[HN Gopher] The U.S. housing market vs. the Canadian housing market
___________________________________________________________________
The U.S. housing market vs. the Canadian housing market
Author : rufus_foreman
Score : 172 points
Date : 2023-09-09 15:54 UTC (7 hours ago)
(HTM) web link (awealthofcommonsense.com)
(TXT) w3m dump (awealthofcommonsense.com)
| Sytten wrote:
| One thing driving this bubble is that we just don't build enough
| houses compared to the number of immigrants we accept. The
| liberal government is just starting to accept that fact. Kinda
| ironic that for years the the rest of Canada told Quebecers they
| were racists because we were pushing back against immigration and
| now it's a mainstream view.
| kjkjadksj wrote:
| Immigration is a good thing. California would not be the fifth
| largest economy by gdp without 40 million people moving there
| over its short history. Its only a bad thing when your elected
| officials choose to scapegoat them to mask their own
| incompetence with policy making. Immigrants are also moving
| where there are jobs to be had, but you never see a politician
| who is against immigration be against attracting more business
| in their district no sir e.
| kchandra wrote:
| The problem can be solved in two different directions -
| accepting fewer immigrants or building more housing (perhaps
| both for some stretch of time to ensure that citizens can
| afford housing and build families).
|
| Long-term though I don't see a way for the Anglosphere to
| thrive unless immigration increases, given low birth rates.
| great_psy wrote:
| Implicitly, this speaks volumes about how much worse life is in
| other countries.
|
| If somebody is willing to leave their home country, immigrate to
| Canada, and work hard enough to afford the rent/mortgage of those
| prices, it must be much worse in their home countries.
|
| I can't really explain it otherwise. It is obvious that it must
| be the increase in population increasing those prices, and people
| born in Canada do not have that many kids.
| georgeburdell wrote:
| I have some familiarity with one prominent immigrant group in
| Canada. Shame keeps people already here from talking about how
| hard life is, because of the pre-conceived notion that Canadian
| life is easier. There is no feedback loop
| glouwbug wrote:
| We certainly aren't dying of malaria or religious war
| georgeburdell wrote:
| I don't think most immigrants to Canada have those concerns
| mabbo wrote:
| I bought a condo in Toronto in 2015 for $592,000 CAD. I live here
| and quite like it. It's been my home for eight years.
|
| Similar units in the same building now sell for $1.2m.
|
| This means that my family's wealth has increased by $75,000 per
| year just from owning our home. That's more than the median
| income in Canada!
|
| I don't say this to gloat. I say this as an example of how badly
| wrong things are. Nothing about this is sustainable. If it
| continues for another decade, we can presume no young person
| today will ever be able to afford a home.
| smsm42 wrote:
| Or, they'd do 60-year mortgages. US already has 30-year more or
| less universally, and those are actually backed by the state. I
| don't see why they can't move to 60 years. Let the next
| generation deal with the fallout, this is the tried and true
| recipe, has been working for nearly a hundred years by now.
| rewmie wrote:
| > I don't say this to gloat. I say this as an example of how
| badly wrong things are.
|
| I think it's a global phenomenon. I own an apartment in an
| European country and I also saw my neighbors selling theirs for
| 2 or 3 times what I paid for mine. The same trend can be
| observed in basically all European capitals. I don't think this
| is a Canadian problem.
|
| I think it's dangerous to jump straight to witch hunts. First
| the scapegoat was golden visas, then it was Airbnb's, then "the
| rich" whatever that means, and now the Canadian government too?
| Which one is it?
| Waterluvian wrote:
| I bought a home in Woodstock, Ontario for about 525k in 2019.
| Last year comparables sold for almost $1M. And now they're back
| down to about $600k.
|
| Family wealth going up is somewhat written in fake money.
| Especially if you're paying a mortgage with a rate that might
| renew at double.
|
| Toronto is still super desirable but I think there's real risk,
| versus it being a guaranteed good investment the way the boomer
| generation has been hammering into us about real estate. Can
| you imagine buying a home at $900k, only for it to fall 33% in
| value and your mortgage interest payments double?
| mabbo wrote:
| Huh, that low in Woodstock, eh?
|
| We're considering moving to London (ON) to be near family and
| friends, since we're both remote workers anyway. Interesting
| to hear the prices down there are falling.
| 0x5345414e wrote:
| I am in London right now temporarily. I'm sure you've spent
| time here but: downtown is riddled with drug addicts,
| traffic is TERRIBLE, it's a 2 hr drive from basically
| everything. There are some nice areas (Wortley, Byron, etc)
| but idk, if you have options I can't say I'd recommend it.
| Waterluvian wrote:
| Woodstock is an incredible city to raise a family. And it's
| literally on the 401 and 403. Highly recommend you
| investigate a bit and consider it.
|
| If you aren't raising a family you'll find Woodstock to be
| devoid of stuff to do for adults unless you hate people.
| Fervicus wrote:
| Can you list some reasons that make Woodstock an
| incredible city to raise a family? I am curious
| Waterluvian wrote:
| It's smaller so it's generally just lower stress. You can
| comfortably walk to Southside park from most
| neighbourhoods. Amazing splash park and family pool and
| playgrounds. Good schools. Less traffic means less
| anxiety with letting kids be independent. I love being
| able to drive literally anywhere in 7 mins and making
| unprotected left turns during "rush hour" without waiting
| an eternity.
|
| A lot of good programs, especially at the library.
| There's a great robotics program at the highschool level.
| Lots of sports leagues... it's kinda wild how many
| quality ball parks there are here (with fences and clay
| infields and lighting). Good hockey arena. Good curling
| program for adults and kids.
|
| Both my partner and I volunteer at schools and they're
| generally great. Filled with teachers who care quite a
| lot.
|
| It feels like what Waterloo was when I grew up there in
| the 90s. I love seeing roving bands of kids on bikes
| without parents in tow.
|
| Of course a lot of it is subjective. Everyone has to make
| their own decisions.
| Fervicus wrote:
| Thanks! Do you work remotely?
| Waterluvian wrote:
| Yep, for about five years now. I can't cay much about the
| commute other than you've got decent access in three
| directions of southern Ontario. My neighbour goes to
| Toronto daily and woof... he leaves at like 5am to avoid
| the traffic.
| holoduke wrote:
| Same here. Bought a house for 700.000 euros in the Netherlands.
| 4 years later got valued at 1.100.000. I guess its a global
| issue we have. Housing either renting or buying is extremely
| difficult for starters. Once you are in the game its relatively
| easy to move arround. But as a starter impossible.
| enraged_camel wrote:
| >> If it continues for another decade, we can presume no young
| person today will ever be able to afford a home.
|
| I mean, the US isn't as bad as Canada (as the article states),
| and this is already the case here. Most young people who manage
| to buy a house either get substantial help from parents, or buy
| in the middle of nowhere because they are able to capitalize on
| having a WFH job. Everyone else is stuck renting, at least
| until their parents die (if they have homeowner parents that
| is).
| stouset wrote:
| > This means that my family's wealth has increased by $75,000
| per year just from owning our home.
|
| Sort of, but in practice not really (particularly when interest
| rates are higher, like now). The only meaningful way to realize
| that extra wealth is to sell. But then you've got to live
| somewhere, but everywhere else has (on average) gotten
| proportionally more expensive too. The only way to really
| capture that wealth is to downgrade or to go to an area that
| has underperformed, neither of which are typically appealing
| options, nor are they generally aligned with our notions of
| "increased personal wealth".
|
| What's really happened is that non-homeowners have effectively
| gotten effectively poorer since their only options are to pay
| increasingly-large rents or buy at inflated prices.
| epistasis wrote:
| No, this is purely wealth, it's not a "sort of" it's the
| actual real wealth just like a bag of diamonds in a safe.
|
| Indeed, homes are some of the _most_ liquid form of wealth,
| easily leveraged with loans to buy even more property. And
| home values are one thing that governments are most likely to
| protect through drastic policy changes. Sure, you can take
| out a loan backed by your diamonds, but it won 't be on terms
| as good as that of your home.
|
| Home wealth really is one of the strongest forms of wealth
| there is, and people trying to pretend it is not have no
| concept of how lucky they are, or even what wealth really
| means.
|
| People without this wealth are forced to pay their rent to
| others, who accept both the rent and then the real estate
| gains.
| fallingknife wrote:
| It's not, though. Since 1970 home prices in the US have
| gone up 16x and the S&P 500 has gone up 44x. Adjusted for
| inflation, that's 2x for houses and 5.5x for stocks. And
| you don't have to sell your stock if you have to move (and
| take a 6% hit on RE agent commissions) or pay money to
| maintain it. You can borrow against it whenever you want
| with just the click of a button. Of course housing sounds
| like a great form of wealth when you compare it to the
| hilariously bad investment of a bag of diamonds in a safe.
| kjkjadksj wrote:
| You are looking at avg gain. I can tell you anecdotally
| that over the past 25 years there have been markets that
| have barely budged at all in median prices, and markets
| that have seen fold change gains in median home prices.
| In some markets you are doing a lot worse than the index,
| in others you handily beat the index and these are
| generally the ones people bemoan in cost of living
| articles in the media.
| epistasis wrote:
| These calculations ignore that most homes are eligible
| for extreme amounts of highly protected leverage. Sure,
| you can trade on margin on the stock market, but you are
| subject to margin calls, which is not the case with a
| home.
|
| So multiple that 16x by the typical 4x-5x leveraging, and
| homes turn out to be really great. And since the
| transaction fees and the non-existence of index funds in
| the 1970s made it harder to invest in the stock market at
| a small scale, and homes were a much better investment.
|
| Add on to that that everybody needs a place to live, and
| your home acting as an investment vehicle with equivalent
| performance to the US stock market, and people from the
| 1970s have had had an amazing deal that younger people
| have not had access to.
| fallingknife wrote:
| But you have to put that capital in anyway because house
| leverage is amortizing. Margin debt is not.
| compiler-guy wrote:
| All that leverage absolutely crushed investors in the
| 2008 housing crash, and is again now ruining people who
| had poor or nonexistent interest rate hedges.
|
| The idea that it's easy or natural to make money via
| leveraged housing had ruined many people.
| ozr wrote:
| This isn't really a thing in the US right now. Less than
| 10% of mortgages are adjustable. The share of ARMs in 08
| was much, much higher.
| [deleted]
| max51 wrote:
| The difference here is that you would make 44x from the
| spare change you can save every month after paying for
| rent, not from a loan worth >5x your yearly salary.
| fallingknife wrote:
| A loan which you have to pay back with interest. So
| unless home prices are rising faster than interest rates,
| you're losing on that deal
| ozr wrote:
| Yes, but:
|
| 1) Historically they have.
|
| 2) Most people in the US that haven't purchased very
| recently are locked in at very low rates. Only 9% of
| mortgages are over 6%. 61% of outstanding mortages are
| <4% [0].
|
| 3) There are a lot of incentives (and the ability) for
| governments to ensure home prices continue to increase,
| although at a rate lower than they are now.
|
| 4) We spent over a year with inflation that is double
| most people's mortgage rates.
|
| 5) You have to live somewhere regardless; the alternative
| is renting. For most of the country, at least until very
| recently, that was a worse option.
|
| [0] https://apolloacademy.com/the-distribution-of-
| mortgage-inter...
| epistasis wrote:
| Or, you know, you rent out the place.
|
| And if you are your own landlord (ie a homeowner) you can
| pretend your rent is whatever you want, but the market
| rent is what one should impute as the value of that rent.
| fallingknife wrote:
| Which you can still lose on. Most major markets in the US
| now rent below cost to own.
| twic wrote:
| > Indeed, homes are some of the most liquid form of wealth
|
| "Liquid" means fast to sell without giving a deep discount.
| Homes are far less liquid than listed securities.
| [deleted]
| stouset wrote:
| > People without this wealth are forced to pay their rent
| to others, who accept both the rent and then the real
| estate gains.
|
| I note this in that _not_ owning results in being beholden
| to increasing rents and at a cost disadvantage in buying a
| future home.
|
| But the property value gains are hard to realize in a
| meaningful way. Yes, you can potentially leverage your
| equity into acquiring more homes. But real estate gains
| have traditionally lagged the stock market. So as you
| continue this cycle, you increase your leverage
| dramatically while investing in highly-correlated and
| slightly underperforming assets.
|
| Meanwhile, little of these gains are able to be used for
| actual lifestyle improvements until you start unloading
| these properties.
| lazide wrote:
| Uh, home equity lines of credit are a thing in most
| places. They certainly are in the US!
|
| Also, renting out rooms. Also 'granny flats', etc.
| HWR_14 wrote:
| > real estate gains have traditionally lagged the stock
| market
|
| Does that take into account the relative ease and long
| term leveraging in real estate vs. the stock market?
| lumost wrote:
| Considering the above scenario where real estate is
| gaining at 75k per year. A wealthy individual could
| easily leaver themselves to 75*5 = 375k/yr. Using the
| starting cost of a home at 600k, this would equate to an
| average rate of return of about 300%
|
| Such rates of returns are simply impossible in the
| general stock market without getting very lucky.
| epistasis wrote:
| Well the location _is_ the lifestyle. If the homeowner
| doesn 't value the location as much as all the wealthy
| people clamoring for a spot in the neighborhood, yet they
| still hold onto their home, it truly is a bad allocation
| of resources among people.
|
| None of these homeowners would even consider the option
| of selling their home and renting it from the purchaser,
| because it is so obviously a bad idea in every way. But
| their blindness to the alternative is also indicative of
| just how amazing a form of wealth is.
|
| Super wealthy people are always convincing themselves
| that they are not wealthy, because they always see others
| with a higher level of lifestyle. I knew an older man who
| had built an empire of hotels, but because he wasn't
| Hilton, he always felt like a failure despite never
| flying commercial, owning mansions across the world, and
| being surrounded by servants at his beck and call.
|
| When people have raised their wealth without their
| lifestyle "changing," yet they can now move nearly
| anywhere else and have a massive lifestyle improvement in
| consumption, without the location they were in, they
| somehow trick themselves into thinking this is not
| wealth.
| kjkjadksj wrote:
| I think you are forgetting the most common way people
| realize this: sell house for gain, use money to afford
| down payment on nicer home, perhaps enough to end up
| paying a similar monthly payment in the end. People act
| like you need to go from paid off house to paid off house
| but thats hardly the case. Partially paid off house to
| even less paid off house is common especially if you know
| you will be working for another few decades.
| bell-cot wrote:
| > ...actual real wealth just like a bag of diamonds in a
| safe.
|
| Vs. the grim reality:
|
| https://fortune.com/2023/09/03/diamond-demand-falling-lab-
| gr...
| epistasis wrote:
| And if this was happening to home values, there would be
| a panic in the legislature and all sorts of policy to
| stop it and preserve home wealth.
|
| Which is one of the reasons it rubs me so wrong when
| people think their homes are not a form of wealth.
| therealdrag0 wrote:
| Nice example of supply/demand and why we just need to
| build more units.
| throw_nbvc1234 wrote:
| Except when interest rates are near 0%, you can take a loan
| against the house and use as leverage to buy more stocks (or
| property).
| majormajor wrote:
| It's one of the only assets available to "normal people" that
| is highly leveraged (yet also protected in many ways).
|
| So that 200-something-thousand-dollar increase is on a
| downpayment that may have originally just been 200K or less.
|
| Short-term "stepping up" through a series of properties can
| be much more wealth-building than, say, renting + investing
| in stocks. The longer you stay in one place the less
| advantageous the returns are over just putting the down
| payment in the market, but then having a concrete asset has
| its own benefits even then.
| somerandomqaguy wrote:
| Not necessarily. Home Equity Lines of Credit (HELOC) are a
| thing. My admittedly overly simplistic understanding is that
| the higher the valuation of your house, the higher line of
| credit you can borrow against it, thus the incentive to keep
| valuation high even if it's unrealized.
| DonsDiscountGas wrote:
| They would still need to pay back the HELOC using actual
| cash, not unrealized gains from estimated home value. Seems
| like an extremely small benefit.
| compiler-guy wrote:
| A large part of the 2008 housing crash in the US was
| driven by HELOCs where the borrower ended up not being
| able to repay or refinance. Such loans can be a good way
| to access the value of the home, but only at the expense
| of reduced consumption while paying the loan off or
| reduced payout when it finally selling.
| djbusby wrote:
| It's not just the valuation of the house it's debit to
| equity.
|
| In a $100k home where you owe $80k the HELOC would be like
| only $10k - and the rate would be less good.
|
| In the same home where you owe $20k (have $80k equity) you
| could borrow $50k at a better rate.
| TrainedMonkey wrote:
| > The only meaningful way to realize that extra wealth is to
| sell
|
| This is true only on first approximation. On second
| approximation rent prices are positively correlated with
| property prices. This means that rent_amount / mortgage >>> 1
| and if you rent the place out you can essentially get passive
| income. You are correct that you still need to live somewhere
| and that is going to come at a cost which will eat up the
| passive income, but effective rent will still be lower.
|
| Another option is to realize that lower mortgage compared to
| equivalent rent means that extra cash is freed up towards
| other things. This can either be extra investments every
| month, experiences such as traveling the world, or even a
| lower paying job with a lot less stress.
| psunavy03 wrote:
| The problem these days, though, is that the equity in House
| 1 is often needed to buy House 2 if you move, otherwise
| you're dipping into your nest egg for a second down
| payment, which is not financially wise. Equities generally
| have a higher rate of return than real estate.
|
| Also, multiple homes mean multiple maintenance bills, and
| also the potential for bad tenants wrecking the place. I
| had a rental property in the past and had to spend multiple
| thousand dollars staging it for sale because, renters
| generally DGAF about maintenance, and property managers get
| lazy and do the bare minimum to get it rented.
| creato wrote:
| I don't see the problem here. You aren't entitled to
| ownership of multiple houses. Being forced to sell one
| house in order to buy another one sounds like working as
| intended to me.
| psunavy03 wrote:
| My point was that "rent it out and print money" doesn't
| always work. I did it with a home I owned, but that was
| also a period of time where I was a) bouncing around the
| country renting the roof over my own head and b) waiting
| to sell after taking it in the shorts value-wise during
| the Great Recession. I was never underwater, but would
| have taken a huge capital loss for awhile if I'd sold.
| pc86 wrote:
| You aren't entitled to ownership of a single house,
| either.
