Canada's 'housing bubble' deemed close to bursting

[hipster duck]

Originally Posted by mikevbar1

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.

Good post.

I don't want to seem like a Doug Ford partisan, but on the joint housing-transportation file he's doing better than pretty much every previous provincial government, even if it's far from perfect.

Back to blaming greenbelt encroachment on the Trudeau government's plan to up immigration to 500k/year: I think this is good realpolitik.

Most governments in the West more or less sing from the same hymnbook, but occasionally the government in power in one country or another suggests a large-scale social engineering project on their country that is truly audacious. Liz Truss' 44-day experiment with borrowing money for tax cuts for the rich in an inflationary, high interest environment is one example. Angela Merkel's acceptance of 1 million Syrian refugees was another. And Trudeau's plan to jack up immigration to unprecedented levels is Canada's.

This wasn't "we're going to increase immigration by 100k a year, and here's billions of Federal dollars to provincial and municipal governments to pay for the increased costs of dealing with this influx". It was "we're going to increase immigration by 100k a year. Deal with it." Ford knows that a disproportionate share of that immigration will be dropped right on a burgeoning GTA, he also knows that Liberal supporters tend to not like natural landscapes being gobbled up by sprawl, and that the reason the Trudeau liberals are in power is because of GTA voters. So Ford has a bit of leverage in this situation, and he might be able to extract concessions from the Feds.

[mikevbar1]

Originally Posted by 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.

Well, yes, all the issues you mention with sprawl still apply. And no doubt the government has been acting rashly with some of these actions. My argument is that we are already planning for sprawl, so it's neither here nor there where it goes. For Hamilton, most of our new sprawl is for the AEGD and will all be employment land; this covers a bunch of different bases you mentioned. One, it helps cover the cost of infra expansion as commercial/industrial pays more in taxes. Secondly, this sprawl will balance out the resi-industrial balance in Hamilton. Third, the land added in Ancaster is apparently going to be employment land as well because most of it lies within the Airport noise shed. I had a discussion about this on UT, I can link some maps if your interested. Anywho, this Isn't a net taxpayer loss like the sprawl towards east Stoney Creek mountain might be...

[ScreamingViking]

Originally Posted by mikevbar1

For Hamilton, most of our new sprawl is for the AEGD and will all be employment land; this covers a bunch of different bases you mentioned.

That has been the plan. I expect there will be a number of developers who will argue it's better to build homes on their land parcels instead of commercial-industrial buildings, despite the airport.

Playing with development charges (also part of Ford's changes) won't help cities pay for the infrastructure that's needed either.

[swimmer_spe]

One of the big problems that we really are facing is that the focus is on the GTA. What if instead of adding more subdivisions, we only allowed infill construction in the GTA for 10 years. Then, we focus on cities that are not within the GTA that has land to build on. Focusing on the GTA has been done at a disservice to the rest of Canada.

[mikevbar1]

Originally Posted by hipster duck

Good post.

I don't want to seem like a Doug Ford partisan, but on the joint housing-transportation file he's doing better than pretty much every previous provincial government, even if it's far from perfect.

Back to blaming greenbelt encroachment on the Trudeau government's plan to up immigration to 500k/year: I think this is good realpolitik.

Most governments in the West more or less sing from the same hymnbook, but occasionally the government in power in one country or another suggests a large-scale social engineering project on their country that is truly audacious. Liz Truss' 44-day experiment with borrowing money for tax cuts for the rich in an inflationary, high interest environment is one example. Angela Merkel's acceptance of 1 million Syrian refugees was another. And Trudeau's plan to jack up immigration to unprecedented levels is Canada's.

