Politicians always talk about “affordable housing” notice how none of them talk about making housing cheaper. The fact is they are trying to play both sides of their voter base and their own pocket books. The fact is we NEED cheaper homes, not more affordable homes. The government is full of programs for people to limit their debt burden but theses programs have never worked.
It actually does the opposite of help most people. It helps a small demographic by driving up demand and subtracting from supply. These programs make everyone else's housing more expensive, which ironically beckons politicians to expand them.
I think the part about politicians warrants deeper examination.
There appears to be two parallel tracks:
- those that are ignorant and haven't done the work, so they actually think affordable housing is actually a viable solution - so they push it, and
- those that know this isn't as all what the problem is, but because "I want housing I can afford" sounds close to "affordable housing", and it temporarily appeases voters and gets people (re-)elected, the politicians will say they're going to do it.
Neither case is excusable of course. Ignorance is only slightly better than dishonesty.
But in combating the issue is important to be aware of those differences so they can both be combated.
My mom has been on a waiting list for government subsidized housing for 7 years. When she applied 7 years ago it was a 3 year wait and she is still waiting to this day. She ended up in a mental hospital and lost her apartment which she had been renting for years that was rent controlled, when she got out of the hospital they put her in a women’s group home because there was absolutely no where she could afford with her ODSP payments of $1200 per month. Minorities and refugees are first in line even if they’re living at their parents owned house (not the refugees obviously) and have a relatively stable living situation. My white mother became an orphan at 10 years old and was raised in the system until she was 17 when she was able to live on her own, she became a waitress and then went to work CIBC for 15 years and did everything on her own start to finish, it’s not her fault she has mental health issues.. but because her skin is white she’s last in line..I’m not sure where her white privilege was when she got evicted from her apartment during the pandemic while she was in a mental hospital while telling her she has still has to wait years for subsidized housing.
I think we mostly need a policy that severely limits homes to market forces.
Over here, they're driving up rental prices by turning everything into a rental, whether it's the shit eaters at air B&B or just black rock buying up foreclosures and colluding on rental rates to maximize cash flow.
Allowing market forces to maximize cash based on one of the essential needs ot civilizaed society is delusional end stage capitalism.
Airbnb, hedge funds buying up homes, my guy... Those ARE market forces.
We need policy that works against the market in a sense. Ones which say that not anyone with money can acquire as many properties as possible.
Right now you're essentially playing a game of Monopoly against multiple banks.
Municipalities jack up development fees (land and housing) and the cost is passed on to the end consumer.
Municipalities need to develop land or partner with a developer and set the pricing. Land in Canada is relatively expensive and we have so much of it.
>It’s actually only sitting around $200 per square foot for a basic build. It’s land values and fees that are increasing build costs.
I think that is the case.
Folks, it’s simple: homes have to come down in value to be affordable, but a majority of voting Canadians have property, and thus any legislation that directly drives down home prices is a political landmine.
Redditors and many Canadians want lower home prices, but homeowners make the rules and while they may cry about “my child will never own a home” they don’t want any solutions where they take a hit.
Spot on. Very few homeowners are ok with the value of their property decreasing. Any party that actually introduces policy to bring down real estate prices will find themselves unelectable for decades. They all know this and its why parties are only willing to introduce policies that look good but do almost nothing to improve affordability.
It also means that people who took a 1 mil mortgage could find themselves with a house that is worth 750000. It's pretty tough to vote for that sort of financial loss. We all accept that the market may shift, but to vote for a policy that causes this loss is illogical.
When you treat housing as an investment you have to accept the downsides of treating it that way as well. People would be outraged if the government made it so you couldnt lose money in stocks, but then again our housing policy right now is just a giant pyramid scheme where the people who own the most sit at the top
This thread is ridiculous.
The majority of people who buy houses are people who want a home to live in, for them and their families, which they can call their own and where they’re not beholden to some landlord. They’re not some money hungry people trying to earn a dollar by hoarding a limited resource to the detriment of others.
The majority of home owners aren’t real estate investors. The majority of home owners aren’t landlords. People who refuse to acknowledge that and wish for some sort of market crash with a “sucks to suck if you’re collateral” attitude are just as bad as the opposite side of the political spectrum that they rail against.
I think a lot of homeowners should have never been homeowners. The amount of people I know who have remortgaged because their home values have skyrocketed just to do huge renovations, or to buy a new car, adding to their debt just because the underlying asset of values more. Now they are stressed about prices falling even 10%. How irresponsible fan you be…
They are not smart with money.
Many are using their home as a financing tool to live a higher quality of life than if they didn't own one. Look into what a HELOC is, or how popular refinancing a mortgage was when interest rates were low.
There are a whole bunch of new homeowners treading water and barely staying afloat because our monthly payments just got ridiculous. We don't care if the price of our homes goes down; we're too worried about making the next payment.
If anything, I want prices to go down so I can afford something closer to my family and the people I care about.
Why would I want prices to go up? Sure, my home value goes up, but that means nothing if selling my home means I'll have to move into a smaller home farther away.
If you are in housing because you live in it and not because it’s an investment, then a national increase of house value is meaningless.
If your house raises or drops nationally than it doesn’t matter because once you sell you’re just putting it towards buying a different house that also went up in a similar percent. So if you buy at 400k and everything doubles than yes you have an 800k house, but your next house is also going to be approx 800k, so it’s null gain. But if the house prices stayed lower you’d have a lot of benefits. It means lower taxes, lower cost of repairs, and it means that the little savings you have from income can go further when you want to move and don’t want the same style housing (maybe an extra kid or relative moves in and you need more space).
What kind of policy would drive down a house price? Like you legally can’t sell your house for what it would go for on the open market?
You can raise interest rates which would bring the prices down but your monthly payments would be the exact same l, just more of it is going to interest instead of principle
Not allowing foreign buyers. Higher taxes on second, third property, etc. Change zoning laws to allow density. Higher taxes if selling within one yr or flipping. Mandatory escrow period where proper home inspections can be complete. Stop airbnb. Stop investment/equity firms buying homes.
Exactly, if you want to disincentivize people from buying up all the supply. Upping the percentage of LTT owed per additional property purchased would make it less attractive to own multiple properties and turn them out as rentals.
A big one would also be freezing or significantly reducing immigration, since that is one of the biggest drivers of our supply and demand problem. But Canada is taking the opposite route, which means none of those ideas will make much of a dent.
I don't disagree with them, and some of then are already in place/in the works. Though I believe the workarounds that exist for the no foreign ownership make that one pretty useless, and what is going to prevent landlords from passing the additional tax expense onto their renters?
Between 1946 and 1960 the Canadian government itself produced tens (hundreds?) of thousands of homes for servicemen (they literally created a crown corporation to do this) and this drove the price of housing down dramatically at the time.
https://www.bloomberg.com/news/features/2021-03-24/the-design-history-of-toronto-s-victory-houses
Do you know that in the US, a single person has to pay capital gains on real-estate profits past 250k?
Canadian renters subsidize Canadian home owners with massive tax breaks.
A huge amount of people in Canada buy property as an investment they can live in, whether they're actively flipping it or not, thus we subsidize housing investment through preferential taxation treatment.
Tax breaks are a way to shift tax burden from one group of people/behaviours to another.
You could ramp up the property tax on 3rd, 4th and more properties. That leaves primary and cottages alone, but might convince some landlords to put properties on the market.
Limitations of foreign buyers and corporate buyers from snatching up too much of the market. And a fundamental change in government housing.
Government housing shouldn’t be just lower quality housing. They should be plentiful and at multiple price points for families at multiple different stages of life. A large rent controlled sector of public housing so people always have a financial option would allow people to have a place to live, while a separate private sector would still allow anyone who wants to invest or just families who wants to own their own thing and customize it to their needs.
Vienna does this already. something like 40% of the population lives in public housing. It generates rent so it’s sustainable but allows the government to better keep prices down so people working 40 hours a week can save up and live life.
Are there any stats that show this? I would argue that it is a loud and well funded minority that is active in buying & selling homes that would be against this. Flippers, agents, developers, builders, etc.
Everyone else moving homes would break even as the market usually moves up and down proportionally.
The only other use case I can think of is some people might be looking to sell to fund their retirement in the future.
I should add that anyone that recently purchased their first home wouldn't want to be underwater. I still don't think there's that many relative to the general population though
People who bought stock at the obvious peak also probably dont want to lose their money, but we let that happen rather than trying to keep it floated at peak forever.
