Canada's 'housing bubble' deemed close to bursting

[cabotp]

How about the idea of a rent control based on inflation. But the maximum length of the agreement is say 5 or 10 years. So at that point the landlord and tennant would then have to renegotiate a new rental agreement.

[milomilo]

Originally Posted by cabotp

How about the idea of a rent control based on inflation. But the maximum length of the agreement is say 5 or 10 years. So at that point the landlord and tennant would then have to renegotiate a new rental agreement.

Well that's basically standard, some of the ones here are 2.5% or so. It seems totally fair on the face of it, but it will distort the market. Also, if you only cap increases at a rate that is at or above the normal rate of rent increases, what is the point? It would be expected that you would only implement rent controls in markets where rents are rising above inflation, and so if you cap rents at below that rate, that's why problems arise.

[cabotp]

Originally Posted by milomilo

Well that's basically standard, some of the ones here are 2.5% or so. It seems totally fair on the face of it, but it will distort the market. Also, if you only cap increases at a rate that is at or above the normal rate of rent increases, what is the point? It would be expected that you would only implement rent controls in markets where rents are rising above inflation, and so if you cap rents at below that rate, that's why problems arise.

Maybe I'm not understanding what you said.

But I wasn't thinking there would be a cap at the 5 or 10 year mark. As an example I sign a rental agreement for $2000 / mth. The agreement is for 5 years. Each year my landlord can raise it by the the inflation rate. At the 5 year mark i would need to regnegotiate a new rental agreement. Depending on market conditions the new agreement might be $3000/mth or maybe cheaper at $1000/mth.

This in theory would allow a tennant to stay in one place for the length of the agreement without the cost rising significantly. It would also allow a landlord to not be stuck with too low a rental over an extended time.

Of course with anything there will be a flaw.

[milomilo]

Originally Posted by cabotp

Maybe I'm not understanding what you said.

But I wasn't thinking there would be a cap at the 5 or 10 year mark. As an example I sign a rental agreement for $2000 / mth. The agreement is for 5 years. Each year my landlord can raise it by the the inflation rate. At the 5 year mark i would need to regnegotiate a new rental agreement. Depending on market conditions the new agreement might be $3000/mth or maybe cheaper at $1000/mth.

This in theory would allow a tennant to stay in one place for the length of the agreement without the cost rising significantly. It would also allow a landlord to not be stuck with too low a rental over an extended time.

Of course with anything there will be a flaw.

I guess that just works as a longer term lease. As long as the landlord actually can raise the rent at the end, it shouldn't distort the market too much.

To be clear, regulations are fine and often a good thing. They just shouldn't be used to try and shape the price. Price control cannot work and will always have unintended consequences.

[lio45]

Originally Posted by milomilo

Are they? I was just repeating what I thought I heard. What is outrageous?

About ~2x what they are in other decent-sized (mid-sized) cities like Sherbrooke and 3-Rivières.

If you are renting and don't need to be in Montreal for career reasons, that's a good incentive to move out. I've seen it happen often in my circles of friends and acquaintances.

A good friend of mine, who used to own a significant portfolio of revenue properties in downtown Sherbrooke but also a bit in Montreal (he sold it all recently, some to me) still rents the same 1br apt in a pricey/desirable area of Montreal that he'd had for some 15+ years, because his pre-gentrification rent is so low that it makes no sense to move. Perfect example of what someone123 describes. For the past few years every time he was looking at buying a condo in the area (which he could pay cash even though they're become crazy expensive lately), he ends up changing his mind because he can't justify the ROI at all in comparison to the rent he has now (valid only for that one particular apt).

Apartments become almost like an extension of one's body... you're just stuck with it until you die.

To me, having the landlord of a sizable portfolio be a renter in a severely rent-controlled apt he has been hugging since his early twenties is kind of grotesque. But it's the sort of thing that happens with rent control.

[Andy6]

Originally Posted by cabotp

How about the idea of a rent control based on inflation. But the maximum length of the agreement is say 5 or 10 years. So at that point the landlord and tennant would then have to renegotiate a new rental agreement.

Maybe the tenant gets a choice between a higher rent and a landlord buyout that would be calculated based on how large an increase the landlord was proposing (and maybe the length of your tenancy). So the landlord proposes a 10% increase but has to offer you $10,000 as an alternative (if you agree to leave). That would discourage gouging, since the landlord would be making a lot of payouts if his demands were significantly above market. There could be a floor, or a minimum tenure requirement of 2 or 3 years, so that mobile tenants like students couldn’t jump around to different apartments in order to collect the payments.

I got bought out in Toronto in 2004, for around $25,000 (split with my roommate at the time). Given how far our rent was below market, it was probably a fair deal for both sides.

[misher]

Originally Posted by Andy6

Maybe the tenant gets a choice between a higher rent and a landlord buyout that would be calculated based on how large an increase the landlord was proposing (and maybe the length of your tenancy). So the landlord proposes a 10% increase but has to offer you $10,000 as an alternative (if you agree to leave). That would discourage gouging, since the landlord would be making a lot of payouts if his demands were significantly above market. There could be a floor, or a minimum tenure requirement of 2 or 3 years, so that mobile tenants like students couldn’t jump around to different apartments in order to collect the payments.

