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Population and Housing
(07-30-2022, 06:05 AM)ac3r Wrote: TD Economics forecasts a potential -8% drop in national housing costs by 2023: https://economics.td.com/ca-forecast-tables#home-sales

I am increasingly of the opinion that there needs to be a bubble burst and crash like 1989 that brings back housing costs to pre-2014 levels with respect to present/future incomes, if not lower.

If not, we'll still have far too many people with issues affording housing.

I dream of provincial and national policies that would regulate residential property to barely more than inflationary appreciation in order to make property a commodity rather than a speculatory investment to get rich on.

Somebody who has property and builds on it housing or other amenities needed by the community is giving value to the community. Somebody who is just sitting on a property and watching the value rise through no work of their own but expects to profit through a later sale is a leech and a parasite on the community.
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(07-30-2022, 11:17 AM)Bytor Wrote:
(07-30-2022, 06:05 AM)ac3r Wrote: TD Economics forecasts a potential -8% drop in national housing costs by 2023: https://economics.td.com/ca-forecast-tables#home-sales

I am increasingly of the opinion that there needs to be a bubble burst and crash like 1989 that brings back housing costs to pre-2014 levels with respect to present/future incomes, if not lower.

If not, we'll still have far too many people with issues affording housing.

A value crash won’t build more housing.

Quote:I dream of provincial and national policies that would regulate residential property to barely more than inflationary appreciation in order to make property a commodity rather than a speculatory investment to get rich on.

How would this result in more housing being constructed? Instead of people being priced out, they would have to queue for access to housing.

Quote:Somebody who has property and builds on it housing or other amenities needed by the community is giving value to the community. Somebody who is just sitting on a property and watching the value rise through no work of their own but expects to profit through a later sale is a leech and a parasite on the community.

I suppose if we believe that so much existing housing is sitting empty that flushing speculators out of the market and bringing it into use would give a significant increase in effective housing supply, then maybe this sort of tinkering with pricing rules could have an impact. I’m skeptical of this however: I’m pretty sure the only way out is to do things which cause more housing to be built.
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(07-30-2022, 12:09 PM)ijmorlan Wrote:
(07-30-2022, 11:17 AM)Bytor Wrote: Somebody who has property and builds on it housing or other amenities needed by the community is giving value to the community. Somebody who is just sitting on a property and watching the value rise through no work of their own but expects to profit through a later sale is a leech and a parasite on the community.

I suppose if we believe that so much existing housing is sitting empty that flushing speculators out of the market and bringing it into use would give a significant increase in effective housing supply, then maybe this sort of tinkering with pricing rules could have an impact. I’m skeptical of this however: I’m pretty sure the only way out is to do things which cause more housing to be built.

I think he's referring to empty land, not vacant housing.

I have previously proposed that the cities should eliminate the property tax discount for vacant land. If anything, it should be at a higher rate than land that contains usable buildings. The property tax discount is an incentive to NOT build on the land.
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(07-30-2022, 03:15 PM)tomh009 Wrote:
(07-30-2022, 12:09 PM)ijmorlan Wrote: I suppose if we believe that so much existing housing is sitting empty that flushing speculators out of the market and bringing it into use would give a significant increase in effective housing supply, then maybe this sort of tinkering with pricing rules could have an impact. I’m skeptical of this however: I’m pretty sure the only way out is to do things which cause more housing to be built.

I think he's referring to empty land, not vacant housing.

I have previously proposed that the cities should eliminate the property tax discount for vacant land. If anything, it should be at a higher rate than land that contains usable buildings. The property tax discount is an incentive to NOT build on the land.

I mean, the problem is that most land which should have dense housing on it, isn't vacant, its underutilized.

That too can be solved with a change to the tax system, but it is a change that would be harsh to people living in a densifying area. I don't think someone should be forced from their home in Victoria Park just because it's a growing city.

I'm not sure how to take away their power over their neighbours though.
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Social housing would be helpful to see as well. It's one thing for interest rates and all that to drop, but not everyone can actually afford to buy a home. The government should be building modern public social housing projects all over the country. We've learned many lessons from the days of projects like Regent Park (and can look to our neighbours in the USA for more lessons - their attempts at this were absolutely disastrous) so it is entirely possible to subsidize housing for people and develop vibrant, safe communities.

There are so many people living pay cheque to pay cheque across this country that would jump at the chance to have truly affordable housing available. And to me, that means building large scale projects that can provide it. Which would be superior to the current model 25 units here, 50 units there, 10 units there which tend to be entirely reliant on the generosity of private rental/condo developers, rather than an actual organization within the government who's mission it is to build and manage public social housing (well, I know we have that, but it's not at the scale it ought to be).
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(07-30-2022, 04:47 PM)ac3r Wrote:  housing for people and develop vibrant, safe communities.

You use all these fancy words but what my city councillor brain heard was "cheap"
local cambridge weirdo
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(07-30-2022, 04:47 PM)ac3r Wrote: There are so many people living pay cheque to pay cheque across this country that would jump at the chance to have truly affordable housing available. And to me, that means building large scale projects that can provide it. Which would be superior to the current model 25 units here, 50 units there, 10 units there which tend to be entirely reliant on the generosity of private rental/condo developers, rather than an actual organization within the government who's mission it is to build and manage public social housing (well, I know we have that, but it's not at the scale it ought to be).