This wasn't "we're going to increase immigration by 100k a year, and here's billions of Federal dollars to provincial and municipal governments to pay for the increased costs of dealing with this influx". It was "we're going to increase immigration by 100k a year. Deal with it." Ford knows that a disproportionate share of that immigration will be dropped right on a burgeoning GTA, he also knows that Liberal supporters tend to not like natural landscapes being gobbled up by sprawl, and that the reason the Trudeau liberals are in power is because of GTA voters. So Ford has a bit of leverage in this situation, and he might be able to extract concessions from the Feds.

Agreed, the realities of immigration are that we need to seriously move on accommodating the growth we are going to see. The way I see it, if we cant implement the sweeping policies needed (upzoning, dramatic transit investment) then we need to do whatever we can. It is also worth noting that the density of new subdivisions is very high, so calling it sprawl in the conventional sense is probably a misnomer. What does need to be done is to realize that density as something not car-dependent.

On the note of the feds, I was astounded when I went to BC by the degree of which their logo is on infrastructure. I got the impression that outside of Ontario, federal investment is quite high. Don't get me wrong, transit investment in Ontario is at an all-time high; but the backlog of projects is astounding, and we are not on good footing. The projects being completed are overdue and more or less exist for the region in its current state. The feds need to get a bit heavy-handed with their involvement, I think, particularly if municipalities are gonna continue to be diminished.

This aggressive approach is certainly appropriate for the level of growth we are seeing, even if it is manifesting in some poor ways. I would like to see quicker uptake and involvement to help the region, and it can't be done by the province alone. Maybe you are right that the feds will realize "—... we helped cause this" and pitch in.

[ssiguy]

For me it's not green zones but rather greenbelts which seem to have little to do with future growth needs but look pretty on a map.

All future growth should be centred along current highways and areas around transit stations. This would result in adding people and new commercial/industrial lands but not having to add endless amounts of new infrastructure. There should be no green zones, unless the particular area is ecologically sensitive, with a km of either a freeway or GO station. This way you wouldn't have endless and disjointed mansions all over the damn place, farms along trucking routes, and empty GO stations like Bloomington.

We also must acknowledge that Ford is simply having to do this because of our city councils who talk endlessly about densification but then don't allow it to take place or send it to committee which is another way of just expanding the deadline for years on end so politicians can completely avoid the issue and instead say "were looking into it". This is why Ford brought in the very progressive new up-zoning regulations and ways for cities expediate the application process. This is something he should NOT have had to do IF the cities were doing their jobs............local politicians and bureaucratic inertia has forced his hand.

[whatnext]

I thought it was interesting in the face of interest rate discussion to look back in time to what a normally functioning housing market looked like, one not goosed by the sugar rush of ultra-low interest rates or offshore money. This place largely kept a constant price, likely for the first 10 years of its life.

Nice unit near Stanley Park:
1402-1888 Alberni Street
Vancouver, BC
Listed $2,150,00 (!)

$1,725,000 +283%
Sold 2021-11-15

$450,000 +0%
Sold 2000-08-31

$450,000 +12%
Sold 1995-02-01

$401,990
Sold 1992-12-30

https://www.rew.ca/properties/4712890/1402-1888-alberni-street-vancouver-bc?property_click=map

[mikevbar1]

Originally Posted by ssiguy

For me it's not green zones but rather greenbelts which seem to have little to do with future growth needs but look pretty on a map.

All future growth should be centred along current highways and areas around transit stations. This would result in adding people and new commercial/industrial lands but not having to add endless amounts of new infrastructure. There should be no green zones, unless the particular area is ecologically sensitive, with a km of either a freeway or GO station. This way you wouldn't have endless and disjointed mansions all over the damn place, farms along trucking routes, and empty GO stations like Bloomington.

We also must acknowledge that Ford is simply having to do this because of our city councils who talk endlessly about densification but then don't allow it to take place or send it to committee which is another way of just expanding the deadline for years on end so politicians can completely avoid the issue and instead say "were looking into it". This is why Ford brought in the very progressive new up-zoning regulations and ways for cities expediate the application process. This is something he should NOT have had to do IF the cities were doing their jobs............local politicians and bureaucratic inertia has forced his hand.

