Share news and updates about housing in Canada. We are mostly buyers eager to change the rigged system that ensures double-digit increases year-over-year. We want housing prices to rise, but in line with wages and inflation.
I mostly agree, with the exception that we need high-density housing, and individuals are unlikely to be able to afford large apartment complexes.
I think high-density housing should be allowed to be corporate-owned, but there should be much better tenant protection laws. Landlordism shouldn't be a highly-profitable enterprise.
If we could make affordable, high-density condo buildings, that would be great. Unfortunately nobody wants to finance expensive construction for low-profit sales.
Individuals also usually cannot afford getting 100 acres of former farmland rezoned, getting the town and county to approve roads and sewer, paying the utility companies to lay electric, gas, internet and telephone lines, grading the land, and building out streets and amenities ... Before building their own house on it.
You're not going to get an increase in the supply of single family homes or multi family housing without businesses doing it as an investment, but guess what? Urbanization is going to keep going, and the US population is going to keep increasing until at least the 2050s.
... So removing the mechanism we rely on to create housing, while knowing more people are going to need housing, without replacing it with a new mechanism, is a recipe for disaster.
You can selectively ban what corporations can do, it doesn't have to be an outright full ban from everything to do with housing.
You can have investment into housing development while simultaneously banning corporate ownership of actual homes beyond building and construction of them. It will still be hugely profitable and drive the expansion we need.
What we should ban is companies buying up housing stock and flipping for profit. We should also ban AirBNB outside specific zones for it. We should ban anyone owning 5+ homes without an exceptionally good reason for it. We should tax the shit out of empty homes that stay empty for longer than a month without a proven valid exception. There is plenty we can do without hurting investment into the actual areas we need them in.
Or we could take the much more straightforward track of incentivizing development of high density housing, and changing zoning laws so they do not overwhelmingly favor wealthy incumbent homeowners over respective home buyers, which is the actual issue
Not from Canada but came across this post and I agree
Agree. Where I come from (the Netherlands) even the fucking royal family is screwing everyday people by buying houses at a huge markup and then renting them out.
We don't need to ban anything. We need to stop banning density.
As it stands, it is literally illegal to build enough housing on the vast majority of urban land in this country.
Any new housing, even market-rate housing, reduces prices:
New buildings decrease rents in nearby units by about 6% relative to units slightly farther away or near sites developed later, and they increase in-migration from low-income areas. We show that new buildings absorb many high-income households and increase the local housing stock substantially.
And eliminating onerous zoning and development restrictions can do a lot to stabilize and reduce prices:
But in four jurisdictions—Minneapolis; New Rochelle, New York; Portland, Oregon; and Tysons, Virginia—new zoning rules to allow more housing have helped curtail rent growth, saving tenants thousands of dollars annually.
...
In all four places studied, the vast majority of new housing has been market rate, meaning rents are based on factors such as demand and prevailing construction and operating costs.
Further, housing supply constraints have had a deep debilitating effect on the economy:
In a follow-up paper, based on surveying 220 metropolitan areas, they revised the figure upwards – claiming that housing constraints lowered aggregate US growth by more than 50 per cent between 1964 and 2009. In other words, they estimate that the US economy would have been 74 per cent larger in 2009, if enough housing had been built in the right places.
How does that damage happen? It’s simple. The parts of the country with the highest productivity, like New York and San Francisco, also had stringent restrictions on building more homes. That limited the number of homes and workers who could move to the best job opportunities; it limited their output and the growth of the companies who would have employed them. Plus, the same restrictions meant that it was more expensive to run an office or open a factory, because the land and buildings cost more.
...
There is, in other words, a prima facie case that the housing crisis has caused more damage to [the UK's] GDP than any single event since the Black Death – when two-fifths of the population died.
In addition to abolishing our over-the-top restrictions on development, we should tax land:
A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements.[1] It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.
Land value taxes are generally favored by economists as they do not cause economic inefficiency, and reduce inequality.[2] A land value tax is a progressive tax, in that the tax burden falls on land owners, because land ownership is correlated with wealth and income.[3][4] The land value tax has been referred to as "the perfect tax" and the economic efficiency of a land value tax has been accepted since the eighteenth century.[1][5][6]
...
