is still quite possible to live here, given the amount of immigration that the area is still getting.
Townhouses and condos in Surrey or Langley are still very affordable, the commute is annoying, but from what I hear from friends in the valley it's not like traffic there is that great either, at least up here you can sit on the skytrain and get things done or read a book rather than be stuck in traffic and have no alternatives because there's no decent public transit.
This sort of thing is true broadly. It's a bit more complicated in California because the South Bay is also very popular and very expensive, but the trendy areas of many downtowns have, over a relatively short period, become very popular with, among others, a certain young & educated demographic that really has turned them into luxury goods.
This has arguably long been the case in some places like Manhattan. Going back decades, living in a crappy tiny apartment in Manhattan rather than, heaven forbid, Queens was a thing for recent graduates. But, at the same time, tech was generally moving out of metropolitan Boston and the computer companies were mostly out on the 128 and 495 corridors.
This has arguably long been the case in some places like Manhattan. Going back decades, living in a crappy tiny apartment in Manhattan rather than, heaven forbid, Queens was a thing for recent graduates. But, at the same time, tech was generally moving out of metropolitan Boston and the computer companies were mostly out on the 128 and 495 corridors.
That 495 tech belt thing was because office park space was so cheap and having 75,000 sqft was required back during the Sun and Digital days. No one really chose to live out there after graduating for college, and if they did move out there it was either reluctantly for a shorter commute or because employees were further on in life (e.g. 30-somethings then would consider suburbia ideal; in my late 20s, early 30s now very few people want to live outside of major cities, opt for public transportation over having cars, etc). Now Central Square is gentrified enough to the point where a heroin junkie won't rob you at at 9PM, and at least amongst my friends, the young & educated (both in the sciences and the liberal arts) either chose to stay in the city post-college (or move out to a comparable city).
>No one really chose to live out there after graduating for college
Sure they did. I knew relatively few people who chose to live in Boston/Cambridge after graduation in the 80s. Yes, some of this was because of the commute to their jobs in Metro-West. But I knew lots of people (including myself) who never seriously considered living in the city post-graduation.
As you say, places like Kendall and Central Square weren't exactly desirable locales. Both the state of much of Boston/Cambridge (and even Somerville) and the general attitude toward urban living among certain demographics has obviously shifted.
Sure they did. I knew relatively few people who chose to live in Boston/Cambridge after graduation in the 80s. Yes, some of this was because of the commute to their jobs in Metro-West. But I knew lots of people (including myself) who never seriously considered living in the city post-graduation.
As you say, places like Kendall and Central Square weren't exactly desirable locales. Both the state of much of Boston/Cambridge (and even Somerville) and the general attitude toward urban living among certain demographics has obviously shifted.
The Bay Area has been really bad about building, but some of the huge explosions in housing, for example the big towers going up in Redwood City, might finally help alleviate a bit of pressure.
<The Bay Area has been really bad about building>
This is largely due to politics. If you were a speculator considering building a rental apartment building, you face:
1) Rent control. (Those cities and counties that don't have it are all considering it.)
2) Requirements that you allocate a percentage of your units as limited to "low income housing", with those units becoming permanently constrained
3) permit costs, neighborhood opposition, and other city-specific barriers
4) high material prices and construction costs (e.g. earthquake and flood codes)
5) high labor costs
This is largely due to politics. If you were a speculator considering building a rental apartment building, you face:
1) Rent control. (Those cities and counties that don't have it are all considering it.)
2) Requirements that you allocate a percentage of your units as limited to "low income housing", with those units becoming permanently constrained
3) permit costs, neighborhood opposition, and other city-specific barriers
4) high material prices and construction costs (e.g. earthquake and flood codes)
5) high labor costs
Of course, that won't help the folks who don't want to own a car and do want to live in SF and be part of the urban scene but there are probably a lot more opportunities for adding housing south of SF--where most of the tech employment is anyway.
Well, it won't help folks who want to live in SF, of course, but it's right on the Caltrain line. I would definitely say you could get by in downtown RWC and commute to SF if you desire without a car.
The price-to-income ratio, a good indicator of affordability is quite ridiculous here. It should be around 4, i.e your home value should be 4 times your gross household yearly income, its closer to 12 here. I believe in this, and though my family makes a good income, in order to meet this ratio I had to move further out to Richmond. Don't regret it at all, since it eases the stress of requiring two well paid jobs just to live a decent life. But the lack of available rental properties, rampant foreign speculation, low interest rates is a pretty perfect storm.
Does the fixed price-to-income ratio actually hold meaning across a wide range of mortgage interest rates?
