Apart from being a terrible idea that almost exclusively targets the middle class (because poor people don’t own property and rich people should be diversified enough that it doesn’t matter), this does nothing to address what are three of the biggest factors in housing costs:
Housing demand (current population increase rate is not sustainable and it shows in areas other than housing)
Inflation (material and labour costs are up something like 40% or more since 2020)
Wage suppression (very much related to (1))
And the kicker to this is that dealing with the three items above will fix a lot more than just housing, whereas your idea doesn’t.
Want to know why material and labour costs are up? Because we have to pay more for land for businesses, and wages so people can afford homes. It’s a carryon effect of land values increasing.
We can always build more, but that’s never going to solve affordability. Supply and demand doesn’t apply to this situation like you think it does. Japan (and even just Tokyo) have had a flat or declining population for over a decade and housing prices are still going up.
Want to know why material and labour costs are up? Because we have to pay more for land for businesses, and wages so people can afford homes. It’s a carryon effect of land values increasing.
This might be a small part of it, but many materials are market commodities that have a lot more behind them than just land values - think copper, steel, lumber.
Also, your entire comment presupposes that land value is causing inflation rather than that land value is reflecting inflation. Land doesn’t print money, governments do, and banks do with debt - a direct consequence of a fractional banking, which is regulated by the government.
You’re thinking too few cycles deep. Even metal and lumber companies employ significant numbers of people or spend money on things which employ significant numbers of people, who all need to be paid more due to increased housing costs. The metal/wood needs to be exported by people, transported by people, with equipment made by people, using fossil fuels that are extracted by people.
It’s not uncommon for 50% of someone’s wage to be going to housing these days if they haven’t owned a home for a decade or more.
The amount of wealth being sucked out of the economy by real estate right now is obscene. My wife and I bought our first home in 2010, we now have around 1 million dollars in equity. We’ve paid only around $350,000 on mortgage payments in that period. So we’ve made $650,000 in 14 years simply by owning a home. That’s tax free, and essentially a third full time income that we did nothing to earn.
Many construction materials aren’t only affected by the Canadian economy, we are a very small part of it even if the material is produced here (ex. if it’s more profitable to export why would a company sell locally?). If global demand goes up prices here go up regardless of the situation.
Also, that money you’ve made isn’t real “made” until you sell, it’s an unrealised gain.
If you think that the land prices are a Canada only issue, you haven’t been paying attention.
It doesn’t matter if it’s realized or not, homes are selling for those prices which means I could sell my home and some poor younger person would have to work even more hours than I did to afford it.
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Apart from being a terrible idea that almost exclusively targets the middle class (because poor people don’t own property and rich people should be diversified enough that it doesn’t matter), this does nothing to address what are three of the biggest factors in housing costs:
Housing demand (current population increase rate is not sustainable and it shows in areas other than housing)
Inflation (material and labour costs are up something like 40% or more since 2020)
Wage suppression (very much related to (1))
And the kicker to this is that dealing with the three items above will fix a lot more than just housing, whereas your idea doesn’t.
Want to know why material and labour costs are up? Because we have to pay more for land for businesses, and wages so people can afford homes. It’s a carryon effect of land values increasing.
We can always build more, but that’s never going to solve affordability. Supply and demand doesn’t apply to this situation like you think it does. Japan (and even just Tokyo) have had a flat or declining population for over a decade and housing prices are still going up.
This might be a small part of it, but many materials are market commodities that have a lot more behind them than just land values - think copper, steel, lumber.
Also, your entire comment presupposes that land value is causing inflation rather than that land value is reflecting inflation. Land doesn’t print money, governments do, and banks do with debt - a direct consequence of a fractional banking, which is regulated by the government.
You’re thinking too few cycles deep. Even metal and lumber companies employ significant numbers of people or spend money on things which employ significant numbers of people, who all need to be paid more due to increased housing costs. The metal/wood needs to be exported by people, transported by people, with equipment made by people, using fossil fuels that are extracted by people.
It’s not uncommon for 50% of someone’s wage to be going to housing these days if they haven’t owned a home for a decade or more.
The amount of wealth being sucked out of the economy by real estate right now is obscene. My wife and I bought our first home in 2010, we now have around 1 million dollars in equity. We’ve paid only around $350,000 on mortgage payments in that period. So we’ve made $650,000 in 14 years simply by owning a home. That’s tax free, and essentially a third full time income that we did nothing to earn.
Many construction materials aren’t only affected by the Canadian economy, we are a very small part of it even if the material is produced here (ex. if it’s more profitable to export why would a company sell locally?). If global demand goes up prices here go up regardless of the situation.
Also, that money you’ve made isn’t real “made” until you sell, it’s an unrealised gain.
If you think that the land prices are a Canada only issue, you haven’t been paying attention.
It doesn’t matter if it’s realized or not, homes are selling for those prices which means I could sell my home and some poor younger person would have to work even more hours than I did to afford it.