Canada's 'housing bubble' deemed close to bursting

[swimmer_spe]

Originally Posted by Wigs

SHH, 3800sq ft of historic home for that price anywhere seems suspect.
There has gotta be a catch.

.... drunken ghost sailors?

[Wigs]

Originally Posted by swimmer_spe

.... drunken ghost sailors?

The shanty songs would be off the hook

SHH, "matchsticks" isn't what any homeowner wants to hear
*Crossing fingers* foundation damage/partial collapse is a future owner's issue and not yours.

[swimmer_spe]

Originally Posted by Wigs

The shanty songs would be off the hook

SHH, "matchsticks" isn't what any homeowner wants to hear
*Crossing fingers* foundation damage/partial collapse is a future owner's issue and not yours.

[theman23]

Surprised this hasn't been posted here.
The Ontario government is looking at allowing housing development within the greenbelt:
https://www.cbc.ca/news/canada/toronto/ontario-greenbelt-proposal-to-cut-land-for-homes-1.6643299

[Coldrsx]

The average price of a single-family home has fallen nearly $50,000 since peaking in April, hitting $463,000 in October, according to statistics released by the REALTORS® Association of Edmonton. The cheapest single-family homes in central Edmonton now cost an average of about $257,000.
-Taproot

[Hawrylyshyn]

Originally Posted by theman23

Surprised this hasn't been posted here.
The Ontario government is looking at allowing housing development within the greenbelt:
https://www.cbc.ca/news/canada/toronto/ontario-greenbelt-proposal-to-cut-land-for-homes-1.6643299

Not quite: he's looking at changing which land is part of the Greenbelt and which isn't, and the change would include expanding the Greenbelt by an additional 2000 acres. It isn't a blanket "developers will be allowed to build on the Greenbelt"

[hipster duck]

Originally Posted by theman23

Surprised this hasn't been posted here.
The Ontario government is looking at allowing housing development within the greenbelt:
https://www.cbc.ca/news/canada/toronto/ontario-greenbelt-proposal-to-cut-land-for-homes-1.6643299

It's good to throw the grenade back at the Trudeau government.

I agree with DoFo: 500k immigrants/year means at least 150k of those settle in the GTA where there's an artificially-imposed growth boundary because the same constituency of Liberal supporters don't like the look of sprawl*. Where are all these people going to go?

I would guess that many, if not most, people aspire to live in a single family home with a yard. Or, at least, a ground-oriented home with some private outdoor space. Right now, this is almost perfectly inelastically supplied - like a Picasso painting or Faberge egg - and artificially so. Not surprisingly, these are the homes with the highest price growth. As these places become more rare, paradoxically, the desire for people in existing SFH to convert their properties to missing middle goes down, or the cost of building missing middle goes up and the affordability argument for MM becomes moot.


*There are good reasons not to build low density subdivisions, like loss of farmland (arguable, since this farmland doesn't really feed millions of people), encroachment into natural lands that provide water supply, and that sprawl is cost inefficient in terms of servicing, but these arguments should be weighed against the fact that the greenbelt makes housing unaffordable. Besides, you can build ground-oriented homes and make it not auto-centric sprawl.

[thewave46]

Originally Posted by hipster duck

It's good to throw the grenade back at the Trudeau government.

Could you possibly mean that the hilarious contradiction we've built over the last few decades isn't sustainable long-term?

Shocking.

It's one thing when it's 1996 and there's just heaps of underused, low-value land in our cities and immigration is only half of today, but another thing in 2022 when one is aiming to up the immigration level to half a million new Canadians per year.

At least Doug kind of realizes that one can't simultaneously press the gas pedal and brake pedal at the same time. Not sure how long our federal government or cities will keep their head in the sand, but politics be politics yo.

[niwell]

Some good points (not opposed to criticizing the inherent contradiction), and some of the land being opened up may make sense given proximity to already serviced areas - but there's still a ton of undeveloped land within the greenbelt. Both within designated settlement areas and within the so-called "white belt". It was always designed to allow for a huge amount of future growth and physical expansion of the GTHA.

