BC Political Discussion: Election 2020 and Beyond

[Changing City]

Originally Posted by chowhou

Also just an FYI for you, the federal government changed the taxation system because flipping was always supposed to be business income, but it was impossible to track down so they're attempting to close the loophole with the 1-year short term holding rule. It has nothing to do with market concerns.

I know, it appears the feds viewed flippers as inherently untrustworthy people.

[chowhou]

The CRA views all people as untrustworthy, that's why we have rules. Flippers are no different on a spiritual level from any other investor, I'm sorry to tell you. I feel like you have a personal vendetta against them, which is your choice, but we shouldn't make government policy based off of that.

[Changing City]

Originally Posted by chowhou

The CRA views all people as untrustworthy, that's why we have rules. Flippers are no different on a spiritual level from any other investor, I'm sorry to tell you. I feel like you have a personal vendetta against them, which is your choice, but we shouldn't make government policy based off of that.

Nothing personal. If the BC government say the new tax is to "further crack down on speculators and those driving up the cost of housing", that's good enough for me. I can see how that happens, but you don't believe it does.

[chowhou]

Originally Posted by Changing City

If the BC government say "..." that's good enough for me.

For me, that's never enough. Evidence based policy or bust. Until I see evidence, this is textbook feelings based policy.

[WarrenC12]

Originally Posted by Changing City

No, sorry, it was Warren who translated that to 'subsidizing'. Incentive is ok in my book - I'd probably call it 'support' for rental housing. Either way, it's not a subsidy.

Various rental building programs by the City of Vancouver waive things like CAC and other fees. Where do you think that shortfall is made up?

[seamusmcduff]

Originally Posted by chowhou

2. Time and flexibility are money. Saying "they can just hold for 4 years" ignores the fact that requiring investors to hold for at least 2 years reduces the viability of investment. Putting a time barrier in front of an investment is a barrier in front of an investment. Anyone saying "well they can just hold for 2 years" is handwaving away the fact that this is a disincentive to investors (no matter how small you might think it is).

I'm confused how you can say this, and then say that flippers don't increase prices? You're admitting that flippers enter the housing market for a flexible investment, and that this legislation creates a barrier to people investing in our housing market in that way. How would that not have a positive effect on the demand/coat of housing. Less people seeing housing as investment means less people creating demand for housing and driving costs up. It might not be a huge amount, but it could still be enough to drive prices up over time to prices they otherwise would not have.

It's all well and good to say that the prices are just what they market will bear, but it's a bit different when it's a human necessity like housing. If someone wants to get into the housing market to secure housing and not worry about eviction, they might pay more than what they can actually afford by most measures. Millions of canadians are over leveraged on their homes. People paying extremely high prices doesn't necessarily mean that that's what the market can bear, as many people are sacrificing their financial stability to ensure they can enter the market before it gets away from them. In a stable market, people would wait to purchase properties that are within their means

People using housing as an investment, such as flippers, contribute to these prices running away from regular home buyers, and contribute the overleraging done to secure a home. Someone's realistic max home they could afford might be 600k, but if the lowest priced product out there is from a flipper who is now asking 675k, they'll likely take it anyways. Flippers are taking advantage of a necessary commodity and artificially boosting their prices.

[chowhou]

Originally Posted by seamusmcduff

I'm confused how you can say this, and then say that flippers don't increase prices? You're admitting that flippers enter the housing market for a flexible investment, and that this legislation creates a barrier to people investing in our housing market in that way. How would that not have a positive effect on the demand/coat of housing. Less people seeing housing as investment means less people creating demand for housing and driving costs up. It might not be a huge amount, but it could still be enough to drive prices up over time to prices they otherwise would not have.

