Canada's 'housing bubble' deemed close to bursting

[WarrenC12]

Originally Posted by Gresto

I gather you have a congenial, dependable tenant, else you wouldn't be so magnanimous.

My tenant is nice enough, but the further the rent gets from the market rent, the more I wonder.

The max fine for illegal eviction is 1 year worth of rent. You can do the math and that actually becomes worthwhile after a point.

[swimmer_spe]

Originally Posted by Wigs

Buffalo is one of the first American cities I've heard of to get rid of parking minimums. They got rid of the grossly outdated 1950s zoning codes and created a new "Buffalo Green Code" in 2017 that was years in the making.

The first development example post 2017 is a 8-storey, 201 unit affordable housing building downtown on a former parking lot adjacent to the first downtown grocer to open up in what was previously considered a "food desert". This grocer, Braymiller, focuses on fresh produce and sourcing as much locally or within NY State as possible.

The building even features a huge colourful mural paid for by the Albright-Knox-Gundlach museum's Public art initiative to commission murals by local and well known artists all over downtown Buffalo and the near east side.

BEFORE (2018) (the ugly concrete wall is the headquarters of the transit agency NFTA-attached to the downtown bus terminal)


AFTER (2022)


BEFORE (2017)


AFTER (2022)


BEFORE (2018)


AFTER (2022)

Buffalo grew for the first time in 7 decades per 2020 census. current population ~280k (1950 peak ~580k in 40 sq miles/104.5 km2). Discouraging parking is aiding development and encouraging transit. If Buffalo can come back, any North American city can.

That is great.
The 1950s - wasn't that when they started to rip up all the streetcars around Canada and USA?
The fact that Buffalo is growing like this, it shows that we need to update all bylaws to reflect today's world, not the world of our grandparents.

[swimmer_spe]

Originally Posted by WarrenC12

My tenant is nice enough, but the further the rent gets from the market rent, the more I wonder.

The max fine for illegal eviction is 1 year worth of rent. You can do the math and that actually becomes worthwhile after a point.

Maybe the maximum fine is a minimum of one year's worth of rent or the total rent they have paid since they moved in, whichever is higher.

[WarrenC12]

Originally Posted by swimmer_spe

Maybe the maximum fine is a minimum of one year's worth of rent or the total rent they have paid since they moved in, whichever is higher.

Are you saying that's what it should be?

[thewave46]

Originally Posted by lio45

The building needs to be younger than 5 years old for rents not to be frozen (in Quebec). Needless to say, you cannot amortize a brand new build on a <5 year period. You couldn’t even if it were built with slave labor. (Slave labor + stolen materials, then okay, doable *if* you bought the land a long time ago )

At least you know the game can’t get worse, if that’s a consolation.

Does the Quebec government set a rental maximum upon initial construction? You’d almost have to start at crazy high rent and accept that as a baseline and hope you clear enough to stay ahead of the game.

[swimmer_spe]

Originally Posted by WarrenC12

Are you saying that's what it should be?

Yes.
Too many things are based on whether you have "ticket money". Maybe it is time to make it so that no one has "ticket money" and it is a real deterrent instead of the cost of business. If I know that long term tenant will cost me ~$10k to get rid of, vs $100,000 + then, good long term tenants would not be at risk of being kicked out of their home.

Imagine if a bank wanted more money and they could kick you out of your house for 1 year worth of mortgage payments. How would that sit with regular voters?

[WarrenC12]

Originally Posted by swimmer_spe

Yes.
Too many things are based on whether you have "ticket money". Maybe it is time to make it so that no one has "ticket money" and it is a real deterrent instead of the cost of business. If I know that long term tenant will cost me ~$10k to get rid of, vs $100,000 + then, good long term tenants would not be at risk of being kicked out of their home.

Imagine if a bank wanted more money and they could kick you out of your house for 1 year worth of mortgage payments. How would that sit with regular voters?

Your comparison doesn't make sense. In fact mortgage holders sign a contract with a bank that has an expiry. I pay off my mortgage, or I pay of a portion and we re-negotiate in 5 years. The bank can outright refuse to renew me, or crank up the interest rate, and I can look on the open market for another.

Or, if I don't have an income, nobody will renew and I have to sell and move out.

Why do we have rent controls but no price controls on food? It's even more important than a home for survival.

[Wigs]

Originally Posted by swimmer_spe

That is great.
The 1950s - wasn't that when they started to rip up all the streetcars around Canada and USA?
The fact that Buffalo is growing like this, it shows that we need to update all bylaws to reflect today's world, not the world of our grandparents.

