Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by Truenorth00

This is a lot of excuses for very poor policy.

Are you suggesting we should not have social or co-op housing and depend on the free market to cover everyone.

I don't think there is a policy the government can introduce that "fixes" manipulates the free market to fix the problem.

[swimmer_spe]

Originally Posted by casper

Are you suggesting we should not have social or co-op housing and depend on the free market to cover everyone.

I don't think there is a policy the government can introduce that "fixes" manipulates the free market to fix the problem.

You mean the government could not require certain number of spaces be priced for low income? That is just the first thing my brain thought of..... I could probably list 10 if I really thought about it.

[casper]

Originally Posted by swimmer_spe

You mean the government could not require certain number of spaces be priced for low income? That is just the first thing my brain thought of..... I could probably list 10 if I really thought about it.

That is based on the assumption the private market wants to build rentals. Until very recently there were not a lot of rentals being built.

They do things like that.

[Truenorth00]

Originally Posted by casper

Are you suggesting we should not have social or co-op housing and depend on the free market to cover everyone.

I don't think there is a policy the government can introduce that "fixes" manipulates the free market to fix the problem.

I am suggesting that praising a system that doesn't actually accomplish the goal is a bit over the top.

[lio45]

From the "Ponzi-Trudeau Scheme" discussion thread from another forum section:

Originally Posted by nito

Just the other week in East London there was the horrific case of a fire at a two-bedroom flat that left one dead. Nothing necessarily out of the ordinary until it was discovered that 18 people were residing at the address, and there was space for four more people. The landlord was collecting USD 10,000 each month in rent on a residence that was massively dilapidated. It is hard to pinpoint exactly why people willingly would choose to live in such conditions, perhaps it is for remittances back home, perhaps it is the hope that whilst circumstances are tough, they will get better because there are opportunities, particularly in the English speaking world.

A two-bedroom flat (!!!) that brings $10,000 USD per month in rent (!!!!!), because you have 18 South Asians like sardines in there? Landlord's dream...

[GenWhy?]

Originally Posted by swimmer_spe

Prior to the Pandemic, I would have just meant SFH. Now, I am not understanding how any family can survive there.

I don't think we need to be hyperbolic.

[niwell]

Originally Posted by lio45

A two-bedroom flat (!!!) that brings $10,000 USD per month in rent (!!!!!), because you have 18 South Asians like sardines in there? Landlord's dream...

Maybe not quite that many people or quite that small but lots of these in the inner-suburbs of Toronto. Very much illegal. And I'm not even talking about the ads for "students" to share bedrooms in houses.

It's been a thing for a long time too - I knew someone who was writing an article about it well over a decade ago but decided not to publish as the chance for repercussion on the people living in these places was deemed too high.

[Truenorth00]

https://twitter.com/charliebilello/status/1641544638484959233?t=PDYajBJgJ3E2IoLdrjiGsg&s=19

It always amazing to me that so many Canadians think it's perfectly normal, for housing prices to go up 300% in two decades, when inflation is up 49%. Like the proverbial frog in the pot of water. Foreigners can see our bubble for what it is.

[thewave46]

Originally Posted by Truenorth00

https://twitter.com/charliebilello/status/1641544638484959233?t=PDYajBJgJ3E2IoLdrjiGsg&s=19

It always amazing to me that so many Canadians think it's perfectly normal, for housing prices to go up 300% in two decades, when inflation is up 49%. Like the proverbial frog in the pot of water. Foreigners can see our bubble for what it is.

Canadians who think it is normal = people who own/paying off their homes, would like the free money gravy train to keep on choo-chooing. Plus the new arrivals who aren't wise to the scam yet.

Canadians who think it is bad = everybody else, plus a lone few who actually kind of care about the long-term health of the Canadian economy.

As long as the latter group is smaller than, votes less, and has less money than the former, nothing changes.

We get what we deserve.

[1overcosc]

Originally Posted by thewave46

Canadians who think it is normal = people who own/paying off their homes, would like the free money gravy train to keep on choo-chooing. Plus the new arrivals who aren't wise to the scam yet.

Canadians who think it is bad = everybody else, plus a lone few who actually kind of care about the long-term health of the Canadian economy.

