Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[YOWetal]

Originally Posted by niwell

Another point would be that the US also has more affordable secondary markets where one without the skills to make it in NYC can live fairly well. We've seen a couple of these in Canada shift from "affordable" to distinctly... not. And a place Halifax isn't exactly Philadelphia or Chicago.

I've crunched the numbers based on the careers of my wife and I - even with her salary bonus to move to NYC it wouldn't work. But somewhere like Chicago could become *very* attractive. It's a moot point since we aren't moving, but there really isn't anywhere else in Canada that would offer the same cost benefits vs. salaries for us. Similarly our friends in the music industry are kinda stuck here.

Yes these are certainly factors to some extent. My point is this problem is solvable and the arugements that "we are a world class city and these cities are unaffordable for all but the rich" just isn't true. Australia has the same issue but any other example is a tiny island with a non democratic system like Singapore or Hong Kong or has so much money sloshing around like San Francisco. Otherwise the formula isn't complicated. Allow development, build transport and middle class people can buy houses. Yes they will have to save and sacrifice which is why in 2011 many didn't buy houses despite things being much more affordable but now the door is closed.

[lio45]

Originally Posted by Build.It

1. Requesting this thread be renamed "The Great Canadian Housing Bubble" - to keep with SSP thread naming culture.

Would “The Great Canadian Scheme of Great Canadian Enrichment” work for you? It would be my choice

[P'tit Renard]

Originally Posted by niwell

A quick look at Zillow shows that most houses in Montclair are going for well over $1M with the median sales price right around that, so I'm not sure that the statement about lack of bidding wars is correct either. NYC has higher salaries for the types of jobs a professional Canadian expat might be able to land (though not all jobs - my industry actually pays less), but the median household income of Essex County NJ is $73kUSD compared to $107k CDN for Durham Region - Montclair itself is probably higher though.

Montclair township's median household income is significantly higher at $176k USD. Bay Ridge I doubt is materially above the Durham average.
https://www.point2homes.com/US/Neigh...ographics.html

Especially in the FIRE and tech space, it's really hard to land lower salaries in NYC versus Toronto. If one ends up with a lower salary, the recruiter may be malicious/predatory. The salary gap between Dallas and Toronto is already quite ridiculous at this point, and NYC gets another COLA bump from Dallas' high base.

[P'tit Renard]

Originally Posted by Build.It

4. Toronto is still an upper tier city, with tons of opportunity. I think this gets forgotten amidst all the negativity on this forum. But to make it here these days you have to work harder than ever before. We are most certainly not New York (not by a longshot). However the reward is still there though for those that make it, and now stupidly expensive housing is something we have to put up with in the process of making a name for ourselves. For those that aren't that ambitious and just want a job so they can live, you're better off in Ottawa or Edmonton - the GTA is no longer for you.

Tons of opportunity is an exaggeration to be honest. It's easier to find opportunities and move up your career in Texas (Dallas, Austin, even Houston to some extent), Chicago, Seattle or Atlanta, and they're not even the superstar cities of NYC, Bay Area or LA.

[hipster duck]

Before anyone comes at me, I will state, unequivocally, that Canada's housing crisis is very bad, worse than the United States, and getting worse.

That said, moving to NYC (or any comparable American city) from Toronto is not all upside, and - as niwell points out - despite all the supposed advantages of landing a job in NYC vs. Toronto, very few Torontonians will make the effort to do this.

Cost of living is getting worse in the US too. There are a lot of hidden costs to housing that we don't have here. Someone pointed out that that Montclair home comes with a USD 18,000 property tax bill. That's an extra $1,500/month in added housing costs that you can't deduct in any way, shape or form. In an equivalent Toronto-area home (an upper middle class suburb 1 hour out with a decent downtown would be like Burlington), the property tax for a home like that would be maybe CAD 6,000. Even if salaries/sticker prices are the same in nominal terms (Toronto salary of CAD 100,000 = NYC salary of USD 100,000), that's still an extra $1,000 a month more in property taxes in Montclair.

There are other costs of living in America that we don't see. The frequent rebuttal to anyone mentioning that Americans either pay huge health insurance co-pays or are chained to their existing job because of healthcare is that Canada's public healthcare is decrepit and getting worse. That's a fair criticism, except that the demographic that is most likely to move from Canada to the United States are people in their late twenties who almost never go to the hospital in Canada, but are still stuck paying American health insurance premiums if they get a job in the US. Once you get the butt end of the Canadian healthcare system, you're probably too old to consider moving to the US for professional reasons.

[lio45]

Originally Posted by hipster duck

There are a lot of hidden costs to housing that we don't have here. Someone pointed out that that Montclair home comes with a USD 18,000 property tax bill. That's an extra $1,500/month in added housing costs that you can't deduct in any way, shape or form. In an equivalent Toronto-area home (an upper middle class suburb 1 hour out with a decent downtown would be like Burlington), the property tax for a home like that would be maybe CAD 6,000. Even if salaries/sticker prices are the same in nominal terms (Toronto salary of CAD 100,000 = NYC salary of USD 100,000), that's still an extra $1,000 a month more in property taxes in Montclair.