| stouset wrote:
| But that's entirely my point. It's hard to actually
| realize these gains in practice since when you sell your
| house, the increase in value is absorbed by buying your
| next residence, which has on average also inflated in
| value.
| mabbo wrote:
| > The only meaningful way to realize that extra wealth is to
| sell. But then you've got to live somewhere
|
| Which is one of many reasons we're considering leaving
| Toronto
| chongli wrote:
| _The only way to really capture that wealth is to downgrade
| or to go to an area that has underperformed, neither of which
| are typically appealing options, nor are they generally
| aligned with our notions of "increased personal wealth"._
|
| There are people doing that. I know of multiple people who
| have sold their $1m++ houses in the city and moved out to
| retire on farms. Their property taxes and total cost of
| living went way down and all of that real estate wealth
| turned into cash.
| djkivi wrote:
| A lot of Ontario license plates here in Alberta these days.
| CydeWeys wrote:
| It works out to effectively way more than $75k/yr in
| realizable income because, in the US at least, long term
| capital gains on your primary residence are _heavily_ tax-
| advantaged in a way that income isn 't.
| doctorpangloss wrote:
| This entire thread is unsophisticated people bemoaning (or
| celebrating) things they don't understand. A median that is
| going to be less than 1 house for a 30 year old, and maybe
| 3 in the average lifetime, so truly, what do they know?
| 90th percentile is probably 10 trades. It's garbage in,
| garbage out, and it's why there is zero progress made on
| any of these issues.
|
| Nobody forces you to buy, or sell, a house. And if you feel
| strongly about the politics of the issues, try to get
| elected.
| bardak wrote:
| Even better in Canada since capital gains on your primary
| residence is not taxed at all.
| tempsy wrote:
| Canada's housing market is much more vulnerable to "popping"
| than the US because everyone's mortgage rate resets every 5
| years.
|
| Let me know what happens to prices when everyone has to pay 8%
| soon.
| blindriver wrote:
| I've lived through 2 housing crashes in 20 years in the US,
| and personally suffered both times, while there's been 0 in
| Canada. Maybe this time it's different? Maybe, but probably
| not.
| [deleted]
| 01100011 wrote:
| Losses will be socialized like they always are. Homeowners
| are too politically powerful. No government will let them
| bear the costs of their decisions.
| aquaticsunset wrote:
| Unless legislation changes, investors will just scoop up the
| sales and keep property values high. It's a pessimistic take
| but I don't see any deviation from this path (in Canada and
| the US).
| tempsy wrote:
| Investors paying 8% can't make the math work either.
| mattnewton wrote:
| Why would they pay 8%? Surely they can get margin at a
| cheaper % somewhere other than a retail mortgage if they
| are a professional investor or firm.
| aquaticsunset wrote:
| They're not getting mortgages. All cash purchases are
| extremely high right now (roughly 30% of all home sales
| in the US). They can fleece us for "modest" rent
| increases every year, conveniently just less than 8%,
| while property values stay high because these investors
| are able to gobble up the housing stock.
|
| Without legislation dissuading this behavior, home
| ownership will continue to be increasingly difficult for
| working people.
| ddorian43 wrote:
| Pretty sure investors buying have dropped by 50%
| according to /r/rebubble
| HWR_14 wrote:
| "All cash" just means "no contingency on financing". It
| rarely means "will not be financed".
| [deleted]
| kevin_nisbet wrote:
| I think the only good news I heard in this area in the
| US, is one of the big companies doing this was going bust
| because they screwed up their calculations for how much
| to offer when buying homes. So if the companies just
| can't make the math work and go bust that would also be a
| good outcome here.
| xhkkffbf wrote:
| IT just differently mortgaged. It's not a direct
| mortgage, but the company that's buying these had to
| raise the capital one way or another. And if the company
| didn't buy a house, they have the choice in investing it
| in something else. If the bonds are paying 8%, the
| company must believe that the house will return even more
| which is pretty hard.
| CapitalistCartr wrote:
| But as the quote says, the market can remain irrational
| longer than you can remain solvent.
| nonethewiser wrote:
| Who are they going to sell to for more at 8% rates?
| parthdesai wrote:
| >This means that my family's wealth has increased by $75,000
| per year just from owning our home. That's more than the median
| income in Canada!
|
| I live in Toronto as well, and did penny pinch from the time I
| graduated (2016) to buy to buy my 1st condo here in 2020. I
| keep hearing statements like these, but if we're being honest
| unless this was an investment property, a 2nd home or you were
| moving away to a different city altogether, money is only made
| on paper. While the condo price has gone up, so has the prices
| of all the other houses. If you were to sell your condo to
| realize your gains, the next property you buy has gone up
| proportionally as well.
| epups wrote:
| Ok, but people who did not buy a home ten years ago still
| have to compete in the same housing market, and they didn't
| earn an additional $75,000 every year from their labor.
| parthdesai wrote:
| First, I know it fully well how bad the housing market here
| is.
|
| Second, that's my point, unless it's an investment property
| or if you're selling and leaving the city altogether, you
| haven't actually earned $75,000/year.
| epups wrote:
| > Second, that's my point, unless it's an investment
| property or if you're selling and leaving the city
| altogether, you haven't actually earned $75,000/year.
|
| Yes, you have. You can take loans against your property
| value, for example. But even if you sell and put the
| money right back into another inflated asset, you still
| actually earned it.
| parthdesai wrote:
| Sure, you can take out HELOC against it, and but you're
| playing a very dangerous game when interests do rise.
| That has literally been happening right now.
| medvezhenok wrote:
| Yes - the point is, by staying in your house you are now
| consuming more housing than you were before, even though
| it's the same exact house.
|
| The wealth is quite real - it just doesn't feel that way
| since the experience of it doesn't change
| dotnet00 wrote:
| You have gotten $75k/year though.
|
| Take two people X and Y, both have $500k in the bank. X
| buys a house with it, Y sticks to renting. A few years
| later, they want to move to another place with the same
| costs. X's house now sells for $1M and he is able to buy
| a new place for the same money, thus his new house
| effectively only cost him the $500k he had spent years
| ago. Y, having not bought a house previously, now has to
| pay $1M, which he does not have.
| stanski wrote:
| He has, that's the point. He has an extra $75,000 per
| year that can go into a new home, than those who didn't
| have a home to sell.
| willis936 wrote:
| Nothing about these gains are imaginary. Imagine this
| person rented the entire time instead of buying. They did
| buy, so let's imagine they decided to sell today and rent
| instead. How did they just convert those imaginary gains
| into real ones?
| parthdesai wrote:
| Because the rents have gone up equally in the city? I
| rented a 1 bedroom condo back in 2017 for $1700/month.
| The same unit is around $2600/month now. So the price to
| either rent or purchase the same unit in the city has
| gone up significantly regardless.
| willis936 wrote:
| Okay but they'd be paying the higher rate regardless. On
| the hypothetical "rent the whole time" track they have
| much less money than the "bought ten years ago" track
| they actually took. In both cases housing costs more, but
| in the latter they have hundreds of thousands of dollars
| more in easily liquified assets.
| medvezhenok wrote:
| You're still missing the point. The gains are real - you
| not willing to give up your house to realize them) or
| insisting that you need another house in exchange)
| doesn't make them not real.
|
| Yes, every other homeowner is sitting on the same gains,
| so relative to them, it feels like nothing has changed.
| But relative to the non-owners, you have been given a
| free handout of wealth. Which you are << consuming >> by
| staying in the same house you were in before.
|
| If the rent has gone up, then your house you live in is
| now producing 2600 dollars of value per month rather than
| 1700 (even though it feels like nothing has changed to
| you)
| vintermann wrote:
| Exactly. You need a place to live, and other places to
| live have become more expensive too, but you own more of
| the place you live thanks to appreciation. You don't have
| to sell it either to realize the gains, you can borrow
| against it to make more money for instance, opportunities
| they certainly wouldn't have had without the
| appreciation.
| smsm42 wrote:
| Are there cheaper places in Canada? In the US, if you can
| work remotely, you can get better and bigger house 2x-3x
| cheaper than, say, around the Silicon Valley or any similarly
| priced cities, and still earn hi-tech salary. Of course, you
| need a remote-friendly job (which may cut off some
| opportunities) and you need to agree to live in a place that
| is not the first destination for every fashionable band out
| there, but it's possible.
| hylaride wrote:
| Historically, the maritimes (Atlantic) provinces and
| Manitoba and Saskatchewan were relatively dirt cheap, but
| their home values have _skyrocketed_ since covid and WFH,
| especially in Nova Scotia.
| epistasis wrote:
| Let's be clear: none of the condo or homeowners "deserve"
| these economic gains, they are merely a wall that is raised
| ever higher to ensure that new entrants to the country are
| forced to pay their wages to existing homeowners' valuations.
|
| Which is what makes complaints that it somehow doesn't
| benefit homeowners all the more outrageous: saying that "sure
| I'm on the other side of this wall, but I can only use my
| wealth to stay in this side of the wall" minimizes an
| absolutely huge unfair advantage you have over people unlucky
| enough to be born after you or not have wealthy parents.
| smsm42 wrote:
| What do you mean by "deserve"? It looks like you are making
| some kind of hidden morality market, where market gains are
| or should be distributed according to some kind of moral
| merit, based on unspecified criteria. But no market in the
| history of humanity has ever worked that way. I think it's
| safe to assume none ever will. So what's the point? Yes,
| it's not "fair" that some people are born in better
| circumstances and some in worse, some are lucky and some
| are not, so what? Yes, the son of Bill Gates has a huge
| "unfair advantage" over me whose parents are not
| billionaires. So what?
| medvezhenok wrote:
| The point is, the more that gains are distributed
| randomly in society (and not due to productive effort or
| doing something useful), the more unstable a society
| becomes.
|
| Sort of how the Weimar hyperinflation in the 1920s (which
| exacerbated the feeling that things are unfair) set the
| stage for the rise of Hitler in the 30s.
|
| If taken to the extreme, it leads to the collapse of
| law&order.
|
| It's also why feudal systems were inherently unstable and
| suffered many uprisings.
| peyton wrote:
| Also (in general) I don't think most people would be so
| sanguine if their condo lost $75k/yr over 8 years.
| bugglebeetle wrote:
| This is exactly how housing works in Japan outside of
| Tokyo and maybe a couple other places and I would say
| they're doing a lot better than Canada.
| neltnerb wrote:
| Not to even get into how weird it is that something that
| is literally in worse condition at the end than the
| beginning, just like a car, increases in value instead of
| decreasing. And even more that this is the assumption,
| despite it being based entirely on demand and not at all
| on quality.
| throw__away7391 wrote:
| This is the scary bit for me. It doesn't take much
| imagination to speculate that homes are possibly
| dramatically overvalued at present and current prices are
| unsustainable. This can't end well.
| psunavy03 wrote:
| The only time home prices collapsed was when the
| mortgages underlying them were shown to be funny money.
| This is largely not the case right now, at least in the
| US. I can't speak for Canada, but the US largely has a
| supply problem which can't keep up with demand.
| smsm42 wrote:
| My house lost about 60-70k from the top one of the years
| (I suck at timing the market). I couldn't care less - I'm
| not going to sell it anytime soon, and this price is
| imaginary anyway, and the imaginary price recovered half
| of it since then, and I still have no idea how much it
| would be priced when I am going to sell - but I'll be
| worrying about it then, no point in doing it now. Of
| course, if that happened every year for 8 years, that
| would probably be weird, but that would also mean I could
| buy houses with my pocket change by the end of it.
| ipaddr wrote:
| That's like saying no deserves economic gains by investing
| in the stock market. You are complaining you were too young
| and not rich enough to buy Microsoft or Apple shares from
| the start and feel you will never catch up to those.
|
| Write your own story. Find a city with home prices similiar
| to Toronto 40 years buy and wait. Toronto 40 years ago was
| very different from the city you know. You had farm land,
| military bases, going to Yorkdale by bus was two bus
| tickets. Toronto has grown the people who bet on Toronto
| were rewarded. It could have went the other way if Quebec
| didn't almost leave Canada which moved invest from Montreal
| to Toronto. The Toronto stock exchange at the time was
| mainly mining financing.
| epistasis wrote:
| No, the stock market is exactly the opposite of real
| estate investing. Land is finite, capital is not.
|
| Speculation on land value is non-productive, whereas
| capitalization of productive economic firms is precisely
| the definition of economic productivity.
|
| Real estate gains, when they are not from development,
| are all rentierism, the enemy of economists of all sorts.
| Spivak wrote:
| Yes but we're not running out of land in any meaningful
| sense of the word. There is nothing at all preventing you
| from investing in the development of a yet undiscovered
| area and betting it will blow up. If you're not choosey
| you can buy land so cheap it might as well be free if you
| want to start from scratch too. If your bet comes to
| fruition you'll be richer than god and you'll be the
| catalyst for so much growth and economic development it
| will make the stock market blush.
| epistasis wrote:
| We are _completely_ out of land in Canada and elsewhere,
| because prices are going through the roof, because the
| thing that matter most about land is location.
|
| Land is not fungible, you can't exchance an acre of
| downtown Vancouver for an acre in a rural area. Nobody
| would ever confuse the two when it comes to economics!
|
| Land value is all about access, about who is near by,
| about what natural resources are near by. When real
| estate prices go up without construction, land value is
| increasing.
|
| In the US, restrictive zoning limits workers from moving
| into productive areas and being able to use their labor
| for more productive ends. This has been a tremendous drag
| on our GDP, while simultaneously concentrating wealth
| into the unproductive hands of landowners.
|
| The first paper to point this out made big errors,
| leading to an underestimate of this effect:
|
| https://www.econlib.org/a-correction-on-housing-
| regulation/
|
| This is the difference between gains from land use and
| gains from the stock market: one reduces overall wealth
| and concentrates wealth to those with the most; stock
| market investing does the opposite.
| Spivak wrote:
| This is only true if your definition of land is
| constrained to the teeny tiny fraction of land that is
| already developed into highly desirable cities. Which in
| real estate terms is like trying to buy a stock at its
| peak and complaining it's expensive.
|
| I am in no way saying that burdensome regulation hasn't
| artificially limited the growth of existing metro areas
| and caused a bubble driven by artificial scarcity but the
| idea that there's nowhere to invest in at the ground
| floor where it's cheap is absurd. This happens in cities
| on a smaller scale already. The nice areas are too
| expensive so young artsy people move where its cheap,
| make it better, and then it becomes a good area --
| repeat.
|
| If you invested in the development of say, Akron Ohio
| with the goal of tipping the scales and starting flywheel
| of metropolitan growth and your bet pays off not only
| will you be filthy filthy rich but you'll create brand
| new economic activity and real growth. Of course fighting
| over the same 100 sq miles is a zero sum game.
|
| As an individual laborer your choices are obviously
| limited to where you can find work but as an investor the
| sky is the limit.
| [deleted]
| RedCondor wrote:
| >the stock market is exactly the opposite of real estate
| investing. Land is finite, capital is not.
|
| This is where you go wrong.
|
| Unlike posters defending real estate "investment," I'll
| criticize you from the opposite end: capital markets are
| a disguised form of the same old rentierism.
|
| Watch out, lest you become a Clevinger.
| deathless wrote:
| We are so far from exhausting usable land that this
| argument is ridiculous. There will be more cities. 3rd
| tier cities will become 1st tier cities (and probably
| vice versa). Go invest in a city or town wisely (and
| don't forget to be lucky!) and you will be rewarded.
| lotsofpulp wrote:
| Are there any examples of 3rd tier cities becoming 1st
| tier?
|
| The situation seems the opposite, the
| NYC/SF/LA/London/etc are entrenched.
| djkivi wrote:
| Dubai wasn't much 30 years ago.
|
| https://www.businessinsider.com/dubai-in-1990-is-totally-
| unr...
| epistasis wrote:
| Land is all about location, and what is near it.
|
| The idea that you could build out in a field ignores the
| true value and the true finiteness of land, the geography
| of agglomerations of skill and people.
| jonny_eh wrote:
| > You are complaining you were too young and not rich
| enough to buy Microsoft or Apple shares
|
| You don't need to buy tech stocks to avoid becoming
| homeless. You do need to rent/own at least one home
| though.
| deathless wrote:
| It's like saying no one deserves anything but an hourly
| wage, and damn anyone that actually builds something.
|
| And yeah, it was "easier" yesterday than today, given
| today's knowledge of the winners. Today is easier than
| tomorrow, if you know tomorrow's winners.
|
| The internet / pop-culture narrative of "everything is
| against me, I'm too late, and there's nothing I can do
| about it" is actually great for people that want to go
| out and do something about it. The competition is sitting
| around bitching on Reddit.
| epistasis wrote:
| People deserve the fruits of their own labor. They do not
| "deserve" to charge rent to others. And appreciation of
| real estate without productive labor to improve that
| particular parcel is collecting the work of others.
| bugglebeetle wrote:
| The wealth was not generated by the person doing
| anything, but by all the activity occurring around them!
| Adam Smith despised landlords and wealth accumulation
| based on land-ownership for exactly this reason. They're
| a parasitic drag on market economies that shifts capital
| from productive activities to unproductive ones (i.e.
| speculating on real estate).
|
| "As soon as the land of any country has all become
| private property, the landlords, like all other men, love
| to reap where they never sowed, and demand a rent even
| for its natural produce."
| izacus wrote:
| Oh come on - the wealth realized here wasn't gained by
| building more for everyone, but by making sure others
| don't build their homes so the exiting owners gain wealth
| without actually creating anything.
| paulryanrogers wrote:
| And if voting NIMBY they're pulling the ladder up,
| denying their neighbors the same benefit. Strikes me as
| parasitic behavior.
|
| I was generally taught to buy only what one needs and can
| maintain, and work for wealth. Maybe naive, but the rent
| seeking and praise of extractive wealth is noxious the
| more I learn to recognize it.
| jmyeet wrote:
| Thing is, your wealth actually hasn't increased. You still only
| have 1 condo unit of wealth regardless of its nominal currency
| value and you have to live somewhere. So if you sold it you'd
| just have to buy another unit or house somewhere anyway.
|
| But this collective delusion that the house prices of
| homeowners has gone up is a huge part of the problem, in part
| because if house prices halved, it would be a huge problem but
| probably not as large as people think, mainly because people
| can largely just walk away from underwater mortgages (in Canada
| AFAIK).
