I wish they would raise the HBP limit for RRSP that can be used towards a downpayment. It’s not like I’m going to be able to retire with that if I can’t build equity beforehand.
From the CRA “Currently, the HBP withdrawal limit is $35,000. This applies to withdrawals made after March 19, 2019.”
From the article “Recent surges — prices have risen 36 per cent in three years”
So it should be closer to $50,000. Maybe $60, 000 would be better to account for prices continuing to rise while we wait for something to be done to improve the situation.
Just tax homes past a primary residence like Singapore. We know it works and at least it’ll be real obvious those against are the immoral asses we thought they were
Are you talking about the capital gains? Because that’s not enough as it treats homes like any other commodity. Homes aren’t an ETF. That’s the whole point of the tax, to make it no longer an attractive investment vehicle for amateur landlords.
No. Capital gains isn’t a tax on homes. It is a tax on income.
We’re talking about taxes on homes, and homes in Canada are taxed, including your primary residence.
But if you want to randomly start talking about income tax for some reason, yes, income generated by housing is also taxed. This is Canada – we tax everything.
What is this tax you’re referring to? You seem to reference it in your comments, make snarky replays like the one in this comment. But fail to actually explain what tax Canada currently has in place that results in owners of multiple homes being taxed more based on how many homes they own.
But fail to actually explain what tax Canada currently has in place that results in owners of multiple homes being taxed more based on how many homes they own.
I would not explain that as we have no such tax of that shape, nor has the conversation ever been about such a tax. Your logical fallacy is ill-conceived.
Other commenters have specifically named the taxes we do have. I’m not sure stealing their thunder adds anything. Did you somehow forget to read all the comments before you thought flailing around like one of those whacky blow up men things you find at the used car lot was a good idea?
Well whatever tax you are talking about it’s not effective in stopping speculators so it’s not enough. Though if the concept of tax is too problematic I’m fine with an outright ban as well.
While I agree, one has to question why there is so much speculation in the first place.
The banks these days will give you 5% returns just sticking your money in a savings account – backed by a government guarantee in case the bank fails. That means housing needs to return something humongous to justify the greater risk.
Speculators can be wrong, but they are never random. There is something out there that makes them legitimately think that those humongous returns are quite possible. While a tax may serve as a bandaid to keep the infection away, what it is that is cutting us?
Taxes aren’t a problem. The problem is when they aren’t invested correctly or when the poor are expected to pay taxes when they shouldn’t. Not perfect but recently we got FHSA.
This is the simplest solution. But the annual property tax on 2+ properties has to bite otherwise corporations hoarding housing stock would just see that as cost of doing business.
The best approach would be progressively higher (like, exponentially) property taxes according to the number of properties held
Every property owned above primary should double in tax.
At this point it’s the only way to stop the hoarding immediately. Canada is rolling into what may be a viciously cold winter soon, and if we don’t do something RIGHT NOW, people will not survive.
I suspect this would crash the housing market immediately.
1% annual tax on the total value of a property, increasing at 2x the rate of inflation, first for corporate owners & foreign individuals of residential properties, then individual owners of any residential property that’s not their primary residence. The money raised goes directly to build affordable housing and first time home buyer rebates.
This doesn’t shock the system, and frees up homes over a period of time, rather than eviscerating demand after a particular date, and slowly releases homes into the market over the course of years, as individual properties fall into non-profitability.
Noooot necessarily, but a solution for that is to raise minimum to median wages up to a point that homes are affordable, and keeping existing wealth as it is or taxed. (AKA not happening.)
Big corps, rich lobbyists would cause government to not even begin considering it, it would cause a good chunk of inflation but there’s a chance that we could get rising wages to outplace inflation instead of the other way around how it’s been.
They want the existing houses to remain expensive while the new houses somehow are cheap? Sounds like they’re wishing for a magic trick, or are trying to put lipstick on their business-as-usual pig.
Call me a radical, but this is a speculation issue. Stop allowing homes to be the object of speculation by limiting the amount of properties people can buy/have.
I think people having where to live is more important but I am well aware we allowed a whole marked to develop over it and it isn’t as easy as it sounds. This is just a big mess.
Housing was expensive four years ago, that was before prices almost doubled. Policy that lowers prices to those levels would put home ownership in the reach of many.
I think you’re assuming waaay too much about the seriousness of this statement. It’s a politician assuring the losers of a policy they won’t lose by rewording the policy a different way.
Lets says I I have a farm that produces all the food people need, but because I own the only farm, I can set the price for food to whatever I want.
Helping me build ten more farms doesn’t solve the problem. The problem is that I’m in a position to decide the price. Helping someone else build more farms, might work, but I already make so much I could probably buy them the moment they’re done. And even if I don’t, we don’t actually need more farms. The one I have could already feed everyone.
Building more farms at that point, would be a irresponsible waste of this already overloaded planets resources.
The real solution is dividing up ownership of the already sufficient existing resources. This will crash prices, but that will only hurt those who already have what they need, not those currently unable to get it.
And even if I don’t, we don’t actually need more farms.
But since you are now operating more farms than needed you’ve ended up with a flood of product. It costs extreme amounts of money to operate a farm, so you are going to be forced to liquidate that product to pay your bills. The consumer won’t pay top dollar for food they don’t need, so you are going to be forced to sell it for pennies on the dollar. And now food is cheap.
And millions were wasted in hardware, work hours, ecologic capacity, industrial machinery, construction…
How is this a viable solution on a planet in the process of self-destructing due to the industrial-scale inefficiency of human economics?
And if I’m even slightly smart I’ll pocket the support given to me to increase production, not actually use it.
And how is subsidizing someone else to build new farms to compete with me, not still just taking a portion of what I have, and giving it to someone else, but with extra steps that wastes time and resources?
And how is subsidizing someone else to build new farms to compete with me, not still just taking a portion of what I have, and giving it to someone else, but with extra steps that wastes time and resources?
