Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[WarrenC12]

The BoC wants to send that message so people stop "holding out" and change their behavior.

They will absolutely cut rates if the economy goes downhill fast.

Remember when they said low rates were here to stay?

[whatnext]

Originally Posted by WarrenC12

The BoC wants to send that message so people stop "holding out" and change their behavior.

They will absolutely cut rates if the economy goes downhill fast.

Remember when they said low rates were here to stay?

And if they do while the USA doesn't, they will tank the loonie and add more fuel to the inflation fire. I've already got a long list of price increases come January 1 from suppliers, inflation isn't going away.

[WarrenC12]

Originally Posted by whatnext

And if they do while the USA doesn't, they will tank the loonie and add more fuel to the inflation fire. I've already got a long list of price increases come January 1 from suppliers, inflation isn't going away.

Ehhh, sort of. We've had decent economies when the C$ is in the 60s. Oil is priced in USD, we export a lot of things, and we become even cheaper skilled labour for tech, Film/TV, etc.

[Innsertnamehere]

A cheap dollar is a boon for Ontario specifically economically, typically.

It just makes cross-border travel suck, as does purchasing certain goods (i.e. cars)

The dollar as it stands now is already pretty low.

The BoCs messaging is clearly intended to direct the economy as much as their set rate is. If the BoC started signaling that they anticipated rate hikes soon, the markets would react and would negate the purpose of the high rates until then.

BoC wants to keep the pressure on the economy as long as possible. As soon as they start cutting rates the whole market will shift and they want to avoid the perception of a rate cut as long as possible right now.

Rate cuts will come - and I suspect sooner than many think - but until the day that the BoC announces it, they have to publicly keep a hawkish tone on rates or it defeats their entire purpose. Most of the industry is predicting cuts in Q2 2024 - but the BoC would never say that publicly. Right now they want people making financial decisions as if rates will be at 5% forever.

What I do think is true is we won't see a prime rate of 0.5% again any time soon. Starting in 2024 I suspect we'll see the BoC cut rates slowly over a few years to 2-3%. Anyone hoping for another sub-3% fixed rate mortgage is likely going to be waiting a longggg time.

[WarrenC12]

Originally Posted by Innsertnamehere

What I do think is true is we won't see a prime rate of 0.5% again any time soon. Starting in 2024 I suspect we'll see the BoC cut rates slowly over a few years to 2-3%. Anyone hoping for another sub-3% fixed rate mortgage is likely going to be waiting a longggg time.

I agree with your whole post but will nitpick that fixed rates are set by the bond market. Variable rates are directly linked to prime.

The Government of Canada is rolling debts over at over 5% now. Good times, PP will have a deficit mess to deal with.

[urbandreamer]

I think many people didn't live through the 1980s. High interest rates were good for savers like my parents. My father retired at 50 and lived off 18% savings bonds!

Interest rates may go up and down a few points, but the long term trend is up.

Low interest rates combined with mass immigration have wrecked Canada's economy. We need entrepreneurs, new Nortels, RIMs, a homegrown automotive industry, not service industry and big government along with crooks and house flippers propping up the economy.

[yaletown_fella]

Originally Posted by urbandreamer

I think many people didn't live through the 1980s. High interest rates were good for savers like my parents. My father retired at 50 and lived off 18% savings bonds!

Interest rates may go up and down a few points, but the long term trend is up.

Low interest rates combined with mass immigration have wrecked Canada's economy. We need entrepreneurs, new Nortels, RIMs, a homegrown automotive industry, not service industry and big government along with crooks and house flippers propping up the economy.

In the 80s the central bank was more independent and wasn't catering to a runaway government spending (and tax cuts) with cheap money.

This is why I don't believe them when they claim rates will stay the same or go up. I see them returning to their dirty tricks of 2008-covid financial bubble and then revising the inflation target to 4-5% per year.

[urbandreamer]

What Canadians fail to realize is interest rates aren't set here. London, New York, and the Fed control our economy. War and high interest rates will be the new economic model for the next 25 years.

[giallo]

RMTransit talks about the game-changing legislation happening in BC right now.

• Video Link

[someone123]

I was never all that excited by laneway houses or four plexes but I think 20 storeys is different. It is only a FAR of 5 though (it makes more sense to talk about FAR than floor count IMO when there are required setbacks). A good step but hopefully can be taken farther in the future.

