Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by 1overcosc

Except the cost of providing rental housing increases beyond CPI in most years.

You can't artificially fix the cost of a service to below the cost of providing it and expect there to not be shortages.

Rent control in BC only applies to to existing tenants. When a tenant moves out your free to rent at market.

Some properties may have some limits of being below market rentals but that is OK, those are convinces on the property that were accepted by the owned in exchange for exemptions from zoning rules.

Cost of operating a rental property is not going up dramatically relative to CPI. Cost of buying property is. But that is ok, if your selling and buying the building you know if there are existing tenants and the conditions before you buy.

[GenWhy?]

Originally Posted by Wigs

Edmonton is growing by leaps and bounds yet somehow they have affordable housing prices and rentals.

Edmonton has a healthy rental vacancy rate, endless suburban sprawl, and not a lot of speculation. Helps greatly with home / rent price upfront affordability.

[swimmer_spe]

Originally Posted by chowhou

Here's a helpful link.

If you cannot explain what you mean, you do not know what you are talking about.
I am not wanting to know what someone else means. I want to know what YOU mean by the statement.

Originally Posted by 1overcosc

Except the cost of providing rental housing increases beyond CPI in most years.

You can't artificially fix the cost of a service to below the cost of providing it and expect there to not be shortages.

Did it magically double in the last 5 years?
I know my housing carrying costs did not double, so I am trying to understand the reasoning for the skyrocketing pricing.

[whatnext]

Originally Posted by Innsertnamehere

Definitely not back to all time high here. Prices are still down 15-20% from the February 2022 peak.

You can thank Justin Trudeau for that!

[swimmer_spe]

Originally Posted by whatnext

You can thank Justin Trudeau for that!

What did he do?

[chowhou]

Originally Posted by niwell

Virtually every aspect of our modern lives is subject to some form of price control.

Such as? Where are the price controls at the car dealership? The clothing boutique? The grocery store? The realtor's office? The gas station? The electronics retailer? The telecom company? I'm actually unable to come up with an example myself besides fully government ran utilities like electricity and water (which is a bit of a circular argument, the government is controlling the price the government sells at).

Originally Posted by swimmer_spe

If you cannot explain what you mean, you do not know what you are talking about.
I am not wanting to know what someone else means. I want to know what YOU mean by the statement.

I'm not going to endlessly support your JAQing off. Maybe you can tell me what you think I mean.

[someone123]

Originally Posted by 1overcosc

You can't artificially fix the cost of a service to below the cost of providing it and expect there to not be shortages.

On the other hand, there should be some tenant protections and if you have no price controls whatsoever then landlords can evict any tenant at any time for failure to pay a made up rent amount. And in practice a lot of people can't afford to purchase housing but need stability in where they live. If they're forced to constantly renegotiate their living arrangements as rents go up by 10% per year, or whatever, their quality of life will be very low.

[chowhou]

Originally Posted by someone123

On the other hand, there should be some tenant protections and if you have no price controls whatsoever then landlords can evict any tenant at any time for failure to pay a made up rent amount. And in practice a lot of people can't afford to purchase housing but need stability in where they live. If they're forced to constantly renegotiate their living arrangements as rents go up by 10% per year, or whatever, their quality of life will be very low.

IMO a perfect system would be to limit rent increases to the local market rate + some nominal amount, but calculating that amount is fairly dubious. I agree that no price controls is de facto at-will tenancy which seems probably deleterious to society.

I wonder if having a system like section 8 housing in the US is viable in Canada?

[goodgrowth]

The best "rent stabilization program" is not letting the vacancy rate drop below 4-5%. Especially not for an extended period.

[chowhou]

Originally Posted by goodgrowth

The best "rent stabilization program" is not letting the vacancy rate drop below 4-5%. Especially not for an extended period.

[WarrenC12]

Supply and demand strikes again!

[O-tacular]

Here's a solution to the housing crisis....

They thought they’d found an affordable place to live. They were never told about the radioactive mining waste

https://www.thestar.com/news/canada/2023...-about-the-radioactive-mining-waste.html

[swimmer_spe]

Originally Posted by chowhou

I'm not going to endlessly support your JAQing off. Maybe you can tell me what you think I mean.

Good to see you are among the ones who have nothing to bring to the discussion.

Originally Posted by goodgrowth

The best "rent stabilization program" is not letting the vacancy rate drop below 4-5%. Especially not for an extended period.

What caused it to be less than 4%?
How do we fix that?

[chowhou]

Originally Posted by swimmer_spe

Good to see you are among the ones who have nothing to bring to the discussion.

You pollute every conversation with this behaviour. Please reflect on yourself.

[whatnext]

Originally Posted by someone123

I was talking to an older person about housing and intergenerational issues a while ago. Her perspective was that young people are doing really well as long as they work hard; she judged that according to the kinds of degrees the younger people had and professions they were going into. She said that it was hard to save for a house back in the 1960's too, and one of the keys to success is to make sure you get a job with a good pension. She worries a lot about her wealth and equity; she is wealthy but is concerned that she will end up with some kind of profound medical issue late in life that will require expensive round-the-clock care and costs hundreds of thousands a year. In order to plan for this, in theory, you need millions of dollars even in your 80's. She also feels she is on a fixed income (she can't work anymore) and is losing buying power to inflation, and so is economically pressured.

This view makes sense given her experience but it's out of touch with the life for younger people. The degree doesn't really mean much and a lot of white collar jobs don't give you a salary that allows you to buy much of anything right now. Some jobs have pensions but the return is generally much lower than for those who were working in the 60's and 70's.