As long as the latter group is smaller than, votes less, and has less money than the former, nothing changes.

We get what we deserve.

I mean.. I'm a millennial homeowner who bought my house in 2015 and so I've gained a huge amount of wealth on paper these last 8 years, and I'd gladly support a policy suite designed to slash prices in half. Heck, I think it's of utmost importance to do so.

[swimmer_spe]

Originally Posted by casper

That is based on the assumption the private market wants to build rentals. Until very recently there were not a lot of rentals being built.

They do things like that.

A government can place a regulation and the private market either complies or gets shut down. That is how regulation of something works.

Originally Posted by GenWhy?

I don't think we need to be hyperbolic.

What do you mean?

[casper]

Originally Posted by swimmer_spe

A government can place a regulation and the private market either complies or gets shut down. That is how regulation of something works.



What do you mean?

The fact is we have a shortage of rentals in BC. Very low vacancy rate and the private sector has had every opportunity to build more affordable rentals. They have in some limited areas, but overall decided they get better ROI doing condos or every high end rentals.

I don't think removing "gatekeepers" is magically going to change any of that.

If we want to increase housing for low income workers, students or seniors in metro Vancouver the solution is going to be social housing of one form or another.

[casper]

Originally Posted by Truenorth00

https://twitter.com/charliebilello/status/1641544638484959233?t=PDYajBJgJ3E2IoLdrjiGsg&s=19

It always amazing to me that so many Canadians think it's perfectly normal, for housing prices to go up 300% in two decades, when inflation is up 49%. Like the proverbial frog in the pot of water. Foreigners can see our bubble for what it is.

So if your a developer building a new home you have a choice you can build an affordable home or you can make more margin building a more expensive home.

[GenWhy?]

Originally Posted by casper

The fact is we have a shortage of rentals in BC. Very low vacancy rate and the private sector has had every opportunity to build more affordable rentals. They have in some limited areas, but overall decided they get better ROI doing condos or every high end rentals.

I don't think removing "gatekeepers" is magically going to change any of that.

If we want to increase housing for low income workers, students or seniors in metro Vancouver the solution is going to be social housing of one form or another.

The gatekeeping is crazy restrictive in the Metro area, and I agree the private market, folks like me, won't build affordable rental because we:
1) can't build tall enough to offset the costs
2) would rather rent at market rates to pay back the construction loan and get financing
3) this isn't a charity

Although I'd like if we could build rentals in more exclusive areas (SF home areas of Vancouver) they would be the luxury while the busy arterial roads would rent at a lower market rate. Maybe not "affordable: for all but lower than what they are going for now.

[WarrenC12]

Originally Posted by casper

The fact is we have a shortage of rentals in BC. Very low vacancy rate and the private sector has had every opportunity to build more affordable rentals. They have in some limited areas, but overall decided they get better ROI doing condos or every high end rentals.

I don't think removing "gatekeepers" is magically going to change any of that.

If we want to increase housing for low income workers, students or seniors in metro Vancouver the solution is going to be social housing of one form or another.

Rent is set by the market, which is supply and demand. Developers don't build "affordable rentals" in a free market. They build homes that enter the overall supply.

All else equal, more homes will drive the lowest cost rental homes even lower.

[casper]

Originally Posted by GenWhy?

The gatekeeping is crazy restrictive in the Metro area, and I agree the private market, folks like me, won't build affordable rental because we:
1) can't build tall enough to offset the costs
2) would rather rent at market rates to pay back the construction loan and get financing
3) this isn't a charity

Although I'd like if we could build rentals in more exclusive areas (SF home areas of Vancouver) they would be the luxury while the busy arterial roads would rent at a lower market rate. Maybe not "affordable: for all but lower than what they are going for now.

There is good reason to review have restrictive the gatekeepers are. Even after that is done its not going to change the fact private developers want to maximize ROI. That is likely going to building to rent at a price point that is not target at low income.

Not saying we should not do that and it will likely benefit some.

What I am saying is that is not going to solve the problem at the lower end of the market.

[GenWhy?]

Originally Posted by casper

There is good reason to review have restrictive the gatekeepers are. Even after that is done its not going to change the fact private developers want to maximize ROI. That is likely going to building to rent at a price point that is not target at low income.