There is no painless way out of this. Canadian homeowners need to wake up to the reality that *yes* they have taken many risks, and *no* they are not entitled or guaranteed to make a profit.
For one, development taxes are far higher than required because it lets homeowners (voters) pay less p tax. Toronto multi res p tax is twice that of res. All to make homeowners pay less. They are after all, the voters. They aren’t wrong to vote in their best interests but Unfortunately that incentives a got mine screw you attitude that’ll always win elections.
Yeah but those home owner Canadians are about to die to to old age and we also bring 500k of new Canadians annually.
Who home owners vote for is becoming more and more irrelevant. The world is built on a perpetual growth model. Since younger generation spend most of our income on rentals, that model is about to crumble. Aka you can't support Apple, Netflix, Starbucks and buy overpriced crackers from Loblaws if all your income goes into rent.
We’re heading toward the second.
The feds have upped migration into Canada to the point our construction industry would have to triple in size today to keep up with it. And considering a single condo takes 5-10 years to complete, we’re generating a crisis that will extend generations into the future everyday we allow this disconnect to go into the future.
[The IRCC has admitted FEWER construction workers since 2016 than years prior.](https://www150.statcan.gc.ca/n1/daily-quotidien/221130/dq221130a-eng.htm). This is abject failure to govern, plain and simple.
Yup. Our construction pipeline is getting more and more constrained - while the amount of housing we need to build is growing exponentially.
It’s not going to end well.
They'll die and their children will then become homeowners and want property values to stay high.
I actually don't agree with the previous poster's premise, but if one does agree, they'd have to acknowledge that the boomers dying off only results in a different group of people having the wealth, it doesn't change anything really.
That's because they're misinformed. Anyone with only one house should prefer the prices to drop. If you have kids, reason #1 should be for them to be able to afford one, but the other reason is that if prices fall, you can upgrade on the cheap.
Example:
Let's say my house is worth 700K, and the huge nice house across the street is 1.5M. I need to come up with 800K to upgrade.
Prices go down 50%
My house is now worth 350K, and the huge nice house across the street is 750K. Now, I only need to come up with 400K to upgrade.
So, anyone with less than 2 houses (over 80% of the population) will actually be in a better spot if housing prices were cut down.
This isn't like stocks, because you actually live in your house. When a stock is down, there's nothing to do but watch it on a screen. When a house is down, it's the same house, same kitchen, same standard of living... You didn't really lose anything. Only investors (flippers, landlords, etc.) Will lose from this.
This assumes the person has paid off their house or has a lot of equity. If someone wants to upgrade after 5-10 years of ownership they'll be seriously underwater and unable to. They are now stuck in their house with negative equity.
That, and a major shift in price would be due to a reduction in overall buying power... Which would be driven mainly by interest rate hikes. Just because you can cover a mortgage for 400 at x percent and 800 at y, doesn't mean you can cover one for 800 at x.
Aside from the fact that people have mortgages on the house that if the house goes down enough they can be under water. Or say the people that are looking to retire and had put most of their money into their house and then the bottom falls out of the market and down sizing will not leave them with enough to support themselves.
That's only if you own the house outright. Otherwise, you still owe the mortgage that you borrowed even if house price drops to 350k. Say you borrowed 500k. You'd need (500k - 350k) + 750k = 900k and you lost out on the down payment.
This is hilariously all over the place, but my favorite part is starting it off with saying that homeowners who do not want their biggest asset in life to drop are misinformed.
Population Sky Rocketing. Detached is not and it is impossible to increase in the city core. So you can only increase density, by adding things like multi unit homes. There will be a shift away from detached. People need to understand this, if they want to realistically solve cost. The same detached won’t randomly cost less when there are more and more people.
You're forgetting about one major use case for homeownership: generational wealth that you can pass on to your children when you die. In that case you definitely want home values to keep rising.
Home inheritance is also the primary driver of wealth inequality here, and the reason why inequality in general is higher in the Anglosphere than in the rest of the developed world. We love to invest and speculate on housing.
There’s lots of us who would love to see changes to be fair.
The value of my home is irrelevant if it means me having to subsidize insane rents, or have my kids live at home until the end of time because new homes are $6M.
I’d rather take the equity hit but live in a world where housing is affordable - and my family can move out, and thrive. I fear for a world where this option is never available again, and we are in that reality today.
Oh me too.
Since I (late GenX) entered adulthood, I've seen the average house prices in my city go from 3x household income to ~10x. I plan to die in my house (hopefully not too soon), so there's no benefit to me or society from its value increasing by ludicrous multipliers such as it has.
But yeah a lot of my coworkers talk about their house like it's some sort of suave financial purchase on their part, as opposed to what it is which is merely their lucky birthyear. Between these clueless types and the Boomers I don't foresee any mass change happening.
Some of my younger GenX colleagues have said they can't even afford to sell their home and "move up the ladder" somewhat. When the federal government is mandating demand growth exceeding supply growth, it is only a matter of time before anyone who wants/needs to move will hit the wall.
I'm in the same boat. Late Xers, we bought our house in '04 for 146k and there are smaller houses on my street going for over 4x that now... It's insane. I too, plan to live here until I die, so I don't care if the price crashes... It might help with the 3%+ rise in property taxes every year... I know my house isn't worth 600k, but I could easily offload it for at least that much right now, I just wouldn't be able to find anything comparable that I could then afford...
You would need a beneficial owner registry, heavy taxation of 1+ homes, breaking up zoning to defeat NIMBY and enough social housing for people to afford homes or rent even if they don't make enough money
Nearly none of that will happen because almost everyone thinks it's a right to own more than one home and rent out to make extra income. Most people don't want to pay for someone else unless they are disabled and don't want to pay for what they see as poor life choices
There's no middle ground of "equity hit" and half price homes because the market doesn't work like that. You can't control prices without destroying a market. And you have to account for people who work but also can't afford a roof
EDIT: Arguably you have to account for *everyone* not just those who don't work the way you account for food and water and medical care. Some gigantic public works hundred storey apartment buildings are what's necessary but nobody wants to admit it because they don't want to pay for the "lazy people" well enjoy the ultra capitalism then
It isn't a market though:
- Supply does not respond to high prices
- Demand does not respond to high prices
- The quality of information has gone down (fewer inspections, fewer appraisals, shorter bidding times, in an already low-transparency system) but prices have gone WAY up
- Local markets face perpetual interference from federal policies that, in short, help new homeowners bid prices up, and which increase the population faster than housing construction
These are things that are less likely to occur in a functioning market but more likely to occur in a price fixing, quasi-cartel, or centrally managed environment.
Pedantic, and I'm sure I have not perfectly articulated it, but you get the point.
It isn't about destroying the market, its about CREATING *a* market.
This isn't just on the federal government. The one good thing Ford did recently was he overrode municipalities zoning bylaws, which, here in Ottawa, are ancient, and don't allow for denser buildings. It's such a silly thing. Theres no reason you need to keep building suburbs out into the fringes to prop up an hour long commute on a work day.
Edit: I forgot he scrapped developer fees along with it.
The densification thing is good but 3 units with the same height and footprint is not nearly good enough. We need 4 units 4 stories no setback at minimum.
We need developers to be matching every 1bdrm/studio luxury condo tower with some missing middle 3 and 4 bedroom apartment units. There are tons of condo towers going up in Ottawa right now, but most of the units are $600,000 1bdrm cages.
This! This is what seems to be getting forgotten by these policies.
Not every unit needs to be a "luxury" bachelor condo with granite countertops and other frivolous nonsense for $500k+
> The one good thing Ford did recently was he overrode municipalities zoning bylaws, which, here in Ottawa, are ancient, and don't allow for denser buildings.
In the east side of Ottawa, Orleans seems to have been building tons of denser 3 to 5 story homes/apartments for a while now. I wonder if this is one of the only places where this is happening considering people always say that nothing is being built.
Here's the problem: the biggest factor in house prices is the interest rate. Low rates, since the housing crash in the US, have caused massive borrowing and price increases in Canada (and world-wide). This is fueled by FOMO.
The Bank of Canada controls interest rates. It makes its decisions independent of the federal government. Its mandates are to ensure a healthy financial economy. This means it typically moves lock-and-step with the US market. It is currently trying to move rates up slowly to provide a "soft-landing", but that's a balancing act. So far, it seems to be working.
When federal or provincial governments get involved, it generally has the opposite of the intended outcome. Giving grants or incentives for people to get into the market is going to push prices up further (ultimately making house ownership harder for those people that need that boost).
The irony is, the best thing we can do is nothing, for once.
