2y ago

Trudeau takes first step to break Canada’s addiction to rising home prices - The Globe and Mail

www.theglobeandmail.com

Trudeau takes first step to break Canada’s addiction to rising home prices

At last, someone from the world of politics is being honest about a pervasive and harmful trade-off. When home prices rise faster than earnings, owners like me gain wealth, while non-owners lose because their incomes fall further behind housing costs.

Honesty is saying that home prices have to fall. But this is progress.

The Generation Squeeze folks have recommendations.

65 comments

Can't wait for whatever policy to be implemented so poorly it ends up raising house prices.
- At this point, I'm certain the intention is still to prop up housing but make voters think he finally gives a shit about them so he gets re-elected. Based on his track record, I don't have any reason to believe him.
  But Pierre Poliviere's platform of "own the libs" including banning abortion and being against trans rights is not an option.
  We need ranked choice voting.
  
  You seem to have simply forgotten about the NDP.
  
  We need open-list MMP or some other form of non-party-list PR. Ranked choice helps, but it still means that non-hyperlocal constituency groups can be ignored. Since old people vote in droves and there are old people everywhere, local winner-take-all systems like FPTP and yes, ranked-choice, still let the politicians ignore the youth.
  Regional-proportional systems like STV or MMP let a constituency in the region that has enough people for a rep regionwide but not enough for any single riding get a voice in the assembly.
  I mean, on the downside, this includes Nazis. But on the upside, this includes renters.
  
  Right????
  I don’t know about ranked choice voting, frankly I believe the foxes are in the hen house and there isn’t much we can do…
  But like… who do I vote for? The conservatives that still want to hate on basic sexual health and destroy healthcare? The liberals that want to do a few nice things but stop short of meaningful change?
  Like…. ???
  Here’s hoping that the ndp pull out a huge and useful platform, because that would be great, but after a few years in charge, they’ll do the same and still screw the populace.
  I can’t trust any of them.
  
  https://www.cbc.ca/news/politics/justin-trudeau-vows-to-end-1st-past-the-post-voting-in-platform-speech-1.3114902
  
  Ranked choice is the worst possible voting reform. We should not want that for our federal government. It strongly favours the party that would be most people's second choice. It would guarantee the Liberals the government for the rest of time.
- I haven't been following this closely but the last thing I heard about was a big hand out to property developers, as if they need any more wealth and power and influence in our system lol
  
  The handout is dependent on the city updating their zoning laws to make building higher density easier.
- Isn't that the point? The market crashed in 2022. Any action now is only coming to try and reverse course.
  That, or to ride on the crash's coattails, I suppose. "Look what I did!" – even though nothing was done.
I love those recommendations. An earlier post here made it seem like they only wanted to build more, which (by itself) is insufficient to keep housing affordable.
But that infographic shows a balanced set of recommendations that - taken together - will definitely help!
- will definitely help!
  What help do we need now, though? The market crashed last year. We needed this like 10 years ago, not after high prices finally cured high prices.
  Let's face it, the only reason we're only now just finally getting some kind of progress on the issue is because the politicians recognize the market has crashed and want to quickly jump in to say it was their doing. It's so weird.
  
  The market crashed?
  40-year-old two-bedroom condos are now $700k here. What crash?
  
  The market crashed last year
  The market: Still significantly above the pre-2020 trend.
  
  the market drop was tied to interest rates so the effective monthly mortgage is unchanged. Unless you've got a million bucks under your mattress to pay up-front, houses are still unaffordable.
  renters are people too, and their prices have gone up, not down.
Regardless of whether these are built as rentals or for sale, the catch-up to fulfill demand will take decades, and no property developer will do them if they aren't profitable.
So don't expect property values to seriously decline. Frankly, what we all need are wages to catch up to the cost of living.
- If wages increase but housing demand remains significantly higher than supply, housing prices will just inflate. We need to build a lot more homes.
  
  We definitely do, but people seem to think that's a speedy election-cycle process.
I mean the solution is pretty clear. Establish residency requirements, and significantly increase taxes on places that aren’t used as primary residences.
- I've been telling this to anyone who will listen...
  At the federal level, any income, personal or corporate, from property rentals or short term rental of any single family residental property is taxed at the highest marginal rate, PLUS a surcharge of 1%, increasing at 2x the rate of inflation every year. All taxes raised from the surcharge go to federal housing programs.
  At the provincial level, any property that isn't your primary residence gets taxed at 1% of the total property value. The tax rate increases at 2x the rate of inflation every year. All taxes raised go to provincial housing programs, including rebates for first time home buyers.
  At the municipal level, cities should be able to tax any property used as a short term rental at whatever rate they feel is fair. Also, any vacant property is taxed at least double the provincial rate.
  This immediately stops individuals and companies from investing in single family residential properties, forces individuals and companies to divest their residential property portfolio as they become unprofitable as the tax rates increase, and slowly creates a steady flow of residential homes onto the market. It shouldn't create a housing crash, it should stop and slowly reverse the upward trend of housing over the course of 5 to 10 years.
  Please steal this idea.
- I'm not sure if you mean "residency" as in residents of Canada, or residency as in living in the property.
  Assuming it's the former: Removing some investors from the pool of buyers would probably help a bit, but I'm not sure it would have a significant impact outside of a few markets.
  Assuming it's the latter: NB taxes non-primary residences at a higher rate and has still seen significant price growth.
  
  "Yes."
- The vast majority of the money being made is being made by single home owners who live in the property. Until you start dealing with that, nothing will change.
  
  You deal with that by flattening the upward trend (or even reversing it a little) by adding more inventory. Corporate ownership of residential housing is a big thing, as is owning second and third homes as investment properties. My upstairs neighbour with a middle-management job and a stay at home wife owns the largest suite in my building, plus two rental condos. It's way, way more common than you think.
Rarely, if ever, has a senior politician in Canada been courageous enough to affirm that home prices need to stall if we truly care about affordability.
Wow. Such courage. To acknowledge a problem after 8 years of ambivalence. /s
- Considering his biggest donors are all speculative investors in the housing market, it is actually pretty unwise, politically, to admit that he wants to slow their profiteering.
  I hate that our government is so inherently corrupt like this.
  
  I think that's where the courage part comes in. They've been pretty good about beating the drum for climate change, which alienates some voters/donors, but they've only really talked about housing supply, which is a great way to keep the base happy.
First step is realizing you have a problem. Small steps but yeah, it's progress.
Is it going to be more rental properties? It's going to be more rental properties, isn't it.
- That's not a bad thing. More units is more units. People need shelter. Not everyone wants to buy a house to get it. If we can build enough rental units to get the supply up, it will reduce the price of "substitute goods" like other types of housing. Plus, density is far more sustainable to build.
- The bill removes GST from purpose built rental, so yes.
  
  FUUUUUUCCK---!
Uh, what rising home prices?
You mean the dead cat bounce seen earlier this year? That's just confirmation of the market having already crashed.
- I find it funny how hard you try yet fail miserably. What a douche canoe.
  
  Interesting that you think pointing out the obvious requires effort. It does not. It requires almost no effort at all. The data speaks for itself.
  I suppose when one is more concerned about people than information, life no doubt seems hard. Data is simple, but people can be quite complex. I am not sure there is actually any value in that complexity, though. Have you considered that you might be challenging yourself for no reason?

65 comments