Kitchener Housing does manage 750 units, which is not a pittance. But, yes, surely it should be at least double that, and probably more.
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With a years long waiting list, you could probably fill up 750 new units before the end of the week! We definitely need much, much more on a local and macro scale (especially since the federal government wants to really ramp up immigration as well as be sympathetic to people fleeing certain countries who will naturally not have any purchasing power here).
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(07-30-2022, 12:09 PM)ijmorlan Wrote:
(07-30-2022, 11:17 AM)Bytor Wrote: I am increasingly of the opinion that there needs to be a bubble burst and crash like 1989 that brings back housing costs to pre-2014 levels with respect to present/future incomes, if not lower.

If not, we'll still have far too many people with issues affording housing.

A value crash won’t build more housing.

No, it won't, but every day I am less and less sanguine that we can build enough new housing soon enough to make a meaningful difference, even if we upzoned everywhere to encourage missing middle housing.

Increasingly that seems to be a long term solution for preventing/mitigating future housing crises that does absolutely nothing for right now. If we froze housing prices right nowand had zero inflation on them (bot possible, I know), housing prices are still too ridiculously high and it would take a generation or more for essentially stagnating wages to get housing costs as a fraction of wages back to ratios like the early 2010s, even with increased missing middle development

So in addition to zoning reform, property tax reform (lower density pays more), and government built housing, the real estate bubble bursting (crashing, if you prefer that framing) is going to be a necessary thing.

(07-30-2022, 12:09 PM)ijmorlan Wrote:
(07-30-2022, 11:17 AM)Bytor Wrote: I dream of provincial and national policies that would regulate residential property to barely more than inflationary appreciation in order to make property a commodity rather than a speculatory investment to get rich on.

How would this result in more housing being constructed? Instead of people being priced out, they would have to queue for access to housing.

It doesn't do anything get housing built, it's not for that. That's for other policies to do, like upzoning or public housing or differential property taxes.

As I said, this is to eliminate or at least significantly reduce the speculation that is one of the big factors that got us into  this crisis in the first place. If inflation ios 2% and house goes up 3%? OK, but not 5% or 10% or 20% or 40%.

(07-30-2022, 12:09 PM)ijmorlan Wrote:
(07-30-2022, 11:17 AM)Bytor Wrote: Somebody who has property and builds on it housing or other amenities needed by the community is giving value to the community. Somebody who is just sitting on a property and watching the value rise through no work of their own but expects to profit through a later sale is a leech and a parasite on the community.

I suppose if we believe that so much existing housing is sitting empty that flushing speculators out of the market and bringing it into use would give a significant increase in effective housing supply, then maybe this sort of tinkering with pricing rules could have an impact. I’m skeptical of this however: I’m pretty sure the only way out is to do things which cause more housing to be built.

I didn't say anything about empty housing.

This guy explains it well. https://www.tiktok.com/@sweetbbluke/vide..._webapp=v1
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NZ historically had "state housing" which was (literal) houses built and owned by the government; conservative governments sold off a bunch of them, and the current Labour government has been trying to build more, with not much success yet.

https://en.wikipedia.org/wiki/State_housing

Wikipedia says that the peak number was 70,000 state houses in the early 90s, on a population of 3.5 million at the time. I guess that is 7,000 state houses for a population of 350k (within an order of magnitude of KW today), which is a lot more than 750 houses for Kitchener's 200k. The goal is to produce 1000 new state houses a year right now, but I don't think they're anywhere close to that production rate.
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(07-31-2022, 01:42 PM)Bytor Wrote: So in addition to zoning reform, property tax reform (lower density pays more), and government built housing, the real estate bubble bursting (crashing, if you prefer that framing) is going to be a necessary thing.

(07-30-2022, 12:09 PM)ijmorlan Wrote: How would this result in more housing being constructed? Instead of people being priced out, they would have to queue for access to housing.

It doesn't do anything get housing built, it's not for that. That's for other policies to do, like upzoning or public housing or differential property taxes.

As I said, this is to eliminate or at least significantly reduce the speculation that is one of the big factors that got us into  this crisis in the first place. If inflation ios 2% and house goes up 3%? OK, but not 5% or 10% or 20% or 40%.

(07-30-2022, 12:09 PM)ijmorlan Wrote: I suppose if we believe that so much existing housing is sitting empty that flushing speculators out of the market and bringing it into use would give a significant increase in effective housing supply, then maybe this sort of tinkering with pricing rules could have an impact. I’m skeptical of this however: I’m pretty sure the only way out is to do things which cause more housing to be built.

I didn't say anything about empty housing.

This guy explains it well. https://www.tiktok.com/@sweetbbluke/vide..._webapp=v1

I think I may have responded to the wrong paragraph. My main point is that any proposal which involves any sort of regulation on pricing won’t do anything other than to make things more complicated and harder to navigate.