It's all well and good to say that the prices are just what they market will bear, but it's a bit different when it's a human necessity like housing. If someone wants to get into the housing market to secure housing and not worry about eviction, they might pay more than what they can actually afford by most measures. Millions of canadians are over leveraged on their homes. People paying extremely high prices doesn't necessarily mean that that's what the market can bear, as many people are sacrificing their financial stability to ensure they can enter the market before it gets away from them. In a stable market, people would wait to purchase properties that are within their means

People using housing as an investment, such as flippers, contribute to these prices running away from regular home buyers, and contribute the overleraging done to secure a home. Someone's realistic max home they could afford might be 600k, but if the lowest priced product out there is from a flipper who is now asking 675k, they'll likely take it anyways. Flippers are taking advantage of a necessary commodity and artificially boosting their prices.

Unless you advocate for the complete transition to government provided public housing which hasn't been shown to work anywhere besides communist regimes, we need housing to be treated as an investment because we need investment in housing. The only way new housing gets built is when there is a profit incentive. The proven way to provide necessary goods is to incentivize production of the necessary good. The proven way to limit a necessary good is to disincentivize production of the necessary good. Fewer people seeing housing as a viable investment while demand increases due to population increase means fewer housing units developed and supply not keeping up with demand. Reducing investment viability drives cost up, not the other way around.

At no point will I say that the cost of housing right now is good for society, but it certainly seems sustainable at current supply and demand levels. I think the "housing is a bubble" thread has finally died as the last vestiges of that concept have withered away. Since we're probably not going to have massive population culling anytime soon, the only solution is incentivizing supply. We subsidize food producers, we subsidize energy producers, but we tax housing producers out the ass.

[whatnext]

Originally Posted by chowhou

Unless you advocate for the complete transition to government provided public housing which hasn't been shown to work anywhere besides communist regimes, we need housing to be treated as an investment because we need investment in housing. The only way new housing gets built is when there is a profit incentive. The proven way to provide necessary goods is to incentivize production of the necessary good. The proven way to limit a necessary good is to disincentivize production of the necessary good. Fewer people seeing housing as a viable investment while demand increases due to population increase means fewer housing units developed and supply not keeping up with demand. Reducing investment viability drives cost up, not the other way around.

At no point will I say that the cost of housing right now is good for society, but it certainly seems sustainable at current supply and demand levels. I think the "housing is a bubble" thread has finally died as the last vestiges of that concept have withered away. Since we're probably not going to have massive population culling anytime soon, the only solution is incentivizing supply. We subsidize food producers, we subsidize energy producers, but we tax housing producers out the ass.

Vienna seems to have done pretty well....

https://www.bloomberg.com/news/features/...orld-famous-social-housing?sref=x4rjnz06

[micmiko]

I'm not quite understanding the argument of the pro-flippers ... flipping should be allowed because they are "investing" in new builds, and that supply is the problem.

I think most on here (bar the resident NIMBY(s)) would agree that more supply is needed, and that policies that impede creation of supply are generally detrimental.

However - if demand exceeds supply, then why exactly are flippers needed to invest in a project? Is there data to show that without flipper-investors, a project would not otherwise have proceeded? Where is the evidence that this is occurring in BC?

Also, what value are assignment flippers actually generating? Or those real estate agents (through a middle man) who buy their client's property at a lower price and then immediately sells them at a higher price?

[chowhou]

Originally Posted by whatnext

Vienna seems to have done pretty well....

https://www.bloomberg.com/news/features/...orld-famous-social-housing?sref=x4rjnz06

My understanding is that Vienna had a massive housing crisis in the early 20th century and the socialist government of the time built massive public housing estates to house those people... then the population collapsed and has not recovered. More people lived in Vienna in 1916 than live in Vienna today. They're still coasting on that legacy, and good for them, but it remains to be seen how the model works now that they've started to see sustained population growth again.

Originally Posted by micmiko

However - if demand exceeds supply, then why exactly are flippers needed to invest in a project? Is there data to show that without flipper-investors, a project would not otherwise have proceeded? Where is the evidence that this is occurring in BC?