I wonder what the impact on politics will be. There are already the Point Grey people who don't want the SkyTrain in their area and they really really won't want it if it comes with guaranteed upzoning rather than an upzoning battle. I would like it if the Point Grey people were ignored but I am not sure that is how BC politics will work.

Another aspect is that Canadian cities, if they want to do this kind of generic zoning, should put more effort into heritage/character preservation and public space in these areas. The Vancouver Specials can go but it would be too bad if the relatively few nice old prewar brick apartments all got replaced with towers because they happen to be near transit.

[casper]

Originally Posted by someone123

I was never all that excited by laneway houses or four plexes but I think 20 storeys is different. It is only a FAR of 5 though (it makes more sense to talk about FAR than floor count IMO when there are required setbacks). A good step but hopefully can be taken farther in the future.

I wonder what the impact on politics will be. There are already the Point Grey people who don't want the SkyTrain in their area and they really really won't want it if it comes with guaranteed upzoning rather than an upzoning battle.

Another aspect is that Canadian cities, if they want to do this kind of generic zoning, should put more effort into heritage/character preservation and public space in these areas.

I think this makes the Conservative housing platform moot with regard to BC. Does it not? To think it came from a "socialist" government. We just need Ontario to do the same thing and the Conservatives need to return to the drawing board.

Irrespective of which party proposes it I think it is a good idea. But it needs to be backed up with Phase II that involves the massive expansion of transit. Perhaps we can see acceleration of Skytrain to UBC, along Hastings and Arbutus LRT.

I think we should see it as a game changer in transit planning. When deciding the viability of a new transit route the calculation is not about current demand along a route but projected demand based on residential build out with zoning changes known a priori.

[Tvisforme]

I'm just thinking out loud, so please bear with me, but I am wondering if these sort of zoning changes have the potential to bridge the gap between the "haves" - those who bought decades ago when housing was "just" a large but not unmanageable portion of your income - and the "have-nots" who can't even imagine getting into today's market.

With respect to those who already own homes, I'm speaking only about the people who own a house where they actually live, not the investors with multiple properties. If you've bought a house with the primary goal of living there for decades, raising a family, and retiring in your community, I think it's fair that you might be concerned about a massive drop in house prices. For most people, their home is the most expensive thing they'll ever purchase and their financial lives do revolve around that purchase as a result. It's also not unreasonable, when downsizing, to want to stay in a comparably nice condo in the same community as where you're currently living. (In some cities under current market conditions, the pricing of homes versus condos is stupidly imbalanced.) On the other hand, of course, keeping prices high kills the dream of home ownership for a large part of the population and is not a viable option.

So, what I'm wondering is if mandatory rezoning can help bridge this seemingly impossible gap. Obviously, it will take a few years for markets to sort themselves out and adapt to a new reality. However, is it possible that the zoning can bring down average housing costs - smaller lots, more homes, lower prices, allowing more people in - while effectively keeping the price of legacy large SFH lots elevated since they're arguably now more valuable?

For argument's sake, let's say you have a SFH lot in Vancouver that's assessed at 2 million today (not unusual at all). If the number of homes can double or triple with zoning (4-6 homes per lot but nowhere near all will do that) then that should put downward pressure on average prices. Existing lots that have not yet been subdivided should however retain a higher price because they have a higher potential build value, similar to how we now see ranchers sell for insane prices because the lot can have a 5 000 sq foot monster built instead. The reason this could be a good thing is that the people who already have homes aren't looking at losing a significant part of their current value - while at the same time now having more options for downsizing. It makes downsizing more attractive, which makes more lots available to be bought and subdivided, increasing the housing supply and so on. I realize that it doesn't do anything about the financial imbalance caused by decades of skyrocketing valuations, but it may get higher buy-in from the older generations which makes it easier for governments to make changes.

Anyway, just some random thoughts on a Saturday morning, I'm interested to see what you think.

[Truenorth00]

Originally Posted by Tvisforme

I'm just thinking out loud, so please bear with me, but I am wondering if these sort of zoning changes have the potential to bridge the gap between the "haves" - those who bought decades ago when housing was "just" a large but not unmanageable portion of your income - and the "have-nots" who can't even imagine getting into today's market.

Isn't that the entire point of the Missing Middle? It creates a more orderly and even housing ladder?

[Truenorth00]

Originally Posted by casper

I think this makes the Conservative housing platform moot with regard to BC. Does it not?