|
| The only people who benefit are those hoarding real estate, not
| individual homeowners. This is the core problem with neoliberal
| private property.
| PeterisP wrote:
| There's no inherent need to have a condo in Toronto; you
| always have an option to cash out and rent, or cash out and
| buy at a cheaper location - and in both of these cases the
| absolute value of the increase matters a lot.
| jmyeet wrote:
| And where is that cheap place to live in Canada exactly?
|
| Toronto (or the GTA more specifically) _was_ the cheaper
| version of Vancouver. Now the average house price is north
| of C$1m in a country where average wages are a fraction of
| that.
|
| People live in cities often because that's where the owrk
| is. A lot of people like it too. Some jobs can be remote.
| Many can't. You can't be a nurse or a mechanic or an EMT or
| a firefighter remotely. Toronto needs all those so-called
| "essential workers" too. Where are they supposed to live?
|
| The general pattern has been in Canada (and the US and
| other places) is that you have starter homes like condos
| and then you buy a house when you want or need more space
| (eg you have children). The commenter I replied to buy a
| condo for just shy of C$600k. At that time maybe a house
| they might move up to was $900k. $300k is a lot but
| probably doable. Now their condo is $1.2m that house is
| probably $1.5-2m. It's actually more relatively
| unaffordable than at the time they bought their condo.
|
| You see what I mean when rising prices for a basic
| necessity you cannot live without actually don't increase
| wealth?
| medvezhenok wrote:
| They do increase wealth, it's just that the prices of
| your preferred consumption basket (houses in this case)
| increases even faster (an important nuance).
|
| Wealth is defined as the purchasing power across all
| possible consumption baskets - not just the one that you
| want though. So if you measure the value of your house in
| bananas, or oranges, or bars of chocolate, it's value has
| definitely gone up.
| boringg wrote:
| I think whats important to note is that increase in value is on
| paper. Market is already dropping a fair bit and is in a
| situation where prices could descend another step down in the
| short term as everyone has to refi their 5 yr mortgage and make
| some financial adjustments
| epups wrote:
| > This means that my family's wealth has increased by $75,000
| per year just from owning our home. That's more than the median
| income in Canada!
|
| This is a pattern we also see in Europe. Homeowners, largely
| older, get richer and richer by just standing still, while at
| the same time controlling politics so that fiscal policy
| supports this and new construction is made expensive by
| regulations.
|
| It surprises me that Canada, with a relatively younger
| population, has similar issues.
| guidedlight wrote:
| Is the same issue in Australia. However it increasing has
| become a supply and demand issue, where housing supply has
| not kept up with immigration policy.
| bawolff wrote:
| Its kind of true of capitalism in general that its easier to
| get ahead by owning valuable things rather than being an
| employee. I think that would be true of any economy that is
| growing, which is most of them.
| tmnvix wrote:
| Earned vs unearned income.
|
| Taxes on unearned income (i.e. income from simply owning
| something) have eased over time relative to taxes on earned
| income (i.e. income from actual productive activity).
|
| Those that argue against wealth taxes on the basis that
| they discourage hard work and productive activity are often
| hypocrites in my opinion. They are usually more interested
| in maintaining a system that has a tendency towards
| concentration of wealth instead of promoting a system that
| encourages positive contribution to overall wealth (i.e.
| societal progress).
|
| Property markets are a glaring example of this.
| medvezhenok wrote:
| Sort of. Picketty writes that it's about the capital to
| labor replacement ratio. If you can replace labor with
| more capital (I.e. robots, automation, tools/equipment -
| etc), then wealth is going to tend to concentrate. With
| the speed of technological innovation today, this is
| largely the case.
| wizerdrobe wrote:
| I don't wish to pry in asking this but...
|
| How do you afford something that high? Were you coming into
| this with a trust fund or are you one of those 300k+ per year
| engineers? I make 130k and feel my 220k mortgage (7.5% interest
| sadly) is scary.
|
| Every time I watch one of those House Hunter type shows in
| Canada or just look at the home prices in my old home in
| Charleston I'm boggled by purchases.
| molsongolden wrote:
| Some of this might be your expectation of housing costs? A
| 220k mortgage, even at 7.5% interest, is still affordable on
| a 130k salary. This works out to < 25% of your after-tax
| income which is pretty average or maybe lower than average
| (unsure if most affordability stats are quoting pre or post-
| tax income).
| losteric wrote:
| tbh the hypernormalization of needing to go in debt and pay
| interest for a home is extremely scary, regardless of the
| rate
| hylaride wrote:
| It's been that way for almost a hundred years. It's not
| so scary when interest rates and values have stayed
| relatively steady (as they have in most of the post-ww2
| era in inflation-adjusted terms). All that seems to have
| fallen apart around the year 2000 (when interest rates
| were made lower than they should have been).
| rconti wrote:
| if you plug those numbers into an affordability calculator,
| you'll see that 18k/130k is very very very sane. I mean, I've
| paid that much in rent on less income.
| [deleted]
| [deleted]
| grecy wrote:
| > _How do you afford something that high?_
|
| Another simple answer is to have renters. It's not glamorous,
| it means people are in your space, but when it's necessary,
| it's necessary.
| mabbo wrote:
| No, this was all our money.
|
| But we're a double STEM couple with no kids (at the time).
| We're also the most boring people you'll ever meet, so our
| expenses are low.
|
| We saved up a 20% down payment after a few years together.
| And interest rates were 2.5% at the time, so the payments
| were manageable.
|
| The long and short is "make lots of money and live like you
| don't".
|
| (That said, a year ago I was a 300+ developer, which is part
| of how we paid off the rest of the mortgage in 7 years.)
| brailsafe wrote:
| I didn't even think it was realistic to get above 200k CAD
| in Canada, but now it's not even realistic to land a job.
| Strange time in this country. Beautiful summer here in BC
| though :)
| mabbo wrote:
| There's a few companies offering good money, when hiring
| starts again.
|
| There's the typical Amazon, Google, Uber who pay decently
| (though Google is _only_ in Waterloo and no remote).
| Shopify was paying well because they wanted to grow
| quickly and outbid on top talent elsewhere, but that blew
| up in their face (I was in the 20% laid off in May).
|
| 2 years ago Instacart offered me a ridiculous total comp
| for remote Canada, but it was mostly paper money- pre-IPO
| stock that will be worth something, someday, maybe.
| gloryjulio wrote:
| Instacart has claw back clause. So if you happened to be
| laid off or piped, your paper money will become paper
| yieldcrv wrote:
| So that means you only put down 118,000 CAD and you were
| leveraged up
|
| Your family wealth didn't increase by 72,000 CAD/year it
| increased by 135,000 CAD/year
|
| but I see, you paid it off. you didn't have to, the option
| was to just make the minimum payments and sell, could have
| used your big income for other things but now I'm just
| reminded why its not interesting to listen to boring (your
| words) mortgage holders.
| nonethewiser wrote:
| Toronto's change in COL is high, but the absolute COL just isnt
| that high compared to other major cities. Your home price
| doubled in 8 years which is high but not crazy for a strong
| housing market. Thats a 9% annual growth rate. On par with the
| historical SP 500 rate.
|
| Also for reference, everone should know 592k CAD is 433k USD
| and 1.2M CAD is 880 USD.
|
| By all means it's expensive and has changed relatively fast.
| But Toronto isnt even top 25 for most expensive cities. Most
| rankings ive seen dont even have it in the top 50. I think
| people are surprised by this because its changed fast and feels
| expensive but in reality its cheaper than the major metros in
| the US, mich of Western Europe, China, Japan, SK.
|
| > If it continues for another decade, we can presume no young
| person today will ever be able to afford a home.
|
| In Toronto. Welcome to having a large, growing city. Generally
| speaking young people dont buy homes in NYC, Tokyo, London,
| Hong Kong, SF, and about 50 other places. Probably 2/3rds of
| the world population are living in metros like this.
| kjkjadksj wrote:
| Part of the issue is wages have lagged behind the market, so
| hearing that housing merely has followed the market is like a
| wet blanket when the issue is a lack of wage growth to match
| asset growth.
| tamimio wrote:
| The problem with the Canadian housing market can be summarized
| in:
|
| - The housing market never crashed, it never reset like the US
| one in 2008, The government instead kept duct-taping the issue by
| printing more money, increasing and decreasing the interest
| rates, and now they are even increasing the period of mortgages
| to up to 70 and 80 years, all of that so the bubble won't burst.
|
| - Interest rates are not fixed, even the fixed ones will/can be
| changed after 5 years.
|
| - The individual in Canada is 40% less productive than the one in
| the US (Statistics Canada and US Bureau of Labor)
|
| - Canada barely manufactures or produces any industrial products,
| Canada's economy shifted from that as well as oil and the stock
| market into investing in housing, basically buying and selling
| houses became the core of Canada's economy.
|
| - Over immigration, the country is accepting immigrants at a very
| high rate, Those immigrants are not construction workers but are
| skilled ones, they won't work to build more houses, but they need
| to buy or at least rent, putting extra salt to the injury there,
| less supply and more demand will definitely increase the prices.
| This is without mentioning the ones who buy these as an
| investment, sometimes even without being a Canadian resident or
| citizen, making it even worse for locals, especially with
| Canadian low wages.
|
| - Because we never had a crisis due to interest rates dropping to
| zero, boomers and GenX managed to buy houses, the country now has
| around 2/3 are actually owning a house, the problem with that is,
| your voter base majorities are AGAINST taking any action to
| reduce housing prices because it's their investment, and they
| would even use that investment to buy more houses, while the ones
| who never bought one are not able to afford even the rent, right
| now, only 10% can afford to buy houses and those are already
| owners or just corporates.
|
| I highly recommend watching this video it goes into more details
|
| https://www.youtube.com/watch?v=XomvuLPiTWM
|
| Solutions? None will be taken by any government as none wants to
| piss off their voters, but it should be just like the Japanese
| model, a harsh, non-democratic approach will surely fix it, also,
| Canada has a lot of land but still owned by the crown, and
| there's basically not much of construction workers either, plus
| banning anyone who's not citizen or resident to buy houses, all
| of that should bring up some solutions.
| matt3210 wrote:
| I've met lots of engineers living in vans in the Bay Area. I
| can't imagine how the lower income people remain housed.
| the_doctah wrote:
| Sounds like a great way to get robbed of literally everything
| you own.
| floodedburner wrote:
| Been there, done that. I agree with this for the bay area,
| living in a vehicle seems like the only chance at getting
| ahead.
|
| I wonder if it will be just as fashionable in the future. All
| you need is a parking garage and a bathroom to make it scale!
| freedomben wrote:
| just curious, what _did_ you do for a bathroom? and how long
| ago was this?
|
| I've heard people say they used the shower at their gym, but
| also that the gyms don't like this and are pushing back.
| hindsightbias wrote:
| There are far more stealth sprinters on the street than there
| were two years ago. Every block has one.
| almost_usual wrote:
| > Been there, done that. I agree with this for the bay area,
| living in a vehicle seems like the only chance at getting
| ahead.
|
| If you're living in a van in the Bay Area to try and get
| ahead as a knowledge worker you're doing the Bay Area
| backwards.
|
| The point of living in the Bay Area is to get a higher paying
| job, not save money. How much you save on rent a month is
| pretty negligible when you're competing with high earners
| when buying a home.
|
| Saving 3k a month in rent nets you an additional 36k a year.
| It doesn't matter, some people make this in as an after tax
| bonus within a month.
| boringg wrote:
| Bay area strategy is equity lottery ticket over the last
| decade. Now it is wait and position yourself for the next
| cycle to begin.
| buzzert wrote:
| They move somewhere else?
| LikeBeans wrote:
| IMO this needs government intervention. Not just in Canada but
| the US too. And I think it will require a multi prong approach.
| There is no one single solution but several needed concurrently.
|
| I think they (the government) needs to:
|
| 1. Build regional passenger rail from from major cities to
| smaller surrounding towns to encourage development.
|
| 2. Provide favorable taxes and loans to developers with a hard
| requirement that, say 20%, of the units being built must be below
| market rate that is tied to inflation(?). And involve a
| government agency to manage these below rate units. Such agency
| also sets that rate based on the person's income.
|
| 3. Increase the local taxes on empty units (say units that sit
| empty for more than 3 months). The longer they sit empty the
| higher the rate (up to some maximum). Use extra revenue to fund
| #1 and #2 above
|
| 4. Extra tax corporations that make, say, over $1B in profit from
| real estate investments. Waive it if they participate in #2
| above. Use extra revenue to fund #1 and #2 above
|
| 5. On the low end of the market finance building SROs and very
| high density housing for people that are struggling and simply
| cannot afford much.
| peyton wrote:
| Everything points to our politicians being fine with owners
| becoming richer and nonowners just being poorer.
| iteria wrote:
| In the US, there's no real way to force a city to build if they
| want to and honestly, they shouldn't be forced to. I've seen a
| city build up fast and it's ugly when the infrastructure lags
| the amount of people in an area.
|
| I'd like to see literally any kind of rail, but for rail to be
| viable the Feds would actually have to enforce the law that
| passenger trains get priority. They're the only people who can
| sue about it and that's basically why Amtrak sucks. New rail is
| largely a pipe dream if we can't even leverage the miles and
| miles of rail we already have.
|
| Subsidiaries would help, since most placed want to grow, but
| can't. Encouraging municipal internet would help since remote
| work could bring money into more rural areas and kick start the
| process of making them worth living in. Honestly, I just think
| we need strategies to encourage people to leave cities and more
| to smaller places. Or at least establish new cities outside of
| the normal bounds of the city a bit further away. The US has
| the space. There's no reason for everyone to crowd together.
| richardw wrote:
| Australia is in the same boat. I think this is a similar graph:
|
| https://fred.stlouisfed.org/series/QAUR628BIS
|
| This place is wild for property. It's a mania and I feel the
| country has reinvented the landed gentry of the UK.
| taxman22 wrote:
| There is certainly a housing problem in Canada, but isn't some of
| this attributable to the Canadian dollar getting weaker since
| 2009? It went from 1=1 to $1.4CAD to $1 USD today. Real housing
| prices will increase as wages in Canada decrease in USD, and
| asset prices increase in CAD.
| amadeuspagel wrote:
| Canadian housing prices are not irrational. Assuming that no new
| housing gets built in canada, but canada keeps welcoming
| immigrants, no new supply but increasing demand, the prices will
| rise even further.
| dan-robertson wrote:
| I wonder how much other things like urbanisation need to be
| controlled for. Eg skimming Wikipedia, over 40% of canadas
| population is in urban areas with a population over 500k whereas
| the percentage for the US is much lower. (Though my guess is that
| different classifications for 'urban area' mess up my quick
| counting).
|
| For example if you plotted similar lines for each of the nine
| census divisions in the US, how much of an outlier would Canada
| still look like? What if one tried to make some synthetic Canada-
| like regions of the us where people are more clustered in big
| cities?
|
| It seems plausible to me that Canada would still stick out, but
| I'm not sure by how much.
| oh_sigh wrote:
| How can any government ever tackle this issue when many millions
| of people have already invested huge chunks of their future
| earnings into the scheme? Explicitly saying "go pound sand" isn't
| going to work politically, but at the same time the government is
| implicitly saying that to people who don't own a house.
| reducesuffering wrote:
| A slow bleed by leveling out home prices. No appreciation, but
| no decline. Just let inflation catch up.
| tmnvix wrote:
| Yep. Keep price rises in check by slowly introducing wealth
| taxes (LVT, capital gains, whatever). Balance this with
| decreased tax-take from income. Also ensure that central bank
| remit takes proper account of property inflation to keep
| interest rates in check (i.e. not letting them get too low
| while house prices are rising too quickly).
| zbrozek wrote:
| Don't forget actually building homes cheaply.
| pharmakom wrote:
| Anyone have similar charts including UK, Australia, NZ?
| TheRealPomax wrote:
| And of course, the idea that there is "one housing market" in
| Canada, and presumably the US, is very much part of the problem.
| ninth_ant wrote:
| The housing market is highly interconnected, as people sell
| homes in expensive areas and thus drive up prices when they
| compete for homes in less expensive areas. This creates a
| ripple effect as those new markets show price gains, and owners
| in those areas can sell their homes and move to other further-
| flung areas.
|
| So yes, there are regional differences but they impact each
| other and can broadly be considered a single market.
| mitthrowaway2 wrote:
| How so? Can you clarify what you mean?
| r-s wrote:
| Some bigger cities (such as Edmonton, 1M people) still have a
| somewhat sane real estate market. In Edmonton a single family
| detached home averages around 450k CAD, while average
| household income is over 120k.
| martythemaniak wrote:
| Yeah, the US housing market is just too broad to be talked
| about as one thing. This used to be the case in Canada, where
| housing was really bad in Vancouver and Toronto, but alright
| elsewhere. This is just not the case anymore and the last ~5
| years or so the Vancouver/Toronto problem has become very
| widespread. Small cities and town now have insanely high costs
| as well.
| randcraw wrote:
| So have undeveloped land prices risen as much as existing
| houses? It seems like the obvious solution is to add new
| housing outside of town to serve the unmet demand, as every
| metro area in the US has done for over a century. With so
| much land and so few people, why hasn't Canada done this too?
| samr71 wrote:
| The housing market in the Anglosphere is a gigantic Ponzi scheme.
| That these countries shortsightedly decided to make housing the
| primary driver of middle class wealth will go down as of the the
| greatest own-goals in history.
|
| Worse yet, these nonsense housing and zoning policies have no end
| in sight, as homeowners are disproportionately those richer,
| older, and more established, and so will continue to vote in
| greater numbers for these policies.
| acover wrote:
| The incentives are hilariously broken. 60-70% of the population
| owns homes and want to restrict new construction, while the
| federal government wants to solve economic problems with 2.5%
| immigration.
| gre wrote:
| Is restricting new construction the problem? I believe the
| problem is airbnb, mega-corporations/banks buying up and
| renting out homes, homes that sit empty trying to get
| exorbitant rental rates, vacation homes and non-homestead
| homes that sit empty...
|
| When I was in LA, I met up with a friend who brought another
| friend as a tagalong. He had a job at a software company
| nearby which we got a tour of, but he lived with his parents
| 40 minutes away. That night I stayed at an airbnb a three
| minute drive from the office that would have been perfect for
| the guy to own and live in. The airbnb was a 2br/2bath with
| electric locks on the outside and inside doors so they could
| double-rent it for the night.