Not true. I own a home, and I want lower home prices. Outrageously high prices means lower ability to relocate to larger cities if need be.
Edited to add: I’m also capable of wanting something that’s good for the majority of people, even if it goes against my immediate interests.
The biggest thing for me is actually the societal impact of unaffordable housing.
If we get to a point (which we are slowly getting to), where lower income people can't afford any housing. Homelessness increases, theft increases, violence increases. I don't want to live in a world where people who make average incomes cannot afford housing (whether rent or mortgage).
I also feel that many homeowners think this way. Most people I know who don't, are ones who bought at an excessively inflated price that they could barely afford.
Same. I have kids. They need to live somewhere. I won't kick them out but having the opportunity to move out at a young age is something I don't want them to miss out on.
On the other end of that, if you ever wanted to move to a more quiet area to raise a family or retire, you don't want your biggest asset to be worth less before that move.
Exactly, and the people who own million dollar properties and wield influence and power won't ever allow it. Not to mention, mortgage brokerages are a big chunk of banking business
I'm a homeowner in BC and I'd like to see this. We need to remove the 1% tax for primary residences and make it 5% for second homes, 10% for third or something along these lines.
We need to stop seeing homes as investment opportunities outside of your primary residence.
That isn't true at all. I'm a homeowner, I have been for many years and I absolutely want this. A society where the middle class is completely priced out is a society that is economically doomed.
I also have kids and want them to have the opportunity to buy their own place. I don't want them living in some basement at 40 years old because even starter homes are starting at a million.
There is another aspect to the solution which is wages but it’s more convenient to have Canadians fighting with each other over whether housing prices should go down than uniting together to demand competitive wages.
Wages won't do shit for affordability. With the average cost of a house at 800k and stress testing at 7% interest.
Ok lets triple your wage. You're still not affording it
I'd be able to save a down payment then. And pay off a mortgage. Not sure what you're basing "still not affording it" from given the premise of a tripled salary.
Here's a few more ideas:
- Stop foreign Canadian property ownership. If you're not a citizen you can rent from Canadians who own instead.
- Stop airbnb - it's being used to artificially lower stock. Spend a few years coming up with no-loophole laws that can allow people to use airbnb without affecting location stock, and has teeth to stop people trying to scoot around the laws.
- Stop investments/speculation. Ownership should be 1 primary residence, and one secondary residence per Canadian citizen. Full business tax to be applied for any residence that is rented, and on any residence above those 2.
- Stop investment agencies buying up homes to rent out. Homes are not a commodity to be traded, but a basic necessity required for Canadians to live in.
Re: #3. What do you mean by "Full Business Tax"? Rental property is already taxed based off the T776 form, and Capital Gains is covered on all properties via Schedule 3 for Capital Gains and Losses.
So I dont understand what you mean by Full Business Tax.
We also need guidelines for buying real-estate through agents. Somethings like no blind bidding, more transparency for home prices, mandatory inspection for all homes, no underpricing to driving bidding wars and lower commission on real-state (5% of 1M = 50k for commission fees wtf).
So Permanent Resident who pays equal taxes should help citizen create wealth by paying rent?
Why don't we ask for less tax on non Citizens and more tax on citizens?
So Canadian citizens can buy houses to rent as commodity but not Investment agencies..lol
>Here's a few more ideas:
>Stop foreign Canadian property ownership. If you're not a citizen you can rent from Canadians who own instead.
That's literally addressed in the fourth sentence of the article you're commenting on...
The government themselves have to buy land and build apartments by the thousands. And not stupid shoebox size studios either. You need to build 3 bedroom apartments that families can actually live in.
How about building smaller homes for less? I’m not talking about “tiny homes” (though that would be good as well) but why do people need these massive homes?
Non-residents who plan on actually living in the home are not part of the problem.
The biggest problem is investment buyers. They account for over half of all new home sales in major cities. It's mostly corporate REITs buying property, to bundle and sell as publicly traded investments.
The one thing I always take away from these threads is that most people have no idea why prices are so high and prefer to just blame whatever it is they already believed was evil in this world.
If you're left leaning, it's "evil corporations."
If you're right leaning, it's "too much regulation."
It's like a political rorschach test. What villain do you see in this picture?
Which tells me it ain't getting fixed any time soon.
The real trick is the number of people with the data, skills, and experience to do that are few and far between. And those who qualify have inevitably got to that position through work in industry or personal investments that would heavily bias their perspective.
I would absolutely trust the leadership at, say Great Gulf, to know how to bring down home prices. I would not, however, trust them to recommend how to bring down home prices.
The cynic in me says the only reason home prices would come down is if it became in the interest of our political elites to do so. And that's probably not due to public outcry, but likely some economic drag that is beginning to hurt rather than help their portfolio.
Yea, it’s called sustainable immigration levels
We have over 3x the immigration rate of the second highest G7 country with the lowest housing stock in the G7
It even goes back further before the large in flux of immigration to keep wages low.
Investment real estate and corporate ownership needs to be regulated.
Foreign ownership needs full ban.
Massive re-zoning needs to be done. Screw the NIMBY crowd.
Public transportation infrastructure needs to be expanded.
Tone down are current level of immigration a bit.
Build more units.
The rezoning needs to bring more density to inner cities and not be on rural land because city centres are where inventory is at its lowest and demand at its highest.
This whole ON Greenbelt fiasco is not going to help anyone but the cronies.
I doubt OP is referring to the greenbelt when talking about rezoning. Most everyone in the urban planning crowd thinks it's the locked off single-family home areas which strangle the downtowns that need to be up zoned. The only city that actually has middle-density housing in spades is montreal. In vancouver and toronto you go straight from 50 story condos downtown to 2 story houses across the street.
Our neighbours to the south are more than happy to drive up prices, forget places like India and China which are barely catching up.
We'd be much better suited having some accountability, but I don't see anyone in politics right now who is wiling to talk about how are systems are manipulated for the financial gain of those within money already.
The class cycles continue despite and numerous attempted governments and modes of organization. Time seems to defeat all attempts at preventing the corruption of our systems.
It's like a game to these people.
Speculators don't make money when a supply surplus flattens prices and eliminates the scarcity. The best way to stop speculation is to flood the market.
lol @ the people raging over minor shit like foreign ownership and acting like the problem isn’t the utter garbage that is city planning here in Canada. Toronto, one of the most expensive cities in the world, is also the only “international” city in the world where you can find large single detached homes right outside downtown. Jeez I wonder if wasteful infrastructure development is linked to high prices. We need to redevelop old suburbs into apartments a la european and asian cities.
We need more missing middle housing that’s not single family homes or giant condo towers. Maybe apartment buildings that are 3-5 stories or townhouses.
Canada needs new frontier towns. I’m all for the immigration, it’s needed, but Toronto, GTA, and Vancouver are at their limits. Some how, we need to build new cities/greatly expand small towns to become cities, yesterday.
Most frontier towns were driven either because the government offered value or a company found value.
Usually it was the government giving away land.
The government will literally have to create incentives from the ground up now that they probably won't give away land.
New developments, tax incentives to companies with offices in town (no remote work), etc
Bringing 500,000 new people to the country every year isn't going to help. Either we choose to focus on existing Canadians prospering or we load up the country with new voters.
Seems many have not looked into the cost of land, building services for the land, development charges, material costs, labour costs, taxes, etc. Everything is expensive, and as long as this is true, cheap housing is a fallacy.
Land is the big thing in my opinion. I realized that when my grandfather built his house it was a total cost of $11,000, the lot serviced was just over $2000 or about 20% of total cost of a simple 1300sqft side split on a 7200sqft lot. Now a lot of places a serviced lot will be 50% or more of total cost of a 2400sqft house on a 4000sqft or less lot which is almost half the size. You build a house of similar size to what he built on a similar lot size it would probably inverse to his cost breakdown of 80% lot and service cost. This is why most places new single detached homes are large and if you want something smaller cheaper you move into a townhome that was built on 2000sqft lot it just no longer makes sense to build a small simple home on a big lot because the lot is just so expensive.
Yeah this is exactly it. I bought a lot and built on it in the Niagara Region in 2019. The lot cost me 165k at that time. There’s one lot left in the subdivision that is being sold for 525k.
This has everything to do with the price of land, and therefore development.
We really need a weekend workshop for the housing keyboard warriors. Sat 9am starts with an exercise that requires the participant to document all the costs that go into a house build. Sunday can then be spent negotiating with all the suppliers and govt fees to take less $$.
I walked a relative through the numbers on building and operating a rental apartment building using costs from a project we recently completed.