Buffalo has built over 10,000 units of multi-family residential in the past decade, which has accelerated in the past 5 years around the time the green code was passed.

1950 was the last streetcar. And Buffalo had one of the best systems in the United States

By 1920, Buffalo had more than 350 kilometres of streetcar track, and its citizens were able to access virtually any corner of the city on a single fare

https://skyrisecities.com/news/2017/01/b...r-history-linked-citys-changing-fortunes

Related photo thread to the decades long decline
https://skyscraperpage.com/forum/showthread.php?t=252760


Photo from 1900, when Buffalo was at its peak prominence: briefly larger than Montreal and Toronto and the 8th largest in US

[thewave46]

Originally Posted by WarrenC12

Why do we have rent controls but no price controls on food? It's even more important than a home for survival.

Food is not a contract-based and regulated industry. It is closer to a free market in the classical sense. This has both upsides and downsides.

The upside is that one can charge whatever they think the market will bear. The downside is that they have to earn their customers' loyalty with each visit.

If a tenant skips on lease/rent, a landlord has legal avenues to seek compensation.

If one wants to get into the landlording business and just expected to have all the cards aligned in their favour in the country of Canada in 2022, have I got disappointing news for you. The best recommendation might to be to assume the worst case might be something like Quebec and be surprised when one's province is not as bad.

Many US states have much friendlier landlord laws. I would recommend them from a purely profit-seeking avenue.

[swimmer_spe]

Originally Posted by WarrenC12

Your comparison doesn't make sense. In fact mortgage holders sign a contract with a bank that has an expiry. I pay off my mortgage, or I pay of a portion and we re-negotiate in 5 years. The bank can outright refuse to renew me, or crank up the interest rate, and I can look on the open market for another.

Or, if I don't have an income, nobody will renew and I have to sell and move out.

Why do we have rent controls but no price controls on food? It's even more important than a home for survival.

Do you recheck that your tenants are still working?

We actually do have price controls for food. Milk is a prime example.

Point was, if we treated good mortgage holders the way good tenants are treated, there would be a lot bigger housing problems.

Originally Posted by Wigs

Buffalo has built over 10,000 units of multi-family residential in the past decade, which has accelerated in the past 5 years around the time the green code was passed.

1950 was the last streetcar. And Buffalo had one of the best systems in the United States

https://skyrisecities.com/news/2017/01/b...r-history-linked-citys-changing-fortunes

Related photo thread to the decades long decline
https://skyscraperpage.com/forum/showthread.php?t=252760


Photo from 1900, when Buffalo was at its peak prominence: briefly larger than Montreal and Toronto and the 8th largest in US

That is impressive.

[Wigs]

Originally Posted by swimmer_spe

That is impressive.

For a city that shrunk to just a tad over 250k, in a Metro that was declining since 1970 it is!
If interested, check out the 2 pages of google streetview (before/after) comparisons BenP did on SSC (post #1860 and on)
https://www.skyscrapercity.com/threads/buffalo-photo-thread.733630/page-93

[whatnext]

Originally Posted by Wigs

Buffalo is one of the first American cities I've heard of to get rid of parking minimums. They got rid of the grossly outdated 1950s zoning codes and created a new "Buffalo Green Code" in 2017 that was years in the making.

The first development example post 2017 is a 8-storey, 201 unit affordable housing building downtown on a former parking lot adjacent to the first downtown grocer to open up in what was previously considered a "food desert". This grocer, Braymiller, focuses on fresh produce and sourcing as much locally or within NY State as possible.

The building even features a huge colourful mural paid for by the Albright-Knox-Gundlach museum's Public art initiative to commission murals by local and well known artists all over downtown Buffalo and the near east side.

BEFORE (2018) (the ugly concrete wall is the headquarters of the transit agency NFTA-attached to the downtown bus terminal)


AFTER (2022)


BEFORE (2017)


AFTER (2022)


BEFORE (2018)


AFTER (2022)

Buffalo grew for the first time in 7 decades per 2020 census. current population ~280k (1950 peak ~580k in 40 sq miles/104.5 km2). Discouraging parking is aiding development and encouraging transit. If Buffalo can come back, any North American city can.

I’m not sure I’d hold up Buffalo as a success at anything. When you haven’t grown in seven decades you’re not a success. Having family in the area, I can say the only thing going for it is the cheap housing because nobody wants to live there.