I got bought out in Toronto in 2004, for around $25,000 (split with my roommate at the time). Given how far our rent was below market, it was probably a fair deal for both sides.

I think a simple system where you pay 3 months rent to get your tenant out should be adopted. If 3 months rent is not enough for you to move then your rent is definitely too low.

[rbt]

Originally Posted by misher

I think a simple system where you pay 3 months rent to get your tenant out should be adopted. If 3 months rent is not enough for you to move then your rent is definitely too low.

3 months is much too low for some portions of the population.

It can cost a fortune for someone in their 80's with significant mobility constraints to move as they basically need 3rd party to perform each step in the process from apartment hunting to unpacking and changing their address. It might take years of around-the-clock oversight if one in the couple has dementia. You might say that person should be in an assisted living facilty but Canadian healthcare has been encouraging in-home care over that whenever possible.

An energetic young able bodied couple? Sure, they can kick that out over a weekend with a rental truck.

[whatnext]

Originally Posted by milomilo

I guess that just works as a longer term lease. As long as the landlord actually can raise the rent at the end, it shouldn't distort the market too much.

To be clear, regulations are fine and often a good thing. They just shouldn't be used to try and shape the price. Price control cannot work and will always have unintended consequences.

That's because it needs to be paired with other tools like "rental only" zoning. The BC NDP gave municipalities that tool, but the Cty of Vancouver has been far too timid to use it.

[misher]

Originally Posted by whatnext

That's because it needs to be paired with other tools like "rental only" zoning. The BC NDP gave municipalities that tool, but the Cty of Vancouver has been far too timid to use it.

Rental only zoning is stupid. If it wasn’t profitable to develop before it won’t suddenly be developed once you make it rental only.

Offering to allow additional density in return for rental development is smart 👍🏻 That was no one loses or feels oppressed, it’s an incentive that people can choose to adopt or not. And if not enough people are taking it then increase the incentive.

[samne]

Originally Posted by misher

Offering to allow additional density in return for rental development is smart 👍🏻 That was no one loses or feels oppressed, it’s an incentive that people can choose to adopt or not. And if not enough people are taking it then increase the incentive.

Responsible compromise.

[misher]

Originally Posted by samne

Responsible compromise.

Yep and whats the loss by giving out more density? Basically someone's view. The city gains more taxes from more density, the province gains more taxes, the feds gain more taxes, and the people benefit from more homes. Its the gift that gives back.

I'm surprised the province hasn't instituted a program to sell density directly to developers and override the city. Just call it the "affordable housing initiative" and use it to pay for modular social housing.

[SignalHillHiker]

One of the best infill projects I've seen in the city - almost no compromise on the exterior. Previous property was fire-bombed, IIRC.

[misher]

Originally Posted by SignalHillHiker

One of the best infill projects I've seen in the city - almost no compromise on the exterior. Previous property was fire-bombed, IIRC.

It costs us more than that to build a unit of social housing in Vancouver with no development fees or land costs.

https://www.vancourier.com/opinion/vanco...meless-increase-by-22-million-1.23940576

For example, the average construction costs of purpose-built social housing in Vancouver would be in the range of $300,000 to $400,000 per unit, while the 605 units were built at approximately $150,000 per unit.

[whatnext]

Thankfully BC courts just tossed out the class action lawsuit against the province's foreign buyers tax. Now the decks are cleared for the federal government to bring in their version promised in the election campaign!

B.C. Supreme Court rejects class action suit over foreign buyers tax

[milomilo]

Excellent.

[SignalHillHiker]

Originally Posted by misher

It costs us more than that to build a unit of social housing in Vancouver with no development fees or land costs.

https://www.vancourier.com/opinion/vanco...meless-increase-by-22-million-1.23940576

Yeah, but... then you [get to/have to] live in Vancouver. Very different market. :F

[memph]

Originally Posted by mcminsen

Here's a story from the Vancouver Sun:

Vancouver real estate: White Spot site on West Georgia sells for whopping $245 million



Here's a link to the project thread in the Vancouver forum:

1608 & 1616 West Georgia Street | 126.6m + 122.2m | 38 fl | Proposed

I thought you'd be able to get a bit more land for that kind of money even in DT Vancouver, but still, it's basically the best location in the city, so I wouldn't use it as a representative example of what's possible in terms of upzoning for more affordable housing. You'd always expect the most desirable location in the city to be geared towards well-to-do residents.

What's the cost of highrise zoned land in Coquitlam, Richmond, Surrey, etc? Keeping in mind that lowrise zoned land is probably less expensive and that if everything was upzoned to allow midrises, although the price of the currently low-rise zoned land might increase a bit, the increase should be smaller than the decrease in the price of highrise zoned land in those suburbs.

[WarrenC12]

Originally Posted by whatnext

Thankfully BC courts just tossed out the class action lawsuit against the province's foreign buyers tax. Now the decks are cleared for the federal government to bring in their version promised in the election campaign!

B.C. Supreme Court rejects class action suit over foreign buyers tax

But misher told us this was a slam dunk and the government would lose...

[Pinus]

Originally Posted by WarrenC12

But misher told us this was a slam dunk and the government would lose...

Well, looks like Mr. Mish (aka SJW extremist) was wrong, again