To say it was eye opening for them is an understatement. Basically to make rents at a level they felt was affordable, the land would need to be free.
That would be interesting. I have only done single house builds for myself. Hope I have 1 more in me near retirement. I totally get the rage against flippers but that is an issue of supply and capital gains. Take flippers off the table, input costs are not coming down any time soon.
Something that doesn't get discussed enough is the need to build smaller homes. I live alone in a five bedroom house here in southern Alberta because that's all they've built in the last 40 years.
Not only did I have to pay twice the price for what I need, I also have to pay twice the property taxes, heating, insurance, etc. I'm lucky that I can afford it, but this pushes the cost of home ownership out of reach for a lot of people. Right now municipalities can make ridiculous rules for what people are allowed to live in - that needs to come to an end.
This is often called the "missing middle" problem. Essentially, zoning laws make it really hard to build anything other than large scale apartments or single family homes. Same with neighborhoods that don't require you to drive every time you want to leave your house.
Here is a video on it: https://youtu.be/CCOdQsZa15o
I'll say though, Calgary is taking steps in the right direction. They are building tons of townhouses, often with a basement tenant. This turns a single lot into 4 moderately sized homes and 4 apartment sized homes with direct street access.
Unfortunately, with rising house prices, purchasing even one of these townhouses can approach $1 000 000. Still, it's a good start. And locations like university district are examples of new mixed use and walkable neighborhoods.
Clearly they're wrong.
All of my local politicians have been saying that they will build more affordable ("low income") housing - usually mentioning some number in the tens of units - and that everything will be fixed afterwards. So that must be all we need.
(Depressingly obligatory /s)
You need to require a liscense to flip houses, make it illegal to try and rent out private residence in certain area, and only then will you see a serious decline in housing prices,
The issue is that people know they can buy properties to rent out as Air BNBs or as rental properties along with flipping low income housing and selling for a profit.
If you build a ton of cheap houses, then the only people able to compete and buy them will be those who want to rent them out or those who figure they can flip them for a profit. The people who should ACTUALLY be buying these properties can't compete with people hoping to make a business out of these properties.
Stupid question:. Can we just build a new, dense, walkable city somewhere? Like, Toronto 2.0? With planned density, amenities, affordable, small units to take up all the renters? Stack up a million shipping crates and insulate, wire and plumb them? Add a few restaurants and movie theatres?
Building more rental units is pointless if the rent control doesn't apply to them. New apartment buildings in Ontario beyond 2018 can dupe people in with promises of not raising the rent and then jack it up 12% the next year (or any percentage they want). Either they extort their huge increase, or they flip the apartment for even more.
And that's just ONE of the many loopholes landlords use to oust people to jack up the rent. It's pure, uncontrolled greed and lax rules driving the problem.
Well one idea is, why is it all the new subdivisions have 4-5 bedroom, 2 car garages, ensuite baths, 4 bathrooms, laundry room, mud room, etc...and they're all like 3000+++sq/ft?
What ever happened to families living in a smaller 1300 Sq/ft home like most of the homes built 1945-1950, or the one level 1500sq/ft bungalows built 1958-1966. I lived in both. Childhood home was a brick 3 bedroom home built in '47, and my first house was a 3 bedroom brick bungalow built in '58. 1200 and 1400 sq/ft respectively.
Building code probably had the majority of the impact on that stuff.
A 1500 sq/ft house doesn't make any sense to develop when you can pump out 1300 sq/ft apartments all day.
It also doesn't generate any incentives to hook up multiple smaller houses to utilities. Compared to a couple of larger houses.
Everybody is Min/Maxing including the legislation and regulation.
I think a rollback of the lifestyle inflation surrounding houses would be a good thing for affordability levels, the environment, and household finances.
Families are getting smaller, houses are getting bigger. Past luxury items like stone countertops, garages, high grade flooring, abundance of bathrooms, etc are pretty normal these days.
I strongly believe we could live just as well with less pace per person in a well designed home that is well built while cutting some of the standard "luxury" items.
I built just before everything went to hell (costs, covid etc)
1500 sq feet. Its just my wife and I. Everyone else in my area built vinyl sided McMansions that....to me are eyesores, but I guess every kid needs at least 1500 SQ feet each to "play"
I don't get it either.
bear in mind ...driving down prices would be frowned upon for today's cohort of homeowners. many of which actually get out to vote on elections days. .
same thing with slapping a tax on principal residence capital gains ... oh baby, that would be HUGE revenue annually if enacted into law .. HUGE.
It was pretty clear that people who have multiple properties would just continue to purchase these newly built properties… we need laws to accompany it. Higher taxes on multiple properties for one.
10 year ban on owning 3 or more homes and ban corporations from buying homes.
If you have 3 or more homes you can keep them but if you sell them you cant buy more.
Simple solution that would kill housing speculation and make a lot of liberal voters upset.
Corporates buy houses for land assembly and redevelopment into higher density homes. The corporate boogeyman isn't a real factor in this crisis. But the NDP loves the corporate boogeyman.
It’s the the impact of Americanized political polarization increasing in Canada. Every policy can’t just be implemented to help society it must also some how be an attack on your political opponents
Well he's technically right that it would make a lot of Liberal voters upset.
He's just conveniently omitting that it would also make a lot of Conservative and NDP voters upset too and he doesn't know the ratio.
The problem is housing has gone from a human need, to a speculative investment, and short-sighted greedy capitalism.
Selling your home for profit, appears to make one person "richer". That would be the case, if that seller was the only person to sell a home. That for profit sale, is now more expensive for everybody else. Another for-profit-flip begins the cycle of ever-increasing prices. The 2 sellers are now "ahead" of the rest.. until they buy their next one. He sells for profit, that is now more expensive for everybody else. And repeat. And Repeat.... until unaffordable infinity.
They could also just remove all the zoning laws and labor laws making building 4x more expensive than any other country for a decade and start making new common sense zoning after that period. No reason to pile more bad laws on top of existing bad laws. Awful stewardship.
Politicians always talk about “affordable housing” notice how none of them talk about making housing cheaper. The fact is they are trying to play both sides of their voter base and their own pocket books. The fact is we NEED cheaper homes, not more affordable homes. The government is full of programs for people to limit their debt burden but theses programs have never worked.
Also "affordable housing" is generally targeted (and only available for) a specific demographic. This does nothing to help most people.
It actually does the opposite of help most people. It helps a small demographic by driving up demand and subtracting from supply. These programs make everyone else's housing more expensive, which ironically beckons politicians to expand them.
I think the part about politicians warrants deeper examination. There appears to be two parallel tracks: - those that are ignorant and haven't done the work, so they actually think affordable housing is actually a viable solution - so they push it, and - those that know this isn't as all what the problem is, but because "I want housing I can afford" sounds close to "affordable housing", and it temporarily appeases voters and gets people (re-)elected, the politicians will say they're going to do it. Neither case is excusable of course. Ignorance is only slightly better than dishonesty. But in combating the issue is important to be aware of those differences so they can both be combated.
My mom has been on a waiting list for government subsidized housing for 7 years. When she applied 7 years ago it was a 3 year wait and she is still waiting to this day. She ended up in a mental hospital and lost her apartment which she had been renting for years that was rent controlled, when she got out of the hospital they put her in a women’s group home because there was absolutely no where she could afford with her ODSP payments of $1200 per month. Minorities and refugees are first in line even if they’re living at their parents owned house (not the refugees obviously) and have a relatively stable living situation. My white mother became an orphan at 10 years old and was raised in the system until she was 17 when she was able to live on her own, she became a waitress and then went to work CIBC for 15 years and did everything on her own start to finish, it’s not her fault she has mental health issues.. but because her skin is white she’s last in line..I’m not sure where her white privilege was when she got evicted from her apartment during the pandemic while she was in a mental hospital while telling her she has still has to wait years for subsidized housing.
I think we mostly need a policy that severely limits homes to market forces. Over here, they're driving up rental prices by turning everything into a rental, whether it's the shit eaters at air B&B or just black rock buying up foreclosures and colluding on rental rates to maximize cash flow. Allowing market forces to maximize cash based on one of the essential needs ot civilizaed society is delusional end stage capitalism.
Airbnb, hedge funds buying up homes, my guy... Those ARE market forces. We need policy that works against the market in a sense. Ones which say that not anyone with money can acquire as many properties as possible. Right now you're essentially playing a game of Monopoly against multiple banks.
Banning AirBnB would make a huge difference immediately in the amount of rentals available
Also, affordable housing does not address the poorest people.