Not saying we should not do that and it will likely benefit some.

What I am saying is that is not going to solve the problem at the lower end of the market.

Correct there is no one shoe fits all, but in conjunction all the levers pulled with relieve an astronomical amount of pressure. If I could build where SF homes are I'd be less inclined to bulldoze a rent-generating apartment building, for example. All these situations compound on one another.

[lio45]

Originally Posted by thewave46

Canadians who think it is normal = people who own/paying off their homes, would like the free money gravy train to keep on choo-chooing. Plus the new arrivals who aren't wise to the scam yet.

Canadians who think it is bad = everybody else, plus a lone few who actually kind of care about the long-term health of the Canadian economy.

As long as the latter group is smaller than, votes less, and has less money than the former, nothing changes.

We get what we deserve.

Exactly.

BTW, your second group, "I know it's bad", doesn't automatically mean "I wish we'd stop the Ponzi-Trudeau Scheme". I'm 100% the former, while I'm on the fence on the latter (I'm not THAT selfless, and I also kinda like the fact that it's not my fault).

So, I'm in a third way / middle / hybrid category: I'm aware it's awful for the long-term health of the economy, and I'm definitely not in the "this is perfectly normal" category, but I'm also not in the same "I know for sure I'd stop this if I could" category that nearly all Canadian renters are.

[lio45]

BTW, the media here recently outed the fact that "affordable" housing is totally not affordable. IIRC, a standard 2br qualifies as "affordable" if it's like $1,300 a month or less, which is frankly completely nuts.

At first sight, I could actually receive a shitload of free government money in exchange for building dedicated "affordable" rental buildings in which I commit to renting the units for "only" $1,300 a month.

This is honestly pretty scam-like to me: the government can brag that they're funding "affordable housing", while in reality they're giving away the taxpayers' money to their buddies who are in the business and who build "new affordable housing to help solve the crisis" which they can then rent at really high prices that somehow are still within what the government has decided to officially deem "affordable".

[swimmer_spe]

Originally Posted by casper

The fact is we have a shortage of rentals in BC. Very low vacancy rate and the private sector has had every opportunity to build more affordable rentals. They have in some limited areas, but overall decided they get better ROI doing condos or every high end rentals.

I don't think removing "gatekeepers" is magically going to change any of that.

If we want to increase housing for low income workers, students or seniors in metro Vancouver the solution is going to be social housing of one form or another.

What he said \/

Originally Posted by GenWhy?

The gatekeeping is crazy restrictive in the Metro area, and I agree the private market, folks like me, won't build affordable rental because we:
1) can't build tall enough to offset the costs
2) would rather rent at market rates to pay back the construction loan and get financing
3) this isn't a charity

Although I'd like if we could build rentals in more exclusive areas (SF home areas of Vancouver) they would be the luxury while the busy arterial roads would rent at a lower market rate. Maybe not "affordable: for all but lower than what they are going for now.

Thank you for being honest. What would happen if you were forced to have, say 10% of your units "affordable"?

Originally Posted by casper

There is good reason to review have restrictive the gatekeepers are. Even after that is done its not going to change the fact private developers want to maximize ROI. That is likely going to building to rent at a price point that is not target at low income.

Not saying we should not do that and it will likely benefit some.

What I am saying is that is not going to solve the problem at the lower end of the market.

What would happen if all new development had to have at least 10% of the units be considered affordable? Would that not start to put a dent in the problem?

Originally Posted by lio45

BTW, the media here recently outed the fact that "affordable" housing is totally not affordable. IIRC, a standard 2br qualifies as "affordable" if it's like $1,300 a month or less, which is frankly completely nuts.

At first sight, I could actually receive a shitload of free government money in exchange for building dedicated "affordable" rental buildings in which I commit to renting the units for "only" $1,300 a month.

This is honestly pretty scam-like to me: the government can brag that they're funding "affordable housing", while in reality they're giving away the taxpayers' money to their buddies who are in the business and who build "new affordable housing to help solve the crisis" which they can then rent at really high prices that somehow are still within what the government has decided to officially deem "affordable".

There is "affordable" and ""geared to income" housing. Affordable is something that an average citizen can afford. Geared to Income is priced to match the individual's income