|
| Landlords, empty houses, and airbnb are destroying the lives
| of young people.
| HarryHirsch wrote:
| Data from the St Louis Fed clearly shows that the issue is
| under-building since the mid-1980's:
| https://fred.stlouisfed.org/series/COMPUTSA
|
| The problem is compounded by the fact that new entry-level
| housing isn't built and that the old stock is
| deterioriating. Please, no fairytales about hand-me-downs
| here, you cannot subdivide an exurban 3600 sqft cardboard
| palace into 3 1200 sqft condominia. Zoning regulations are
| against it, and the infrastructure (water, electric, roads,
| schools) would require a massive upgrade.
| gre wrote:
| How do you read that graph? I see the dip around 2010,
| but what about that graph implies under-building?
| (genuine question, it's not obvious to me)
| HarryHirsch wrote:
| Up until the mid-1980's average new construction was 1.8
| million units/year, afterwards it dropped off, while the
| population grew from 240 millions in 1985 to 330 millions
| today. The fact that household sizes have shrunk, and the
| rural depopulation only exacerbate the problem. There is
| a grave supply problem.
| WarOnPrivacy wrote:
| > The fact that household sizes have shrunk
|
| This will see some natural reversion as families become
| forced together.
|
| _That 's_ going to be especially rough ride after 80
| years of erasing the housing that could accommodate those
| families.
| jedberg wrote:
| > Landlords, empty houses, and airbnb are destroying the
| lives of young people.
|
| Those things certainly aren't helping, but they represent
| only a small number of total housing units. The main cause
| is lack of new units. We fall further behind every year.
| epups wrote:
| Yes, lack of new constructions is the main problem. For
| example, housing vacancy rates are near historic lows [1].
| The existence of Airbnb and other short-term rentals should
| increase the demand for housing, which in turn should lead
| to new construction. The fact this is not happening is the
| problem,, and we should look into why.
|
| [1] https://www.census.gov/library/stories/2022/05/housing-
| vacan...
| gre wrote:
| People are renting/living in groups or with parents, are
| unemployed or underemployed, and can't live in the areas
| where they would want to live. Building more houses is
| not simply the answer since they are unaffordable to the
| people who need them.
|
| The problem is the for-profit housing industry.
|
| Skyrocketing Rents & Skyrocketing Homelessness: Why Are
| US Homes for Profit Not for Living In?
|
| https://podcasts.apple.com/us/podcast/skyrocketing-rents-
| sky...
| WarOnPrivacy wrote:
| >People are renting/living in groups or with parents, are
| unemployed or underemployed, and can't live in the areas
| where they would want to live.
|
| This is true. I live with my 5 adult sons because the
| alternative is homelessness for all of us.
|
| > Building more houses is not simply the answer
|
| Not _the_ answer because there is no _the_ answer. It is
| one critical part of the way out tho.
|
| > since they are unaffordable to the people who need
| them.
|
| Also true. While unaffordable housing dominates new
| builds, we are extending the growing homelessness crisis
| out another generation or so.
| dmoy wrote:
| > Is restricting new construction the problem?
|
| It is a major problem, yes.
|
| > I believe the problem is airbnb
|
| What? No? Short term rentals are under 1% of housing stock.
| Population growth in the US is somewhere between 0.5-1% per
| year, so even if you got rid of all short term rentals that
| solves your housing issues from just population growth for
| two years at most.
|
| > mega-corporations/banks buying up and renting out homes,
|
| This I don't know about. I think at least 25% of housing
| rental stock total, something like 10-15 million units, is
| just individual owners.
|
| I don't know to what extent that forces market prices.
|
| > homes that sit empty trying to get exorbitant rental
| rates,
|
| The vacancy rate is what like 5% for rentals? 5% rental
| vacancy for rentals is a little high, but e.g. a 2% vacancy
| rate would exist if people move on average once every four
| years and it takes only a month to turnaround to a new
| tenant. 5% isn't all _that_ high.
|
| > vacation homes and non-homestead homes that sit empty...
|
| Vacancy rate for housing that isn't rentals is under 1%.
| martythemaniak wrote:
| People love coming up with all sorts of ideas trying to
| find a suitable bogeyman that's the cause of all this -
| rich foreigners, investors, BlackRock, AirBnB, etc and
| since There have been many policies actually implemented in
| many places (vacancy tax in Vancouver, foreign owner tax in
| both Toronto and Vancouver etc etc). None of them have
| worked and the housing crisis just keeps getting worse.
|
| The reason people don't want new construction is because
| it's ideologically comforting. For increasingly large
| swathes of the population (largely young, urban, leftist),
| it's far more important to denounce BlackRock, TechBros and
| Gentrification than to save $1000/month in housing costs.
| It's pretty incredible.
| gre wrote:
| I'm not against new housing, I bought new construction
| two years ago. It's in a place that was owned by the city
| and the locals used it as a park. There is considerable
| anger that it was allowed to be built in the first place.
|
| I am just not onboard that new housing is the crux of the
| problem when there are perfectly good existing houses
| that are being misused. We should fix the exploitation
| and also build new housing, but focusing only on new
| housing as a solution misses the problems of renting and
| airbnb and excessive hoarding by the well-off.
|
| Imagine what would happen to the housing market if people
| were forced to sell off their excess rental houses and
| only keep one house. The people who can afford to own
| these excesses can afford to deal with the consequences
| of having to downsize.
| martythemaniak wrote:
| Look into Vancouvers vacancy tax. People were convinced
| there were tons of empty houses sitting around and a lot
| of political capital and bureaucratic effort spent and
| the result was practically nothing. 500 vacant homes in a
| city of 2 million is not a meaningful contributor to the
| housing crisis, and certainly worthless compared to the
| amount of effort spent on it. It's the tens of thousands
| of units not being built that's the issue.
| Ekaros wrote:
| No new housing is the crux of issue, but the issue has
| compounded over the decades. It should have happened 10,
| 20, 30, 40 years ago. If there had been enough supply
| back then, the misuse now would not matter.
|
| For past decades we should have been tearing down single
| family houses near core and replacing them with better
| density. And building new denser suburbs with good
| connectivity to core while also offering necessary
| services for regular living.
| one_level_deep2 wrote:
| [dead]
| harmmonica wrote:
| Tangential to the broader topic here, but what's just
| happened in NYC with Airbnb, provided enforcement actually
| takes place, is going to be very telling in the coming
| months and could have far-reaching implications for the
| housing market, specifically in those markets that are
| popular Airbnb destinations. I have a very small, entry-
| level apartment in a popular downtown neighborhood in NYC
| (yep, I'm a landlord--guilty!). Tenants usually only stay
| for a year or two given a bunch of different reasons, but
| the reason I bring that up is that I have a long history
| with the NYC rental market.
|
| I had a tenant move out this summer and for the first time
| in years (barring 2020 when Covid was in full swing), the
| place usually rents out within days of it being listed.
| This year, however, it not only didn't rent out right away,
| but required decreasing the rental rate to finally find a
| tenant. And this when all the industry stats stated that
| comparable apartment rental rates, as of June, were up 8%
| yoy. Now there are of course myriad reasons this particular
| apartment could be facing headwinds, but I am more or less
| convinced that the magnitude of the shift from short-term
| to long(er) term rentals that has been happening in
| anticipation of the Airbnb ban is the reason for this drop
| in rental rates. And just to quantify this n=1 data point,
| the price drop from last year's rental rate was 5%. If you
| believe the industry stats saying that prices were up 8%
| yoy in June, which likely were based on Q2 stats, well
| before short-term landlords would've been faced with the
| Airbnb ban, this may actually mean that the rental rate
| drop was ~12%.
|
| Nothing about what I wrote above is scientific, but if
| these numbers (https://www.wired.com/story/airbnb-ban-new-
| york-numbers/) are to be believed, it seems likely that the
| drop in rental rate is largely attributable to the Airbnb
| ban. The yoy Q4 '23 numbers, when the ban will have been in
| place for the entire quarter, will confirm or deny all of
| this. If confirmed, though, will be interesting to see if
| other cities start to aggressively cut back on Airbnb in an
| effort to reduce rental rates. Again, not saying this is
| hard data, but if regulating Airbnb more or less out of
| existence resulted in a 12% drop in rental rates across
| major markets nationwide, that would be an amazing lever to
| almost-immediately decrease rental rates, even though the
| knock-on effects of declining real estate valuations would
| potentially cause significant problems. And I say that as a
| happy Airbnb user, a landlord and a homeowner. Things have
| just gotten too out of whack with the housing market so you
| have to somewhat cheer the possibility that there's
| actually a (low-caliber) silver bullet to reduce rents more
| or less overnight.
| mycologos wrote:
| > I believe the problem is airbnb, mega-corporations/banks
| buying up and renting out homes, homes that sit empty
| trying to get exorbitant rental rates, vacation homes and
| non-homestead homes that sit empty...
|
| The number of owner-occupied housing units in the USA has
| gone from 70m in 2001 to 86m today [1]. The number of total
| housing units has gone from 118m to 145m over the same
| period [2]. 70/118 is 59.3%. 86/145 is ... also 59.3%!
|
| I agree that it feels counterintuitive. I share the _sense_
| that there are more entities playing landlord than there
| used to be, but it doesn 't seem to be borne out in data. A
| possible contributing factor is that AirBNBs are more
| prevalent in the cities that attract visitors, for free
| market reasons.
|
| IMO an underrated part of the US housing crisis (in
| addition to construction's failure to keep up with
| population growth, which I think is most of the story) is
| the fact that the fraction of households consisting of only
| one person more than doubled from 1960 to 2020, from 13% to
| 27% [3]. That same article notes that 25% of LA households
| consist of one person.
|
| [1] https://fred.stlouisfed.org/series/EOWNOCCUSQ176N
|
| [2] https://fred.stlouisfed.org/series/ETOTALUSQ176N
|
| [3] https://www.census.gov/library/stories/2023/06/more-
| than-a-q...
| WarOnPrivacy wrote:
| > Is restricting new construction the problem?
|
| "The" implies one driving issue but like most big problems,
| the current housing crisis has a number of drivers.
|
| Think of a grease fire where the people throwing water on
| it are making it worse. So are the people pouring gas on
| it. So are the idiots with the big fans trying to blow it
| away from their own stuff.
| gre wrote:
| I wouldn't say restricting new construction is negligible
| but it seems more like an SF/bay area problem. New
| housing is going up everywhere but if the airbnb rentals
| all went to new owners who lived there you would not need
| the new housing for awhile.
|
| Another search states that there are 329,283 airbnbs in
| California in 2021. These should go to families first.
|
| New York has 955,437 empty houses according to a quick
| search, and it's 4th behind Florida, California, and
| Texas. Take away renting out houses, short-term or
| otherwise, and sell those houses to people who don't have
| a first house, the crisis would away. It's simply greed.
| WarOnPrivacy wrote:
| > I wouldn't say restricting new construction is
| negligible but it seems more like an SF/bay area problem.
|
| No - that's really an issue all over. Especially when
| viewed thru the broader lens of counterproductive zoning.
| epups wrote:
| If Airbnb was the major problem, we would only have a
| housing crisis in California, NY and other highly
| touristic places. We don't, we have it even in mid-sized
| non-touristic cities in the US, Canada and Europe.
| applied_heat wrote:
| There are houses for $50k in the Canadian prairies on
| nice big lots. They will need some work, and there
| probably isn't much around for jobs and services. The old
| saying location location location stands
| WarOnPrivacy wrote:
| > New York has 955,437 empty houses ... 4th behind
| Florida, California, and Texas. Take away renting out
| houses, short-term or otherwise, and sell those houses to
| people who don't have a first house, the crisis would
| away. It's simply greed.
|
| But not this particular greed - only. Maybe not even
| mostly. Whatever (temp) relief would be found by
| (permanently) forcing owners of empty dwellings to divest
| - that relief would be quickly overrun by the issues of
| an overly-constrained housing supply.
|
| > Take away renting out houses,
|
| I'd be homeless.
| gre wrote:
| There are ways that we as a society could implement where
| you would outright own that house.
|
| https://en.wikipedia.org/wiki/Land_Reform_Movement
| generic92034 wrote:
| I think this is not specific for the Anglosphere.
| phatfish wrote:
| Indeed, a strange comment considering that Chinese property
| companies are the ones billions in debt and were using
| deposits buyers made on one property as leverage to build
| another somewhere else.
| tempsy wrote:
| housing is expensive in coastal metros
|
| in 95% of the country you can buy a house for under $400k.
| rcme wrote:
| The real estate market in the US is one of the cheapest in the
| world relative to incomes. Perhaps real estate is actually more
| valuable than you've been lead to believe.
| epicureanideal wrote:
| > The real estate market in the US is one of the cheapest in
| the world relative to incomes.
|
| But I'd still prefer it to be the way it was 20-30 years ago,
| than how it is now. So much more affordable in the past...
| poulsbohemian wrote:
| How would you categorize it as being different 20-30 years
| ago than today? I ask because my observations of friends
| and family who were buying / selling in that era is that
| the more things change, the more they stay the same. When I
| think about the baby boomers I know who have real wealth,
| every one of them will tell you a story of buying real
| estate in the 70s and 80s...
| almost_usual wrote:
| The early 80s were easily as unaffordable as now with the
| high rates then.
| poulsbohemian wrote:
| Yes, and yet people bought and sold properties and those
| that held eventually saw their asset appreciate. And
| that's my point - "Before all was the land..." is the
| start of many opening chapters on real estate, because
| oil, mining, timber, housing, commerce - it all ties back
| to this physical asset. It is innately an immovable asset
| thus it will always have value and that value will
| fluctuate (generally increasing...) based on its
| marketability and use. So sure - real estate is different
| in each decade, but overall the treatment of it as an
| investment has been true as long as there has been
| civilization. It ain't a coincidence that retiring Roman
| soldiers were given land as thanks for their service.
| medvezhenok wrote:
| Just make sure to not look at real estate prices in Japan
| since 1990:)
| mycologos wrote:
| I was curious about this, so here's a bit more detail.
|
| Interest rates were quite high (and surprisingly
| variable, as a modern observer) in the early 1980s,
| peaking at almost 20% and spending a lot of time in the
| teens [1]. However, the median house price [2] was still
| low relative to median household income -- at the
| interest rate peak of 18.9% at the end of 1980, the
| median house sale price was 66k, and the median household
| income was 21k [3], for a ratio of about 3.1. In 2022 the
| median house sale price was about 450k, and the median
| household income was $71k [4], for a ratio of about 6.3!
|
| I think the mortgage rate difference does mean the 80s
| were still worse _if you took out a long mortgage at the
| given rates_. However, 1) you could also save for much
| less time and buy a house with a smaller mortgage, and 2)
| there seem to have been a lot of since-closed loopholes
| [5] like assumable mortgages (from my limited
| understanding: you essentially take over the current
| owner 's mortgage, along with its lower rates from when
| they bought house) that meant a lot of people were
| technically buying houses with much lower effective
| rates.
|
| So ... I question the claim that the early 80s were
| easily as unaffordable as now.
|
| [1] https://fred.stlouisfed.org/series/FEDFUNDS
|
| [2] https://fred.stlouisfed.org/series/MSPUS
|
| [3] https://www.census.gov/library/publications/1982/demo
| /p60-13...
|
| [4] https://www.census.gov/library/visualizations/2022/co
| mm/medi...
|
| [5] https://www.marketwatch.com/story/how-people-bought-
| homes-in...
| echelon wrote:
| The US was still riding high off the post-war boom.
|
| In the 40's - 60's, the US was the manufacturing powerhouse
| while Europe and Asia were rebuilding. The US had the baby
| boom and the enormous natural resources to lean into that
| growth.
|
| After some decades, we grew to a point that labor became
| increasingly expensive. Workers wanted more, consumers
| wanted more for less. So we outsourced the lower-end
| manufacturing jobs to lower cost of living areas, and
| ultimately shipped them overseas to developing economies.
|
| The US now does mostly high-cost, value-add. We're sitting
| at the top of the production food chain and labor costs a
| tremendous amount. Fewer people, as a percentage of the
| population, are able to fill these jobs due to the high
| skill required.
|
| 20-30 years ago the end of the post-war tailwinds. We've
| been experiencing the US operate in a global economy where
| our lower class doesn't have access to what were once well-
| paying jobs. We moved those over to cheap overseas labor,
| and we benefitted greatly from the lower cost of goods.
|
| Our highly compensated knowledge workers are pushing prices
| up at the high end, and there's less middle ground.
|
| The middle and upper classes will be fine. It's those at
| the bottom that are suffering. Instead of providing means
| to lift our poor up and into the middle class, we're
| lifting laborers in India, Vietnam, and Mexico out of
| poverty and into their own growing middle classes. (Which I
| think is absolutely great for them. I just wish we could
| also help our own lower class.)
| medvezhenok wrote:
| Labor costs are high primarily because the USD is kept
| artificially propped up by other countries depreciating
| their currencies faster (I.e. see China's manipulations).
| If we allowed USD to drop, American labor could become
| competitive again.
| [deleted]
| almost_usual wrote:
| Home affordability is about the same now as it was in the
| early 80s.
| hammock wrote:
| It's a double-edged sword. If RE values in the US "normalize"
| to income-ratio equivalents in other countries by rising and
| never falling again, the US is going to see a drain of wealth
| and talent to those other places - UK, Latin America, etc
| that are now on even competitive ground in terms of owned
| housing
| WarOnPrivacy wrote:
| > The real estate market in the US is one of the cheapest in
| the world relative to incomes.
|
| This hints at a fairly incomplete puzzle.
|
| For example :A low-end US residence requires 4+ typical
| income earners to meet minimal bills needed to stay housed.
|
| That would imply that in most of the world, a typical
| household has a much higher number of income earners living
| in the residence - they have many earning-adults under one
| roof.
|
| I'm skeptical that most of the world is dominated by 5-10
| adults living in US sized houses. So what's the rest of the
| picture look like?
| verteu wrote:
| Good point. I suppose median_home_price/median_income is a
| decent metric? Some stats to further the debate:
|
| - https://www.numbeo.com/property-
| investment/rankings_by_count...
|
| - https://knoema.com/infographics/hyjmcxd/housing-
| affordabilit...
|
| - https://www.nationmaster.com/nmx/ranking/house-price-to-
| inco...
|
| - https://www.statista.com/statistics/237529/price-to-
| income-r...