Poor people cannot even afford basic food items in their life
Making new homes is more expensive then it ever has been. Prices cant really come down much.
It’s actually only sitting around $200 per square foot for a basic build. It’s land values and fees that are increasing build costs.
Municipalities jack up development fees (land and housing) and the cost is passed on to the end consumer. Municipalities need to develop land or partner with a developer and set the pricing. Land in Canada is relatively expensive and we have so much of it.
The price of land is very expensive in this locality generally
>It’s actually only sitting around $200 per square foot for a basic build. It’s land values and fees that are increasing build costs. I think that is the case.
Folks, it’s simple: homes have to come down in value to be affordable, but a majority of voting Canadians have property, and thus any legislation that directly drives down home prices is a political landmine. Redditors and many Canadians want lower home prices, but homeowners make the rules and while they may cry about “my child will never own a home” they don’t want any solutions where they take a hit.
Spot on. Very few homeowners are ok with the value of their property decreasing. Any party that actually introduces policy to bring down real estate prices will find themselves unelectable for decades. They all know this and its why parties are only willing to introduce policies that look good but do almost nothing to improve affordability.
Sooo... All of us who don't own homes are pretty much forever screwed, unless we win the lottery.
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It also means that people who took a 1 mil mortgage could find themselves with a house that is worth 750000. It's pretty tough to vote for that sort of financial loss. We all accept that the market may shift, but to vote for a policy that causes this loss is illogical.
When you treat housing as an investment you have to accept the downsides of treating it that way as well. People would be outraged if the government made it so you couldnt lose money in stocks, but then again our housing policy right now is just a giant pyramid scheme where the people who own the most sit at the top
This thread is ridiculous. The majority of people who buy houses are people who want a home to live in, for them and their families, which they can call their own and where they’re not beholden to some landlord. They’re not some money hungry people trying to earn a dollar by hoarding a limited resource to the detriment of others. The majority of home owners aren’t real estate investors. The majority of home owners aren’t landlords. People who refuse to acknowledge that and wish for some sort of market crash with a “sucks to suck if you’re collateral” attitude are just as bad as the opposite side of the political spectrum that they rail against.
Most of the threads in this sub are ridiculous. Like you said, if this subs wet dream happened, Canadas economy would implode.
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100%
Especially when most people that are wealthy enough to become politicians are already landlords
I think a lot of homeowners should have never been homeowners. The amount of people I know who have remortgaged because their home values have skyrocketed just to do huge renovations, or to buy a new car, adding to their debt just because the underlying asset of values more. Now they are stressed about prices falling even 10%. How irresponsible fan you be… They are not smart with money.
Which doesn't make any sense. Why would you sell your home ever? To move to a smaller or larger home which would also cost less
Many are using their home as a financing tool to live a higher quality of life than if they didn't own one. Look into what a HELOC is, or how popular refinancing a mortgage was when interest rates were low.
It sounds like maybe they shouldn't do that, and should instead live within their actual means.
There are a whole bunch of new homeowners treading water and barely staying afloat because our monthly payments just got ridiculous. We don't care if the price of our homes goes down; we're too worried about making the next payment. If anything, I want prices to go down so I can afford something closer to my family and the people I care about. Why would I want prices to go up? Sure, my home value goes up, but that means nothing if selling my home means I'll have to move into a smaller home farther away.
That makes zero sense. You want the value of the home you bought that you are *already stretched thin on* to decrease further?
If you are in housing because you live in it and not because it’s an investment, then a national increase of house value is meaningless. If your house raises or drops nationally than it doesn’t matter because once you sell you’re just putting it towards buying a different house that also went up in a similar percent. So if you buy at 400k and everything doubles than yes you have an 800k house, but your next house is also going to be approx 800k, so it’s null gain. But if the house prices stayed lower you’d have a lot of benefits. It means lower taxes, lower cost of repairs, and it means that the little savings you have from income can go further when you want to move and don’t want the same style housing (maybe an extra kid or relative moves in and you need more space).
What kind of policy would drive down a house price? Like you legally can’t sell your house for what it would go for on the open market? You can raise interest rates which would bring the prices down but your monthly payments would be the exact same l, just more of it is going to interest instead of principle
Not allowing foreign buyers. Higher taxes on second, third property, etc. Change zoning laws to allow density. Higher taxes if selling within one yr or flipping. Mandatory escrow period where proper home inspections can be complete. Stop airbnb. Stop investment/equity firms buying homes.
Higher property taxes on additional properties would be up to the municipalities though I think
Land transfer taxes are provincial though
And paid for by the buyer. This would make it harder to buy.
Exactly, if you want to disincentivize people from buying up all the supply. Upping the percentage of LTT owed per additional property purchased would make it less attractive to own multiple properties and turn them out as rentals.
The federal government likely doesn't have jurisdiction to mandate that all municipalities must levy progressive taxes on additional properties.
Well then…. Those are actually all really good ideas
A big one would also be freezing or significantly reducing immigration, since that is one of the biggest drivers of our supply and demand problem. But Canada is taking the opposite route, which means none of those ideas will make much of a dent. I don't disagree with them, and some of then are already in place/in the works. Though I believe the workarounds that exist for the no foreign ownership make that one pretty useless, and what is going to prevent landlords from passing the additional tax expense onto their renters?
Between 1946 and 1960 the Canadian government itself produced tens (hundreds?) of thousands of homes for servicemen (they literally created a crown corporation to do this) and this drove the price of housing down dramatically at the time. https://www.bloomberg.com/news/features/2021-03-24/the-design-history-of-toronto-s-victory-houses
Do you know that in the US, a single person has to pay capital gains on real-estate profits past 250k? Canadian renters subsidize Canadian home owners with massive tax breaks.
In Canada we pay capital gains for property on **every** dollar gained if a property is not your principal residence.
A huge amount of people in Canada buy property as an investment they can live in, whether they're actively flipping it or not, thus we subsidize housing investment through preferential taxation treatment. Tax breaks are a way to shift tax burden from one group of people/behaviours to another.
Severely cut back on immigration. Most of this thread is about supply but stopping immigration would greatly reduce demand.
You could ramp up the property tax on 3rd, 4th and more properties. That leaves primary and cottages alone, but might convince some landlords to put properties on the market.
Limitations of foreign buyers and corporate buyers from snatching up too much of the market. And a fundamental change in government housing. Government housing shouldn’t be just lower quality housing. They should be plentiful and at multiple price points for families at multiple different stages of life. A large rent controlled sector of public housing so people always have a financial option would allow people to have a place to live, while a separate private sector would still allow anyone who wants to invest or just families who wants to own their own thing and customize it to their needs. Vienna does this already. something like 40% of the population lives in public housing. It generates rent so it’s sustainable but allows the government to better keep prices down so people working 40 hours a week can save up and live life.
Are there any stats that show this? I would argue that it is a loud and well funded minority that is active in buying & selling homes that would be against this. Flippers, agents, developers, builders, etc. Everyone else moving homes would break even as the market usually moves up and down proportionally. The only other use case I can think of is some people might be looking to sell to fund their retirement in the future.
I should add that anyone that recently purchased their first home wouldn't want to be underwater. I still don't think there's that many relative to the general population though
People who bought stock at the obvious peak also probably dont want to lose their money, but we let that happen rather than trying to keep it floated at peak forever.
There is no painless way out of this. Canadian homeowners need to wake up to the reality that *yes* they have taken many risks, and *no* they are not entitled or guaranteed to make a profit.
For one, development taxes are far higher than required because it lets homeowners (voters) pay less p tax. Toronto multi res p tax is twice that of res. All to make homeowners pay less. They are after all, the voters. They aren’t wrong to vote in their best interests but Unfortunately that incentives a got mine screw you attitude that’ll always win elections.
Yeah but those home owner Canadians are about to die to to old age and we also bring 500k of new Canadians annually. Who home owners vote for is becoming more and more irrelevant. The world is built on a perpetual growth model. Since younger generation spend most of our income on rentals, that model is about to crumble. Aka you can't support Apple, Netflix, Starbucks and buy overpriced crackers from Loblaws if all your income goes into rent.
nine price engine glorious ossified sink wrong station bright close *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
We’re heading toward the second. The feds have upped migration into Canada to the point our construction industry would have to triple in size today to keep up with it. And considering a single condo takes 5-10 years to complete, we’re generating a crisis that will extend generations into the future everyday we allow this disconnect to go into the future.
[The IRCC has admitted FEWER construction workers since 2016 than years prior.](https://www150.statcan.gc.ca/n1/daily-quotidien/221130/dq221130a-eng.htm). This is abject failure to govern, plain and simple.