It is a social good to have an overproduction of food to ensure that there is still sufficient food available when things go wrong. A single farm is incentivized to leave people to starve, so it is a given that expansion would be needed when moving away from that single farm in an effort to better serve the population.
The necessity of surplus capacity is not mutually exclusive with ecologically efficient solutions to economic problems.
Which is what we are discussing here.
You are attempting to forward an argument that would apply to supply issues, as if my scenario of a single farm were more than just an anecdotal example illustrating one single point of interest. (The economics of the housing market)
My entire point is that there should be multiple providers (owners) that do not collude. The number of farms used in my example is coincidental. You are basically reciting my own argument back to me.
Nothing you say can change the fact that when the capacity to meet and even exceed demand already exists, solving economic problems through excessive new supply, is inordinately wasteful.
Canada does have an unusually small number of houses, relative to its population size, as compared to most other countries. It may be true that we still have a sufficient number of houses to house everyone, but not unlike farming, houses can burn down, get hit by tornadoes, etc. and having an oversupply can also be a social good to ensure that people can still find a roof over their head when things go wrong.
So additional construction is part of the solution, in Canada’s case. There’s also the fact that buildings need to be located in the places people want to move to, it’s not enough to simply have enough. At no point have I disagreed that critical industries should not have redundancies, so I don’t know why you are repeating that argument.
That still leaves the fact the current real-estate market has issues that require severe changes to resolve. And that you can’t just slap “supply” with a capital “S” on the problem and expect equilibrium to return quickly, efficiently, or indeed, at all.
There is a logic to this. Private developers will not make multi-year, large capital investments in something if they think that its value is guaranteed to decrease. That should be obvious.
And we desperately need to increase supply. For better or worse, we do still live in a capitalist society so its going to be up to the private sector to increase supply, with the govt providing an incentivizing role. The govt ever saying anything like “we need to bring house prices down” would paralyze private sector investment into building houses.
FWIW, in my esteemed position as an armchair big-social-problems-fixer, the solution is obvious: Govt investment/subsidies to convert downtown commercial real estate towers into condos. Instead of forcing people back to the office to salvage what’s left of the real estate value for those empty towers. The owners get their handout, people can continue to work from home, it’s good for the environment too! I dunno, I think it makes sense.
We accept that a fundamental need like healthcare shouldn’t be subject to market forces. We don’t have to treat housing any differently. Vienna was rated the #1 most livable city because they understand this. Our path forward is not only clear as day, it’s tested, proven, and already putting out the best results in the world. The only reason we don’t follow that path is because those with the authority to change things are in the class of people profiting from doing things wrong.
Governments have done the work of providing housing in the past, and still do in limited numbers. There is no reason why they can’t just push the number of projects up until there is no housing crisis anymore.
I’ve heard some numbers here and there, and it seems like there’s plenty of organizations providing non-market housing that rent at below half the usual prices. Apparently the YMCA is one of them.
If the governments aren’t willing to do it themselves, they can just make it easier for corporations that are willing to provide non-market housing to get the property rights and loans needed to actually get this done.
There is a logic to this. Private developers will not make multi-year, large capital investments in something if they think that its value is guaranteed to decrease. That should be obvious.
Government can make large, multi-year capital investments, too. They just don’t want to, because we’re two generations of civil servants and politicians that consider publicly-provided services to be heretical.
You’ll note that anything that doesn’t involve giving money to the private sector is not done, and what little fully public institutions we still have left are a) from an earlier era, and b) so intrinsic to the cash flow of a functioning government that not even the most boot-licking Thatcherite can make a case for selling them off.
If the governments aren’t willing to do it themselves, they can just make it easier for corporations that are willing to provide non-market housing to get the property rights and loans needed to actually get this done.
As above, there is no appetite in government to do this as it would erode the ability of the wealthy to make money, and even if they did, developers would just build something expensive to maximize value.
The entire philosophy of how government delivers services would need to change, reversing course on a quarter-century of neoliberal policy.
The issue is that the top parties feel secure in their oligarchy. It doesn’t really matter which one is in power as they’re always relevant and can squabble as they like.
They don’t feel threatened during elections anymore because it’s not about leading the country in a better direction according to their party principals, but it’s about what each person can personally gain by doing favours.
I’m worried that the only way to actually make positive change is to put one of the minor parties in charge. Maybe seeing the Green party or the Communist Party of Canada in charge for a few years’ll be what it takes to make the mainstream parties actually fix their crap. Of course, the level of a miracle for something like that to happen is so remote that it’s hard to see any hope in the government without some sort of major upheaval to happen.
I’m worried that the only way to actually make positive change is to put one of the minor parties in charge.
We tried that. The, once minor, Reform Party was given chance for the first time in 2006 and we gave them a second try in 2011. I’m not sure anything changed.
Trouble is, once a party takes charge, they are fundamentally no longer minor and naturally become just like all the rest. You haven’t accomplished anything.
What you really want to do is elect a representative who works for you, not for his labour union (i.e. the party). As the employer, choosing your employee based on their union affiliation is, quite frankly, strange.
Agree with the diagnosis, but disagree with retrofit. Vancouver doesn’t need that right now. It takes more political will but I think a better solution would be to finish the job of bringing density to downtown and just rezone the whole of west end into condos with commercial fronts. Then move on to do the same with mt pleasant and Kitsilano. SFH within 5 minutes of seawall is just too much subsidy for suburban conservatives.
It seems to me that increasing supply alone is not going to cut it. Are there not a bunch of financial groups with nearly bottomless wallets that enable them to afford to buy up any amount of property to rent or flip at any price they want, even if it means some properties sit on the market empty for a long time? This government policy seems analogous to having people with $100 dollars sitting at a no-limit poker table with a bunch of billionaires who can afford to endlessly put you all in on every bet, so they always bet more than you have and then the government comes in and says they will allow for more games to be played. Wouldn’t the policy be pointless if you don’t also limit the number of games the wealthy players can play?