| tootie wrote:
| -1 for abusing the term "Ponzi scheme" but otherwise I'm with
| you. Ponzi implies this was some elaborate conspiracy with a
| puppeteer at the top when it reality it's an emergent property
| of 50 years of misaligned incentives playing out in similar
| ways across multiple nations in similar ways.
|
| The postwar years saw a huge boom in housing construction which
| created a few decades of housing availability that may just
| never exist again nor should it. Housing as a vehicle for
| building wealth and housing becoming unaffordable for the
| younger generation are two sides of the same coin.
| ckelly wrote:
| "Housing as a vehicle for building wealth and housing
| becoming unaffordable for the younger generation are two
| sides of the same coin." That's a great insight.
| epicureanideal wrote:
| > The postwar years saw a huge boom in housing construction
| which created a few decades of housing availability that may
| just never exist again nor should it.
|
| There's plenty of demand for housing. There's no reason we
| can't build more to meet that need, other than regulation.
| hungryforcodes wrote:
| This is true and not true. Desirable land aka location is
| where everyone wants to buy. This drives the price up.
| Building in the middle of nowhere increases available
| housing, but doesn't solve the problem really, because no
| one wants to live there.
|
| In theory remote work could help with this problem, but
| honestly it's really only available to workers who work in
| offices. People with physical jobs like Amazon warehouse
| workers and restaurant staff and construction workers...all
| have to live somewhere near where they work.
| ghaff wrote:
| >In theory remote work could help with this problem, but
| honestly it's really only available to workers who work
| in offices.
|
| And I daresay that even most of the professional class
| who _could_ live anywhere in the country they wanted to
| probably don 't want to live in or near some small
| midwestern city or many of the other places where housing
| is relatively cheap. (Some of that is preserving future
| employment options but even if you take that off the
| table, there's still almost certainly a common preference
| for at least the general vicinity of large mostly coastal
| cities--and tons of excuses why this location or that
| location is a non-starter.)
| ghaff wrote:
| There's also plenty of relatively inexpensive housing in
| many areas of the US (can't really speak to Canada) but
| many people are less inclined to live in those areas for a
| variety of reasons.
| mitthrowaway2 wrote:
| There was in Canada, too, before the pandemic. But it was
| a fairly small amount in terms of actual housing units,
| and in 2020-2021 it was almost completely swallowed up by
| people leaving Toronto and Vancouver for places like the
| Maritimes and Vancouver Island. They could build more
| capacity, but the price of land has risen in advance of
| that.
| metaphor wrote:
| > _Housing as a vehicle for building wealth and housing
| becoming unaffordable for the younger generation are two
| sides of the same coin._
|
| To be sure, there's a distinct difference between housing as
| a vehicle for _preserving_ wealth vice _building_ it, where
| the underlying grift of the real estate industry is in having
| normalized the country to the perverse idea that the latter
| is both healthy and sustainable.
| gruez wrote:
| >The postwar years saw a huge boom in housing construction
| which created a few decades of housing availability that may
| just never exist again nor should it.
|
| More importantly, the proliferation of the personal
| automobile made suburbs possible and unlocked a one-time
| dividend of cheap housing that was "close" to the city (in
| terms of travel time, not distance). That suppressed prices
| for a while, but now we're returning back to historical
| trends.
| gonzo41 wrote:
| Australia is afflicted by this insanity as well. We have
| Trillions tied up in housing. Yet productivity and economic
| complexity are on the decline because everyone is trying to
| flip houses and make housing into an investment vehicle rather
| that invest in new businesses.
| swores wrote:
| A minor pedantic point: not "as well", since the comment you
| replied to talked about "in the Anglosphere" which by pretty
| much any definition certainly includes Australia :)
| almost_usual wrote:
| > The housing market in the Anglosphere is a gigantic Ponzi
| scheme.
|
| What? Have you seen real estate prices in Hong Kong and
| Singapore? The US is pretty cheap compared to the rest of the
| world.
| samr71 wrote:
| (Arguably Hong Kong and Singapore are in the Anglosphere but)
| Those are city states. Housing in Manhattan is really
| expensive too.
| [deleted]
| cjbgkagh wrote:
| Don't forget they have to import lots of people to keep the
| ponzi scheme going.
| bell-cot wrote:
| Lots of ever-richer-and-richer people.
| xwdv wrote:
| The problem isn't housing and zoning. The problem is people
| absolutely refuse to go live in places where housing is cheap
| because they'd rather live in the popular hotspots.
|
| You want a cheap house? Sub 300k? Come to the Midwest, you'll
| get one easy. Oh what's that? You'd rather live right in
| downtown San Francisco or Manhattan? Well...
|
| Sometimes I think about just selling my expensive city
| apartment and moving out to a small rural mountain town and
| finding a wife there.
| jeffbee wrote:
| Surprisingly, people don't think that living under a racist
| theocracy in Tulsa is a substitute good for living in a
| liberal democracy.
| solarhoma wrote:
| Wow, spoken like a truly superior progressive where the
| only morally good place to live in the world is SF. And,
| apparently every other city will get you killed due to
| racism. Please consider never leaving your 'liberal
| democracy' because folks like you destroy cities.
| reducesuffering wrote:
| Really? Painting all of the Midwest as a "racist
| theocracy?" Those $300k homes are also Nebraska, Kansas,
| the Dakotas, even blue states like Minnesota, Illinois, and
| Michigan.
| poulsbohemian wrote:
| You aren't wrong, but I also want to throw out a challenge
| to anyone with similar thinking: help us. You might be
| surprised by the number of people living in deep red areas
| who crave political change. We can't do it without
| political and financial support from the more liberal parts
| of each state / the country. There's even the option of
| moving here and being part of boots-on-the-ground change.
| Some of these communities can and will change in my
| lifetime, even if it is a slow process. And the housing is
| cheaper too.
| jeffbee wrote:
| I am not going to sacrifice my children's happiness so
| that I can move back to Oklahoma and somehow stick my
| finger in the dike against theocracy. It's all well and
| good to propose that an influx of reasonable people would
| help reform a state's politics, but when it comes down to
| your own family you are talking about specific people,
| not averages.
| xwdv wrote:
| Your children don't give a damn. They're children. They
| will live wherever you live and be completely oblivious
| to whatever adults argue about on forums and the news.
| Don't prop your children up as an excuse.
| jeffbee wrote:
| You live a life of sheltered ignorance if you aren't
| aware of what young people go through in such places when
| they are of minority races, minority religions, not
| heterosexual, or not conforming to gender binaries.
| rootusrootus wrote:
| This is pretty much it, at least in the US. Lots of places in
| the Midwest where the median house is less than 2.5x the
| median income. But if you want to live in San Jose, that
| ratio is 10x. Even in Portland it's over 5x.
|
| A remote tech worker can buy quite a lot of house in the
| midwest if they keep all or most of the salary they were
| getting while living in a coastal city.
| jedberg wrote:
| But then you'd have to live in the midwest. There's a reason
| the costal cities are popular -- culture, weather, people
| with similar political views, exposure to other races and
| cultures.
|
| Especially if you didn't grow up there, the weather is
| killer.
|
| And there is still plenty of space in the popular places, if
| people were allowed to build there.
|
| But the people who are already there do everything in their
| power to prevent it.
| rufus_foreman wrote:
| For many people living in coastal cities, moving to the
| areas of the midwest where housing is affordable will
| definitely involve exposure to other cultures.
|
| There is also an abundant supply of weather.
| jedberg wrote:
| > There is also an abundant supply of weather.
|
| That's the problem though. Unless you grew up with it,
| most people do not like the extreme weather in the
| midwest. Both too hot and too cold.
| ghaff wrote:
| In the case of California climate specifically though,
| you have to ask yourself how much you're willing and able
| to pay to live in the only Mediterranean climate in the
| US versus e.g. somewhere that gets snow in the winter.
| (Lots of California can get pretty hot too.)
| kuchenbecker wrote:
| People value things differently, including the things you
| mentioned, and cost is a large driver of that.
|
| The only thing cities dislike more than an increasing
| population is a decreasing one. Given homeostasis is
| essentially traffic, suburban sprawl, etc we should let
| areas organically grow and shrink as people make choices.
| And areas that are appealing now will become unappealing
| either by cost or changing economies.
| stouset wrote:
| Cheap houses in cheap areas are cheap precisely because the
| areas themselves are low value with a low expected-value of
| living there.
|
| Put another way, those houses are cheap because employment
| opportunities are limited.
| xwdv wrote:
| What a disgustingly materialistic and capitalist way to
| write off entire communities of people as worthless simply
| because you can't find a six figure job there. No wonder
| the coastal elites get hated so much.
| stouset wrote:
| I think you may be interpreting my comment the way you
| did because you viewed it through a lens of already-
| existing hatred of coastal elites.
|
| Certainly nothing in the comment itself even hints at me
| considering entire communities of people as worthless.
| verteu wrote:
| Keep in mind the word "value" has several definitions
| [1]. Describing low-cost areas as "low-value" could be
| seen as insulting via definitions 1-3.
|
| [1] https://en.wiktionary.org/wiki/value#Noun
| [deleted]
| danbolt wrote:
| I think it can be more simply explained with supply and
| demand when it comes to labour. Or, if you're a cook, for
| example, you're going to find a more robust market for
| your skills in Vancouver rather than Castlegar. Because
| of that, cities can often be more attractive for the
| working class.
|
| I do have a lot of respect for the people who are able to
| make a sustainable living in a less dense area, but it's
| not a reliable path for everybody.
| verteu wrote:
| Perhaps remote work will reduce this disparity. I'd expect it
| to happen in "waves" as high-paid remote workers move from
| cities with "tier N" CoL+culture to "tier N+1."
|
| There's already been a significant migration from NY+CA to
| FL+TX: https://en.wikipedia.org/wiki/List_of_U.S._states_and_
| territ...
| ghaff wrote:
| I'd just add that, while it's hard to drive out of
| expensive real estate in the Bay Area, that's actually not
| true of a lot of major cities. While there are expensive
| towns, there are also some pretty reasonable towns within
| 60-90 minutes of Boston for example. Not living downtown
| can buy you a lot of weekends on the town in a hotel.
| angmarsbane wrote:
| Or perhaps they merely want to live near their jobs and their
| spouse's jobs?
| hiAndrewQuinn wrote:
| I have a wild guess that the entire Anglosphere experiences these
| kinds of housing inflation issues due to a kind of slow moving
| collective action problem w/r/t which languages to learn to get
| the big wages. Housing prices in non-Anglosphere cities worldwide
| rarely hit these same kinds of extremes.
| mcntsh wrote:
| You're wrong, most EU countries have a _worse_ income-to-
| housing-price ratio than Canada /Aus/US/NZ.
|
| https://www.numbeo.com/property-investment/rankings_by_count...
| aden1ne wrote:
| That site uses some wild assumptions about what constitutes
| household income.
| disgruntledphd2 wrote:
| Well, except for Hong Kong, Singapore and Tel Aviv. Which is to
| say, while it's definitely a problem in the Anglosphere, it's
| not limited to it.
| unreal37 wrote:
| Canada doesn't really have any other industries other than real
| estate. Oil and mining, sure. But after that, four of the top 8
| industries are centered around real estate.
| glouwbug wrote:
| Top ~15% GDP is real estate followed by manufacturing
| paganel wrote:
| Crazy to see how the second largest country in the world by
| surface is so dysfunctional when it comes to housing (similar
| point could be made about Australia, a continent in itself).
|
| Yes, I know that people can't live in the Yukon Territory, but,
| even so, there's a lot and lot of space to build housing further
| South.
| freedomben wrote:
| > _Yes, I know that people can't live in the Yukon Territory_
|
| I'm not challenging you on this, I'm really curious to know why
| you said this.
|
| why can't people live in the YT?
| paganel wrote:
| On account of the cold, I guess. And of the tundra there,
| kind of difficult to build lots of stuff on it, such as roads
| or railways. The dark during winter-time, too.
|
| All this to say that that makes it difficult to potentially
| set up big human settlements in there.
| mitthrowaway2 wrote:
| Well, for one, the Yukon territory suffers from extremely
| high housing prices.
|
| https://www.cbc.ca/news/canada/north/whitehorse-home-
| prices-...
|
| Not to mention that food and transportation costs are also
| very high.
| xienze wrote:
| Canada is committed to absurd levels of immigration relative to
| population. The crucial difference between population growth by
| birth versus by immigration is that you get ~20 years for
| housing supply to catch up to every new person. With growth by
| immigration, every new person needs housing _today_. The
| Canadian government isn't creating housing at anywhere near the
| same rate as immigration. It's really not complicated to
| understand what's happening.
| reducesuffering wrote:
| It's quite an outlier for having 500k immigrants per year,
| with a population of 39m. That's 1.25% per year. In 20 years,
| less than a generation, 25% of the population is entirely
| new. There's already a housing crisis and they're set to add
| 10 million people in 20 years? Build the housing first,
| otherwise you're just playing musical chairs and jettisoning
| people onto the street.
| CrimsonCape wrote:
| Let's use 500,000 per year as a basis.
|
| A large percentage of immigrants are becoming pregnant the
| year they immigrate. Let's assume there is no interaction
| with the native population. For the example's sake, let's
| assume 500k is evenly split men and women. let's assume 40%
| of the immigrants have a child in the first year.
|
| Total immigrants divided by gender times 40% percent having
| a child in the first year: 500k / 2 * 0.4 = 100k
|
| That means a theoretical 500k immigration rate is actually
| 600k after one year.
|
| And, in fact, for the hypothetical sake assume the same
| thing happens in year two as the original women have a
| second child in year 2 and now the original population has
| become 700,000.
| likenesstheft wrote:
| It's a shell game. A less informed population won't notice
| that the political dynasties continue to live luxurious
| pompous lives off everyone's backs, and the informed will
| be too busy in an unfair competition over scraps. Unless
| there is a huge surplus of housing, college space, and well
| paying jobs...your leadership is selling you out in a
| gambit to take in people who will gladly keep voting for
| them in return for 10% of the typical Canadian lifestyle.
| You need new leaders who put citizens first, not last.
| Jerry2 wrote:
| Canada is taking in around 2 million immigrants per year.
| They're taking in over 900,000 students per year alone. [1]
|
| [1] https://www.cbc.ca/lite/story/1.6948733
| unreal37 wrote:
| Updated numbers. Canada is on track to accept one million
| permanent residests in a year, PLUS 800,000 international
| students who tend to arrive and stay for years thus also
| need housing.
|
| Canada passed 40 million population this year and will hit
| 41 in a few months.
| likenesstheft wrote:
| How come you construe more housing as being a government
| responsibility? That is strange, especially when your
| government is causing these issues in the first place.
| Housing supply normally gets built to satisfy demand. If the
| regulations are too stifling for construction to be
| profitable for builders and workers, you won't have houses.
| Period. Magic funny money only works for so long before the
| house of cards comes crashing down.
|
| Interesting that some in Canada respond to the problem by
| expecting the government to do something all the time. They
| serve the poison and you want their antidote too? Canada's
| leaders are doing a pretty great job of setting the stage for
| a housing takeover so they can conveniently come up with a
| solution that makes them more central and more powerful.
|
| Do they overly regulate construction and make it hard to do
| business?
| xienze wrote:
| > How come you construe more housing as being a government
| responsibility?
|
| Well, official government policy is creating immense
| housing demand and adversely affecting citizens. If you
| want population growth via infinity immigration, you as the
| government need to do something about creating additional
| housing, simple as that.
| swores wrote:
| In addition to the point made by xienze that if its
| government policy causing increased need for housing it
| makes sense for them to also help with that issue, I'd add
| a more general point:
|
| Many people (including me) believe it should be
| government's responsibility to make sure its citizens can
| have a reasonable standard of living, including housing,
| water, food, etc.
|
| Whether that's by directly providing it (building and
| managing social housing, state-run energy provider, etc.)
| or by managing policies that enable private companies to
| offer stuff to a satisfactory level, both can work and it's
| debatable (and the debate varies depending on the specific
| areas).
|
| But if private companies aren't doing as much as is needed
| then it should be the government's job to fix that,
| regardless of whether the fix is providing services
| directly to the people who need it or providing support to
| private companies so that they can do so.
| spiderice wrote:
| > it makes sense for them to also help with that issue
|
| They can help.. by getting the hell out of the way. Let
| people build and the problem will solve itself.
|
| When the government "helps" we end up with situations
| like college tuition prices 10x-ing.
| swores wrote:
| If "getting the hell out of the way" means removing red
| tape that was previously a case of the government causing
| there to be less housing then, then yes that's one way
| they can help.
|
| If they're already at an ideal low of red tape (keeping
| in mind we probably don't want to get rid of laws that
| require things like making sure buildings are safe both
| for the occupants and for the builders), and aren't
| restricting the market in any foolish ways, but the
| market still isn't providing enough housing, then I
| disagree that the government shouldn't actively try to
| improve the situation.
|
| Citing an example of a government apparently doing a bad
| job doesn't mean that every job a government does has to
| be bad. Otherwise seeing a private building company doing
| a bad job leads to also thinking private businesses
| shouldn't be allowed either.
|
| At the end of the day both companies and governments are
| run by humans, who are capable of doing great things and
| terrible things, and of doing them both well and badly.
|
| The response should be to argue about what a good
| government initiative could consist of, not to say that
| if there's a problem they should just throw their hands
| up in the air and pray that it improves by itself.
| wnc3141 wrote:
| Can't speak to Canada's situation specifically, For your
| comment on housing as a government responsibility. You're
| correct that housing, for the most part, is privately
| financed and constructed.
|
| However the limiting agent in this environment is
| governments willingness to zone and permit new housing
| construction. The aggregate supply of housing is mostly a
| function of government policy. One issue is that while it
| may be popular at federal level to boost housing supply,
| housing policy is mostly enacted through local government.
| likenesstheft wrote:
| > However the limiting agent in this environment is
| governments willingness to zone and permit new housing
| construction.
|
| Yep. So they cause the problem in order to be the ones
| who conveniently have the solution. One that has the
| added benefit of keeping them more and more central and
| overreaching over your lives.
| hungryforcodes wrote:
| Though the government has lots of influence on this.
|
| For example in most South East Asian countries it's
| impossible to buy land as a foreigner (basically a
| house).
|
| Just this one rule alone would help the situation in
| Canada as there is alot of foreign ownership with as I
| understand it no restrictions.