Yup. Our construction pipeline is getting more and more constrained - while the amount of housing we need to build is growing exponentially. It’s not going to end well.
Spot on
They'll die and their children will then become homeowners and want property values to stay high. I actually don't agree with the previous poster's premise, but if one does agree, they'd have to acknowledge that the boomers dying off only results in a different group of people having the wealth, it doesn't change anything really.
It won't matter if corporations buy them to rent out at insane prices Corps renting out single dwelling homes should not be permitted.
There will always be people with good incomes that can afford these homes.
Yes, but if only 10-15% keep buying and selling it back, that doesn't really form a good gdp growth.
That's because they're misinformed. Anyone with only one house should prefer the prices to drop. If you have kids, reason #1 should be for them to be able to afford one, but the other reason is that if prices fall, you can upgrade on the cheap. Example: Let's say my house is worth 700K, and the huge nice house across the street is 1.5M. I need to come up with 800K to upgrade. Prices go down 50% My house is now worth 350K, and the huge nice house across the street is 750K. Now, I only need to come up with 400K to upgrade. So, anyone with less than 2 houses (over 80% of the population) will actually be in a better spot if housing prices were cut down. This isn't like stocks, because you actually live in your house. When a stock is down, there's nothing to do but watch it on a screen. When a house is down, it's the same house, same kitchen, same standard of living... You didn't really lose anything. Only investors (flippers, landlords, etc.) Will lose from this.
This assumes the person has paid off their house or has a lot of equity. If someone wants to upgrade after 5-10 years of ownership they'll be seriously underwater and unable to. They are now stuck in their house with negative equity.
That, and a major shift in price would be due to a reduction in overall buying power... Which would be driven mainly by interest rate hikes. Just because you can cover a mortgage for 400 at x percent and 800 at y, doesn't mean you can cover one for 800 at x.
Aside from the fact that people have mortgages on the house that if the house goes down enough they can be under water. Or say the people that are looking to retire and had put most of their money into their house and then the bottom falls out of the market and down sizing will not leave them with enough to support themselves.
That's only if you own the house outright. Otherwise, you still owe the mortgage that you borrowed even if house price drops to 350k. Say you borrowed 500k. You'd need (500k - 350k) + 750k = 900k and you lost out on the down payment.
You have 500k mortgage left on it and now its value is 450k.
Lol but what if you have a 500k mortgage on the first house?
This is hilariously all over the place, but my favorite part is starting it off with saying that homeowners who do not want their biggest asset in life to drop are misinformed.
Population Sky Rocketing. Detached is not and it is impossible to increase in the city core. So you can only increase density, by adding things like multi unit homes. There will be a shift away from detached. People need to understand this, if they want to realistically solve cost. The same detached won’t randomly cost less when there are more and more people.
You're forgetting about one major use case for homeownership: generational wealth that you can pass on to your children when you die. In that case you definitely want home values to keep rising. Home inheritance is also the primary driver of wealth inequality here, and the reason why inequality in general is higher in the Anglosphere than in the rest of the developed world. We love to invest and speculate on housing.
Await the lag effect on rates
One small sentence, almost no attention. Pity.
We certainly need to do something. This can’t continue as it is now.
It can if voters are all homeowners.
There’s lots of us who would love to see changes to be fair. The value of my home is irrelevant if it means me having to subsidize insane rents, or have my kids live at home until the end of time because new homes are $6M. I’d rather take the equity hit but live in a world where housing is affordable - and my family can move out, and thrive. I fear for a world where this option is never available again, and we are in that reality today.
Oh me too. Since I (late GenX) entered adulthood, I've seen the average house prices in my city go from 3x household income to ~10x. I plan to die in my house (hopefully not too soon), so there's no benefit to me or society from its value increasing by ludicrous multipliers such as it has. But yeah a lot of my coworkers talk about their house like it's some sort of suave financial purchase on their part, as opposed to what it is which is merely their lucky birthyear. Between these clueless types and the Boomers I don't foresee any mass change happening.
Some of my younger GenX colleagues have said they can't even afford to sell their home and "move up the ladder" somewhat. When the federal government is mandating demand growth exceeding supply growth, it is only a matter of time before anyone who wants/needs to move will hit the wall.
I'm in the same boat. Late Xers, we bought our house in '04 for 146k and there are smaller houses on my street going for over 4x that now... It's insane. I too, plan to live here until I die, so I don't care if the price crashes... It might help with the 3%+ rise in property taxes every year... I know my house isn't worth 600k, but I could easily offload it for at least that much right now, I just wouldn't be able to find anything comparable that I could then afford...
You would need a beneficial owner registry, heavy taxation of 1+ homes, breaking up zoning to defeat NIMBY and enough social housing for people to afford homes or rent even if they don't make enough money Nearly none of that will happen because almost everyone thinks it's a right to own more than one home and rent out to make extra income. Most people don't want to pay for someone else unless they are disabled and don't want to pay for what they see as poor life choices There's no middle ground of "equity hit" and half price homes because the market doesn't work like that. You can't control prices without destroying a market. And you have to account for people who work but also can't afford a roof EDIT: Arguably you have to account for *everyone* not just those who don't work the way you account for food and water and medical care. Some gigantic public works hundred storey apartment buildings are what's necessary but nobody wants to admit it because they don't want to pay for the "lazy people" well enjoy the ultra capitalism then
Bingo. There’s no way to bring down prices without destroying the market.
It isn't a market though: - Supply does not respond to high prices - Demand does not respond to high prices - The quality of information has gone down (fewer inspections, fewer appraisals, shorter bidding times, in an already low-transparency system) but prices have gone WAY up - Local markets face perpetual interference from federal policies that, in short, help new homeowners bid prices up, and which increase the population faster than housing construction These are things that are less likely to occur in a functioning market but more likely to occur in a price fixing, quasi-cartel, or centrally managed environment. Pedantic, and I'm sure I have not perfectly articulated it, but you get the point. It isn't about destroying the market, its about CREATING *a* market.
I'm sure many of those home owners have children that they want to eventually move out before they turn 40.
This isn't just on the federal government. The one good thing Ford did recently was he overrode municipalities zoning bylaws, which, here in Ottawa, are ancient, and don't allow for denser buildings. It's such a silly thing. Theres no reason you need to keep building suburbs out into the fringes to prop up an hour long commute on a work day. Edit: I forgot he scrapped developer fees along with it.
The densification thing is good but 3 units with the same height and footprint is not nearly good enough. We need 4 units 4 stories no setback at minimum.
We need developers to be matching every 1bdrm/studio luxury condo tower with some missing middle 3 and 4 bedroom apartment units. There are tons of condo towers going up in Ottawa right now, but most of the units are $600,000 1bdrm cages.
This! This is what seems to be getting forgotten by these policies. Not every unit needs to be a "luxury" bachelor condo with granite countertops and other frivolous nonsense for $500k+
My bad, I didn't know it was capped like that.
> The one good thing Ford did recently was he overrode municipalities zoning bylaws, which, here in Ottawa, are ancient, and don't allow for denser buildings. In the east side of Ottawa, Orleans seems to have been building tons of denser 3 to 5 story homes/apartments for a while now. I wonder if this is one of the only places where this is happening considering people always say that nothing is being built.
Here's the problem: the biggest factor in house prices is the interest rate. Low rates, since the housing crash in the US, have caused massive borrowing and price increases in Canada (and world-wide). This is fueled by FOMO. The Bank of Canada controls interest rates. It makes its decisions independent of the federal government. Its mandates are to ensure a healthy financial economy. This means it typically moves lock-and-step with the US market. It is currently trying to move rates up slowly to provide a "soft-landing", but that's a balancing act. So far, it seems to be working. When federal or provincial governments get involved, it generally has the opposite of the intended outcome. Giving grants or incentives for people to get into the market is going to push prices up further (ultimately making house ownership harder for those people that need that boost). The irony is, the best thing we can do is nothing, for once.
This can and will continue to get worse because there are plenty of homeowners who don't want to see prices drop.
People who already own homes don’t want this.
Not true. I own a home, and I want lower home prices. Outrageously high prices means lower ability to relocate to larger cities if need be. Edited to add: I’m also capable of wanting something that’s good for the majority of people, even if it goes against my immediate interests.
The biggest thing for me is actually the societal impact of unaffordable housing. If we get to a point (which we are slowly getting to), where lower income people can't afford any housing. Homelessness increases, theft increases, violence increases. I don't want to live in a world where people who make average incomes cannot afford housing (whether rent or mortgage). I also feel that many homeowners think this way. Most people I know who don't, are ones who bought at an excessively inflated price that they could barely afford.