You are not only right, but foreshadowing the astroturfing all of that area is going to receive. Regulating real estate is the only answer and then we’ll talk about building more. We know this to be true:
Limit ownership to either you live on the property and 1 more house.
Corporations and all of its subsidiaries are only allowed owning for renting above a certain amount of people. For example, they couldn’t own a duplex, they could only own above a 10 unit rental or something. Not sure what that number would be.
Airbnb’s only allowed if the owners live on property and one more spot. No corporations unless they become a hotel and follow those regulations.
I think personal ownership can go higher than just two properties without problems. The issue isn’t everybody owning five properties, but a small handful owning thousands.
Following that, limiting corporations’ ownership is definitely a top priority. Only owning housing with 30 units or more would probably help a lot. 10 units is just too little I think, as that’s just a conjoined townhouse, which can easily be personally owned and operated. 30 is more like a really small low rise.
AirBnB is definitely an issue as well, and is probably the hardest to regulate. Though definitely not the hardest to pass (that’s the corporations one). I’m not sure what can be done with it, as there’s already laws in place regarding hotels. Maybe force the company to register all BnB locations to a government database in real time? Though with enough housing, I think this will be an insignificant issue. Especially combined with the other changes. BnBing a spare room is quite a different thing compared to an entire unit/house on a permanent basis.
I think you’re probably right about the numbers, that’s definitely a discussion to be had. I originally said 30 on the units but there are units that I walk past a lot and they have about 10. I couldn’t see a small business owner owning that, but I guess they could.
Living in Seattle and watching it be demolished was hard to watch, I’ve accepted it now. We’re still fast becoming San Francisco where you have the rich and then no one to work there, it’s not a good situation. Regulating the corporations is the only way to begin truly fixing it, imo. All of the best cities in the world are becoming disneyland and nothing behind the curtain.
I like the idea of progressively higher taxes. Second house might have a modestly higher tax, but the third will be a steep increase and it only gets higher from there. Anyone who truly wants/needs multiple homes can have em, but they’re gonna pay through the teeth for them (which we can invest into building more homes).
We have such a shortage that IMO any extra home ownership is a problem. But it’s the kind of problem that I don’t think is a concern if they pay sufficient taxes on it. It’s the kind of problem that we can largely throw money at to fix.
Personally, I have no issues with things like summer homes, or having a second property you rent out for some money on the side.
The first is typically somewhere that having property is purely a luxury rather than a neccessity, so as long as it’s not being done in another large city or something, it’s not that much of a big deal. Especially so if the government isn’t on the hook for utilities.
For the latter, as long as the number of properties being rent out, and that the renting is done properly, it’s not a big deal either. The government already has regulations on rentals anyways, though I do wonder how well they’re enforced. Either way, while I do agree that excesses here is an issue, one or two properties utilized like this isn’t a problem, even if thousands of people do it in a single city.
Corporations have lots of money and so a lot of people are told that it’s the “nimby’s” who aren’t letting things get built and that “Trickle Down Housing works!”. There is a slight chance Trickle Down Housing would work in 30 to 40 years, but regulating real estate is the fastest, easiest and best for the people who live there. So basically, the people who want more and more money.
Please no, don’t stop building supply until we get the demand side just right. We also massively lack supply, with the lowest housing per capita in the G7. It takes years to build supply. It’s insane that people want to slow that down!
When are people going to understand it’s both? What makes housing such a “good investment” is that we don’t build enough of it for the people we have. Investors aren’t snatching up affordable housing in rural Arkansas because they have way more supply. We should absolutely deal with investors, make their lives miserable, but we ALSO need supply.
Zoning plays an enormous role. The Lower Mainland is one of the densest regions in Canada, and it has a fraction of the density of virtually all European countries, even mountainous and rural Switzerland. Our urban planning is sprawly and terrible.
Even ignoring housing supply, if you want walkable livable cities, low transportation costs, low environmental impact, and high quality of life, then we should seriously rethink our zoning and urban planning. The consensus on here against more supply, which is also against better zoning and more density, is seriously mind boggling.
Interesting. I was thinking that if there were more openness to mixing zoning for housing and commercial then this would make room to put in housing in the dense areas you were talking about.
The corporations that want to rent out the housing as airbnb’s and taking away rental units for the people who live and work there?
Or maybe the corporations that price fix their rental properties so that the rent never goes down like they did/do in Seattle?
Or maybe you’re talking about the condos in high rises that buy their way out of providing affordable housing and then won’t lower their rent, but rather keep it unrented so they can get a tax break or whatever?
How about non-market housing supply, like the spacious comfortable middle class condos that Scandinavian countries provide? Vienna is also a model for government owned housing.
How about co-op housing supply, for people who want to live in communities and not live in an investment?
How about we free up zoning like they do in Japan, where you can buy a spacious new detached SFH in the middle of Tokyo for a fraction of the price of Toronto?
Do you know why the last housing bubble popped in Canada? Because we had a massive oversupply of condos and homes relative to demand. Being against supply is absolutely delusional.
How about non-market housing supply, like the spacious comfortable middle class condos that Scandinavian countries provide? Vienna is also a model for government owned housing.
Because in America that usually becomes a “place to put the poors” and becomes a place you can’t go to unless you’re one of them. Cabrini Green in Chicago started out as a wonderful thing to get people off the street and turned into a hell hole. It was also a great location that was rightfully torn down and became luxury condos. That is what America is.
How about co-op housing supply, for people who want to live in communities and not live in an investment?
Now you’re talking, I’ll add that to the list of awesome ideas.
How about we free up zoning like they do in Japan, where you can buy a spacious new detached SFH in the middle of Tokyo for a fraction of the price of Toronto?