I don't think the existence of the greenbelt is bad. But acknowledging that large swathes of it can be rearranged should be essential; there is no difference between parcels being unlocked by Ford and those in the white belt. My only criticism is that these supposed "swaps" should occur inside the greenbelt, not outside- it's fairly pointless if you're just cutting away at it. It is more of a sprawl management system; as long as the amount of white belt land does not see a net increase, I don't really care how it is rearranged (forgetting environmentally sensitive areas of course).

I agree to a point that Ford is doing this purely because of resistance from municipalities to not densify. He is forcing their hand in that regard already. I do think there's an element of coercion from developers, wherein they are voicing their concerns and needs, and that they could begin construction today if they were allowed. Stifling this easy growth is not in the province's interest, and they will do what they can to accommodate. It's a bad look, and perhaps even morally wrong, but municipalities continue to do very little by comparison. If they don't like it that much, then they should do something about it.

[swimmer_spe]

Originally Posted by ssiguy

For me it's not green zones but rather greenbelts which seem to have little to do with future growth needs but look pretty on a map.

All future growth should be centred along current highways and areas around transit stations. This would result in adding people and new commercial/industrial lands but not having to add endless amounts of new infrastructure. There should be no green zones, unless the particular area is ecologically sensitive, with a km of either a freeway or GO station. This way you wouldn't have endless and disjointed mansions all over the damn place, farms along trucking routes, and empty GO stations like Bloomington.

We also must acknowledge that Ford is simply having to do this because of our city councils who talk endlessly about densification but then don't allow it to take place or send it to committee which is another way of just expanding the deadline for years on end so politicians can completely avoid the issue and instead say "were looking into it". This is why Ford brought in the very progressive new up-zoning regulations and ways for cities expediate the application process. This is something he should NOT have had to do IF the cities were doing their jobs............local politicians and bureaucratic inertia has forced his hand.

Ford could save face better if he did away with zoning bylaws that do not promote density. Although that may look bad, it looks better than destroying the pseudo greenbelt that saw lots of development.

The idea of green zones is not a bad idea, however, we cannot eat concrete. To me the bigger plan of the greenbelt seemed to be keeping farmland as farmland.

[Drybrain]

I think one critical thing we forget about here is that greenbelting is not only a measure intended to protect farmland or reduce sprawl (both commendable goals, though). It's also to preserve natural areas for their own sake, ensure ecosystems remain intact, and perform important "ecosystem services"--high among those would be wetlands and natural areas filtering water, which makes for much cleaner streams, lakes and rivers, which improves drinking water supplies, reduces flooding, mitigates toxic blue-green algae blooms (worsening with climate change and longer warm seasons), etc.

Too often this decision sounds like it's farms vs. homes, but it's far more than that.

[MonctonRad]

Good points!

[Innsertnamehere]

Originally Posted by Drybrain

I think one critical thing we forget about here is that greenbelting is not only a measure intended to protect farmland or reduce sprawl (both commendable goals, though). It's also to preserve natural areas for their own sake, ensure ecosystems remain intact, and perform important "ecosystem services"--high among those would be wetlands and natural areas filtering water, which makes for much cleaner streams, lakes and rivers, which improves drinking water supplies, reduces flooding, mitigates toxic blue-green algae blooms (worsening with climate change and longer warm seasons), etc.

Too often this decision sounds like it's farms vs. homes, but it's far more than that.

There are other mechanisms that protect those things though. The Toronto greenbelt of course includes a lot of sensitive natural features, but the lands being contemplated for removal are all relatively unsensitive table lands (i.e. farmers fields).

Ontario has ridiculously strict flood regulations for new development as well, probably the strictest on the continent. Flood risk in Ontario is generally exceedingly low as all development has to be designed to be able to handle a 100-year storm at a minimum. There is a reason you see stormwater management ponds everywhere in southern Ontario but not in other jurisdictions.