I don't think voters anywhere will really care. Just like high gas prices (mostly driven by high oil prices) have made the carbon tax popular (despite rebates in half the country), high rent and mortgage payments will have every voter blaming the incumbent government come election time. Doesn't help, that the government isn't really reducing demand side pressure either.

[giallo]

Originally Posted by someone123

Another aspect is that Canadian cities, if they want to do this kind of generic zoning, should put more effort into heritage/character preservation and public space in these areas. The Vancouver Specials can go but it would be too bad if the relatively few nice old prewar brick apartments all got replaced with towers because they happen to be near transit.

Absolutely.

I applaud this new plan wholeheartedly, but I really want our streets to be a mix of styles and eras. There are some wonderful old houses and buildings that need to be preserved. Not only do they add to a diverse streetscape, they retain what little we have left of our architectural history.

[casper]

Looks like the new anti-airbnb laws coming into place in BC are expected to improve the business case for building more hotels in places like Victoria.

Should take 16,000 ghost hotel rooms off the market and make them available for longer term renters. I guess that is good, but there is going to have to be a lot of hotel construction happening now.

https://www.timescolonist.com/hospit...eliers-7817100

[1overcosc]

Originally Posted by someone123

Another aspect is that Canadian cities, if they want to do this kind of generic zoning, should put more effort into heritage/character preservation and public space in these areas. The Vancouver Specials can go but it would be too bad if the relatively few nice old prewar brick apartments all got replaced with towers because they happen to be near transit.

This is one thing I really like about how intensification is proceeding in Kingston. In the downtown area, the prewar brick & stone buildings are being left alone while the vacant lots next to them are being infilled. In some areas (like Williamsville) this is leading to a really cool urban landscape where you have a mix of heritage buildings on a block with the gaps between them filled in with modern construction. Developers have generally done a good job of fitting them in architecturally: they don't try to take attention away from the heritage buildings, but they're not bland either. A happy medium.

[ssiguy]

^^^ In most cities I would agree about your concerns regarding heritage protection but not in Vancouver. Heritage has never been an issue in Vancouver as basically anything can be torn down if it's SFH. Looks at the thousands of beautiful houses in Point Grey, Kerrisdale, Shaunessy etc that have be torn down over the last 40 years only to be replaced by ugly monster houses made of vinyl siding and stucco.

Vancouver, and every BC city, has had decades to put these houses under heritage protection {the new BC zoning does allow for an exemption to heritage buildings} but haven't and hence thousands of beautiful homes have been torn down. It's a bit rich for Vancouver to talk about heritage protection now. If these houses weren't considered heritage by the city if they were being torn down to build a mega house with the right Feng Shui, then they aren't heritage buildings to be torn down for higher density.

This is just a ploy for the wealthy West Side to claim this is some form of social engineering by the NDP and, thankfully, Ebby is having none of it. Lower Mainland cities have shown themselves to be completely corrupt on the housing file and this is the middle finger they so justly deserve.

[zoomer]

/\ Here’s an example I shared in the Victoria construction thread so most folks wouldn’t have seen it - sharing here:

A proposal for 395 St. Charles Street in Victoria. Right now it’s a non-descript 1970ish looking bungalow hidden behind a lot of bushes in a beautiful neighbourhood. Proposal calls for 3 houses to replace the one, and each will also have a self-contained bachelor unit, so there will be a total of 6 new separate housing units where there used to be one. Images are from the proposal shared on the Victoria Development Tracker.

395 St. Charles Street Proposal - Victoria BC. October 2023 by JohnnyJayEh, on Flickr[/QUOTE]

[niwell]

Old Toronto for instance (and the 1950s suburbs) has a lot more missing middle than most assume. However these are often the first to go when it comes to new highrise proposals. From the developers stance it makes sense - we're talking about rental buildings on decent sized lots. Land assembly is much easier. But from a policy perspective it makes little sense to demolish a 6 storey walkup with a couple dozen units that while sometimes dated tend to be much more functional in layout. Also a lot more affordable.

Assembling land in SFH neighbourhoods is a tricky proposition at best when the average house is going for millions. We're seeing a decent number of multiplex proposals but these also tend to be in areas where the traditional housing makeup is/was already dwellings containing multiple units. Hence my assertations over the years that simply "building our way out" with zoning relaxations isn't going to work, even if it's a good thing from a city-building perspective. At some point you have to contend with the reality that growth is too high and concentrated in too few areas.

There's little value proposition in building a fairly simple development like this https://maps.app.goo.gl/kjr6R1SR3kqQaNik6 even if it were more permissible.