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You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided. Stop championing scarcity by blaming scapegoats. Either we limit

You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided. Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. While you're at it, you could go after other wildly popular policies that lead to high housing prices, like the primary homeowner capital gains tax exemption (probably, by value, the biggest tax dodge in the industrialized world), and Canadian cities' extremely low property tax rates (0.3% of assessed value in Vancouver, for example).

LimaBearz 5y ago
Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcity" not having full transparency and realtors not in alignment with their own clients needs is a step in the right direction. (I use scare quotes here because while I know we're not building enough but the current market has a fair share of retail speculation, institutional investors inflating prices, and homes held as purely places to mark money(non-owner occupied). Scarcity is real and building does need to happen, but thats slow and expensive. Millions of homes are kept empty or as poor speculative investments and thats a problem)
- CountSessine 5y ago
  Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices. In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%. In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing. It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!" Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.
  - LimaBearz 5y ago
    Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets. This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
    - CountSessine 5y ago
      ...but I'm not sure that just building more will do much of anything <sigh> As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it? Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity! Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity! Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-canada/ https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity! The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side. Don't talk to me about housing prices unless you deal with scarcity.
      - Majromax 5y ago
        > Do those foreign investors leave the house empty? Who cares if we can just build more? I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would. Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.
- AzzieElbab 5y ago
  Lets see. Assume I am a realtor, I earn outrageous commissions of 2.5%. Does it make sense for me to jack up price of 1M condo by say 15% above the market and spend a month trying to sell it or to lower the price by 10% below and possibly sell two similar properties in the same month?
  - Valgrim 5y ago
    But every house that is on the market IS being sold, even at outrageous price, because buyers don't believe the price hike will slow down anytime soon (why would they? this segment of the market is guaranteed to be protected by any government who wishes to get re-elected) So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
    - AzzieElbab 5y ago
      that is classic cause and effect. realtors are just tagging along. I bet even if they make realtors accept second highest price instead of first(aka google adds) the impact would be minimal overall
      - cpwright 5y ago
        It isn't the Realtor accepting the price, it is the owner. At least in my state they are obligated to present every offer. Price is not the only dimension to factor in either. Just off the top of my head: (1) inspection contingency (2) mortgage contingency (or how much to make up for the appraisal) (3) timing for closing (4) lease back option Can all affect what you would select, not just the price.
  - Alan_Dillman 5y ago
    Yes, it does. Because you don't know if it will take a month, and if you have any confidence (maybe too much) in your abilities, you will likely assume you will sell it quickly. And a second one too. Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.
ch4s3 5y ago
> Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. I'm all for building more houses in cities/high demand areas, but doesn't Canada only have a population growth rate of around 1%/yr? It seems like you could easily build your way past that without giving up the advantages of immigration and a little population growth.
- michael1999 5y ago
  Canada is a big country. But immigration goes where the jobs are, and those are concentrated in 3-5 large cities which are hitting the limits of sprawl (congested highway commute time) and geography (water and mountains). Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.
  - edgyquant 5y ago
    Can they not move to nearby cities and commute?
    - techsupporter 5y ago
      No, that's what the person you replied to mean when they wrote: > hitting the limits of sprawl (congested highway commute time) There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively. In cities where sprawl isn't physically prohibitive, like Calgary or Toronto, the upper bound of "this shit ain't worth it" for time and money is a limiting factor. I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more. Remote work might help with this but even there, you have people who are moving "a little further out" but not leaving the region because they want to stay nearby for other reasons (or because they're not entirely convinced that full remote is actually on the table long term).
stjohnswarts 5y ago
If you cut off foreign buyers then you absolutely will have cut out some competition for the purchase so I don'd see how you can possibly say what you're saying? I mean it's a basic economics principle.