Because zoning is there for a reason and that is a developer’s dream request. They would put high rises filled with luxury condos next to your garage if they could. See Houston.
Do you know why the last housing bubble popped in Canada? Because we had a massive oversupply of condos and homes relative to demand. Being against supply is absolutely delusional.
That’s not the reason, lol. You might want to do some research on that.
It’s because public housing in the US is a ghetto to segregate poor people and undesirables. On the Scandinavian model, non-market and market housing are mixed together. Rich and poor live next to each other. These are highly successful.
Are you a NIMBY? Our zoning is horrible. It is mathematically impossible to reach our climate goals if we maintain the terrible zoning laws that we have.
You also totally misunderstand why we build tall expensive towers. It’s BECAUSE we don’t allow middle density in SFH areas. Please read about the “missing middle”. Both tall towers and SFH are symptoms of the same disease.
You might want to actually read about the last housing bubble. When the bubble finally burst, people couldn’t sell their homes and vacancies were high. That’s also why the government stopped building non-market housing. They thought we had built too much. 
It’s BECAUSE we don’t allow middle density in SFH areas. Please read about the “missing middle”. Both tall towers and SFH are symptoms of the same disease.
That’s absolutely not true, see the following neighborhoods: Fremont, Queen Anne, University, Capitol Hill, West Seattle, etc.
You’re obviously not reading anything I’m saying and promoting the buzzwords of the developer community so this is my last response to you.
It seems to me that increasing supply alone is not going to cut it.
Well obviously you also need to increase demand. Without that, most Canadians will remain out of the market. The hope is that more home options will encourage increased demand.
Supply and demand control prices. Period. Adding supply will only fail to control prices if demand keeps rising. And if buyer demand keeps rising to keep up with prices? It would suck, but there’s actually a silver lining to that: Rent goes down then.
Remember, now that we’re punishing vacant units, every investment unit must be rented out. So as the investors make a mad dash to build and buy our endlessly-rising housing units, more and more inventory gets dumped onto the rental market.
Now, there’s obvious downsides to this story, I’m not going to pretend the “own nothing and be happy” end is ideal. But it’s better than the “own nothing and live in a fucking tent” ending.
No, market failures exist. It’s not all supply and demand. The cartoon economic world of libertarians is not reality.
That said, we do have a supply problem. Vacancy is essentially zero in Canadian cities, and that’s not true in more affordable housing markets like the US or Japan.
No, market failures exist. It’s not all supply and demand.
Huh? Supply and demand is an observation of human behaviour. Market failure is equally observable through the supply and demand lens. It too is ultimately human behaviour.
Canada wants to eat it’s cake while also having it. Something like 60% of Canadians own their home or live in a home their parents own. 40% of a country is more than sufficient to tear the country apart if they lose faith in the society they live in. Allowing housing to become investments has been a mistake that needs to be corrected for the long term stability of the nation.
If government had the power to just snap their fingers and halve the price of all real estate, regular home owners should not be negatively affected.
It’s mostly only the people who own multiple homes as investments, developers, and people who rent out their properties.
If you own a home that you live in, yes it will suck that prices dropped after you signed your mortgage, but you already agreed to pay that before so you should be able to afford those payments wether your house is $1M or $500K.
If you need to move, the house that you need to move to will now be half price so you didn’t lose anything with your own house going half price. If anything you win by not having to pay as much taxes.
If you need to move, the house that you need to move to will now be half price so you didn’t lose anything with your own house going half price. If anything you win by not having to pay as much taxes.
This part is incorrect. If you buy a $1MM home with a $200K down payment, then you have a $800K debt. If you sell at $500K, then you still owe $300K and will declare bankruptcy and need to start saving for 7 years (?) for that bankruptcy to fall off your credit history to be able to get a new mortgage again.
This is the problem some people are facing now. They bought at the peak, with a variable rate mortgage, and are now underwater on their house and can’t afford the payments that have literally tripled. This will get worse in the next ~3½ years as fixed rate mortgages signed before/at the peak of the market come due for renewal, if interest rates remain this high.
Housing prices going down absolutely kills people’s wealth. Which is a huge problem since this means half the population is selfishly benefiting from maintaining high real estate prices.
Allowing housing to become investments has been a mistake that needs to be corrected for the long term stability of the nation.
Canadians are using real estate as their retirement nest eggs. That means they’re investing less in productive businesses and are woefully under-diversified. Reducing/removing the capital gains exemption on real estate sales would encourage actual investment.
As someone who struggled to get into homeownership in vancouver area it not about investment by candians. you are actively bidding on homes where asian investors trump your offer by 100K without even seeing the property. And the vacancies are bad. Two of my friends rent small basement suite in a giant home. The asian owners have not lived in the rest of the house for 2 years. So an entire family is denied housing for an investor to just sit on the property…not a canadian nest egg.
To be fair, the reason they’re using it for retirement is because every other method (defined-benefit pensions, defined-contribution pensions, bonds, mutual funds, RRSPs) have been systematically broken by the wealthy.
The dotcom bust, and the lesser extend the 2008 crisis, wiped out a lot of Boomer and elder-Xer equity. Real estate was the next thing that “weath advisors” pushed after they ran the other options into the ground.
If people could retire with dignity and security, we probably could have headed off some of the early stages of the real estate speculation boom. Of course, that would have required rich people to make less money, or face some kind of consequence. As it stands, the economy suits them just fine, even if it fails everyone else.
Those people will also need to factor in how much housing is causing localized inflation which is eating into their monthly cash flow. Unless the person has a rather large real estate portfolio they could defer the burden to I don’t think the current situation is going to work out well for most single dwelling owners unless they plan to move away soon.
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“I want you to buy a home at this price.”
I can’t afford that.
“But what if you paid anyway…”
I wish they would raise the HBP limit for RRSP that can be used towards a downpayment. It’s not like I’m going to be able to retire with that if I can’t build equity beforehand.