Also, what value are assignment flippers actually generating? Or those real estate agents (through a middle man) who buy their client's property at a lower price and then immediately sells them at a higher price?

I think this is a semantic argument. Who is investing in developments if not "flippers"? These are generally people who are not expecting to live there but are planning on selling (read: flipping) the property at some point to turn a profit. Very few people are buying early into housing developments that won't complete for 5-6 years for their own personal housing. Can you really explain the difference between someone who invests in a project and someone who "flips" a project?

[whatnext]

Originally Posted by chowhou

My understanding is that Vienna had a massive housing crisis in the early 20th century and the socialist government of the time built massive public housing estates to house those people... then the population collapsed and has not recovered. More people lived in Vienna in 1916 than live in Vienna today. They're still coasting on that legacy, and good for them, but it remains to be seen how the model works now that they've started to see sustained population growth again.

Austria's population seems to have been pretty level since the time the housing project s were built (with the exception of the Anschluss/WWII period when Jews left or were killed). The public investment in housing seems to have paid off in terms of keeping housing costs reasonable. I'm generally not in favour of massive government intervention but in the face of a housing crisis largely brought in by inept and ill-considered government policies maybe that's what is needed. I can't see a private sector solution for a problem of this scale.

[chowhou]

Originally Posted by whatnext

Austria's population seems to have been pretty level since the time the housing project s were built (with the exception of the Anschluss/WWII period when Jews left or were killed). The public investment in housing seems to have paid off in terms of keeping housing costs reasonable. I'm generally not in favour of massive government intervention but in the face of a housing crisis largely brought in by inept and ill-considered government policies maybe that's what is needed. I can't see a private sector solution for a problem of this scale.

I would say that on the contrary, the private sector tends to be able to accomplish things at scale better than the public sector. There is no force stronger than market force, if the government would simply more broadly legalize housing in the province and provide economic incentives I think that would be the best policy to take.

[Changing City]

Originally Posted by chowhou

I think this is a semantic argument. Who is investing in developments if not "flippers"? These are generally people who are not expecting to live there but are planning on selling (read: flipping) the property at some point to turn a profit. Very few people are buying early into housing developments that won't complete for 5-6 years for their own personal housing. Can you really explain the difference between someone who invests in a project and someone who "flips" a project?

I think you may have explained one of the fundamental problems with the current housing market in much of BC, and some other places (certainly Toronto). I suspect it's a relatively new phenomenon for developments to be bought by investors (flippers or otherwise) with no intention of living there. I bought into a condo around 25 years ago on West Broadway. The building was 10 years old at the time, and all but two of the other condo units were occupied by the original purchasers.

The introduction of more and more investors, and flippers into the market, who view residential property purely as a commodity, rather than a home, is arguably the greatest factor that has pushed house prices ever higher. While higher construction wages, more expensive materials and increased fees might account for some of the price increase on new apartments, it doesn't explain the doubling in price per square foot of suburban condos in a very few years.

edit - I paid $218,000 in 2000. Today, the Bank of Canada says that with inflation that would be $369,000. The current assessed value of the apartment is $1,175,000.

[micmiko]

I think this is a semantic argument. Who is investing in developments if not "flippers"? These are generally people who are not expecting to live there but are planning on selling (read: flipping) the property at some point to turn a profit. Very few people are buying early into housing developments that won't complete for 5-6 years for their own personal housing. Can you really explain the difference between someone who invests in a project and someone who "flips" a project?

I'm genuinely curious - do you have any data to support that very few people are buying early into housing developments for their own personal housing? Is it possibly because assignment-flipping (especially those overseas and "friends and family" early releases before it is released locally) is so rampant that there simply isn't enough leftover supply for those who would actually want to buy in early but can't?