Melbourne's just as horrible. So's Sydney. So are a lot of places.
So what's happening with this general trend? Does it mean some smaller cities have stagnating prices and people are leaving? Or does that mean the money we've given to China for 30 years is finally buying out the world? Or does that mean that everyone is afraid of a bubble and invests since 7 years in land?
At least Sydney has nice beaches. I do agree that housing here suffers the same issues. We need a massive unimproved land value tax.
Previous discussion (also today) here: https://news.ycombinator.com/item?id=11086981
Ok, we merged the threads. Thanks!
The current article seems to be the original source, so we'll keep it.
The current article seems to be the original source, so we'll keep it.
Vancouver is becoming a store of value rather than a city.
I see that as a worldwide problem, as interest rates tend to zero.
In Brazil, real estate prices are completely out of touch with median income (at least, the rents are still affordable, because the typical landlord owns only one or two places and simply needs to rent to cover taxes and maintenance, he cannot sit on them).
Economists and governments paid too much attention to the inflation of the Big Mac and forgot real estate and other hard assets. Also, govts have a huge incentive to allow real estate bubbles: tax revenue, abundance of blue-collar jobs while the construction frenzy lasts, illusion of prosperity for whoever already owns the home, etc.
Yet another possibility is that too many people need to put dirty or excess money in a 'safe' investment. I hear that Chinese buy a lot of real estate in London, Vancouver, etc. At least here in Brazil, the money you have in a bank can be frozen in a milissecond if you are suspect of a crime, but controls over real state are very lax, so a lot of corruption money goes into real estate, which fuels the bubble.
In Brazil, real estate prices are completely out of touch with median income (at least, the rents are still affordable, because the typical landlord owns only one or two places and simply needs to rent to cover taxes and maintenance, he cannot sit on them).
Economists and governments paid too much attention to the inflation of the Big Mac and forgot real estate and other hard assets. Also, govts have a huge incentive to allow real estate bubbles: tax revenue, abundance of blue-collar jobs while the construction frenzy lasts, illusion of prosperity for whoever already owns the home, etc.
Yet another possibility is that too many people need to put dirty or excess money in a 'safe' investment. I hear that Chinese buy a lot of real estate in London, Vancouver, etc. At least here in Brazil, the money you have in a bank can be frozen in a milissecond if you are suspect of a crime, but controls over real state are very lax, so a lot of corruption money goes into real estate, which fuels the bubble.
Slightly off topic, but is the supply significantly higher than the demand out in Vancouver? I've always wondered how companies could get away with the abysmally low salaries for dev roles vs anywhere on the east coast relative to living costs.
Yes many people love Vancouver because of the weather (esp relative to the rest of canada) and the proximity to nature there are also a lot of recent ubc/sfu grads and kids from other Canadian schools who find van desirable. This combined with few roles to begin with gives you the current situation
There are lots and lots of empty Housing from Tokyo, HK and Sydney and Vancouver, most belongs to Chinese investors. We have empty housing sitting here, acting as a way to park money and yet we have so many suffer from housing price inflation.
If we Tax of empty housing for prolong period of time, like 6 months, which should force the owner to rent out its place, balancing some of the supply and demand issue.
IT DOES NOT solve the housing issues. Far from it, but it is one fair way to get more money to government and stop the price hiking so much.
If we Tax of empty housing for prolong period of time, like 6 months, which should force the owner to rent out its place, balancing some of the supply and demand issue.
IT DOES NOT solve the housing issues. Far from it, but it is one fair way to get more money to government and stop the price hiking so much.
Currently residing within Vancouver.
We love it here, but we have accepted that it is not where we will be able to put roots down.
My partner and I work remotely, we'll enjoy our time here then buy a home elsewhere...
Like maybe Hawaii. :)
We love it here, but we have accepted that it is not where we will be able to put roots down.
My partner and I work remotely, we'll enjoy our time here then buy a home elsewhere...
Like maybe Hawaii. :)
Funny, the last two people I know who moved to Hawaii, moved back a year later. I'll have to find out why. But they must have a good reason - this is Iowa, and its currently 16 degrees.
I know people who love it. But it's expensive and it's a long way from anywhere. You either live in a pretty soulless city (Honolulu) or in effectively a beach community of some sort that's often dominated by tourism.
I appreciate why some people are attracted to it but I could easily see it getting old quickly even if living in a condo near a beautiful beach and ocean initially seemed like the perfect life. (OTOH, it's sure better than Florida IMO.)