From the CRA “Currently, the HBP withdrawal limit is $35,000. This applies to withdrawals made after March 19, 2019.”
From the article “Recent surges — prices have risen 36 per cent in three years”
So it should be closer to $50,000. Maybe $60, 000 would be better to account for prices continuing to rise while we wait for something to be done to improve the situation.
Just tax homes past a primary residence like Singapore. We know it works and at least it’ll be real obvious those against are the immoral asses we thought they were
We do tax homes past a primary residence. In fact, we also tax the primary residence.
Are you talking about the capital gains? Because that’s not enough as it treats homes like any other commodity. Homes aren’t an ETF. That’s the whole point of the tax, to make it no longer an attractive investment vehicle for amateur landlords.
Again look at how Singapore does it, it works.
No. Capital gains isn’t a tax on homes. It is a tax on income.
We’re talking about taxes on homes, and homes in Canada are taxed, including your primary residence.
But if you want to randomly start talking about income tax for some reason, yes, income generated by housing is also taxed. This is Canada – we tax everything.
What is this tax you’re referring to? You seem to reference it in your comments, make snarky replays like the one in this comment. But fail to actually explain what tax Canada currently has in place that results in owners of multiple homes being taxed more based on how many homes they own.
I would not explain that as we have no such tax of that shape, nor has the conversation ever been about such a tax. Your logical fallacy is ill-conceived.
Other commenters have specifically named the taxes we do have. I’m not sure stealing their thunder adds anything. Did you somehow forget to read all the comments before you thought flailing around like one of those whacky blow up men things you find at the used car lot was a good idea?
Well whatever tax you are talking about it’s not effective in stopping speculators so it’s not enough. Though if the concept of tax is too problematic I’m fine with an outright ban as well.
While I agree, one has to question why there is so much speculation in the first place.
The banks these days will give you 5% returns just sticking your money in a savings account – backed by a government guarantee in case the bank fails. That means housing needs to return something humongous to justify the greater risk.
Speculators can be wrong, but they are never random. There is something out there that makes them legitimately think that those humongous returns are quite possible. While a tax may serve as a bandaid to keep the infection away, what it is that is cutting us?
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You won’t have a (second) home in which to tax. You will have sold it. It is your income that will be taxed.
But housing is also taxed, just not by way of capital gains. Capital gains only taxes income.
Taxes aren’t a problem. The problem is when they aren’t invested correctly or when the poor are expected to pay taxes when they shouldn’t. Not perfect but recently we got FHSA.
Who says they are?
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Those vacancy taxes are a joke compared to the property value.
This is the simplest solution. But the annual property tax on 2+ properties has to bite otherwise corporations hoarding housing stock would just see that as cost of doing business.
The best approach would be progressively higher (like, exponentially) property taxes according to the number of properties held
@clutchmattic @BedSharkPal
This.
Every property owned above primary should double in tax.
At this point it’s the only way to stop the hoarding immediately. Canada is rolling into what may be a viciously cold winter soon, and if we don’t do something RIGHT NOW, people will not survive.
I like Singapore’s handling
I suspect this would crash the housing market immediately.
1% annual tax on the total value of a property, increasing at 2x the rate of inflation, first for corporate owners & foreign individuals of residential properties, then individual owners of any residential property that’s not their primary residence. The money raised goes directly to build affordable housing and first time home buyer rebates.
This doesn’t shock the system, and frees up homes over a period of time, rather than eviscerating demand after a particular date, and slowly releases homes into the market over the course of years, as individual properties fall into non-profitability.
Someone PLEASE steal this idea.
Hot damn. That’s how you do it!
Those two goals are fundamentally at odds with each other.
Noooot necessarily, but a solution for that is to raise minimum to median wages up to a point that homes are affordable, and keeping existing wealth as it is or taxed. (AKA not happening.)
Big corps, rich lobbyists would cause government to not even begin considering it, it would cause a good chunk of inflation but there’s a chance that we could get rising wages to outplace inflation instead of the other way around how it’s been.
That only considers people who are already with a job. Doesn’t solve homelessness.
That is true. Even now we’re getting to a point where you’re fucked even if you have a job (or 2, or 3).
Welfare/Disability has to go up as well accordingly.
yeah we pretty much need to double welfare/disability rates
That will just push prices higher because now you have more prospective buyers for same inventoru of houses on the market.
They want the existing houses to remain expensive while the new houses somehow are cheap? Sounds like they’re wishing for a magic trick, or are trying to put lipstick on their business-as-usual pig.
House: 1 million $.
Job: 22k$/years.
So, how can this work? Magic 🪄✨
99 year mortgage.
And I want a unicorn!! 🦄
Call me a radical, but this is a speculation issue. Stop allowing homes to be the object of speculation by limiting the amount of properties people can buy/have.
That will cause property prices to tank… Trudeau just wants a paradox
I think people having where to live is more important but I am well aware we allowed a whole marked to develop over it and it isn’t as easy as it sounds. This is just a big mess.
“I want to stop being an alcoholic but I’d like to drink occasionally”
You say that in jest but I know far more previous functional alcoholics who drink occasionally vs went teetotaler.
CanadaInternational Billionaires want to makehomesplaces where poor people liveaffordableprofitable without crushing prices*fixed your headline
Possibly making a statement before election. Doubt government has any intention make housing affordable.
Whenever they say “I don’t want to drive down prices” that demonstrates a fundamental unseriousness about the crisis.
Housing was expensive four years ago, that was before prices almost doubled. Policy that lowers prices to those levels would put home ownership in the reach of many.
I think you’re assuming waaay too much about the seriousness of this statement. It’s a politician assuring the losers of a policy they won’t lose by rewording the policy a different way.
Yes. By having an official policy of propping up prices, the government is effectively giving a subsidy to homeowner profits at the cost of renters.
That’s the core tenet of neoliberalism: to transfer wealth to the wealthy.