|
| Regulations favoring Canadian citizens wouldn't violate
| the spirit of the private market, and would certainly
| help Canada.
| glouwbug wrote:
| 60% of Canadians are home owners, the majority of those being
| baby boomers. Their retirement relies on downsizing and
| living off their remaining capital. The demand for buying
| their overly priced detached homes will exist so long as we
| immigrate the qualified uber-wealthy. It is a ponzi-scheme,
| and I have observed that anti-immigration retorts were met
| with racism up until recent years where the remaining 40% of
| Canadians renters learned they will never be able to buy
| dang wrote:
| Related ongoing thread:
|
| _Investors account for 30 per cent of home buying in Canada,
| data show_ - https://news.ycombinator.com/item?id=37445732 - Sept
| 2023 (129 comments)
| pxmpxm wrote:
| Why is that relevant? It's not as if those properties remain
| vacant, that wouldn't exactly make sense from the investor
| perspective.
|
| You've got excess demand over supply, so prices go up. Just
| like with anything else, the solution is to add more supply.
| Build more houses and prices of houses will go down.
| rufus_foreman wrote:
| >> Why is that relevant?
|
| It was relevant to me, I was reading the other thread that
| dang brought up and it reminded me that I had read this
| article yesterday and it seemed like something that would be
| interesting to other people also which is why I posted it.
| chongli wrote:
| The investors aren't building the houses. They're not
| developers. They're speculators. They're the real estate
| equivalent of scalpers buying up all the Taylor Swift tickets
| and reselling at huge markups. Except they're doing it with
| shelter, a basic human need, rather than a luxury
| entertainment product.
| amadeuspagel wrote:
| Developers build houses so that they can sell them, and use
| the proceeds to build the next house.
| chongli wrote:
| Houses aren't being built. We've had a huge reduction in
| construction essentially since 2008. This is why the
| scalper analogy fits: it's a largely fixed supply with
| skyrocketing demand and investors see it as a gold rush.
| amadeuspagel wrote:
| > Houses aren't being built.
|
| OK, that's the problem then. If enough houses were built
| there would be no speculation either, just as there's no
| speculation in cars.
| dang wrote:
| The intersection of "housing" and "Canada" makes these two
| topics essentially identical from a HN discussion point of
| view.
|
| The appearance of one thread on HN's frontpage often leads to
| follow-up submissions on closely related topics. We try to
| avoid giving such article clusters more than one slot,
| because frontpage space is the scarcest resource HN has: http
| s://hn.algolia.com/?dateRange=all&page=0&prefix=true&que....
|
| Normally we downweight the follow-up (https://hn.algolia.com/
| ?dateRange=all&page=0&prefix=true&que...), but in this case I
| let the follow-up "win" because it has a slightly more
| neutral basis for discussion, and the topic is flame-prone to
| begin with.
| tmnvix wrote:
| If they become short term rentals they essentially 'become
| vacant' (just one example of why an investment property might
| be 'vacant').
|
| Obviously I'm not suggesting that all do, but some will.
|
| By definition an owner occupier doesn't own a vacant property
| - only investors do, so the higher the proportion of
| investors the higher the proportion of underutilised
| properties.
| joenot443 wrote:
| This is probably the most pressing topic in Canadian politics at
| the moment. Cost of housing, both to buy and to rent, has scaled
| greatly out of pace with Canadian salaries. Our PM and his
| cabinet recently went on a retreat with the intention of creating
| an action plan on how to get us pointed in the right direction.
| They came back empty handed. [1]
|
| Truthfully I don't think this is an issue the federal government
| is in a position to solve any time soon. The long and short is
| that our population has grown faster than our supply of housing,
| COVID being an unfortunately timed disruption which further
| strained that supply. Nothing was built for almost a year, but
| the population continued to grow.
|
| If I had a singular policy suggestion, after having talked to
| some friends in the industry, it would be to pump federal money
| into expediting site plan approvals and environmental assessments
| done at a county or municipal level. Some of these offices have
| tiny rosters who end up being the bottlenecks for enormous
| projects which otherwise would be breaking ground. Environmental
| assessments are notoriously time-consuming and particular in
| Canada, something we're largely very proud of. That said, I
| believe if there were ever a time for Canadians to be okay with
| cutting corners if it meant getting more of us into homes, I
| think it would be now. From my understanding, there are many
| housing projects in Ontario for which construction could begin
| next week, if not for the Sisyphean approval processes.
|
| Here's an example of a site plan approval process for a town in
| Ontario[2] - just imagine all the points in which that chain of
| communication can get gummed up and projects can sit idle. We're
| used to steps like this taking a couple weeks in tech, but in the
| land development industry things move s l o w.
|
| Canadians often take pride in our ability to do things the way
| they're meant to be done and to follow the rules as presented,
| even when they might not make sense in the moment. I think
| occasionally our love of process can be our downfall.
|
| [1] https://archive.ph/CZE3y [2]
| https://www.middlesexcentre.on.ca/sites/default/files/2021-0...
| SamReidHughes wrote:
| > Truthfully I don't think this is an issue the federal
| government is in a position to solve any time soon. The long
| and short is that our population has grown faster than our
| supply of housing,
|
| Federally they can do an immigration moratorium. Immigration-
| driven population increase is clearly making quality of life
| worse for Canadians.
| RyanShook wrote:
| Since demand won't be going down the only solution is expedited
| development as you suggest. We've seen government pump record
| money into businesses so it's frustrating that in both the US
| and Canada more isn't being done to solve the problem of
| housing affordability by pursuing the only real solution.
| treespace8 wrote:
| At many levels Canada seems to be choking on it's own
| bureaucracy. We have a complete lack of intra provincial trade,
| including many intra provincial barriers for experts. Does
| Saskatchewan with a population of 1 million need its own
| licensing board for Psychologists? Why Can't I buy an Ontario
| wine in Alberta?
| markus_zhang wrote:
| In many ways Canada feels like a feudal state to me. The
| provinces simply have too much power.
| trinovantes wrote:
| Most likely as a concession to getting Quebec to join the
| country
|
| Same reason why we have things like the notwithstanding
| clause that allows provinces to overrule the constitution
| nick__m wrote:
| You meant not leave the country, Quebec, Ontario, Nova
| Scotia, and New Brunswick are the founding provinces and
| Quebec had almost no leverage at the time.
| Fervicus wrote:
| Federal government can easily solve immigration if they wanted
| to though. Does it make sense to bring in a million people each
| year? It's not gonna change though because people are profiting
| from it.
| Havelock wrote:
| I believe that the current housing bubble began to really go
| off the rails during the 2008 financial crisis due to decisions
| made by the Conservative Party of Canada at that time. Instead
| of addressing the issue directly, the government chose to
| stimulate the housing market through incentives and policies,
| effectively artificially inflating it. Subsequent governments
| have followed a similar path.
|
| As we've seen, the accumulated potential energy in the housing
| market has now grown to such an extent that we don't know what
| to do with it. Eventually, the "sandpile effect" is likely to
| come into play, since the laws of nature always wins.
| tmnvix wrote:
| > They came back empty handed.
|
| The solution (in my opinion) is simple. Increase taxes on
| unearned income and balance that with decreased taxes on earned
| income (i.e. productive activity). Unfortunately this looks
| like political suicide in a climate where a large portion of
| the population has gone all in on a strategy of investing in
| unearned income.
|
| We've embraced the exploitative aspects of capitalism at the
| expense of the creative aspects and it has made our societies
| sick and fragile.
| abledon wrote:
| r/cscareersCAD looking grim on the job searches
| ZoomerCretin wrote:
| You can completely expedite the site plan approval and
| environmental assessments to take place in one day, and still
| not get anywhere. The problem is not the amount of bureaucracy,
| it's that you've made it illegal to build anything but single
| family homes on >80% of your urban land.
| VHRanger wrote:
| I really don't think it's that hard to work it at the federal
| level.
|
| The issue is at the municipal level (mainly), and the
| provincial level (less so).
|
| Look at what California has been doing in the last 2 years. You
| force constraints on zoning regulations down on the lower level
| entities. You force permitting time limits and acceptance
| rates. You force a minimum level of multifamily lots per
| population.
|
| It's really really really not as hard as it's presented. It's
| just in political gridlock.
| bardak wrote:
| >The issue is at the municipal level (mainly), and the
| provincial level (less so).
|
| The municipalities are creations of the province so
| personally I would assign them just as much blame. The
| provinces have the most power to address the issue but seem
| to be happy to hide behind the Feds and Cities.
| voisin wrote:
| Ford in Ontario seems most serious about fixing the
| municipal problems.
| VHRanger wrote:
| Absolutely, everyone is passing the buck on responsibility
| here.
| kevin_nisbet wrote:
| > Truthfully I don't think this is an issue the federal
| government is in a position to solve any time soon.
|
| I agree in general. There is some stuff the federal government
| can do, which is to return to funding social housing. The
| Federal government for a long time provided subsidized housing
| in the post war period up to the 1970s-80s.
|
| > If I had a singular policy suggestion, after having talked to
| some friends in the industry, it would be to pump federal money
| into expediting site plan approvals and environmental
| assessments done at a county or municipal level.
|
| I've seen similar. One of the biggest issues that is almost
| never talked about is development (land improvement?) taxes
| occur late in the process. So when it comes to multi-dwelling
| development, there is substantial risk the developers have to
| take on and manage, because they could get slapped with losing
| all their profits in surprise taxes near the end of the project
| (besides all the risks for building costs in general). I think
| the stats is in the ballpark of 2/10 building are successes,
| 6/10 are break even, and 2/10 are are losses. At $100-$400
| million a piece for a medium sized tower, imagine taking on
| that risk profile... I can't. So cities need to understand the
| risks they're transferring to development, and fund their
| infrastructure upgrades through good and solid planning
| upfront.
|
| Another related idea I saw from a youtube video on Vancouver I
| think it was, was the return to the Vancouver standard house
| plan. It was one of the post war house plans, and while there
| were a couple variations and you could make superficial
| changes, it was extremely cheap to get approvals for because
| the city was basically approving the same structure every time,
| and were so used to it the reviews were cheap and easy.
|
| So you're right, just finding the opportunities to optimize
| that process for both the City and Developer is essential. And
| also allowing basement apartments and other medium density
| development. The giant towers are hella expensive if that's the
| only density getting built.
| adverbly wrote:
| > Our PM and his cabinet recently went on a retreat with the
| intention of creating an action plan on how to get us pointed
| in the right direction. They came back empty handed. [1]
|
| It's too bad that's such important discussions happen in
| private. Between this and the shenanigans with the Ontario
| Premier and developers, I think it is obvious that most
| politicians don't actually want to solve the problem.
|
| I'm hoping we get something like a single issue party with a
| mandate to implement a land value tax.
| inSenCite wrote:
| Interesting the recent focus on the Canadian market. FT just
| publiched an opinion peice last weekend on why we are not a
| global leader. Basically low pop density -> limited competition
| -> limited innovation & productivity
|
| I recently sold my downtown Toronto condo (principle residence)
| after 8 years and the returns are arguably higher than the wage
| I've made over the same period of time after taxes (I work at one
| of the big 4 consulting firms, so a fairly average salary for the
| city).
|
| We are now with our backs to a wall where we cannot let house
| prices drop, which means we cannot increase supply to quickly or
| risk a good chunk of the population losing a significant portion
| of their future buying power....that is unless wages shift.
| randomdata wrote:
| _> limited innovation & productivity_
|
| Thing is, historically, Canada was incredibly innovative. It
| seems there was a culture shift somewhere in the 90s where
| "getting a good job" became the goal of Canadians.
|
| We can see this echoed in education data. Canada has become the
| most educated nation, but is so because of an exceptionally
| high rate of vocational training. Canada lags well behind when
| it comes to research-focused education.
|
| As seen in the link's charts, the US housing market crashed in
| 2006 because, after a period of innovation stagnation (Dotcom
| bust, 9/11), new innovation was taking hold. Investors left
| housing to ride that train, and thus the price declined. The
| people of Canada do not appear to have it in them to offer
| anything other than housing to investors.
| perardi wrote:
| I was born in the US, and lived in Canada, specifically
| Toronto, for a while.
|
| And contrary Americans' vague impressions of some snow-swept
| utopia...yeah, Canada is shockingly lacking in innovation.
|
| It's a place of US-designed and Chinese-made products,
| moribund government-backed private industry like Rogers and
| Bombardier, and a population that really did seem complacent
| and rather go-along get-along. People didn't seem to look
| past going to the cottage on the weekend, and whistling past
| a lot of increasingly decrepit infrastructure.
| Zircom wrote:
| Oh no, the absolute horror. Homeowners will end up having
| actually _spent_ money to have somewhere to live instead of
| making more money just by virtue of owning a home.
|
| Plenty of people are already living that reality, it's called
| renting.
| mdgrech23 wrote:
| A lot of people borrow against their house in the form of a
| HELOC. If you run into the case where people owe more than
| it's worth a lot of for better or worse are going to walk
| away and the real estate market will crash. This is where
| home owners have a lot of power.
| zdragnar wrote:
| Who do you think you rent from?
| Zircom wrote:
| A corporation that owns hundreds of homes, and I can say
| with a completely straight face that the world would
| probably be better off without them.
| spiderice wrote:
| So your solution to people currently getting screwed is to
| screw more people? And you wonder why these policies don't
| make it through.
| Zircom wrote:
| If we want to fix the situation someone is eventually going
| to end up with the short end of the stick. I don't think
| it's entirely unfair that the people that have _benefited
| for decades from the current situation_ end up with said
| short end.
|
| I've been renting for the last 10 years, the house I'm in
| now is estimated to be worth $300,000. My rent payment is
| 2500.
|
| 2500 x 10 x 12 = coincidentally, $300,000 exactly, that
| I'll never see again.
|
| So someone who owns an equivalent home for the same amount
| of time, if it were to suddenly have the value plummet to
| $0, would still come out ahead of me because they'd only be
| losing the equity they've put into their home. And that's
| still not a fair comparison, because there's almost no way
| it'd become utterly worthless, so they'd still be left with
| something to show for it even if it loses a significant
| percentage of its value.
|
| Housing is a basic human need for survival, to be 100%
| honest I don't feel that bad that the people that have been
| willfully participating in a system that only works by
| screwing other people over may lose some money when the
| people getting screwed over have had enough and try to
| change things.
| freedomben wrote:
| Given that a lot of people's retirement wealth is largely in
| their home, and that they've planned and worked toward this
| for 40 to 50 years, this is a remarkably calloused take. I
| agree the current system has absurdities and needs to be
| changed, but rapidly disrupting the system and dismissing
| people's devastation with a "lol" is how you start political
| wars. I suspect this attitude is one of the main drivers
| behind the contemporay political polarization that is ruining
| friendships, marriages, and families. The only way we are
| going to be able to fix our broken system is with physical
| force where the victor gets to impose their beliefs on the
| others, or with empathy where people genuinely seek to
| understand the impact of things on others and work towards
| ideal solutions. I certainly hope the latter is what society
| chooses.
| Zircom wrote:
| You're right, the snark was unnecessary, but to be 100%
| honest no I don't feel that bad that the people that have
| been willfully participating in and profiting off a system
| that only works by screwing other people over may lose some
| money when the people getting screwed over have had enough
| and try to change things.
|
| Just by living in the US and participating in our modern
| society here I am myself in a similar situation, and I'm
| not exactly a political activist dedicating my life to
| changing the status quo, but if and when the people we're
| exploiting to fund our current lifestyle start fighting for
| a better life I'm not gonna be telling them that they need
| to stop and think about the effect their demands would have
| on our lives.
| dang wrote:
| Can you please not post in the flamewar style on HN? You can
| make your substantive points without it, and we're trying for
| something else here.
|
| https://news.ycombinator.com/newsguidelines.html
| Zircom wrote:
| You're right my apologies, the snark was unnecessary. Will
| keep that in mind if I choose to continue discussing in
| this thread.
| dang wrote:
| Appreciated!
| jedberg wrote:
| One big difference between Canada and the US is tax policy
| related to housing. In Canada, you don't pay capital gains on the
| sale of your home. In the USA you do if the gain was over $250k
| ($500k if you're married). So this creates a huge incentive in
| Canada to buy a house, renovate it while you live there, and then
| sell it and apply the entire gain to your next purchase.
|
| It means Canadians who are already in the system can afford a lot
| more house in their subsequent purchases, especially at the high
| end.
| jholman wrote:
| I feel like your comment is implying that it's common for
| renovations in the US to increase the value of the property by
| over $500,000 (or over $250,000 for the sort of home that an
| unmarried person would flip). If that's not what you're
| implying, then there's no difference in incentive to reno-and-
| flip.
|
| It seems to me that the incentive-difference is that in the US,
| the tax code is telling you to flip often, or not flip at all.
|
| Another big difference in tax policy, if I recall correctly, is
| that Americans don't pay tax on mortgage interest. Seems to me,
| that incentivizes Americans to over-leverage on paying mortgage
| interest. Don't worry though, in Canada these days, we too
| over-leverage on mortgages, because otherwise we're homeless,
| as per the article. I sure wish I could tax-deduct my mortgage
| interest, because that's the main thing I spend money on.
| sologoub wrote:
| Not a tax expert, but I don't think you can flip often using
| owner occupancy. You are limited to a single deduction every
| two years: https://www.investopedia.com/ask/answers/06/capita
| lgainhomes...
|
| 1031 is probably closer to flip model, but not sure the
| implications of the rules.
| querulous wrote:
| this is 100% it. there's a ratcheting effect in owning housing
| in canada. that recent study about how 70% of homes in canada
| are being bought be investors is completely bogus. 70% of homes
| in canada are being bought by _people who already own homes_.
| often this is "investment" properties like rental units but a
| significant proportion of it is second ("vacation") properties
| and parents using their own equity to fund children's home
| purchases
| dan-robertson wrote:
| I thought house-flipping like this was reasonably popular in
| the US. Is it common for renovations to homes to increase the
| value by more than $250k (or $500k for married couples)? My
| guess would be no and even if some couple buys an actual fixer-
| upper that needs a lot of work, they aren't going to next look
| for some kind of dilapidated mansion in need of hundreds of
| thousands of dollars of repairs. I'm pretty unconvinced that
| this specific tax difference has a big effect.