The reality is the lands proposed to be removed could just as arbitrarily be located in the whitebelt and would be developed with no hullabaloo. Ultimately where the "greenbelt" is located is rather arbitrary, and I agree that it makes sense to think about where development really should be going in the GTA, not staying fast on some arbitrary greenbelt and letting that growth jump it to go out to Simcoe County or something.

It's a similar opinion I hold on Ottawa's Greenbelt. That greenbelt has done nothing but cost Ottawa billions in additional infrastructure costs and made the city even more car dependent.

[ScreamingViking]

Originally Posted by swimmer_spe

One of the big problems that we really are facing is that the focus is on the GTA. What if instead of adding more subdivisions, we only allowed infill construction in the GTA for 10 years. Then, we focus on cities that are not within the GTA that has land to build on. Focusing on the GTA has been done at a disservice to the rest of Canada.

It's hard to dictate the market though. If people want to live there, the market aims to make that happen. Policy can only go so far.

I don't know how a government would change "focus." Subsidize home purchases in places outside of the GTA or Greater Golden Horseshoe? Pay developers to build more elsewhere? (and will they incorporate that into their pricing? doubtful) How would either of those things be fair?

It's a complicated issue.

[thewave46]

Originally Posted by ScreamingViking

It's hard to dictate the market though. If people want to live there, the market aims to make that happen. Policy can only go so far.

I don't know how a government would change "focus." Subsidize home purchases in places outside of the GTA or Greater Golden Horseshoe? Pay developers to build more elsewhere? (and will they incorporate that into their pricing? doubtful) How would either of those things be fair?

It's a complicated issue.

In theory, government could provide expedited citizenship or some benefit for living/working in a rural place. Oh, it’ll turn into a scam, because that’s what these things do and as soon as one gets the benefit, they tend to high-tail it out of there. Who wants to live in places like Thompson, MB permanently? (Answer for last several decades: fewer than live there now)

I might argue that the type of immigrant that would most benefit rural Canada is one we don’t really pursue anymore, or just can’t find. One thinks of the blue-collar Poles, Ukrainians, and Eastern Europeans who built much of the country.

At least we’ll have Tim’s clerks and hotel staff I suppose.

[ScreamingViking]

Originally Posted by thewave46

I might argue that the type of immigrant that would most benefit rural Canada is one we don’t really pursue anymore, or just can’t find. One thinks of the blue-collar Poles, Ukrainians, and Eastern Europeans who built much of the country.

At least we’ll have Tim’s clerks and hotel staff I suppose.

Yep. It's a different world. Can't easily offer land they can clear and farm these days either. Edit... maybe we will be able to in future, once climate change alters the environs of our north and its permafrost.

[yaletown_fella]

The reality is many families want new SFH in the 905. Artificially restricting the free market for new build SFH to 10% of what it would otherwise be is not a wise move. It is only going to mean these yuppies will instead be compromising and bidding for city properties and rentals and driving up demand and prices for housing and rentals in the 416.

The key is to cut development charges to incentivize stacked townhomes and infill/ secondary units as a viable cost efficient alternative to a SFH.

The issue with housing in the GTA and much of Canada an issue of artificial scarcity of supply and negative real interest rates. If you take out a loan , the value of your debt will decrease overtime due to inflation whereas savers are still being punished by inflation.

Many of these yuppies who are driving up prices also work for zombie e-commerce and tech companies which are only feasible due to artificially cheap credit. Most of these companies should have gone under long ago.

[thewave46]

Originally Posted by ScreamingViking

Yep. It's a different world.

More thinking on this point:

Having compared towns/places that have been more successful versus less successful at attracting newcomers, I suspect the key aspect is the presence of a large number of unskilled to semi-skilled, but decently paying jobs available.