Don’t worry it’ll trickle down eventually! One day… Any minute now
I read an article a while back that argued the only way to really make housing affordable is to build MASSIVE amounts of housing.
Supply and demand is at least part of the problem.
It really isn’t in this case, unfortunately.
Lets says I I have a farm that produces all the food people need, but because I own the only farm, I can set the price for food to whatever I want.
Helping me build ten more farms doesn’t solve the problem. The problem is that I’m in a position to decide the price. Helping someone else build more farms, might work, but I already make so much I could probably buy them the moment they’re done. And even if I don’t, we don’t actually need more farms. The one I have could already feed everyone.
Building more farms at that point, would be a irresponsible waste of this already overloaded planets resources.
The real solution is dividing up ownership of the already sufficient existing resources. This will crash prices, but that will only hurt those who already have what they need, not those currently unable to get it.
But since you are now operating more farms than needed you’ve ended up with a flood of product. It costs extreme amounts of money to operate a farm, so you are going to be forced to liquidate that product to pay your bills. The consumer won’t pay top dollar for food they don’t need, so you are going to be forced to sell it for pennies on the dollar. And now food is cheap.
And millions were wasted in hardware, work hours, ecologic capacity, industrial machinery, construction…
How is this a viable solution on a planet in the process of self-destructing due to the industrial-scale inefficiency of human economics?
And if I’m even slightly smart I’ll pocket the support given to me to increase production, not actually use it.
And how is subsidizing someone else to build new farms to compete with me, not still just taking a portion of what I have, and giving it to someone else, but with extra steps that wastes time and resources?
It is a social good to have an overproduction of food to ensure that there is still sufficient food available when things go wrong. A single farm is incentivized to leave people to starve, so it is a given that expansion would be needed when moving away from that single farm in an effort to better serve the population.
The necessity of surplus capacity is not mutually exclusive with ecologically efficient solutions to economic problems.
Which is what we are discussing here.
You are attempting to forward an argument that would apply to supply issues, as if my scenario of a single farm were more than just an anecdotal example illustrating one single point of interest. (The economics of the housing market)
My entire point is that there should be multiple providers (owners) that do not collude. The number of farms used in my example is coincidental. You are basically reciting my own argument back to me.
Nothing you say can change the fact that when the capacity to meet and even exceed demand already exists, solving economic problems through excessive new supply, is inordinately wasteful.
Canada does have an unusually small number of houses, relative to its population size, as compared to most other countries. It may be true that we still have a sufficient number of houses to house everyone, but not unlike farming, houses can burn down, get hit by tornadoes, etc. and having an oversupply can also be a social good to ensure that people can still find a roof over their head when things go wrong.
So additional construction is part of the solution, in Canada’s case. There’s also the fact that buildings need to be located in the places people want to move to, it’s not enough to simply have enough. At no point have I disagreed that critical industries should not have redundancies, so I don’t know why you are repeating that argument.
That still leaves the fact the current real-estate market has issues that require severe changes to resolve. And that you can’t just slap “supply” with a capital “S” on the problem and expect equilibrium to return quickly, efficiently, or indeed, at all.
There is a logic to this. Private developers will not make multi-year, large capital investments in something if they think that its value is guaranteed to decrease. That should be obvious.
And we desperately need to increase supply. For better or worse, we do still live in a capitalist society so its going to be up to the private sector to increase supply, with the govt providing an incentivizing role. The govt ever saying anything like “we need to bring house prices down” would paralyze private sector investment into building houses.
FWIW, in my esteemed position as an armchair big-social-problems-fixer, the solution is obvious: Govt investment/subsidies to convert downtown commercial real estate towers into condos. Instead of forcing people back to the office to salvage what’s left of the real estate value for those empty towers. The owners get their handout, people can continue to work from home, it’s good for the environment too! I dunno, I think it makes sense.
We accept that a fundamental need like healthcare shouldn’t be subject to market forces. We don’t have to treat housing any differently. Vienna was rated the #1 most livable city because they understand this. Our path forward is not only clear as day, it’s tested, proven, and already putting out the best results in the world. The only reason we don’t follow that path is because those with the authority to change things are in the class of people profiting from doing things wrong.
This. Fucking this.
Homes are infrastructure not investments. Well not monetary investments anyway.
Governments have done the work of providing housing in the past, and still do in limited numbers. There is no reason why they can’t just push the number of projects up until there is no housing crisis anymore.
I’ve heard some numbers here and there, and it seems like there’s plenty of organizations providing non-market housing that rent at below half the usual prices. Apparently the YMCA is one of them.
If the governments aren’t willing to do it themselves, they can just make it easier for corporations that are willing to provide non-market housing to get the property rights and loans needed to actually get this done.
Government can make large, multi-year capital investments, too. They just don’t want to, because we’re two generations of civil servants and politicians that consider publicly-provided services to be heretical.
You’ll note that anything that doesn’t involve giving money to the private sector is not done, and what little fully public institutions we still have left are a) from an earlier era, and b) so intrinsic to the cash flow of a functioning government that not even the most boot-licking Thatcherite can make a case for selling them off.
As above, there is no appetite in government to do this as it would erode the ability of the wealthy to make money, and even if they did, developers would just build something expensive to maximize value.
The entire philosophy of how government delivers services would need to change, reversing course on a quarter-century of neoliberal policy.
The issue is that the top parties feel secure in their oligarchy. It doesn’t really matter which one is in power as they’re always relevant and can squabble as they like.
They don’t feel threatened during elections anymore because it’s not about leading the country in a better direction according to their party principals, but it’s about what each person can personally gain by doing favours.
I’m worried that the only way to actually make positive change is to put one of the minor parties in charge. Maybe seeing the Green party or the Communist Party of Canada in charge for a few years’ll be what it takes to make the mainstream parties actually fix their crap. Of course, the level of a miracle for something like that to happen is so remote that it’s hard to see any hope in the government without some sort of major upheaval to happen.