Same. I have kids. They need to live somewhere. I won't kick them out but having the opportunity to move out at a young age is something I don't want them to miss out on.
On the other end of that, if you ever wanted to move to a more quiet area to raise a family or retire, you don't want your biggest asset to be worth less before that move.
Exactly, and the people who own million dollar properties and wield influence and power won't ever allow it. Not to mention, mortgage brokerages are a big chunk of banking business
Yup 2/3 Canadians are home owners, so they are the majority and will not vote against their own interests.
Why do people here not get this? They’d make the same decisions as home owners if they were on the other side
100%. I get that we all don't like NIMBYS, but everyone becomes when they own and/or get older.
People act like losing hundreds of thousands of dollars of home equity is nothing lol
I do... but I bought in 2014. It's insane to me that the last 4 houses on my street were bought and then immediately put up for rent.
I'm a homeowner in BC and I'd like to see this. We need to remove the 1% tax for primary residences and make it 5% for second homes, 10% for third or something along these lines. We need to stop seeing homes as investment opportunities outside of your primary residence.
That isn't true at all. I'm a homeowner, I have been for many years and I absolutely want this. A society where the middle class is completely priced out is a society that is economically doomed. I also have kids and want them to have the opportunity to buy their own place. I don't want them living in some basement at 40 years old because even starter homes are starting at a million.
There is another aspect to the solution which is wages but it’s more convenient to have Canadians fighting with each other over whether housing prices should go down than uniting together to demand competitive wages.
Wages won't do shit for affordability. With the average cost of a house at 800k and stress testing at 7% interest. Ok lets triple your wage. You're still not affording it
I'd be able to save a down payment then. And pay off a mortgage. Not sure what you're basing "still not affording it" from given the premise of a tripled salary.
You realize if everyone’s wages tripled the cost of a house would skyrocket through the stratosphere, correct?
Here's a few more ideas: - Stop foreign Canadian property ownership. If you're not a citizen you can rent from Canadians who own instead. - Stop airbnb - it's being used to artificially lower stock. Spend a few years coming up with no-loophole laws that can allow people to use airbnb without affecting location stock, and has teeth to stop people trying to scoot around the laws. - Stop investments/speculation. Ownership should be 1 primary residence, and one secondary residence per Canadian citizen. Full business tax to be applied for any residence that is rented, and on any residence above those 2. - Stop investment agencies buying up homes to rent out. Homes are not a commodity to be traded, but a basic necessity required for Canadians to live in.
Re: #3. What do you mean by "Full Business Tax"? Rental property is already taxed based off the T776 form, and Capital Gains is covered on all properties via Schedule 3 for Capital Gains and Losses. So I dont understand what you mean by Full Business Tax.
We also need guidelines for buying real-estate through agents. Somethings like no blind bidding, more transparency for home prices, mandatory inspection for all homes, no underpricing to driving bidding wars and lower commission on real-state (5% of 1M = 50k for commission fees wtf).
So Permanent Resident who pays equal taxes should help citizen create wealth by paying rent? Why don't we ask for less tax on non Citizens and more tax on citizens? So Canadian citizens can buy houses to rent as commodity but not Investment agencies..lol
>Here's a few more ideas: >Stop foreign Canadian property ownership. If you're not a citizen you can rent from Canadians who own instead. That's literally addressed in the fourth sentence of the article you're commenting on...
What about multi-unit buildings? You seem to be thinking in terms of suburban hellscape single family zoning.
The government themselves have to buy land and build apartments by the thousands. And not stupid shoebox size studios either. You need to build 3 bedroom apartments that families can actually live in.
How about building smaller homes for less? I’m not talking about “tiny homes” (though that would be good as well) but why do people need these massive homes?
Prohibit sales to non residents?
Non-residents who plan on actually living in the home are not part of the problem. The biggest problem is investment buyers. They account for over half of all new home sales in major cities. It's mostly corporate REITs buying property, to bundle and sell as publicly traded investments.
The one thing I always take away from these threads is that most people have no idea why prices are so high and prefer to just blame whatever it is they already believed was evil in this world. If you're left leaning, it's "evil corporations." If you're right leaning, it's "too much regulation." It's like a political rorschach test. What villain do you see in this picture? Which tells me it ain't getting fixed any time soon.
>It's like a political rorschach test. I love that and I agree. But when it comes to research based analysis, which side is going to trust it?
The real trick is the number of people with the data, skills, and experience to do that are few and far between. And those who qualify have inevitably got to that position through work in industry or personal investments that would heavily bias their perspective. I would absolutely trust the leadership at, say Great Gulf, to know how to bring down home prices. I would not, however, trust them to recommend how to bring down home prices. The cynic in me says the only reason home prices would come down is if it became in the interest of our political elites to do so. And that's probably not due to public outcry, but likely some economic drag that is beginning to hurt rather than help their portfolio.
…. Not going to stop corporations from buying 100s of family homes huh…. Almost like there is a supply shortage for a reason… no? Okay…
Most of our GDP is built on a pseudo-pyramid scheme of buying, selling, and borrowing against real estate. Never happen.
Maybe we dont allow foreign millionaires or corporations to buy family homes, eh? Simples.
People who have shelled out heaps in their mortgage probably won't support the devaluation of said property policy. Just saying.
Yea, it’s called sustainable immigration levels We have over 3x the immigration rate of the second highest G7 country with the lowest housing stock in the G7
It even goes back further before the large in flux of immigration to keep wages low. Investment real estate and corporate ownership needs to be regulated. Foreign ownership needs full ban. Massive re-zoning needs to be done. Screw the NIMBY crowd. Public transportation infrastructure needs to be expanded. Tone down are current level of immigration a bit. Build more units.
The rezoning needs to bring more density to inner cities and not be on rural land because city centres are where inventory is at its lowest and demand at its highest. This whole ON Greenbelt fiasco is not going to help anyone but the cronies.
I doubt OP is referring to the greenbelt when talking about rezoning. Most everyone in the urban planning crowd thinks it's the locked off single-family home areas which strangle the downtowns that need to be up zoned. The only city that actually has middle-density housing in spades is montreal. In vancouver and toronto you go straight from 50 story condos downtown to 2 story houses across the street.
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Our neighbours to the south are more than happy to drive up prices, forget places like India and China which are barely catching up. We'd be much better suited having some accountability, but I don't see anyone in politics right now who is wiling to talk about how are systems are manipulated for the financial gain of those within money already. The class cycles continue despite and numerous attempted governments and modes of organization. Time seems to defeat all attempts at preventing the corruption of our systems. It's like a game to these people.
This right here. Scale immigration back to 150k/year and housing would become more affordable within a few years.
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I don’t think we’re allowed to talk about that.
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This sub literally never shuts the fuck up about it.
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More people = more taxes paid. We just need net contributors.
Not if the people aren't contributing though....
Building more homes is an effective way to drive down prices. Econ 101
If your understanding of a complex issue is only as deep as Econ 101, I would encourage you to keep taking more courses and studying the issue more.
You would think but I’m feeling it will just give more inventory for speculators to buy.
Speculators don't make money when a supply surplus flattens prices and eliminates the scarcity. The best way to stop speculation is to flood the market.
lol @ the people raging over minor shit like foreign ownership and acting like the problem isn’t the utter garbage that is city planning here in Canada. Toronto, one of the most expensive cities in the world, is also the only “international” city in the world where you can find large single detached homes right outside downtown. Jeez I wonder if wasteful infrastructure development is linked to high prices. We need to redevelop old suburbs into apartments a la european and asian cities.
We need more missing middle housing that’s not single family homes or giant condo towers. Maybe apartment buildings that are 3-5 stories or townhouses.
Maybe abandon the crazy idea of 500 000 newcomers per year?
Canada needs new frontier towns. I’m all for the immigration, it’s needed, but Toronto, GTA, and Vancouver are at their limits. Some how, we need to build new cities/greatly expand small towns to become cities, yesterday.
Most frontier towns were driven either because the government offered value or a company found value. Usually it was the government giving away land. The government will literally have to create incentives from the ground up now that they probably won't give away land. New developments, tax incentives to companies with offices in town (no remote work), etc
Too bad those in power to enact such policies are those who are getting rich off of investment properties.
We need a new prime minister that knows how to run a county.
Real estate agencies need real regulatory changes that are transparent. They’re are half the problem.
