[QUOTE=misher;8324979][QUOTE=Changing City;8324904]
Quote:
Originally Posted by misher
Government regulations and development charges have driven up house prices in Metro Vancouver to the tune of $644,000 per new house, according to a new report from the C.D. Howe Institute.
Seemed high to me too. I can see it happening if you have to cut a tree down/move it around and other issues though. Maybe if you average it out and consider that you have some very expensive houses in the West side? At the very least we can agree its a couple $100,000.
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We can't agree unless you show me the math. The C D Howe 'research' was only concerned with new build single family houses. Not duplexes, not apartments. They compared the cost of construction, and compared it with the price an average new house cost. They assumed that land values were the same everywhere in Canada. They then assumed that if there was a difference between the cost of construction, and the price of the home, that was due to government taxes and fees.
This is for Metro Vancouver - not the City of Vancouver. (They found Abbotsford was even more 'restrictive' than Vancouver). Given how high our land is now valued (and how much builders have to pay) is that more likely to be why single family houses here sell for more than Montreal or Edmonton?
Their argument was that in Metro Vancouver houses sell for $1.3m, but construction only costs $654,000, so the remaining $644,000 was 'restriction cost'. That's not described in the report as necessarily having anything to do with fees or charges, it's because all municipalities have zoning, which restricts the market by not allowing anyone to build whatever they like, wherever they like. They argue that if developers weren't restricted by zoning then land costs would be irrelevant, and houses would be cheaper.
It's an ultimate 'free market' report that has no basis in reality, or at least any reality of a planned region. All the press jumped on the $644,000 number, the conclusion, and failed to read (or understand) the flaws in the methodology.
I have no idea what the fees and regulatory costs are on a single house, or on an apartment, but I would be surprised if they were over $200,000 per unit, and that would be everything that all governments take, including stamp duty, GST, property taxes while the place is being built etc. A few remarkable rezonings in the City of Vancouver that go from low value land to very high end condos could see more, due to a high CAC, but they're not common, and not typical.
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