I appreciate why some people are attracted to it but I could easily see it getting old quickly even if living in a condo near a beautiful beach and ocean initially seemed like the perfect life. (OTOH, it's sure better than Florida IMO.)
One lived in a rural (?) farm commune. Why, I don't know. I guess it got to be Groundhog Day.
The other, a chef in a touristy restaurant. Made something new and different every week. He's another story - no idea why he'd give that up!
The other, a chef in a touristy restaurant. Made something new and different every week. He's another story - no idea why he'd give that up!
For all these 'bubble' cities (Vancouver, S.F., Seattle, London, ...), I wonder if the bubble ever pops? Are there examples of the prices/avg. income getting so far out of whack that things collapse?
http://www.economist.com/blogs/dailychart/2011/11/global-hou...
Detroit probably experienced a R.E. bubble in the day...
http://www.economist.com/blogs/dailychart/2011/11/global-hou...
Detroit probably experienced a R.E. bubble in the day...
https://en.wikipedia.org/wiki/Lost_Decade_(Japan)
Everything is still disputed, but Tokyo real estate prices certainly played a part. There was no crash as such, but rather a stagnation.
Everything is still disputed, but Tokyo real estate prices certainly played a part. There was no crash as such, but rather a stagnation.
Yes. I'm told that some people who bought property in Vancouver the early 80's were upside down on their properties for 15 years.
That said, I'm not predicting that outcome myself -- at this point, I would not want to place any sort of bet on that market.
That said, I'm not predicting that outcome myself -- at this point, I would not want to place any sort of bet on that market.
Oh, sure. In the Bay Area, prices drop substantially after every bubble / recession (early 90s, 2000, mid-2000s).
Are Yaletown, Coal Harbour and Olympic Village area (I forget what it is called, I left the Sea-to-Sky a few years ago), no longer the ghost towns of towering apartments they used to be? Even with the growth of 30,000 people per year, I can't image supply being a problem at all.
Is there any really viable plan to get the foreign owned real estate on to the rental market?
Is there any really viable plan to get the foreign owned real estate on to the rental market?
Yeah, investors are all around in Bay area too. They are making the real estate market crazy. I have witnessed more than 15 offers on ordinary properties in South Bay, and well, they are selling far more than the listed price. All these investors pay all-cash, money gifted from other side of the globe. It doesn't matter where you work, how much is your salary - you can't beat these investors.
For very real reasons, it's different in Vancouver than in the Bay Area, which some of the comments touch on.
Not that you're wrong -- we bought in the bay area. Our offer was the best of 13, and narrowly beat out an all-cash offer. Of course, you have to have the right seller to be willing to "risk" selling it to normal people who have to borrow to buy, vs the sure thing of an all cash offer.
Guy across the street bid on tons of properties before buying. I think they had the best of 34 (!) offers. RWC.
Not that you're wrong -- we bought in the bay area. Our offer was the best of 13, and narrowly beat out an all-cash offer. Of course, you have to have the right seller to be willing to "risk" selling it to normal people who have to borrow to buy, vs the sure thing of an all cash offer.
Guy across the street bid on tons of properties before buying. I think they had the best of 34 (!) offers. RWC.
I can't help but to quote the full song Modern Man from Arcade Fire's album The Suburbs -- which basically was an entire album chronicling this sort of issue in San Francisco.
So I wait my turn, I'm a modern man And the people behind me, they can't understand Makes me feel like Makes me feel like
So I wait in line, I'm a modern man And the people behind me, they can't understand Makes me feel like Something don't feel right
Like a record that's skipping I'm a modern man And the clock keeps ticking I'm a modern man Makes me feel like Makes me feel like
In my dream I was almost there Then they pulled me aside and said you're going nowhere They say we are the chosen few But we waste it And that's why we're still waiting On a number from the modern man Maybe when you're older you will understand Why you don't feel right Why you can't sleep at night now
In line for a number but you don't understand Like a modern man In line for a number but you don't understand Like a modern man
Oh I had a dream I was dreaming And I feel I'm losing the feeling Makes me feel like Like something don't feel right I erase the number of the modern man Want to break the mirror of the modern man Makes me feel like Makes me feel like
In my dream I was almost there Then they pulled me aside and said you're going nowhere I know we are the chosen few But we waste it And that's why we're still waiting In line for a number but you don't understand Like a modern man In line for a number but you don't understand Like a modern man
If it's alright Then how come you can't sleep at night? In line for a number but you don't understand Like a modern man
I'm a modern man I'm a modern man I'm a modern man I'm a modern man
In a Law of Rents sort of way, I can't help but to think that these phenomena are self indictments. If land prices are driven by those who can extract the most value from them, and the result is that wealthy people land-grab property that even remains vacant in some cases, or otherwise is a living space for a twenty-something working in finance, law, or medicine, who will eventually move away and be replaced by some other twenty-something in finance, law, or medicine, this seems to say a lot more about failures on the part of the wealthy members of older generations to innovate. If the best a use of that land is dormancy, sitting like gold in a vault, instead of being a place where a working class father inspires a child or where a mother teaches her son or where an artist, like what David Byrne did in the Talking Heads days in New York, transforms a space into a freeing creative studio ... isn't this embarrassing to them (the wealthy older generations)? It's basically an admission that, with the huge wealth endowment and peaceful world they were handed by their parents' generation, they managed to squander it to the point where the best use of land, the most inventive thing they can do with their money, is ... nothing. You've got two options: pour your money into consumer variation bullshit startups, or park it into assets like real estate that deprive younger generations of opportunity. It seems that wealth and a half century of the position of passively dominating in Western-led proxy wars has stripped away any sense of civic duty, or even basic shame at their failure to use capital to do anything.