Most taxes distort economic decisions and discourage beneficial economic activity.[14] For example, property taxes discourage construction, maintenance, and repair because taxes increase with improvements. LVT is not based on how land is used. Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses. Thus landlords cannot pass LVT to tenants, who would move or rent smaller spaces before absorbing increased rent.[15]
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LVT's efficiency has been observed in practice.[18] Fred Foldvary stated that LVT discourages speculative land holding because the tax reflects changes in land value (up and down), encouraging landowners to develop or sell vacant/underused plots in high demand. Foldvary claimed that LVT increases investment in dilapidated inner city areas because improvements don't cause tax increases. This in turn reduces the incentive to build on remote sites and so reduces urban sprawl.[19] For example, Harrisburg, Pennsylvania's LVT has operated since 1975. This policy was credited by mayor Stephen R. Reed with reducing the number of vacant downtown structures from around 4,200 in 1982 to fewer than 500.[20]
LVT is arguably an ecotax because it discourages the waste of prime locations, which are a finite resource.[21][22][23] Many urban planners claim that LVT is an effective method to promote transit-oriented development.[24][25]
Even a pretty low LVT can still have benefits:
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
Why not both?
Fuck corporations buying up housing stock to flip for profit.
flip for profit
This is only possible under severe supply constraints and lack of lamd value tax. As the Australian Capital Territory data in my original comment shows, even a very modest LVT deters speculation.
If you cut out the "speculation" in "corporate speculation", that's the important part. If you focus your energy on the "corporate", you 1) expose yourself to unintended side effects (maybe you unintentionally make it too hard to build new housing, especially rentals), and 2) you still have the problem of neighbor Jim the landlord exploiting you.
I live in a city (Montreal) that has some of the best land use patterns in North America, and a result is a much better supply situation. And you know what? Corporate landlords are perfectly fine. I live in a building owned and managed by a corporation, and I negotiated down my rent before signing the lease. How is that possible? Due to more abundant supply, I have more negotiating power than people in Toronto or Vancouver do, corporate landlord or not.
Further, I've had small local landlords before, and they can also suck in their own special ways. My current corporate landlord has a much better system for getting repairs done and is very fast to do so. I had a toilet with unresolved issues for months with my old small-time landlord.
Blaming the "corporate" for the "speculation" is a red herring. I'd rather spend our finite political capital fighting for YIMBYism and land value taxes, not trying to pointlessly stick it to the man.
In South Africa corporations are allowed to purchase residential housing, but banks won't finance any bonds on the property unless the property is rezoned as for commercial use. The town / city planners won't easily rezone residential as commercial.
On top of that many local councils are blocking the construction of commercial office buildings and requiring the property be rezoned as residential and thing like apartments are built instead. I know of a few properties bought up to turn into office space that has been denied a construction license and the project stalled as the companies behind the project work to get investors to back an apartment complex.
As long as they're investments, I think you'll have better luck separating a crack head from crack.
seriously.
So if a housing developer won't be able to build housing developments?
Housing is expensive because there is not enough housing supply -- it's grown more slowly than the population, and the population has become significantly more urbanized, meaning many rural areas have tons of excess capacity, exacerbating the problem.
In the States, the percent of housing occupied by the owner has remained steady for the last 60 years, but the ratio of housing available to households has declined considerably. In other words, it ain't corporate-owned-housing that's making the cost of housing go up.
If you want the price of housing to go down, you either need to a) move people to where the excess housing is, or b) create excess housing where the people are.
The sort of solution you're proposing would simply mean even fewer houses get built, making the problem even worse. It's not well thought out.
So if a housing developer won’t be able to build housing developments?
OP didn't say that, the pic says corporations shouldn't be allowed to purchase housing. They can still build it then sell it on to individuals.
OP didn't say that, the pic says corporations shouldn't be allowed to purchase housing
So if I own a house on 10 acres that's zoned residential, a real estate developer can't buy it and put up 10 houses?
If a property is condemned, hugely dilapidated, etc ... A contractor can't buy it with his LLC, fix it up, and sell it?
This is a solution that attacks something that isn't actually contributing to the problem, in such a way as to exacerbate the problem. That's ... Not a solution.
A contractor can’t buy it with his LLC, fix it up, and sell it
If they sell it, then yes there isn't an issue with what OP is stating.
Definitely