We tried that. The, once minor, Reform Party was given chance for the first time in 2006 and we gave them a second try in 2011. I’m not sure anything changed.
Trouble is, once a party takes charge, they are fundamentally no longer minor and naturally become just like all the rest. You haven’t accomplished anything.
What you really want to do is elect a representative who works for you, not for his labour union (i.e. the party). As the employer, choosing your employee based on their union affiliation is, quite frankly, strange.
Agree with the diagnosis, but disagree with retrofit. Vancouver doesn’t need that right now. It takes more political will but I think a better solution would be to finish the job of bringing density to downtown and just rezone the whole of west end into condos with commercial fronts. Then move on to do the same with mt pleasant and Kitsilano. SFH within 5 minutes of seawall is just too much subsidy for suburban conservatives.
It seems to me that increasing supply alone is not going to cut it. Are there not a bunch of financial groups with nearly bottomless wallets that enable them to afford to buy up any amount of property to rent or flip at any price they want, even if it means some properties sit on the market empty for a long time? This government policy seems analogous to having people with $100 dollars sitting at a no-limit poker table with a bunch of billionaires who can afford to endlessly put you all in on every bet, so they always bet more than you have and then the government comes in and says they will allow for more games to be played. Wouldn’t the policy be pointless if you don’t also limit the number of games the wealthy players can play?
You are not only right, but foreshadowing the astroturfing all of that area is going to receive. Regulating real estate is the only answer and then we’ll talk about building more. We know this to be true:
I think personal ownership can go higher than just two properties without problems. The issue isn’t everybody owning five properties, but a small handful owning thousands.
Following that, limiting corporations’ ownership is definitely a top priority. Only owning housing with 30 units or more would probably help a lot. 10 units is just too little I think, as that’s just a conjoined townhouse, which can easily be personally owned and operated. 30 is more like a really small low rise.
AirBnB is definitely an issue as well, and is probably the hardest to regulate. Though definitely not the hardest to pass (that’s the corporations one). I’m not sure what can be done with it, as there’s already laws in place regarding hotels. Maybe force the company to register all BnB locations to a government database in real time? Though with enough housing, I think this will be an insignificant issue. Especially combined with the other changes. BnBing a spare room is quite a different thing compared to an entire unit/house on a permanent basis.
I think you’re probably right about the numbers, that’s definitely a discussion to be had. I originally said 30 on the units but there are units that I walk past a lot and they have about 10. I couldn’t see a small business owner owning that, but I guess they could.
Living in Seattle and watching it be demolished was hard to watch, I’ve accepted it now. We’re still fast becoming San Francisco where you have the rich and then no one to work there, it’s not a good situation. Regulating the corporations is the only way to begin truly fixing it, imo. All of the best cities in the world are becoming disneyland and nothing behind the curtain.
I like the idea of progressively higher taxes. Second house might have a modestly higher tax, but the third will be a steep increase and it only gets higher from there. Anyone who truly wants/needs multiple homes can have em, but they’re gonna pay through the teeth for them (which we can invest into building more homes).
We have such a shortage that IMO any extra home ownership is a problem. But it’s the kind of problem that I don’t think is a concern if they pay sufficient taxes on it. It’s the kind of problem that we can largely throw money at to fix.
Personally, I have no issues with things like summer homes, or having a second property you rent out for some money on the side.
The first is typically somewhere that having property is purely a luxury rather than a neccessity, so as long as it’s not being done in another large city or something, it’s not that much of a big deal. Especially so if the government isn’t on the hook for utilities.
For the latter, as long as the number of properties being rent out, and that the renting is done properly, it’s not a big deal either. The government already has regulations on rentals anyways, though I do wonder how well they’re enforced. Either way, while I do agree that excesses here is an issue, one or two properties utilized like this isn’t a problem, even if thousands of people do it in a single city.
Those sound like better ideas to prioritize to me. Besides political machinations, what reasons are there not to implement those types of policies?
Corporations have lots of money and so a lot of people are told that it’s the “nimby’s” who aren’t letting things get built and that “Trickle Down Housing works!”. There is a slight chance Trickle Down Housing would work in 30 to 40 years, but regulating real estate is the fastest, easiest and best for the people who live there. So basically, the people who want more and more money.
Everyone who is making money by not implementing these policies is peeling off some of it to keep the policies that make them the money in place.
Please no, don’t stop building supply until we get the demand side just right. We also massively lack supply, with the lowest housing per capita in the G7. It takes years to build supply. It’s insane that people want to slow that down!
When are people going to understand it’s both? What makes housing such a “good investment” is that we don’t build enough of it for the people we have. Investors aren’t snatching up affordable housing in rural Arkansas because they have way more supply. We should absolutely deal with investors, make their lives miserable, but we ALSO need supply.
Out of interest, what impact do you think zoning regulations play in all this? @PeleSpirit, care to comment as well?
Zoning plays an enormous role. The Lower Mainland is one of the densest regions in Canada, and it has a fraction of the density of virtually all European countries, even mountainous and rural Switzerland. Our urban planning is sprawly and terrible.
Even ignoring housing supply, if you want walkable livable cities, low transportation costs, low environmental impact, and high quality of life, then we should seriously rethink our zoning and urban planning. The consensus on here against more supply, which is also against better zoning and more density, is seriously mind boggling.
Interesting. I was thinking that if there were more openness to mixing zoning for housing and commercial then this would make room to put in housing in the dense areas you were talking about.
Don’t slow it down for who?
How about non-market housing supply, like the spacious comfortable middle class condos that Scandinavian countries provide? Vienna is also a model for government owned housing.
How about co-op housing supply, for people who want to live in communities and not live in an investment?
How about we free up zoning like they do in Japan, where you can buy a spacious new detached SFH in the middle of Tokyo for a fraction of the price of Toronto?