[whatnext]

Originally Posted by WarrenC12

Your comparison doesn't make sense. In fact mortgage holders sign a contract with a bank that has an expiry. I pay off my mortgage, or I pay of a portion and we re-negotiate in 5 years. The bank can outright refuse to renew me, or crank up the interest rate, and I can look on the open market for another.

Or, if I don't have an income, nobody will renew and I have to sell and move out.

Why do we have rent controls but no price controls on food? It's even more important than a home for survival.

Because it’s a lot easier to set up food banks than house banks.

[swimmer_spe]

Originally Posted by whatnext

I’m not sure I’d hold up Buffalo as a success at anything. When you haven’t grown in seven decades you’re not a success. Having family in the area, I can say the only thing going for it is the cheap housing because nobody wants to live there.

When you haven't grown in 7 decades and grow in 1 decade, that is a failure?

[Wigs]

Originally Posted by swimmer_spe

When you haven't grown in 7 decades and grow in 1 decade, that is a failure?

yeah, wut

Buffalo (declining since 1950) grew by 17k and Erie county (declining since 1970) grew by 35k, meanwhile the likes of Cleveland, Detroit, even Pittsburgh (the rustbelt king of Eds and Meds) still posted declines!
Only 1 inner ring suburb of Buffalo posted population decline and it was marginal.
A growing medical campus employing over 17,000 (new Children's Hospital, constantly expanding nationally recognized Cancer Research hospital, general hospital, Vascular institute, bioinformatics and genomics labs, vast amounts of medical office space) with a new-ish $375M UB Medical school, M&T Bank (now the 16th largest bank is US) growing its current employment of over 7,000 by at least 1,500. Seneca One Tower went from completely abandoned now transformed into mixed-use and is home to a cluster of Buffalo's small but growing tech sector and tech incubator 43 North, including M&T's top notch $58M tech hub. M&T now needs more space and is spending $24M renovating floors in a different building downtown as they keep growing. For $82M USD renovating older office space, M&T Bank could have built another office tower.

Heck, even a former grain elevator abandoned for decades in an odd location is being transformed into apartments. Not to mention the 10,000 other multi-family units that have been completed this past decade.

Literally Billions of development have occurred in the past decade.
But hey if people want to believe it's just a depressed rust belt cesspool keep it up with the outdated views

[whatnext]

Originally Posted by swimmer_spe

When you haven't grown in 7 decades and grow in 1 decade, that is a failure?

A lot more failure than places that have grown through 7 decades and haven’t in 1.

[theman23]

Originally Posted by WarrenC12

Your comparison doesn't make sense. In fact mortgage holders sign a contract with a bank that has an expiry. I pay off my mortgage, or I pay of a portion and we re-negotiate in 5 years. The bank can outright refuse to renew me, or crank up the interest rate, and I can look on the open market for another.

Or, if I don't have an income, nobody will renew and I have to sell and move out.

Why do we have rent controls but no price controls on food? It's even more important than a home for survival.

Did you not sign a tenancy agreement with your tenant in his first year? You must have known what you were getting into.

[WarrenC12]

Originally Posted by swimmer_spe

Do you recheck that your tenants are still working?

We actually do have price controls for food. Milk is a prime example.

Point was, if we treated good mortgage holders the way good tenants are treated, there would be a lot bigger housing problems.

Dairy is supply managed and benefits the producers, the price is artificially high! That's like the opposite of what we're talking about.

[WarrenC12]

Originally Posted by theman23

Did you not sign a tenancy agreement with your tenant in his first year? You must have known what you were getting into.

Of course I knew, I've been a landlord for a long time.

I did not anticipate COVID (of course), or the BC NDP to clamp down harder on rental increases than pretty much any other province.

Its a new tenant vs. existing tenant issue. New tenants continue to subsidize existing ones at an increasing rate.

[lio45]

Originally Posted by thewave46

Uninformed layman POV here, but isn't landlording mostly a capital appreciation play? (I think you mentioned this lio) It's all and nice one grinds out a profit at the end of the day, but mostly the benefit is having someone else pay the mortgage on a place you own.

Admittedly, locking in at rock-bottom rates for as long as one can would be just as good a benefit for a landlord as a resident homeowner, and one runs the same risk with respect to increasing interest rates.

Unless the angle was the rapid appreciation flip and just renting in the meantime to keep the bills paid, but rising rates have nuked that option for the time being. I foresee many AirBnbs/attempted flips entering the rental market soon, given how fast rents are rising and how little rental construction (relatively speaking) has happened.

Remind me to get back to you sometime about this (when I’m not on my phone). I don’t want to lose my forum title of Truenorth of long-term larger-scale Canadian real estate