The lands in question aren't being opened up as some true relief valve to build housing, it's because of lobbying by landowners. Who, for the record, were generally fine with the greenbelt but if they see an opportunity will obviously take it. It's not going to cause prices to go down or really affect the number of houses that can be built in the long term one way or the other. Again, some probably make sense while others (particularly those encroaching on environmentally sensitive areas) don't.

Hard to say if it will fly politically - last time Ford tried to touch the greenbelt it blew up in his face quite spectacularly. The optics of doing this while the media was preoccupied with CUPE may not prove great.

Originally Posted by hipster duck

*There are good reasons not to build low density subdivisions, like loss of farmland (arguable, since this farmland doesn't really feed millions of people), encroachment into natural lands that provide water supply, and that sprawl is cost inefficient in terms of servicing, but these arguments should be weighed against the fact that the greenbelt makes housing unaffordable. Besides, you can build ground-oriented homes and make it not auto-centric sprawl.

Maybe not millions but there's a LOT of valuable farmland within designated greenbelt areas. If supply chains shook out a bit different it could certainly provide more food than it does, which could prove important in the future. Some of it is more replaceable than other parts - Niagara fruit areas and the Holland Marsh in particular are quite unique and important to the economy.

It would be false to suggest that the greenbelt has no effect on housing costs, but in terms of the sky high investor driven spikes peaking early this year I don't think it plays a huge one. Housing prices were rising linearly before and after the greenbelt and associated policies came into effect, and only skyrocketed well after. There was no real land crunch during this time nor has the GTA come close to running out of designated developable land.

In any event, the constraint is more driven by policies in the PPP and Places to Grow which outline density and intensification targets plus designate growth areas. These were always a bit too broad and not fine-grained enough so ended up promoting the current mix of ultra-high density towers and packed in single-family subdivisions (with a vague grid pattern) with little in between. If all residential areas in the GTA were more or less at the same density as Old Toronto we'd be able to fit several more million within the current built boundary in a fashion that would allow for a lot more ground-oriented and walkable stuff. We're stuck here now, unfortunately.

I think some of Ford's policies with respect to housing are a step in the right direction (others not so much), and at least they are acknowledging it exists. But I doubt it will have much real effect.

[ssiguy]

I don't agree with Greenbelts and I never have and never will. I do agree with certain areas being off limits but not this wholesale right-off of entire districts. They are classic examples of good intentions being poorly executed.

As we have seen in Vancouver, all that happens is that development simply skips over the Greenbelt doing nothing but increasing commute times. Often these lands, and Richmond is a prime example, once had productive farm land but that is no longer the case. Richmond has very ideal growing areas and while the farms are still there, they are incredibly unproductive.

The lands are technically for farming but farming is a relative word. Much of the land is left fallow years on end and are nothing more than properties to flip, some have become birth-hotels, and are a way to build a huge house on a massive acreage but pay almost no property taxes. This is why you get these mega-mansions all along the roadways but never see a tractor or people in the fields. These buyers had absolutely no intention of every running a farm and the standard the province goes by as to what constitutes a farm is little more than a typical garden.

I think protecting special areas or creating new parkland or forest reserves in specific areas is far more ideal that these blanket declarations that everything is off bounds.

[GenWhy?]

The only poorly executed element is community planning and monocultures. If you get rid of a greenbelt you still have endless car-oriented monocultures and traffic.

[Drybrain]

Originally Posted by thewave46

It's one thing when it's 1996 and there's just heaps of underused, low-value land in our cities and immigration is only half of today, but another thing in 2022 when one is aiming to up the immigration level to half a million new Canadians per year.

Okay, but most of the GTA looks like this, meaning there is heaps of underused land in our cities.

Slamming down more SFH sprawl is going to worsen congestion and quality of life, exacerbate pollution and energy use, and needlessly eradicate natural ecosystems, in addition to farmland.

If Doug wants to do something truly radical, he'd upzone the whole GTHA, not nibble away at the greenbelt, which at best is only going to kick the housing-crisis can down the road a few years anyway.