Do you know why the last housing bubble popped in Canada? Because we had a massive oversupply of condos and homes relative to demand. Being against supply is absolutely delusional.
Because in America that usually becomes a “place to put the poors” and becomes a place you can’t go to unless you’re one of them. Cabrini Green in Chicago started out as a wonderful thing to get people off the street and turned into a hell hole. It was also a great location that was rightfully torn down and became luxury condos. That is what America is.
Now you’re talking, I’ll add that to the list of awesome ideas.
Because zoning is there for a reason and that is a developer’s dream request. They would put high rises filled with luxury condos next to your garage if they could. See Houston.
That’s not the reason, lol. You might want to do some research on that.
It’s because public housing in the US is a ghetto to segregate poor people and undesirables. On the Scandinavian model, non-market and market housing are mixed together. Rich and poor live next to each other. These are highly successful.
Are you a NIMBY? Our zoning is horrible. It is mathematically impossible to reach our climate goals if we maintain the terrible zoning laws that we have.
You also totally misunderstand why we build tall expensive towers. It’s BECAUSE we don’t allow middle density in SFH areas. Please read about the “missing middle”. Both tall towers and SFH are symptoms of the same disease.
You might want to actually read about the last housing bubble. When the bubble finally burst, people couldn’t sell their homes and vacancies were high. That’s also why the government stopped building non-market housing. They thought we had built too much. 
That’s absolutely not true, see the following neighborhoods: Fremont, Queen Anne, University, Capitol Hill, West Seattle, etc.
You’re obviously not reading anything I’m saying and promoting the buzzwords of the developer community so this is my last response to you.
Well obviously you also need to increase demand. Without that, most Canadians will remain out of the market. The hope is that more home options will encourage increased demand.
Supply and demand control prices. Period. Adding supply will only fail to control prices if demand keeps rising. And if buyer demand keeps rising to keep up with prices? It would suck, but there’s actually a silver lining to that: Rent goes down then.
Remember, now that we’re punishing vacant units, every investment unit must be rented out. So as the investors make a mad dash to build and buy our endlessly-rising housing units, more and more inventory gets dumped onto the rental market.
Now, there’s obvious downsides to this story, I’m not going to pretend the “own nothing and be happy” end is ideal. But it’s better than the “own nothing and live in a fucking tent” ending.
That’s trickle down housing and it doesn’t work, the end.
No, market failures exist. It’s not all supply and demand. The cartoon economic world of libertarians is not reality.
That said, we do have a supply problem. Vacancy is essentially zero in Canadian cities, and that’s not true in more affordable housing markets like the US or Japan.
Huh? Supply and demand is an observation of human behaviour. Market failure is equally observable through the supply and demand lens. It too is ultimately human behaviour.
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Canada wants to eat it’s cake while also having it. Something like 60% of Canadians own their home or live in a home their parents own. 40% of a country is more than sufficient to tear the country apart if they lose faith in the society they live in. Allowing housing to become investments has been a mistake that needs to be corrected for the long term stability of the nation.
If government had the power to just snap their fingers and halve the price of all real estate, regular home owners should not be negatively affected.
It’s mostly only the people who own multiple homes as investments, developers, and people who rent out their properties.
If you own a home that you live in, yes it will suck that prices dropped after you signed your mortgage, but you already agreed to pay that before so you should be able to afford those payments wether your house is $1M or $500K.
If you need to move, the house that you need to move to will now be half price so you didn’t lose anything with your own house going half price. If anything you win by not having to pay as much taxes.
This part is incorrect. If you buy a $1MM home with a $200K down payment, then you have a $800K debt. If you sell at $500K, then you still owe $300K and will declare bankruptcy and need to start saving for 7 years (?) for that bankruptcy to fall off your credit history to be able to get a new mortgage again.
This is the problem some people are facing now. They bought at the peak, with a variable rate mortgage, and are now underwater on their house and can’t afford the payments that have literally tripled. This will get worse in the next ~3½ years as fixed rate mortgages signed before/at the peak of the market come due for renewal, if interest rates remain this high.
Housing prices going down absolutely kills people’s wealth. Which is a huge problem since this means half the population is selfishly benefiting from maintaining high real estate prices.
Canadians are using real estate as their retirement nest eggs. That means they’re investing less in productive businesses and are woefully under-diversified. Reducing/removing the capital gains exemption on real estate sales would encourage actual investment.
As someone who struggled to get into homeownership in vancouver area it not about investment by candians. you are actively bidding on homes where asian investors trump your offer by 100K without even seeing the property. And the vacancies are bad. Two of my friends rent small basement suite in a giant home. The asian owners have not lived in the rest of the house for 2 years. So an entire family is denied housing for an investor to just sit on the property…not a canadian nest egg.
Shit, when was such an exemption passed? That’s literally a law that turns housing into a non-productive investment.
Making a necessity to live in the modern world an investment is the way to turn a portion of the population resentful and unproductive.
Googling around, all I can find is that Canada didn’t have a capital gains tax until 1972. I think that means all investment profit was tax free.
To be fair, the reason they’re using it for retirement is because every other method (defined-benefit pensions, defined-contribution pensions, bonds, mutual funds, RRSPs) have been systematically broken by the wealthy.
The dotcom bust, and the lesser extend the 2008 crisis, wiped out a lot of Boomer and elder-Xer equity. Real estate was the next thing that “weath advisors” pushed after they ran the other options into the ground.
If people could retire with dignity and security, we probably could have headed off some of the early stages of the real estate speculation boom. Of course, that would have required rich people to make less money, or face some kind of consequence. As it stands, the economy suits them just fine, even if it fails everyone else.
Those people will also need to factor in how much housing is causing localized inflation which is eating into their monthly cash flow. Unless the person has a rather large real estate portfolio they could defer the burden to I don’t think the current situation is going to work out well for most single dwelling owners unless they plan to move away soon.