- hello_moto 5y ago
  Might not move the needle. Plus there are a few stories of rich int'l students eventually becoming PR holder and get their monies from parents.
  - chaostheory 5y ago
    Sure if someone wants it bad enough, they’ll jump through all the hoops. I feel that while deterrents aren’t full proof, they do their job of limiting the overall amount of undesired behavior.
vkou 5y ago
1%/year is not a crazy-high rate, considering that Canadian fertility is below replacement. If the country can't figure out how to deal with a population growth of ~1%/year, the problem is not the growth, the problem is somewhere else.
- imtringued 5y ago
  The problem is the allocation of jobs in a handful of city centers.
  - vkou 5y ago
    Then it sounds like the obvious solution is to ban rural people from moving into the cities! ... Or build more.
- CountSessine 5y ago
  I completely agree. 1%/year should be very manageable. Especially for the country with the 2nd largest landmass in the world. And yet here we are. Folks love their suburbs. And they love those laws protecting their suburbs and excluding everything else the market might want to try.
- 3qz 5y ago
  It’s not population growth, just immigrantion. 1.3 million in the next 3 years and 430k this year when the population is not even 40 million. That’s not even including the hundreds of thousands of foreign students and temporary workers. There are several cities where the majority of residents were not born in Canada so it obviously has an enormous strain on everything.
  - vkou 5y ago
    1. So, it's a mere 1% of the population/year, in a country that has below-replacement fertility. 2. Of course you shouldn't count foreign students or temporary workers, they get counted if they choose to stay. If you were counting them, as well as immigrants, you'd be double-counting the same people. 3. I didn't realize that the singular suburb of Vancouver called Richmond, BC (Population: 216,000) can be referred to as 'several cities'. 4. Why does a young[1], educated[2] person moving into the country in the prime of their life 'put an enormous strain on everything'? Would you care to elaborate? To me, it seems like a gift of all the costs of early-life childcare, plus the cost of a K-12-post-secondary education from their country of origin. [1] https://www.statista.com/statistics/443305/international-migrants-in-canada-2014/ https://www.statista.com/statistics/443305/international-mig... [2] https://www.statista.com/statistics/555224/number-of-landed-immigrants-in-canada-by-education-level/ https://www.statista.com/statistics/555224/number-of-landed-...
legulere 5y ago
No it’s just classic abuse of power what’s described. Information asymmetry is one of the classic reasons for market failure.
deleted 5y ago
[deleted]
Melatonic 5y ago
So.......built up in big cities? Isn't that what a big city is supposed to have in the first place?
kbenson 5y ago
> You're fighting scarcity. No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated. A rational actor should walk away from a system like this, but if that's all that's available around you because of scarcity, you're forced to work at a disadvantage. Banning this is akin to banning other anticomptitive behavior, such as collusion and monopolies. That is, it's up to the government to decide whether the harm outweighs the problems regulation introduces (regulation always introduces some level of friction and problems, you just hope to minimize them and maximize the benefits it brings) and is thus worth pursuing.
- crooked-v 5y ago
  All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.
  - kbenson 5y ago
    You pick your battles, as perfect is the enemy of good. That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way.
    - CountSessine 5y ago
      That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity. None of these things will matter one whit to housing affordability. "Helps in some way" is fine as long as we understand that it has nothing to do with high housing prices. "Helps in some way" is fine as long as we measure our claims and admit that this is about basic fairness and respect for the law. "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!" Every one of these things should be dealt with. Canada should probably have anti-racketeering laws. Real-estate boards should have less power and should be compelled to publicize their sales data. Etc, etc, ... Just quit the bullsh*t about this being about addressing housing affordability.
TuringNYC 5y ago
>> illiberal zoning laws One of the problems is that once people buy into the system, their entire life's savings (plus often 4x more via leverage) is tied up in the house and the price of the house. At that point, most dont want more development, because they lose their life savings if home prices go down. Each person entering this horrible system is forced to perpetuate it, or lose it all.
- throwaway2037 5y ago
  In France and Germany, housing supply is more carefully planned. In most places, housing prices are flat in real price terms (including inflation). That's ideal for middle income and below. Even in places that have seen sharp rises like Paris and Berlin, there is a lot of political pressure (and action) to solve these problems.
dheera 5y ago
A better plan would be to increase the friction to buy a home without actually living in it, and tax the living shit out of homes that are empty and not occupied by anyone at all most of the time.
arcticbull 5y ago
Canada's immigration rate isn't "crazy high" it's been an average of 1% per year for the last 100 years. It's standard. What's not standard is limiting new construction.