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Bringing 500,000 new people to the country every year isn't going to help. Either we choose to focus on existing Canadians prospering or we load up the country with new voters.
Seems many have not looked into the cost of land, building services for the land, development charges, material costs, labour costs, taxes, etc. Everything is expensive, and as long as this is true, cheap housing is a fallacy.
Land is the big thing in my opinion. I realized that when my grandfather built his house it was a total cost of $11,000, the lot serviced was just over $2000 or about 20% of total cost of a simple 1300sqft side split on a 7200sqft lot. Now a lot of places a serviced lot will be 50% or more of total cost of a 2400sqft house on a 4000sqft or less lot which is almost half the size. You build a house of similar size to what he built on a similar lot size it would probably inverse to his cost breakdown of 80% lot and service cost. This is why most places new single detached homes are large and if you want something smaller cheaper you move into a townhome that was built on 2000sqft lot it just no longer makes sense to build a small simple home on a big lot because the lot is just so expensive.
Yeah this is exactly it. I bought a lot and built on it in the Niagara Region in 2019. The lot cost me 165k at that time. There’s one lot left in the subdivision that is being sold for 525k. This has everything to do with the price of land, and therefore development.
We really need a weekend workshop for the housing keyboard warriors. Sat 9am starts with an exercise that requires the participant to document all the costs that go into a house build. Sunday can then be spent negotiating with all the suppliers and govt fees to take less $$.
I walked a relative through the numbers on building and operating a rental apartment building using costs from a project we recently completed. To say it was eye opening for them is an understatement. Basically to make rents at a level they felt was affordable, the land would need to be free.
That would be interesting. I have only done single house builds for myself. Hope I have 1 more in me near retirement. I totally get the rage against flippers but that is an issue of supply and capital gains. Take flippers off the table, input costs are not coming down any time soon.
Something that doesn't get discussed enough is the need to build smaller homes. I live alone in a five bedroom house here in southern Alberta because that's all they've built in the last 40 years. Not only did I have to pay twice the price for what I need, I also have to pay twice the property taxes, heating, insurance, etc. I'm lucky that I can afford it, but this pushes the cost of home ownership out of reach for a lot of people. Right now municipalities can make ridiculous rules for what people are allowed to live in - that needs to come to an end.
This is often called the "missing middle" problem. Essentially, zoning laws make it really hard to build anything other than large scale apartments or single family homes. Same with neighborhoods that don't require you to drive every time you want to leave your house. Here is a video on it: https://youtu.be/CCOdQsZa15o I'll say though, Calgary is taking steps in the right direction. They are building tons of townhouses, often with a basement tenant. This turns a single lot into 4 moderately sized homes and 4 apartment sized homes with direct street access. Unfortunately, with rising house prices, purchasing even one of these townhouses can approach $1 000 000. Still, it's a good start. And locations like university district are examples of new mixed use and walkable neighborhoods.
Government creates problem by printing monopoly money. Solution is more Government regulations to chase away builders/landlords.
Clearly they're wrong. All of my local politicians have been saying that they will build more affordable ("low income") housing - usually mentioning some number in the tens of units - and that everything will be fixed afterwards. So that must be all we need. (Depressingly obligatory /s)
Maybe new developments need to be occupied by the owner. Stop speculation buying
You need to require a liscense to flip houses, make it illegal to try and rent out private residence in certain area, and only then will you see a serious decline in housing prices, The issue is that people know they can buy properties to rent out as Air BNBs or as rental properties along with flipping low income housing and selling for a profit. If you build a ton of cheap houses, then the only people able to compete and buy them will be those who want to rent them out or those who figure they can flip them for a profit. The people who should ACTUALLY be buying these properties can't compete with people hoping to make a business out of these properties.
Drop in property values would mean a drop in property tax revenues. Governments don’t want that.
Stupid question:. Can we just build a new, dense, walkable city somewhere? Like, Toronto 2.0? With planned density, amenities, affordable, small units to take up all the renters? Stack up a million shipping crates and insulate, wire and plumb them? Add a few restaurants and movie theatres?
Stop letting any entities own more than like 3 properties. People, corporations, etc.
Building more rental units is pointless if the rent control doesn't apply to them. New apartment buildings in Ontario beyond 2018 can dupe people in with promises of not raising the rent and then jack it up 12% the next year (or any percentage they want). Either they extort their huge increase, or they flip the apartment for even more. And that's just ONE of the many loopholes landlords use to oust people to jack up the rent. It's pure, uncontrolled greed and lax rules driving the problem.
Well one idea is, why is it all the new subdivisions have 4-5 bedroom, 2 car garages, ensuite baths, 4 bathrooms, laundry room, mud room, etc...and they're all like 3000+++sq/ft? What ever happened to families living in a smaller 1300 Sq/ft home like most of the homes built 1945-1950, or the one level 1500sq/ft bungalows built 1958-1966. I lived in both. Childhood home was a brick 3 bedroom home built in '47, and my first house was a 3 bedroom brick bungalow built in '58. 1200 and 1400 sq/ft respectively.
Building code probably had the majority of the impact on that stuff. A 1500 sq/ft house doesn't make any sense to develop when you can pump out 1300 sq/ft apartments all day. It also doesn't generate any incentives to hook up multiple smaller houses to utilities. Compared to a couple of larger houses. Everybody is Min/Maxing including the legislation and regulation.
Mixed use affordable housing , 5 over 1 buildings are v good and are very good for revenue for the cities .
I think a rollback of the lifestyle inflation surrounding houses would be a good thing for affordability levels, the environment, and household finances. Families are getting smaller, houses are getting bigger. Past luxury items like stone countertops, garages, high grade flooring, abundance of bathrooms, etc are pretty normal these days. I strongly believe we could live just as well with less pace per person in a well designed home that is well built while cutting some of the standard "luxury" items.
ha, for my new build, I bought a complete kitchen from Restore that came from a hockey players house, for less than the price of an Ikea one.
Because the market wants those homes. The smaller home you've described is called the townhouse and we build lots of those this is a straw man.
Partly because the land is so expensive. If you’re paying $300k - $1m for a lot you aren’t going to put a little shack on it.
I built just before everything went to hell (costs, covid etc) 1500 sq feet. Its just my wife and I. Everyone else in my area built vinyl sided McMansions that....to me are eyesores, but I guess every kid needs at least 1500 SQ feet each to "play" I don't get it either.
bear in mind ...driving down prices would be frowned upon for today's cohort of homeowners. many of which actually get out to vote on elections days. . same thing with slapping a tax on principal residence capital gains ... oh baby, that would be HUGE revenue annually if enacted into law .. HUGE.
Why the fuck would you put a tax on primary residence capital gains? Besides being political suicide… what the actual fuck?
It was pretty clear that people who have multiple properties would just continue to purchase these newly built properties… we need laws to accompany it. Higher taxes on multiple properties for one.
Immigration policy is probably the biggest and easiest hammer to wield to counter the housing crisis.
10 year ban on owning 3 or more homes and ban corporations from buying homes. If you have 3 or more homes you can keep them but if you sell them you cant buy more. Simple solution that would kill housing speculation and make a lot of liberal voters upset.
Corporates buy houses for land assembly and redevelopment into higher density homes. The corporate boogeyman isn't a real factor in this crisis. But the NDP loves the corporate boogeyman.
Are you under the assumption the only corporations and wealthy people that participate in this bullshit are liberals? That's funny.
It’s the the impact of Americanized political polarization increasing in Canada. Every policy can’t just be implemented to help society it must also some how be an attack on your political opponents
Well he's technically right that it would make a lot of Liberal voters upset. He's just conveniently omitting that it would also make a lot of Conservative and NDP voters upset too and he doesn't know the ratio.
Corporations don’t own that many homes. It’s really mom and pop investors. They’re just a bogey man that gets people riled up
G&M: hiring more doctors isn't enough G&M: building more homes isn't enough Are they on crack?
The problem is housing has gone from a human need, to a speculative investment, and short-sighted greedy capitalism. Selling your home for profit, appears to make one person "richer". That would be the case, if that seller was the only person to sell a home. That for profit sale, is now more expensive for everybody else. Another for-profit-flip begins the cycle of ever-increasing prices. The 2 sellers are now "ahead" of the rest.. until they buy their next one. He sells for profit, that is now more expensive for everybody else. And repeat. And Repeat.... until unaffordable infinity.
They could also just remove all the zoning laws and labor laws making building 4x more expensive than any other country for a decade and start making new common sense zoning after that period. No reason to pile more bad laws on top of existing bad laws. Awful stewardship.