[niwell]

Originally Posted by ssiguy

The lands are technically for farming but farming is a relative word. Much of the land is left fallow years on end and are nothing more than properties to flip, some have become birth-hotels, and are a way to build a huge house on a massive acreage but pay almost no property taxes. This is why you get these mega-mansions all along the roadways but never see a tractor or people in the fields. These buyers had absolutely no intention of every running a farm and the standard the province goes by as to what constitutes a farm is little more than a typical garden.

This isn't really accurate. While it's true that there are many farmhouses occupied by non-farmers, the land has to be actively farmed to be taxed at the farm rate (which isn't free, it's 1/4 the residential rate). And yes, municipalities do check this quite fastidiously as it has implications on their tax ratios. Most farmed land in Southern Ontario is leased out to farmers regardless of ownership.

[hipster duck]

Originally Posted by Drybrain

Okay, but most of the GTA looks like this, meaning there is heaps of underused land in our cities.

Sure, but most of those people aren't going to sell their single family homes to developers. That's the lifestyle they want, and nobody is making any more single family homes, so it becomes more of a valuable commodity with each passing year.

Besides, even if more people were willing to part with their homes, bargaining with individual homeowners and assembling lots one at a time is a long, arduous process. Wouldn't you just want to buy 100 acres of farmland in one shot?

Ironically, if single family homes were less of a hot commodity because there was no greenbelt, more of those people might be inclined to do so, and we might have seen more development on the yellow belt.

[Drybrain]

Originally Posted by hipster duck

Besides, even if more people were willing to part with their homes, bargaining with individual homeowners and assembling lots one at a time is a long, arduous process. Wouldn't you just want to buy 100 acres of farmland in one shot?

Not if you had to assemble lots one at a time, because the farmland was protected. Honestly, I don't think it would be all that hard to start intensifying SFH areas pretty quickly. I can imagine loads of seniors who are downsizing or moving into homes (or their families, disposing of their estates) would be happy to sell a little bungalow to a small-scale developer who plans to build an eight-unit building on the site.

In any case, I'm not a housing economist or land-use planner, but surely our only options aren't endless outward SFH expansion or nothing.

[thewave46]

Originally Posted by Drybrain

Okay, but most of the GTA looks like this, meaning there is heaps of underused land in our cities.

Slamming down more SFH sprawl is going to worsen congestion and quality of life, exacerbate pollution and energy use, and needlessly eradicate natural ecosystems, in addition to farmland.

If Doug wants to do something truly radical, he'd upzone the whole GTHA, not nibble away at the greenbelt, which at best is only going to kick the housing-crisis can down the road a few years anyway.

Right. That 'underused' land isn't a parking lot or an abandoned industrial zone, though. It's used, albeit inefficiently, and the current owners don't want to stop using it in its current form.

So, we come down to the crux of 2022 Canada.

We want high population growth to keep growing the labour supply. This is so we can have 'cheap calories'-style economic growth. That 'cheap calories' growth helps keep taxes low and prevents labour shortages/wage inflation.

We also want cheap housing and people have a strong preference to a certain style of housing in this country.

We have organized opposition to that housing and thus little of it is built where it is most desired. Prices shoot up to the point that it is more acceptable to have uptown Waterloo-style towers next to single-family homes. We somehow find a way to complain about that too.

For awhile one could make the contradiction work, especially starting out at the bottom floor in terms of home/land value and in a world of interest rates falling.

I don't know how the contradiction ends.

Possibilities:

1. We choose to limit the growth of population, given that high immigration is just a choice of government these days. We sacrifice cheap calories economic growth in such a scenario.
2. We undo the restrictions on development near our major cities and sprawl.
3. We re-zone large portions of cities and use force of government to evict low-density loving residents.
4. We keep with the status quo until some external force happens/people get angry enough. Who knows how that comes apart?

[niwell]

This area in Pickering is increasingly comprised of rental housing and many of these houses now have multiple units, legal or otherwise (something we discovered when selling my grandmothers place): https://goo.gl/maps/jXYEuVQkcV5aXxhA6

If you could easily subdivide these lots into small plexes I'm sure there'd be a demand for it. Certainly not many people seem to be buying them and building new SFHs. Probably other areas where this is the case, though I'm directly familiar with this one.