This is very smart on the part of the Americans, because the specuvestor multimillionaire who reports zero taxable income and receives the GST credit for low income people and other such goodies, is at least forced to contribute $25k CAD of his money to the public coffers per year in the US…

Property taxes are among the only taxes that multimillionaires with creative accountants just cannot evade. When you make them low (like in Vancouver), you’re just inviting unproductive land use and speculation.

No one would buy that Montclair house and leave it empty while hoping it gains value every year… those high property taxes ensure it serves as housing, not as a brick-and-mortar bitcoin like Canadian real estate.

[P'tit Renard]

Originally Posted by hipster duck

Cost of living is getting worse in the US too. There are a lot of hidden costs to housing that we don't have here. Someone pointed out that that Montclair home comes with a USD 18,000 property tax bill. That's an extra $1,500/month in added housing costs that you can't deduct in any way, shape or form. In an equivalent Toronto-area home (an upper middle class suburb 1 hour out with a decent downtown would be like Burlington), the property tax for a home like that would be maybe CAD 6,000. Even if salaries/sticker prices are the same in nominal terms (Toronto salary of CAD 100,000 = NYC salary of USD 100,000), that's still an extra $1,000 a month more in property taxes in Montclair.

Property taxes are artificially low though in the GTA, that's why we have such a serious housing crisis exacerbated by terrible taxation policies. In the GTA, new homebuyers are unduly burdened with excessive development charges to make up the shortfall of artificially low receipts from property tax. Another example of young Torontonians shouldering the costs for the Boomers.

Instead of sticker shock, what property owners in Montclair is paying is the fair value of city services, and isn't subsidised by astronomical property development charges.


Excessive development charges and taxes, coupled with restrictive zoning keeps jacking up the cost of new builds in the GTA:

[YOWetal]

Originally Posted by hipster duck

Before anyone comes at me, I will state, unequivocally, that Canada's housing crisis is very bad, worse than the United States, and getting worse.

That said, moving to NYC (or any comparable American city) from Toronto is not all upside, and - as niwell points out - despite all the supposed advantages of landing a job in NYC vs. Toronto, very few Torontonians will make the effort to do this.

Cost of living is getting worse in the US too. There are a lot of hidden costs to housing that we don't have here. Someone pointed out that that Montclair home comes with a USD 18,000 property tax bill. That's an extra $1,500/month in added housing costs that you can't deduct in any way, shape or form. In an equivalent Toronto-area home (an upper middle class suburb 1 hour out with a decent downtown would be like Burlington), the property tax for a home like that would be maybe CAD 6,000. Even if salaries/sticker prices are the same in nominal terms (Toronto salary of CAD 100,000 = NYC salary of USD 100,000), that's still an extra $1,000 a month more in property taxes in Montclair.

There are other costs of living in America that we don't see. The frequent rebuttal to anyone mentioning that Americans either pay huge health insurance co-pays or are chained to their existing job because of healthcare is that Canada's public healthcare is decrepit and getting worse. That's a fair criticism, except that the demographic that is most likely to move from Canada to the United States are people in their late twenties who almost never go to the hospital in Canada, but are still stuck paying American health insurance premiums if they get a job in the US. Once you get the butt end of the Canadian healthcare system, you're probably too old to consider moving to the US for professional reasons.

There are for sure lots of pros and cons. The Property tax thing is a tradeoff against income taxes. So a couple each making $125k in Ontario pays $60k in income tax vs $50k in New Jeresy. Some of that is just lower US taxes but some is a preference for property tax vs income.

Health insurance. Crime. Guns.

All of that good reasons to stay in Toronto in many professions but my point is not Canada sucks move to the US it is even the financial capital of the world has ground based housing a nurse and cop can afford so we can too.

[whatnext]

Originally Posted by P'tit Renard

Property taxes are artificially low though in the GTA, that's why we have such a serious housing crisis exacerbated by terrible taxation policies. In the GTA, new homebuyers are unduly burdened with excessive development charges to make up the shortfall of artificially low receipts from property tax. Another example of young Torontonians shouldering the costs for the Boomers.

Instead of sticker shock, what property owners in Montclair is paying is the fair value of city services, and isn't subsidised by astronomical property development charges.


Excessive development charges and taxes, coupled with restrictive zoning keeps jacking up the cost of new builds in the GTA:

The problem is compared to the USA our federal and provincial taxes are much higher than in the USA. There isn't room for cities to tax at higher rates.

[Truenorth00]

Originally Posted by hipster duck

That said, moving to NYC (or any comparable American city) from Toronto is not all upside, and - as niwell points out - despite all the supposed advantages of landing a job in NYC vs. Toronto, very few Torontonians will make the effort to do this.

Mostly because it's really difficult for all but the most talented to immigrate to the US (unlike our immigration system). If we had Schengen like movement rights with the US, Canada would see massive brain drain well down the talent pyramid.

We see this in sectors where American industry is happy to take our talent. In the past, Canadian tech CEOs have demanded that American companies should be made to pay for our top talent or that we should legislate a mandatory period of work in Canada for our top grads. Such was the level of desperation.

[Innsertnamehere]

It's not hard at all to work in the US as a skilled Canadian worker. You can literally show up at the border with a job offer and get a work visa.

Getting permanent residency is a whole other challenge though and you can only stay as long as you have a sponsoring employer.