| larsnystrom wrote:
| Capital gains taxes on your primary residence stops older
| people (who have large unrealized gains in the home they own)
| from selling their large, built-to-accommodate-a-family house
| to buy something smaller in a more convenient location. They're
| not able to buy something in the same price bracket after
| selling, because of capital gains taxes. So old people stay in
| their large homes and younger people, who would actually need
| that larger house, can't get into the market.
|
| I would think dropping capital gains taxes on your primary
| residence, and have a property tax that scales with the market
| value of your home, would make the housing market more
| efficient.
| joshlemer wrote:
| But then many provinces go and pursue policies like allowing
| seniors to defer property taxes until death, which if
| anything incentivizes them to stay in place.
| floren wrote:
| Aren't you exempted from capital gains tax if you reinvest
| the money within a year or whatever?
| jedberg wrote:
| Only the first $250k (or $500k if you're married). And you
| use it to buy another primary residence.
| lotsofpulp wrote:
| I think they are referring to a 1031 exchange.
|
| https://www.investopedia.com/financial-
| edge/0110/10-things-t...
| jedberg wrote:
| No, they were referring to the capital gains exemption,
| which is only allowed every two years.
|
| Actually, you pay full cap gains on a 1031 exchange
| because it can't be your primary residence. You pay gains
| on the difference in value during the exchange, and if
| you sell it down the line you pay gains on the full
| difference (minus your improvements).
| jedberg wrote:
| It makes it more efficient by allowing the price to go more
| towards the natural price, which is high due to lack of
| inventory.
|
| It keeps prices suppressed in the USA for exactly the reason
| you say -- old people won't sell their high end homes, which
| keeps the median price lower.
| surge wrote:
| Just wave the tax if you're over a certain age or collect SS.
| Seems like a good compromise.
| abledon wrote:
| wow thats gross.
| taxman22 wrote:
| Any improvements increase the cost basis in the US and reduces
| the capital gain as well.
|
| I think the 2 bigger taxes difference are: 1. Property tax in
| Canada is often 80% less than much of the US. (0.28% in
| Vancouver vs 1.3% in Bay Area, CA vs 2.2% in Austin, TX) 2.
| Interest on $750k is tax deducible in the US, however with low
| interest rates, many people just take the standard deduction
| anyway.
| ttul wrote:
| Property tax as a share of property value is lower, but
| property tax revenue as a share of total taxation is similar.
| llm_nerd wrote:
| Canada is currently entering _catastrophe_ levels, but because of
| lagging consequences people don 't realize how much of a disaster
| is before us. There is a collective delusion that has sustained
| some profoundly self destructive policies. The toll is coming
| due.
|
| Almost all of Canada cannot qualify for a home at current housing
| prices. Either to buy _or_ to rent. The rental market is
| currently at the level of parody where the requirements filter
| out almost everyone. The bottom 50% of Canada, income wise, is in
| the precarious situation where if anything happens to their
| current housing, they _will be homeless_. Slowly social
| assistance and related programs are going to have to start
| resetting and the costs are going to be enormous.
|
| https://archive.ph/4xWtC
|
| This is a problem created by multiple governments over various
| parties, and at this point I don't see an exit that isn't
| enormously painful.
| mdorazio wrote:
| Your link was heavy on opinion and light on data, so I went
| looking for numbers on Canada to verify your assessment.
|
| Median income after taxes: $68,400 [1] Median rent (2 bedroom):
| $2,300 [2] Average tax rate (single worker): ~32% [3]
|
| If we apply the 30% rule (it's ok to spend up to 30% of pre-tax
| earnings spend on rent), your assertion doesn't hold up - well
| over 50% of Canadians are making plenty of money to afford
| rent. Of course, in expensive cities where rents have far
| outpaced wages things are going to be bad but that's true
| pretty much everywhere in the West these days. If anyone has
| better numbers, please share.
|
| [1] https://www.policyadvisor.com/magazine/what-is-the-
| average-i...
|
| [2] https://www.zumper.com/blog/rental-price-data-canada/
|
| [3] https://www.oecd.org/tax/tax-policy/taxing-wages-canada.pdf
| rewmie wrote:
| > This is a problem created by multiple governments over
| various parties, and at this point I don't see an exit that
| isn't enormously painful.
|
| Isn't Canada's housing problem caused by a supply crunch? Other
| than the Canadian government going into the real estate
| business and start building medium and high-density appartment
| blocks, what role does the Canadian government have in this
| mess?
|
| Also, please note that this issue is plaguing basically the
| whole European housing market as well.
| ttul wrote:
| The supply crunch is caused by wealthy Canadians owning
| multiple homes, most of which are empty. There are some
| relatively new speculation and vacancy taxes, but they are
| trivially easy to evade - just have your adult child "rent"
| your vacant cottage and suddenly it's occupied.
|
| During the pandemic period, low interest rates caused home
| owners with plenty of house equity to go on a virtual binge
| of home buying. I know of people who bought four extra houses
| in 2021 just because they could. The bank gave them free
| money. Why not?
| rewmie wrote:
| > The supply crunch is caused by wealthy Canadians owning
| multiple homes
|
| Is it, though? I mean, that would drive up demand, but what
| happened to supply? If your hypothesis had any basis,
| wouldn't real estate developers rush to profit from that
| demand by building more homes? They wouldn't turn down all
| that free money, would they?
|
| And more to the point, why is that a government problem?
| remarkEon wrote:
| >Almost all of Canada cannot qualify for a home at current
| housing prices.
|
| How are you quantifying this? If this is true, how is it not
| reflected in some manner in prices? In other words, who are are
| the buyers propping up prices?
|
| I'm not trolling, because if what you're saying is true it
| suggests that there is something fundamentally fraudulent about
| the Canadian housing market.
| swarnie wrote:
| The R/canada subreddit had a good breakdown last week
|
| Essentially 92% of Canadians can't afford the average home
| based on the average income.
|
| I think if you do "top" of the last month it'll be near the
| top.
| ttul wrote:
| My household is in the top 1% of income earners. We cannot
| afford a house in our exurb. 20 years ago, with this level of
| income, it would have been trivially affordable.
|
| Yes, I rent for $4250 a home that you can buy for $1.7M. The
| distortion here is beyond ridiculous. The equivalent mortgage
| would be something like $7K before property taxes and
| maintenance.
|
| Because you can't imagine government moving fast enough to
| change policy, the only way out is likely a sudden and
| shocking collapse in home values caused by the bond market
| failing to continue its belief that Canada is sound.
| Fervicus wrote:
| Canadian housing market is full of fraud at all levels, from
| people falsifying incomes, to real estate agents, to money
| laundering [0].
|
| [0] - https://www.reca.ca/consumers/financial-
| considerations/money...
| gemstones wrote:
| The buyers are foreign to Canada (investors), so the effects
| don't affect the Canadian economy as directly as you might
| expect.
| shagmin wrote:
| I don't have a source on me but I've read plenty about
| wealthy people in other countries buying large amounts of
| Canadian real estate as a store of value, even if it sits
| vacant. Mostly people in countries where there aren't so many
| great places to invest. But I don't know off hand if that's
| just a drop in the bucket compared to other things or what.
| cscurmudgeon wrote:
| That is just vanilla racism/xenophobia.
|
| https://news.westernu.ca/2023/01/expert-insight-canadas-
| ban-....
|
| Data that tracks foreign buyers and owners in Canada are
| scarce and patchy. The Canadian Housing Statistics Program
| shows that non-residents only own about two to six per cent
| of Canadian residential properties in 2020.
|
| Edit: Those numbers are in line with the US. Why is the US
| real estate market not that crazy then?
| rossdavidh wrote:
| Hmmm...2 to 6 percent of a market can be more than enough
| to make a difference, even a sizeable one, if there is
| already a shortage. Now, there is still the question of
| why there is a shortage, but 2 to 6 percent in an already
| tight market is more than enough to spike the prices.
|
| Of course, China shows that you don't need outsider
| investing to create a ridiculous property affordability
| situation.
| electrondood wrote:
| No, it is a fact. The same happens in the US.
|
| Real estate is, at worst, used for sanction evasion and
| money laundering, and at best, as a loophole for citizens
| of restrictive countries to extract more of their money
| from those countries.
|
| All of these create an incentive to overbid on real
| estate.
|
| Where I live, this is a known issue. In fact, the top
| real estate companies _specifically_ try to attract
| foreign investors, and have stated so publicly.
|
| Look at the chart in the article. Home prices plummeted
| in 2022, when the Canadian government enacted a 1%
| Underused Housing Tax (UHT) on Canadian residential
| property that is considered vacant or underused.
|
| [0] https://sgp.fas.org/crs/misc/IF11967.pdf
|
| [1] https://www.brookings.edu/articles/the-impact-of-
| treasurys-p...
|
| [2] https://www.reuters.com/world/us/us-set-unveil-long-
| awaited-...
|
| [3] https://gfintegrity.org/press-release/new-report-
| finds-u-s-r...
|
| [4] https://www.faegredrinker.com/en/insights/publication
| s/2023/...
|
| [5] https://lewisbrisbois.com/newsroom/legal-
| alerts/foreign-inve...
| 88913527 wrote:
| Stuff like UBI sounds less insane if that's your alternative,
| and if it's truly as bad as you're suggesting it is. I wouldn't
| know the Canadian market well enough but based on armchair
| knowledge of list prices, paired with the knowledge of lower
| wages, it doesn't seem too far off.
| creato wrote:
| I don't see how UBI helps. It _would_ help if home prices
| were low enough such that builders aren 't incentivized to
| build, but high enough that people can't afford them. But
| that isn't the scenario. In the current scenario, UBI or any
| other form of rent subsidy is just going to go almost
| directly into property owners bank accounts.
| midasuni wrote:
| UBI would simply increase housing costs. The only way it
| wouldn't is if UBI was funded from a land value tax, but
| even that would require enough housing in non desirable
| areas.
| chiefalchemist wrote:
| Unless there's in increase in housing supply, UBI will simply
| increase what the market can bear. That is, in due time, the
| UBI "advantage" will end up in the pocket of landlords.
| Grimburger wrote:
| And here's me escaping the west along with my neighbors
| escaping China, none of us have had a rental price rise in 4
| years. We live only a few hundreds metres from the beach and
| even closer to vibrant national parks.
|
| What would you all pay for such a thing? I'm ashamed of how
| little it actually costs, you can't even rent a car park in my
| old city for the same amount.
|
| If this really is _hacker news_ then you can either find
| somewhere good to live with a bit of searching or you aren 't
| particularity good at hacking the basics of life.
| moltar wrote:
| Where did you move?
| colordrops wrote:
| Do you have children?
| DoreenMichele wrote:
| The US may be in a more or less similar situation. We have a
| lack of affordable housing in every state, have underbuilt for
| decades, etc.
| mitthrowaway2 wrote:
| I don't want to underplay the housing crisis in the US; the
| problems are serious. But the situation in Canada is like
| taking all of that and tripling it.
| llm_nerd wrote:
| There is a problem in many parts of the world right now, and
| the same housing problem can be cited in almost all of the
| West.
|
| The scale of the problem is dramatically different. In the
| US, like much of the world, there are the expensive areas and
| then the less expensive areas, and people migrate
| accordingly. Gentrification happens and people have to move
| further afield, etc. I see listings for extraordinary homes
| in various towns in the US for prices that are absolutely
| dreamy (not like ghettos, but nice little towns). In a remote
| world, the US has astonishingly attainable options throughout
| the union.
|
| In Canada, far-flung garbage towns have million dollar
| bungalows and $3000 rents. There are no inexpensive options
| anywhere, no matter how far out you're willing to move just
| to have a place to live. The country literally has
| politicians telling people to loan a bedroom. Yet in the face
| of actually falling home building and recurring disasters,
| the governing party has doubled down on an immigration rate
| that exceeds every other developed country (and I'm not
| talking about per capita, I'm talking about in absolute
| numbers!). It's unbelievable.
| candiddevmike wrote:
| IMO the cost of living US kind of averages out these days.
| House price gradient is pretty slim, and the large metros
| typically have less expensive services due to local
| competition/robust economies, vs the rural areas where
| medical care can be extremely pricey, food prices are
| outrageous, and no local competition to sustain more than
| one option for most staples.
|
| Thank you for coming to my TED talk on location-based
| compensation is wage theft.
| lotsofpulp wrote:
| The big equalizer is the opportunity cost of not being
| able to find an income stream if you lose your current
| one, or the cost of not being able to find better income
| streams.
|
| Call it volatility, and it is not easily calculable as a
| number. I can get a job move to cheap Topeka, KS, but how
| much does the volatility cost me if I lose that job or I
| get laid off, etc.
| Fervicus wrote:
| I'll leave this here: https://www.centuryinitiative.ca/
| DoreenMichele wrote:
| I was homeless for nearly 6 years. I was willing to
| relocate to anywhere in the western US to make my life work
| and get back into housing and spent a few years researching
| my options.
|
| I'm not convinced the "affordable housing" people imagine
| is available if you go far enough out in the US is as
| available as is popularly presumed.
| llm_nerd wrote:
| I don't have to imagine anything. I can pull up Zillow
| right now and find some incredible homes priced at what
| would be considered very cheap here almost anywhere in
| the US. Even San Francisco is looking pretty economical!
| Outside of the major centres homes are amazingly
| inexpensive.
|
| Obviously this doesn't mean everyone in all situations
| can find a home, but the scale of the problem is just
| dramatically different.
| DoreenMichele wrote:
| I had this same argument with people over and over on HN
| while I was homeless. If you want to actually move there
| and live there, looking into those "cheap" homes
| frequently is a case of _they aren 't actually livable
| and need many thousands of dollars of work,_ among other
| issues.
| llm_nerd wrote:
| You are predicating this entire discussion on your own
| personal experience. I have no idea what your income,
| credit rating, job, etc is, but as mentioned obviously
| people fall through the cracks and have trouble anywhere,
| at literally any time in human history. I mean, you
| mentioned that you looked for six years, yet even the US
| notion of a lack of "affordable" (which again, is a
| _relative_ term) housing is a recent phenomena.
|
| No, I'm not looking at teardowns. Many of these are
| absolutely gorgeous, extremely well-appointed homes. This
| is more than just touristy noise at this point: I am
| seriously considering relocating to the US because of
| what is happening in Canada, and have looked in depth at
| available homes across the nation.
| DoreenMichele wrote:
| You've basically said "my personal firsthand experience
| trumps yours" when my personal firsthand experience
| includes living in multiple places in the US and yours
| apparently includes living in Canada and looking up info
| about the US online and concluding life here might be
| better for you.
|
| I wish you luck in finding your bliss, but this seems
| like an unconstructive discussion.
|
| PS: What's on the internet is not necessarily a
| comprehensive and accurate picture of reality on the
| ground.
| lotsofpulp wrote:
| > I was willing to relocate to anywhere in the western US
|
| The western US is a lot more expensive than the rest of
| the US.
|
| https://cdn.nar.realtor//sites/default/files/documents/eh
| s-0...
| DoreenMichele wrote:
| I have a serious medical situation. For me, that makes
| the eastern US vastly more expensive.
| brailsafe wrote:
| Yep. I've been thinking about this a lot. It's... very very
| very not good.
| b3d wrote:
| The current leadership can't solve this because it would directly
| contradict their election talking points.
| lilboiluvr69 wrote:
| Last time I visited Toronto I was shocked by the amount of not
| just homeless people but loud and disruptive or mentally ill
| homeless people. I remember hearing a blood curdling scream
| coming from a crowd. I ran over to look, it was just this
| homeless man screaming at the top of his lungs as people walked
| past him.
|
| My friend told me it didn't used to be this bad (we've known each
| other for years and he used to complain about how many homeless
| people there were in American cities when he visited me), but the
| population, at least from his perspective, seems to have surged
| in recent years. At the time he blamed COVID, which I am sure had
| an effect, but I had no idea how bad affordable housing had
| gotten in that country (although maybe I should have noticed
| since he always gripes about making STEM money and not being able
| to afford to live alone in Toronto).
|
| I remember something he said once that has really stuck with me.
| Last time I visited he told me the homeless used to be the
| fringes of society that fells through the social safety net. But
| now in Toronto they seem to be a class all their own.
| TheRealPomax wrote:
| Generally you don't solve homelessness with affordable housing.
| We might call it "homelessness" but that's just the bullshit
| word we use based on the symptom, it's actually destitution,
| and the help they need extends so far beyond just getting them
| their own place that _that part_ is actually the easiest
| problem to solve compared to all the other parts that also need
| solving.
|
| The fact that Toronto and Vancouver haven't even set up
| container apartments in several places around the city is all
| the proof you need that folks don't care, which means they
| shouldn't be given a choice on whether or not to solve the
| problem. This should get mandated with fines for the city
| itself if it doesn't help the people who can't help themselves
| because the system's been designed to prevent them from getting
| help.
| hungryforcodes wrote:
| Though technically container apparments would be "affordable
| housing" -- which I think might be one part of the solution.
| mjr00 wrote:
| > This should get mandated with fines for the city itself if
| it doesn't help the people who can't help themselves because
| the system's been designed to prevent them from getting help.
|
| The problem is that "help" means different things to
| different people.
|
| For years, the general view was that addicts in Canada got
| help via safe injection sites, first responders trained in
| administering naxolone, free housing available, and no real
| consequences for petty crime. Keeping them out of jail and
| making sure they had housing and clean drugs was seen as
| helping them.
|
| It's only been in the past ~2 years, now that it's spiraled
| out of control during COVID, that some are redefining "help"
| to mean forced rehabilitation and/or institutionalization and
| keeping them off the streets if they commit crime. But
| there's no consensus on this.
| verteu wrote:
| I disagree that the root problem is "destitution" rather than
| affordable housing.
|
| I haven't seen much good research on the best way to solve
| homelessness, but most cross-city analyses suggest that high
| rent (and low housing density) is the main determinant of
| homelessness rates: https://sci-
| hub.ee/10.1111/1467-9906.00168
|
| Note that "extreme poverty," "low-wage jobs," and welfare
| recipients were not significant factors.
|
| A second study claims the "the availability of low income
| housing and of mental health care are the strongest
| predictors. Relatively modest investments in improving
| availability of these services would provide considerable
| payoff in reducing homelessness": https://sci-
| hub.ee/10.2307/800641
|
| A third study I can't find now concluded that 25th-
| percentile-rent (rather than median rent) was the most
| significant factor (ie, availability of affordable housing).