FWIW there's still over 10,000 ground related dwellings (SFHs, semis, rows) built in the GTA each year. Well below the peak of close to 30k, but still not nothing.

[mikevbar1]

Originally Posted by Drybrain

If Doug wants to do something truly radical, he'd upzone the whole GTHA, not nibble away at the greenbelt, which at best is only going to kick the housing-crisis can down the road a few years anyway.

I would argue he's doing a bit of both. He's taking the path(s) of least resistance, ironically, despite the intrusions into the greenbelt being egregious and inciting alot of outrage. The PCs did legalize garden/basement suites provincewide (3 units/lot effectively) and have made it easier to build in growth areas while giving the OLT more power. Frankly mass-upzoning the province is a herculean task; it's certainly in the cards, but it is far from the lowest-hanging fruit. I empathize with the mindset to pursue every possible easier alternative first, just so the PCs can say they are 'getting it done'. It is not implausible to suggest that a proper multiplex legalization plan will come about, perhaps in response to these policies.

It is also key to remember that the province overriding and expanding municipal boundaries was explicitly known. Hamilton and Halton's boundary freezes would never have lasted, as much as I would have liked them to. These overridden boundaries were stated to be for growth until 2051, but that is neither here nor there. Unfortunately, there is a reality that greenfield development is easier to do than building condo towers for many small-medium private sector builders. You need significantly more patience and deeper pockets for the latter, and since this is the way we are forced to build density, all you can really do is make it seem more lucrative for the big players.

There Isn't much excuse for the greenbelt intrusions, but the parcels chosen are already owned by developers. They are going to do everything in their power to capitalize on their investment, and when the areas are just arbitrary farmland (not a natural heritage feature) I can see why the PCs are willing to jump. Let's take a conservative, market-oriented perspective. Yes, sprawl is bad, but the Greenbelt is not well-designed to be anti-sprawl. Durham, Halton, and Peel region have a truly ridiculous amount of land set aside for expansion already, and most of these are further from the contiguous GTHA than the new lands added. IMO, These additions ('swaps') don't undermine the greenbelt so much as the existence of the white belt does; the sprawl is coming either way. By allowing greenfields in some places and not in others, we are dictating who the winners and losers are in the market. I figure if we are playing with sprawl, where it goes is somewhat arbitrary. We can either coordinate with the builders in good faith or not. The only real way to offset sprawl is to make densification a viable alternative, and the PCs are ironical the only entity making that possible, too.

[ScreamingViking]

I read an article that said much of the land Ford aims to add to the Greenbelt, to balance what is removed, is already protected from development for various environmental or policy reasons. Not sure how true that is, but I wouldn't put it past the PCs to be disingenuous about it, even if it's just some of the additional space.

The debate about expanding urban areas vs. protecting farms and land is one thing.

But another aspect is that expanding urban areas means more infrastructure to build and maintain, and more services to provide over a wider area. This eventually hits residential taxpayers in the teeth, especially when something expensive needs to be replaced or rebuilt in a couple of decades. Balanced growth in the tax base can obviously help, but as Ontario's economy has restructured over the past 40 years I think in many cities the residential portion has gone up relative to the commercial/industrial. That's certainly been the case in Hamilton, which lost so much manufacturing.

But I assume the Ford government has a plan for this.

[goodgrowth]

It needs to be an "all of the above" when it comes to housing. Both "sprawl" and upzoning need to be allowed. The later(if actually done seriously) will limit the former organically anyway. But right now we sort of have neither. It's just overregulation and central planning on steroids.

When it comes to "sprawl" new greenfield developments are not and do not have to be what they were in the 70's and 80's in terms of density and use. It's also preferable to absorb demand around the edges of major urban areas than have it leapfrogging to commuter towns.

Some of the older generation in this country just need to come to grips with the fact that population growth requires development. And municipalities probably need to have their housing need projections audited or something.