So I wait my turn, I'm a modern man And the people behind me, they can't understand Makes me feel like Makes me feel like
So I wait in line, I'm a modern man And the people behind me, they can't understand Makes me feel like Something don't feel right
Like a record that's skipping I'm a modern man And the clock keeps ticking I'm a modern man Makes me feel like Makes me feel like
In my dream I was almost there Then they pulled me aside and said you're going nowhere They say we are the chosen few But we waste it And that's why we're still waiting On a number from the modern man Maybe when you're older you will understand Why you don't feel right Why you can't sleep at night now
In line for a number but you don't understand Like a modern man In line for a number but you don't understand Like a modern man
Oh I had a dream I was dreaming And I feel I'm losing the feeling Makes me feel like Like something don't feel right I erase the number of the modern man Want to break the mirror of the modern man Makes me feel like Makes me feel like
In my dream I was almost there Then they pulled me aside and said you're going nowhere I know we are the chosen few But we waste it And that's why we're still waiting In line for a number but you don't understand Like a modern man In line for a number but you don't understand Like a modern man
If it's alright Then how come you can't sleep at night? In line for a number but you don't understand Like a modern man
I'm a modern man I'm a modern man I'm a modern man I'm a modern man
In a Law of Rents sort of way, I can't help but to think that these phenomena are self indictments. If land prices are driven by those who can extract the most value from them, and the result is that wealthy people land-grab property that even remains vacant in some cases, or otherwise is a living space for a twenty-something working in finance, law, or medicine, who will eventually move away and be replaced by some other twenty-something in finance, law, or medicine, this seems to say a lot more about failures on the part of the wealthy members of older generations to innovate. If the best a use of that land is dormancy, sitting like gold in a vault, instead of being a place where a working class father inspires a child or where a mother teaches her son or where an artist, like what David Byrne did in the Talking Heads days in New York, transforms a space into a freeing creative studio ... isn't this embarrassing to them (the wealthy older generations)? It's basically an admission that, with the huge wealth endowment and peaceful world they were handed by their parents' generation, they managed to squander it to the point where the best use of land, the most inventive thing they can do with their money, is ... nothing. You've got two options: pour your money into consumer variation bullshit startups, or park it into assets like real estate that deprive younger generations of opportunity. It seems that wealth and a half century of the position of passively dominating in Western-led proxy wars has stripped away any sense of civic duty, or even basic shame at their failure to use capital to do anything.
> It's basically an admission that, with the huge wealth endowment and peaceful world they were handed by their parents' generation, they managed to squander it to the point where the best use of land, the most inventive thing they can do with their money, is ... nothing
THIS!
I know it's considered bad form to chime in to just to agree, but upvoting didn't seem enough in this case
THIS!
I know it's considered bad form to chime in to just to agree, but upvoting didn't seem enough in this case
Those "consumer variation bullshit startups" are providing a lot of value to people. It's easy to forget how much less fun day-to-day life was even ten years ago.
I think the main reasons people want to park their money in property in expensive cities are some combination of 1. uncertainty/flight to safety 2. thinking prices will go up, perhaps due to undersupply, perhaps due to genuine value to be produced in the cities 3. for some wealthy foreign investors, an asset that's not at risk of being seized by a corrupt government.
The wealthy are certainly revealing their uncertainty. I'm not at all convinced this is worse than the time when the wealthy had absolute confidence in their grand plans for improving the lot of the unwashed masses.