But adjusting the tax system to encourage development may help. Some of the ideas here sound a bit like Georgism:

https://en.wikipedia.org/wiki/Georgism

I think this is interesting and worth investigating. I’m a bit concerned about the situation of somebody who is forced to move from an inheritance due to the rising value of their land; but on the other hand, maybe that is the whole point. So that may be more a matter of something we need to be clear and honest about, rather than an actual counter-argument.

Another scenario which occurs to me is somebody who has a naturalized area in the city. They would be incentivized to develop it, which isn’t necessarily what is wanted. On the other hand, if they want to keep it naturalized, maybe they should dedicate it to a land trust or to the city’s parks department. Again, maybe something we need to be clear and honest about rather than an actual counterargument.

Also consider cases like the Erb-Kumpf house: https://www.historicplaces.ca/en/rep-reg...x?id=11185

For an owner to keep it as it is would become infeasible if property were taxed based on potential development; no owner could afford to leave a 2 story house in place on a property that could be used to build a skyscraper. But again, maybe there would be a process for permanently dedicating a property as being a heritage property, giving up the right to redevelop in return for being taxed on a much lower basis. This could be enforced by granting the air rights to the city along with other measures to ensure no shenanigans happen.

Another thing to consider: maybe we don’t need wholesale reform of the tax system, but just a reform of the assessment methods. If I understand correctly, a house is assessed based on its value as a house. But in the scenario where the house is right on the edge of downtown, its market value has nothing to do with its value as a house; instead, it is the value of the land as a building site which is controlling. It’s weird in a tax system supposedly based on market value taxation to ignore the actual determinants of market value when making a tax assessment of a property. Maybe just changing the system to actually be what it is called would do the job. If anybody understands better and can explain our tax assessments, I’d be interested.
Reply
(07-31-2022, 06:14 PM)ijmorlan Wrote:
(07-31-2022, 01:42 PM)Bytor Wrote: So in addition to zoning reform, property tax reform (lower density pays more), and government built housing, the real estate bubble bursting (crashing, if you prefer that framing) is going to be a necessary thing.


It doesn't do anything get housing built, it's not for that. That's for other policies to do, like upzoning or public housing or differential property taxes.

As I said, this is to eliminate or at least significantly reduce the speculation that is one of the big factors that got us into  this crisis in the first place. If inflation ios 2% and house goes up 3%? OK, but not 5% or 10% or 20% or 40%.


I didn't say anything about empty housing.

This guy explains it well. https://www.tiktok.com/@sweetbbluke/vide..._webapp=v1

I think I may have responded to the wrong paragraph. My main point is that any proposal which involves any sort of regulation on pricing won’t do anything other than to make things more complicated and harder to navigate.

But adjusting the tax system to encourage development may help. Some of the ideas here sound a bit like Georgism:

https://en.wikipedia.org/wiki/Georgism

I think this is interesting and worth investigating. I’m a bit concerned about the situation of somebody who is forced to move from an inheritance due to the rising value of their land; but on the other hand, maybe that is the whole point. So that may be more a matter of something we need to be clear and honest about, rather than an actual counter-argument.

Another scenario which occurs to me is somebody who has a naturalized area in the city. They would be incentivized to develop it, which isn’t necessarily what is wanted. On the other hand, if they want to keep it naturalized, maybe they should dedicate it to a land trust or to the city’s parks department. Again, maybe something we need to be clear and honest about rather than an actual counterargument.

Also consider cases like the Erb-Kumpf house: https://www.historicplaces.ca/en/rep-reg...x?id=11185

For an owner to keep it as it is would become infeasible if property were taxed based on potential development; no owner could afford to leave a 2 story house in place on a property that could be used to build a skyscraper. But again, maybe there would be a process for permanently dedicating a property as being a heritage property, giving up the right to redevelop in return for being taxed on a much lower basis. This could be enforced by granting the air rights to the city along with other measures to ensure no shenanigans happen.

Another thing to consider: maybe we don’t need wholesale reform of the tax system, but just a reform of the assessment methods. If I understand correctly, a house is assessed based on its value as a house. But in the scenario where the house is right on the edge of downtown, its market value has nothing to do with its value as a house; instead, it is the value of the land as a building site which is controlling. It’s weird in a tax system supposedly based on market value taxation to ignore the actual determinants of market value when making a tax assessment of a property. Maybe just changing the system to actually be what it is called would do the job. If anybody understands better and can explain our tax assessments, I’d be interested.

Where are you getting regulation on sale pricing or people being forced to move?
Reply
(08-04-2022, 01:57 PM)Bytor Wrote: Where are you getting regulation on sale pricing or people being forced to move?

From your previous message:

Quote:I dream of provincial and national policies that would regulate residential property to barely more than inflationary appreciation in order to make property a commodity rather than a speculatory investment to get rich on.

As to being forced to move, it is possible for somebody to be forced to move from their property by increased property taxes. If my property were suddenly to be taxed as “vacant land for an 80 story building” rather than as a house, I myself might have to move.

I don’t think anybody suggested explicitly forcing anybody to move, but changing property tax policies could very well force more people to move.
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