[WarrenC12]

Originally Posted by micmiko

I'm genuinely curious - do you have any data to support that very few people are buying early into housing developments for their own personal housing? Is it possibly because assignment-flipping (especially those overseas and "friends and family" early releases before it is released locally) is so rampant that there simply isn't enough leftover supply for those who would actually want to buy in early but can't?

I have purchased 2 pre-sales in my lifetime. I ended up living in both of them as planned, but with 3-4+ year lead times, lots of things can change in family or job situations.

Some people end up "flipping", others end up living there, regardless of original intent.

[WarrenC12]

Originally Posted by Changing City

The introduction of more and more investors, and flippers into the market, who view residential property purely as a commodity, rather than a home, is arguably the greatest factor that has pushed house prices ever higher. While higher construction wages, more expensive materials and increased fees might account for some of the price increase on new apartments, it doesn't explain the doubling in price per square foot of suburban condos in a very few years.

Scarcity explains why prices increased.

It doesn't matter who owns these units. Somebody ends up living in them, or it's heavily taxed to encourage tenancy.

[whatnext]

Originally Posted by chowhou

I would say that on the contrary, the private sector tends to be able to accomplish things at scale better than the public sector. There is no force stronger than market force, if the government would simply more broadly legalize housing in the province and provide economic incentives I think that would be the best policy to take.

Except the market forces have been proven incapable of delivering affordable housing in Vancouver. The market will chase the deep pocketed offshore buyer first. Why not, it is easy money.

[GMD]

Originally Posted by WarrenC12

Scarcity explains why prices increased.

It doesn't matter who owns these units. Somebody ends up living in them, or it's heavily taxed to encourage tenancy.

This is exactly right. I never understand people who say that flippers or people treating housing as a commodity or whatever have driven up prices. How does that even work? Same with foreigners, offshore buyers, whatever, as long as the units are not being kept empty, how does any of the trail of ownership affect prices?

To be more precise than 'scarcity' (although scarcity is the correct culprit), the primary problem is a lack of elasticity in the market, that is, a rise in price doesn't bring forth a sufficient, *and timely enough* response in terms of new supply to bring prices back down to the marginal cost. This is due to artificial scarcity due to zoning limitations, and also due to the very long timeframes required for construction due to over-regulation, and also due to a lack of competition in the construction space, again mostly driven by over-regulation that prevents smaller players from competing.

[WarrenC12]

Originally Posted by GMD

To be more precise than 'scarcity' (although scarcity is the correct culprit), the primary problem is a lack of elasticity in the market, that is, a rise in price doesn't bring forth a sufficient, *and timely enough* response in terms of new supply to bring prices back down to the marginal cost. This is due to artificial scarcity due to zoning limitations, and also due to the very long timeframes required for construction due to over-regulation, and also due to a lack of competition in the construction space, again mostly driven by over-regulation that prevents smaller players from competing.

Yeah I would agree with this, especially as we densify, the process to approve and build is a lot longer. Think 40 story condos instead of a mass of SFHs in the suburbs.

[whatnext]

Since we don't have a federal election thread I'll put this here. Not sure why Boyle would want to jump to a life of irrelevance as an NDP MP but she apparently wants to, along with a former city councillor:


Christine Boyle and Andrea Reimer seeking BC NDP nomination for provincial election
Kenneth Chan
Mar 4 2024

A fierce battle is shaping up for who will represent the BC NDP in the riding of Vancouver-Little Mountain in the general provincial election later in 2024.

Christine Boyle and Andrea Reimer both announced today they are seeking the BC NDP’s nomination to be the party’s candidate to run as the MLA of the riding.

Boyle is a sitting Vancouver city councillor under the OneCity Vancouver party, while Reimer was a city councillor between 2008 and 2018 under the Vision Vancouver party. In more recent years, following her time in municipal political office, Reimer has served on the board of directors for the University of British Columbia and TransLink.....

https://dailyhive.com/vancouver/christine-boyle-andrea-reimer-bc-ndp-vancouver-little-mountain