I think the main reasons people want to park their money in property in expensive cities are some combination of 1. uncertainty/flight to safety 2. thinking prices will go up, perhaps due to undersupply, perhaps due to genuine value to be produced in the cities 3. for some wealthy foreign investors, an asset that's not at risk of being seized by a corrupt government.
The wealthy are certainly revealing their uncertainty. I'm not at all convinced this is worse than the time when the wealthy had absolute confidence in their grand plans for improving the lot of the unwashed masses.
> Those "consumer variation bullshit startups" are providing a lot of value to people. It's easy to forget how much less fun day-to-day life was even ten years ago.
I think this is highly questionable.
I think this is highly questionable.
Nothing has changed in the last 20 years. House prices are still high, and salaries are still low. There is no real industry in Vancouver except tourism.
At least the rents are somewhat affordable, tho. The gap between house prices vs rent prices is immense, compared to a place like San Francisco. You can rent a 2 bedroom in the West End for ~$1500.
At least the rents are somewhat affordable, tho. The gap between house prices vs rent prices is immense, compared to a place like San Francisco. You can rent a 2 bedroom in the West End for ~$1500.
"Direct spending on Film & TV production in British Columbia (BC) totalled more than $2 billion in 2014 making Vancouver the 3rd largest production centre in North America"
http://www.vancouvereconomic.com/film-television/
http://www.vancouvereconomic.com/film-television/
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i live in a subburb 30km outside vancouver.
have a 3000sqft house with a $600k mortgage.
my yearly income is 90k before taxes/deductions.
my mortgage is $2500.00 a month (a bit more than half months wage).
my property tax is ~5000.00 year
my house insurance is $1200.00 a year
my car insurance is ~$1300.00 a year
my city utilities is about $120.00/month
my car gas is about $400.00/month
my house natural gas is $150/month
my house hydro electric is ~$200/month
that just covers the necessities minus food.
i have friends who live in downtown core vancouver, paying the same as me for 600sqft condo.
that is more than half my gross income, very not affordable. thinking about relocating. can keep same position and just move remote... also had career change opps in dallas, ny, californa, etc at $120k+, better than here... but my whole family is here... my whole life is here.
tough decisions... always thought more money would lead me away, now lack of affordability will instead.
have a 3000sqft house with a $600k mortgage.
my yearly income is 90k before taxes/deductions.
my mortgage is $2500.00 a month (a bit more than half months wage).
my property tax is ~5000.00 year
my house insurance is $1200.00 a year
my car insurance is ~$1300.00 a year
my city utilities is about $120.00/month
my car gas is about $400.00/month
my house natural gas is $150/month
my house hydro electric is ~$200/month
that just covers the necessities minus food.
i have friends who live in downtown core vancouver, paying the same as me for 600sqft condo.
that is more than half my gross income, very not affordable. thinking about relocating. can keep same position and just move remote... also had career change opps in dallas, ny, californa, etc at $120k+, better than here... but my whole family is here... my whole life is here.
tough decisions... always thought more money would lead me away, now lack of affordability will instead.
This article and thread hits pretty hard for me. I was born in Vancouver and I'm getting pretty worried that Canadian salaries aren't enough to live in Canadian city. To any of you living in Vancouver and working remotely, do you have any advice for getting into that?
Not a remote job per se - but my side project which pays me in USD is working out quite well since the Canadian dollar started sliding. The economics of a building small side project have improved dramatically if you can get paid in USD and live in Canada.
The situation is very similar in Norway's capital city Oslo. Single family homes all a round a small downtown. Crammed between the fjord on side and the great woods protected by politicians, it's runninh out of free space.
Article summary: Vancouver is expensive, their young, creative and fun population will leave because they can't afford a house. Let's burn down its antique building restrictions, and build big skyscrapers where no neighbor knows each other, now the young, creative and fun population can live in a gray place and become old, dull and boring.
Hope they can read a little of Jane Jacobs: https://en.wikipedia.org/wiki/The_Death_and_Life_of_Great_Am...
Hope they can read a little of Jane Jacobs: https://en.wikipedia.org/wiki/The_Death_and_Life_of_Great_Am...
Vancouver is on the way to becoming the bar from the joke "nobody goes there anymore, it's too crowded"
Take note, Auckland. The same dynamics exist there.
Monoco s a ghosttown...
How are property taxes calculated in other places in the world? Vancouver? London? Tokyo?
This is such a hard problem to solve, no one wants to force elderly people to move because of a bull real estate market, but you also need young hard working people in your city for economic growth. My solution would be to jack up the real estate inheritance tax and allocate that money for public transportation and affordable housing.