There is also the psychology of being older, not knowing how long you will live, and watching your wealth shrink rather than grow as you spend it.

It's interesting the difference in perspective. My brother was telling me his condo's contingency fund had to be topped up based on a depreciation report. The strata council reminded their meeting that there were some younger owners with mortgages being hit with interest rate increases but basically everyone over 50 (even the retirees) said "just tell me how much to write a cheque for". They didn't want the maintenance fees raised to cover it incrementally.

[niwell]

Originally Posted by chowhou

Such as? Where are the price controls at the car dealership? The clothing boutique? The grocery store? The realtor's office? The gas station? The electronics retailer? The telecom company? I'm actually unable to come up with an example myself besides fully government ran utilities like electricity and water (which is a bit of a circular argument, the government is controlling the price the government sells at).

If you can’t think of any throughout our supply chain dependent on global trade you’re a very stupid person I have zero time for.

I honestly can’t tell if you are trolling because literally all of those involve some form of price control at some point in the process, even if it’s not obvious at the retail end. Jesus - telecoms???

[lio45]

Originally Posted by goodgrowth

The best "rent stabilization program" is not letting the vacancy rate drop below 4-5%. Especially not for an extended period.

How do you propose we attain that? Mass MAID to the working classes, or we stop the immigrant pipeline?

[lio45]

Originally Posted by swimmer_spe

What caused it to be less than 4%?
How do we fix that?

Answer to your first question: "We currently run a Ponzi Scheme that involves importing over 1,000,000 fresh new suckers-who'll-all-want-a-roof-over-their-heads-in-Canada per year, and we can't possibly build anywhere near enough new housing (given that land is finite, materials are finite, tradesmen are finite) per year to house them. Side note, many Canadian voters find this Ponzi Scheme to be great, as it has turned them into multi-millionaires with zero effort."

Answer to your second question: "We decide to stop importing such large yearly amounts of fresh new suckers, at least until the (im)balance of supply and demand somewhat corrects itself. Side note: that's *if* we think many Canadian Boomers being multi-millionaires is a "problem" that needs "fixing"; they may disagree at the voting booth."

[swimmer_spe]

Originally Posted by lio45

How do you propose we attain that? Mass MAID to the working classes, or we stop the immigrant pipeline?

No, we do like were were taught the FN in the Arctic did - we do that to the elderly....

Seriously though,stupid arguments need stupid responses.

Originally Posted by lio45

Answer to your first question: "We currently run a Ponzi Scheme that involves importing over 1,000,000 fresh new suckers-who'll-all-want-a-roof-over-their-heads-in-Canada per year, and we can't possibly build anywhere near enough new housing (given that land is finite, materials are finite, tradesmen are finite) per year to house them. Side note, many Canadian voters find this Ponzi Scheme to be great, as it has turned them into multi-millionaires with zero effort."

Answer to your second question: "We decide to stop importing such large yearly amounts of fresh new suckers, at least until the (im)balance of supply and demand somewhat corrects itself. Side note: that's *if* we think many Canadian Boomers being multi-millionaires is a "problem" that needs "fixing"; they may disagree at the voting booth."

Great! History will repeat itself. We are almost in a World War. The Dirty 30swill come a little sooner. Maybe where you are there are no jobs, but around here, everyone is still hiring.

[MonkeyRonin]

Originally Posted by chowhou

Rent control is a short term relief with long term negative consequences.

Abolishing rent control is a short term harm with long term positive consequences.

Choose what you value.

It's neither of the above. People need to stop tying rent control/stabilization (the latter of which is technically what we have, though it's commonly just referred to as rent control anyway) to housing affordability, one way or another - that's not the purpose of it. I'll just requote myself from when it last came up a few weeks ago:

Originally Posted by MonkeyRonin

Rent control isn't an affordability measure, it's a stability tool. The purpose is not to achieve lower average rents (as it doesn't do that), but to protect tenants from unpredictable and unmanageable increases in the cost of their housing.

You're absolutely correct that rent control disincentivizes new rental construction and causes new tenants to subsidize existing ones. Where we disagree is on the value of this tradeoff. If our only goal was to get the cheapest housing possible then yeah, it'd be a policy failure; but I'd argue that ensuring that the millions of renter households be guaranteed a stable place to live makes it a worthwhile cost to bear. Many of our policies cost money or contribute to COL - but that in and of itself doesn't make them bad policy if they contribute to QOL in other ways.

The flipside of this is that the government should incentivize further rental construction through levers like tax breaks and density bonuses for rental developments. This is where all levels of government have failed over the past several decades - the last big rental boom we had was also as a result of these sorts of measures, and ended in the 80s. We're now dealing with the consequences of decades of underinvestment coupled with unprecedented growth.

I don't want to steer this back to the Greenbelt again, but it's the same sort of concept at play with things like that or heritage preservation by-laws - they certainly don't help in the creation of housing supply (though the degree to which they hinder it is certainly debatable), but are a worthy tradeoff in exchange for protecting ecologically, agriculturally, or historically important lands. In exchange though, in order to avoid the downstream effects of escalating housing costs, governments need to enact other policies to offset these like upzoning existing built-up areas; streamlining approvals processes & incentivizing construction; and not doing everything in their power to juice the housing market. This is, again, where we've failed horribly.

The positives/negatives (both short & long-term) of it are largely dependant on how it's implemented and what the specifics of the local market are like; and the "rent control bad" / "rent control now" type arguments like the one above are simplistic and guided more by ideological allegiance than proven best practices - which, like everything else in our economy require a mix of market solutions and government intervention.