| reducesuffering wrote:
| > Generally you don't solve homelessness with affordable
| housing.
|
| I think in some part, you do. I think a significant portion
| of homeless became that way through the stress and despair of
| affording $2k+ rents on a meager income, dealing with the
| lack of hope by turning to alcohol and possible other drugs,
| leading to a downward spiral where they end up on the street,
| abusing drugs for years, and eventually turning into the
| destitution you see.
| gedy wrote:
| You are correct, but I don't think we can ignore the massive
| drug abuse problem, that has progressively gotten worse over
| the past 50 years, and especially 20.
| tmnvix wrote:
| I would argue that the rise in drug abuse is a consequence of
| societal issues - not the cause.
|
| In my experience many people use drugs. Those that abuse
| drugs almost always had existing problems prior (mental
| health, destitution, a sense of hopelessness, etc).
| dghlsakjg wrote:
| Just a note: STEM money in Canada is significantly less than
| STEM money in the US, especially factoring in exchange rates.
| mabbo wrote:
| It's lower, yes, but in Toronto and Vancouver it has
| definitely improved in the last decade.
|
| Amazon opened big offices in both cities (bias: I was one of
| the early Amazon people in Toronto) and quickly grew by
| outbidding other employers on good developers. Then other
| companies opened offices to do the same to Amazon. Now
| there's a pretty big dev economy.
| glitchc wrote:
| Top end is not the same as average. Not everyone can work
| at FAANG and no one else in the sector pays like FAANG.
| What's healthy is a top end that can afford 90% of housing
| and a median that can afford 50%. Instead we have a top end
| that can afford 50% and a median that can barely afford
| 10%. That's what's out of whack.
| mitthrowaway2 wrote:
| It's still substantially lower. I know some talented devs
| who got offers from Amazon within the past couple years,
| and Amazon's internal HR rules placed a strict comp ceiling
| on their offer that could be _doubled_ if they 'd agree to
| work from Seattle rather than Vancouver. Same developer,
| same role, and a very short distance to move. So they
| moved.
| mabbo wrote:
| And yet... the Vancouver and Toronto offices are still
| pretty big- thousands of devs. And not just for visa
| reasons.
|
| Canadians want to be in Canada. That's why I moved back
| from Seattle, knowing it would affect my comp badly.
| mjr00 wrote:
| Yeah. Here in Vancouver you need 250k+ yearly household
| income to afford a very average detached single-family house
| (3 bed, 1 floor) anywhere in the metro area. A typical senior
| engineer salary here, for a local company, is $200k/year on
| the high end. AWS/MS might pay a bit more but not
| significantly.
|
| The larger houses in "nice" neighborhoods are going for 4/5
| million, so they're not getting purchased by anyone in the
| working class, by which I mean anyone who relies on regular
| employment income to live.
| glouwbug wrote:
| Vancouver's 90 percentile before tax income is 99k age
| 25-34 and 142k for age 35-44.
|
| https://www12.statcan.gc.ca/census-recensement/2021/dp-
| pd/dv...
| nimos wrote:
| Taxes are a pretty big difference too. Even though the
| California top federal + state isn't that far off of Ontario
| the income bands are much wider. At 300k USD(410 CAD) you'll
| have about an extra 21k USD take home in California. Then
| sales taxes are 13% in Ontario vs 7-10% in Cali(local taxes).
| one_level_deep2 wrote:
| For the Californian, you also need to factor in the $10-15k
| in health insurance costs. That cuts pretty deeply into the
| $21k surplus.
|
| https://www.statista.com/statistics/184955/us-national-
| healt...
| pseg134 wrote:
| The company pays 100% of my premiums and I've had the
| same thing at other places.
| xienze wrote:
| Right. I think a lot of foreigners are completely
| oblivious to how little people with good jobs have to pay
| for insurance premiums and max out of pockets. Everyone
| seems to think it's nothing but $100K bills for having a
| paper cut.
| abduhl wrote:
| Relevant to this:
| https://www.cbc.ca/news/politics/international-student-cap-i...
|
| "Canada is on track to host around 900,000 international
| students this year, Miller said in an interview that aired
| Saturday on CBC's The House. That's more than at any point in
| Canada's history and roughly triple the number of students who
| entered the country a decade ago."
|
| There is a perverse incentive to attend what amount to for-
| profit scams in Canada owing to their immigration policies
| giving preference to folks with Canadian degrees.
| TheRealPomax wrote:
| Sounds like someone's not been paying attention to how the
| international student game works. If you think luring
| international students by for-profit academia is a Canada
| thing, you have some learning to do.
|
| Also the idea that Canada can _retain_ folks with a Canadian
| degree is hilarious: the location factor for backwater rural
| Washington is higher than the location factor for Vancouver
| or Toronto: you think those students are gonna stay in Canada
| after they graduate instead of moving South and getting paid
| twice the amount for the same position? Because if you do,
| that 's another bit where you have some learning to do.
| hungryforcodes wrote:
| ...or back to their original countries with the prestige of
| a foreign degree.
| abduhl wrote:
| You are unfamiliar with the Canadian international student
| game. For reference, the Unites States has roughly the same
| number of international students as Canada (~1 million) at
| 10x the population. This large number has created an
| industry of "strip mall" for-profit colleges that award
| degrees which provide a preferred path to citizenship
| because Canada's immigration system offers additional
| points for having a Canadian degree (technically any degree
| but a Canadian degree is automatically qualified while
| foreign degrees are not). These people are often not
| looking to get an education and then get a job in America -
| they are often trying to immigrate and the cost of
| attending the Canadian college is just part of the
| paperwork for them.
|
| America's immigration system, in contrast, is generally
| merit-blind. You do not get extra points for a degree and
| so there is no incentive to pursue a qualified American
| degree. The US path for an international student seeking
| citizenship is based on work after the degree: sponsorship
| by an employer. The Canadian path for an international
| student IS the degree.
|
| See also https://macleans.ca/longforms/fraud-canada-
| education-interna... and
| https://www.politicstoday.news/politics-today/ottawa-
| signals... in case you care to do some learning of your
| own.
| AbrahamParangi wrote:
| I think this is an extremely important problem for progressive
| governments to solve because at the moment they're doing an
| extremely bad job of it and opening up opportunities for someone
| to say: "I am willing to do what is necessary to solve the
| problem - restrict immigration, ban foreign ownership, eliminate
| environmental and bureaucratic review"
| ikerrin1 wrote:
| It may have something to do with urban design and zoning in the
| two countries. Candace has far fewer exurbs and higher suburban
| density. You can't just add new housing stock by moving beyond a
| city's boundaries.
| diogenescynic wrote:
| Zoning laws have become weaponized. I would bet that the more
| zoning laws passed, the higher prices have increased. In places
| like San Francisco, neighbors can fight your permits and delay
| your building by years/decades depending on how much effort is
| put in. California stopped building enough housing supply to
| meet demand in the 1970s and since then has slowed new housing
| construction. We need to reverse this.
| jmyeet wrote:
| The problem here is capitalism generally and neoliberalism
| specifically.
|
| The idea of _private property_ (as distinct to _personal
| property_ ) is fundamentally flawed. Every aspect of your life
| becomes financialized, including basic needs like food, water and
| shelter as well as education and health care. All of this becomes
| simply a means of extracting every last possible dollar from you
| through mountains of debt and sky-high rents.
|
| Withholding shelter in the wealthiest countries in the world just
| so a handful of people can have $120 billion instead of $100
| billion in net wealth is beyond coercion. It's state-sanctioned
| violence.
|
| The solution is social housing. In places like Vienna the
| majority of people (~60%) live in state-owned housing. The state
| essentially guarantees housing (mostly), as it should.
|
| The provincial governments of Canada should build a pool of
| housing through a combination of building, eminent domain and
| taking ownership of foreclosed properties. You could even have a
| scheme where people who are in arrears on their mortgage get to
| convert their house to being state-owned (which they can continue
| living in) where the mortgage gets bought out at a discounted
| value, which is what would happen anywya if it were underwater.
| ilrwbwrkhv wrote:
| Canada is a country filled with risk averse people who have been
| brainwashed into thinking real estate as the only investment
| which "smart" people do. The result is a country which severely
| lacks innovation, has huge problems of oligopoly at every level,
| healthcare and social nets falling apart at the seams and housing
| which is out of control. But hey, look at how much the 50 year
| old risk averse granddad has through sitting on properties for 30
| years like some perverted dragon.
|
| It's a shame really. Canada could have been a great country like
| one of the Scandinavian ones. Instead it is like watching a
| trainwreck in slow motion.
| jt2190 wrote:
| We can explain this without "brainwashing": Risk-taking
| Canadians move to the United States, leaving behind the risk-
| averse. ;)
|
| In reality, Canada and the U.S. have a "common market" of sorts
| that allows talent to move back and forth fairly easily. On top
| of this, cities tend to "specialize" in certain industries, and
| it's much easier to move the talent to the industry than move
| then industry to the talent.
|
| This means that Hollywood stays in Los Angeles, and Canadian
| actors move south; Silicon Valley stays in San Francisco and
| Canadian programmers move south; Wall Street stays in New York
| and (some) Canadian Bankers move south.
| edrxty wrote:
| It seems like societies start to have issues when they become
| too risk averse and comfortable. Humans are actually really
| good at handling risk and even negative outcomes and it's very
| central to our nature. The problem is when the risk
| probabilities become so small that we can't actually assess
| them so we start doing absolutely ridiculous things to continue
| mitigating them.
| VHRanger wrote:
| [citation needed]
| b3d wrote:
| If we can't have a discussion without people accusing others of
| being racist or xenophobic instead of refuting their arguments
| with data and concrete analysis, then we can't have a discussion
| at all.
|
| And yes, the majority (and growing) in this case would be called
| racist and xenophobic, because they have not been shown a single
| fact that runs counter to their argument. Not even an attempt.
| And you know what? They're probably right.
| fnetisma wrote:
| If you talk to anyone here in Canada there is bipartisanship.
| Real Estate owners and non-owners both agree housing prices to be
| a huge issue around Canada right now, but the former would never
| budge on reducing the prices as a means to a solution. They have
| too much invested too late. Non-owners on the other hand want
| price corrections to take place, but systemic issues such as a
| rising population due to immigration [1] and increasing
| construction costs [2] are causing upward pressure.
|
| [1] https://www.cbc.ca/amp/1.6938242
|
| [2] https://thoughtleadership.rbc.com/proof-point-soaring-
| constr....
| MichaelZuo wrote:
| There is no 'bipartisanship' on this issue as all major parties
| strongly support at least some mixture of policies that are
| known to increase housing prices.
|
| Whether that's protecting farmland/parks/forests/etc.,
| increasing immigration, increasing building standards, etc...
|
| In fact, I don't think it's viable for any party to drop
| support for even two of those. e.g. I doubt there's much of a
| voting base for someone who's both hard on immigration and
| relaxed on environment issues to allow for huge housing
| developments on protected lands.
| fnetisma wrote:
| Sorry, I wasn't clear enough, I don't mean bipartisanship in
| the political sense. I mean bipartisanship between two groups
| of people namely real estate owners and people who don't own
| real estate. At a general level, sellers want high prices and
| buyers want lower prices, but the level at which the prices
| are right now is simply way too high if compared with income
| per capita to be justified for a home purchase, and
| correction to "USA levels" assuming that's the baseline is
| also not justifiable as home equity is a huge chunk of
| everyone's wealth
| aborsy wrote:
| Everyone talks about the housing crisis in Canada. But the post
| also includes the curves for income growth. Unfortunately, unlike
| US, the wages simply don't increase much in Canada. The purchase
| power is bad.
| codeisawesome wrote:
| So many people in this and every thread online (there's a deluge
| on Reddit / Instagram even, almost feels like astroturfing)
| complaining about immigrants. Perhaps it's convenient to blame
| other people.
|
| Take a look at housing density and zoning, and fix the problems
| there. Get a more vibrant economy in the process: a society that
| aspires to be stuck in a 'golden era' is one that is chasing an
| illusion.
| GenerocUsername wrote:
| It's not astroturfing. Its a major contributor, and has been
| weaponized to the point that large portions of the population
| are trained to immediately dismiss any mention of it.
| codeisawesome wrote:
| The reason I use the term astroturfing is the complaint posts
| / comments all look & sound very similar with minor
| variations, like a "shaped charge" that detonates peoples'
| emotional centers and taps into primal emotions like hatred
| and fear of the Other.
|
| Very occasionally I see 'real sounding' and human sounding
| comments from every day people (instead of a professionally
| sharpened message). Those are now growing very slowly over
| time, which could just be a success of the propaganda.
| Anon_Forever wrote:
| >primal emotions like hatred and fear of the Other.
|
| It's not hatred and fear "of the Other". Leftist and their
| leftist policies invite as many immigrants as they possibly
| can to an area with limited housing. Then it's
| shockedpikachu.jpg when the reality of supply and demand
| occurs and they clutch their pearls and ask "what could we
| have done to stop this?!" When in reality land,
| conservatives are telling them "we told you so". So instead
| of taking ownership of their mistakes thus proving
| conservatives were right, they gaslight everyone into
| thinking anything even remotely pointing towards the influx
| of immigrants is an issue is racist, effectively shielding
| themselves from blame.
|
| This tactic of blaming any opposition as "racist" has been
| insanely effective in the West for the past four or so
| decades. Reality is catching up, and people left and right
| are seeing through the BS.
|
| No one hates the immigrants, who wouldn't leave a third
| world country for Canada? The blame is firmly on the
| leftist politicians in Canada that are speed running the
| housing crisis.
| mitthrowaway2 wrote:
| > complaining about immigrants. Perhaps it's convenient to
| blame other people.
|
| So, this is conflating two completely different issues, in a
| rather counterproductive way.
|
| There is "complaining about immigrants", which is racist stuff
| like "I don't like the fact that the composition of my
| neighborhood is changing, I don't like the fact that the people
| from other places are different than me, I don't like that my
| school has to hire a Mandarin interpreter for parent council
| meetings".
|
| Then there's a completely different thing, _complaining about
| unsustainable immigration levels_. Which has nothing to do with
| disliking the immigrants themselves, and might even involve a
| great deal of concern about their welfare. This is what you get
| when the situation is so bad that even Ukrainian refugees want
| to go back to Ukraine because they didn 't realize how hard it
| would be to fend for themselves in Canada.
|
| As one person aptly put it, this is the kind of complaint that
| happens when a host invites a hundred guests to a party and
| only orders three pizzas. You aren't complaining because you
| don't like the other guests, you're complaining because the
| host's all-are-welcome attitude is completely irresponsible
| when they have no intentions of making accommodations
| available.
| ZoomerCretin wrote:
| Then make accommodations available. The analogy doesn't even
| hold to reality: you don't need to spend any money creating
| accommodations; you only need to repeal the extreme
| restrictions that prevent any more accommodations from being
| built.
|
| Most of the housing crisis is a result of politicians and
| homeowners refusing to cede even one plot of land for any
| building denser than a detached single family house. The
| other week on Twitter, a city councilmember from Toronto/some
| major Canadian city was complaining about an apartment tower
| being "out of scale with the neighbothood" as though 90th
| percentile incomes were still sufficient to get a loan for a
| house.
| mitthrowaway2 wrote:
| It's worse than my example because the reality would be
| like if baking a pizza had a three-year lead time.
|
| Even if the authorization was permitted to construct an
| entire new city capable of housing 3 million people, no
| reviews or permits, and assigned the highest priority and a
| blank-cheque budget to rush construction, it would take _at
| least_ ten years to build. Vancouver 's massive Oakridge
| redevelopment alone broke ground in 2019 and is expected to
| take _until 2027_ to complete. (The rezoning was approved
| in 2014.)
|
| And that is what we should do! Yes! The country should be
| building brand new cities and linking them up with high-
| speed rail. But, even if that plan were shovel-ready today
| -- which it definitely, definitely isn't! -- it would still
| take years before it contributed to the solution, and all
| the while, the demand is continuing to grow!
|
| The seeds of the supply solution to today's housing crisis
| needed to be planted at least ten years ago. But it wasn't,
| so we can plant those seeds now, but they'll take time to
| come to fruition. In the meantime, the only fast-acting
| measures are demand-side measures. And having to deploy
| demand-side measures is a very tragic consequence of not
| having taken timely action on the supply side. And that's
| even assuming we can plant those seeds today: if the city
| council squabbling about setbacks and floor-space-ratios
| continues today, then those seeds still aren't being
| planted, the demand-side measures will unfortunately need
| to last even longer, and the vitality of the country will
| suffer for it.
| CTDOCodebases wrote:
| Why not look at all contributing factors?
|
| People critical of immigration aren't necessarily critical of
| the immigrants themselves but they are critical about the level
| of immigration during a housing shortage.
|
| I believe governments don't want to address this because of the
| ugly truth it would expose.
|
| At the heart of the issue is sky high deficits and an ageing
| population putting pressure on federal budgets and the easiest
| way to grow the budget is to continually increase the tax base.
|
| The local population doesn't wan't to or can't afford to have
| children and it's more beneficial for the government to import
| full grown adults who will contribute towards GDP immediately.
| All costs from doing this (i.e not just financial costs) are
| passed onto the citizens. Those with assets actually pay the
| least in this system since they financially benefit from
| increased increased rents, suppressed wages and larger target
| markets.
|
| This is not a phenomenon unique to Canada. It is common problem
| in developed nations.
| Anon_Forever wrote:
| >complaining about immigrants. Perhaps it's convenient to blame
| other people.
|
| Leftist and their leftist policies invite as many immigrants as
| they possibly can to an area with limited housing. Then it's
| shockedpikachu.jpg when the reality of supply and demand occurs
| and they clutch their pearls and ask "what could we have done
| to stop this?!" When in reality land, conservatives are telling
| them "we told you so". So instead of taking ownership of their
| mistakes thus proving conservatives were right, they gaslight
| everyone into thinking anything even remotely pointing towards
| the influx of immigrants is an issue is racist, effectively
| shielding themselves from blame.
|
| This tactic of blaming any opposition as "racist" has been
| insanely effective in the West for the past four or so decades.
| Reality is catching up, and people left and right are seeing
| through the BS.
|
| No one hates the immigrants, who wouldn't leave a third world
| country for Canada? The blame is firmly on the leftist
| politicians in Canada that are speed running the housing
| crisis.
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