The presence of a large number of these types of jobs either requires a larger centre (just sheer odds) or a high concentration of semi-skilled, but less desirable jobs available in a smaller place. Brandon, MB has a Maple Leaf Foods facility right smack there. It's not glorious work, but coming from elsewhere, it's probably not that bad work either.

By providing a large number of those types of jobs, one can attract a large community rapidly that provides a sense of home quickly. Brandon might have been initially unfriendly to newcomers, but when you've a whole community of the like, one can more effectively build a home that is one's own.

Why do mining towns do worse on this metric today? Because mining is no longer a unskilled/semi-skilled profession. It's a high-skill one, which is why miners make pretty decent money, often into the six-figures. Mining evolved from the concept of throwing bodies at it to actually needing a fair bit of skill. Productivity went way up, but required knowledge. Mining companies don't hire just anyone, because the consequences of idiocy are much higher. So, these communities now require a certain type of labour that's much higher in demand (high-skill blue collar) and not easily importable.

[SFUVancouver]

Originally Posted by thewave46

More thinking on this point:

Having compared towns/places that have been more successful versus less successful at attracting newcomers, I suspect the key aspect is the presence of a large number of unskilled to semi-skilled, but decently paying jobs available.

The presence of a large number of these types of jobs either requires a larger centre (just sheer odds) or a high concentration of semi-skilled, but less desirable jobs available in a smaller place. Brandon, MB has a Maple Leaf Foods facility right smack there. It's not glorious work, but coming from elsewhere, it's probably not that bad work either.

By providing a large number of those types of jobs, one can attract a large community rapidly that provides a sense of home quickly. Brandon might have been initially unfriendly to newcomers, but when you've a whole community of the like, one can more effectively build a home that is one's own.

Why do mining towns do worse on this metric today? Because mining is no longer a unskilled/semi-skilled profession. It's a high-skill one, which is why miners make pretty decent money, often into the six-figures. Mining evolved from the concept of throwing bodies at it to actually needing a fair bit of skill. Productivity went way up, but required knowledge. Mining companies don't hire just anyone, because the consequences of idiocy are much higher. So, these communities now require a certain type of labour that's much higher in demand (high-skill blue collar) and not easily importable.

With mining, I'll add the the remoteness of various high-yield mines necessitates a fly-in/fly-out workforce and provision of full-service camp. This is extraordinarily capital intensive, but it also enables the mine to pick and choose its workforce from practically the whole country. At a certain point it's a rounding error to a mine's capex if they're flying someone in from the nearest large city or one across the country. If you're paying to put staff on a plane, get the best staff you can and let them live wherever and put in their time in camp and then GTFO for their rest cycle at home.

[swimmer_spe]

Originally Posted by ScreamingViking

It's hard to dictate the market though. If people want to live there, the market aims to make that happen. Policy can only go so far.

I don't know how a government would change "focus." Subsidize home purchases in places outside of the GTA or Greater Golden Horseshoe? Pay developers to build more elsewhere? (and will they incorporate that into their pricing? doubtful) How would either of those things be fair?

It's a complicated issue.

Imagine that for the next decade the federal an provincial governments refused to help any business with grants or other things for opening or expanding within the GTA. That is what the governments can do to dictate the market.

[whatnext]

New study out today. How strange, are they all just seniors scraping by on CPP cheques?

Ultra-luxurious home owners in Vancouver pay peanuts in income tax: UBC study
Sarah Anderson
Nov 10 2022

The owners of the top 5% of Greater Vancouver’s most expensive and luxurious homes pay relatively little in income tax, according to a recent study.

In a study called “The Prevalence of Low-Income Tax Payments Among Owners of Expensive Homes in Vancouver and Toronto,” authors Thomas Davidoff, Paul Boniface Akaabre, and Craig Jones report that “most luxury homes in Greater Vancouver appear to be purchased with wealth derived from sources other than earnings taxed in Canada.”...

https://dailyhive.com/vancouver/luxury-home-owners-income-tax