eyelidlessness 5y ago
> Either we limit Canada's crazy-high immigration rate (1% of population every year) You could just stop there, it’s clear where your priorities lie. I’m not Canadian (and don’t worry I’m not emigrating), but I welcome a “crazy high” 1% population immigration rate and I don’t see a conflict with that and reasonable housing policy. Many major cities already see this kind of growth regardless of where people are moving from. We should be able to house and sustain that growth. Limits on immigration don’t slow the growth, they just satisfy anti immigration attitudes for a while.
- monkeywork 5y ago
  >You could just stop there, it’s clear where your priorities lie This is such a toxic take - listen I know there are xenophobic people out there, but just because someone brings up the fact that our immigration is high doesn't make them one. Canada builds on average something like 189K houses a year, our current immigration targets are 400-450K ppl per year. We have the LOWEST housing stock in the G8 while having one of the largest immigration numbers, plus due to the selection / scoring methods for our immigration policy they are often entering the country with a sizable nest egg which allows them to enter the housing market sooner. Add on top of all this that Canada has a blatantly broken provincial nomination process which allows people to get perm residency faster if they have a province nominate them - it was intended to get people to put down roots in those provinces, instead people use it to fast track PR status and then immediately move to Toronto, Vancouver or Montreal. This again stresses an already saturated market and infrastructure. Canada needs immigration - there is zero doubt about it - however the rate needs to be lock step with the infrastructure and housing needs that population boost brings with it. Canada needs to: 1. Slow immigration by roughly 1/3 for a period of 3-5 years. 2. Massively increase housing stock during that period, possibly shifting some of the entrance requirements for people in #1 from white collar workers to trades to help with this. 3. Close the provincially nominated loop holes, either do away with the system and not allow fast tracks or require that if you fast track you need to stay in the province until you become a full citizen - moving revokes your PR status. 4. In Canada's smaller cities start doing deed restrictions like Colorado did with Vails Indeed program, this will help with smaller towns / cities having their native population priced out by people fleeing the larger cities. None of those takes are xenophobic or anti-immigration. A person can be pro immigration but be against the current policies that surround it. You muddy the water and come off as dishonest and toxic when you automatically assume malice.
hypoxia 5y ago
Open auctions will help. In the last year, we've ended up #2 in 6 bidding wars (as disclosed by the listing agents) in one particular area of the GTA. In each case we reached our absolute max and wouldn't have paid any more. Several times we lost by $100-200k, and once by $250k. These overpayments set new price benchmarks for the area which became sticky. To continue to be competitive, we had to make hard sacrifices to increase our budget throughout the year. The fact that houses continued to move at the prices determined by these over-payments indicates there are some buyers at the higher prices. However, the market is very thin and the pace of price growth in this speculative market would've been slowed with open bidding. Beyond the blind bidding issue, I don't know why people focus on foreign and large corporate buyers. Yes, they're scary because they represent potentially large sources of demand. But are they actually buying a large percentage of the homes? No. It's the smaller investors who speculatively bought 40% of homes last fall. But we should definitely protect mom and pop investors, such as our housing minister wink Real solution? Reduce the incentive for speculation among these groups by treating all gains on non-primary residences as income.

LimaBearz 5y ago

Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcity" not having full transparency and realtors not in alignment with their own clients needs is a step in the right direction. (I use scare quotes here because while I know we're not building enough but the current market has a fair share of retail speculation, institutional investors inflating prices, and homes held as purely places to mark money(non-owner occupied). Scarcity is real and building does need to happen, but thats slow and expensive. Millions of homes are kept empty or as poor speculative investments and thats a problem)

CountSessine 5y ago
Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices. In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%. In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing. It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!" Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.
- LimaBearz 5y ago
  Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets. This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
  - CountSessine 5y ago
    ...but I'm not sure that just building more will do much of anything <sigh> As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it? Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity! Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity! Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-canada/ https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity! The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side. Don't talk to me about housing prices unless you deal with scarcity.
    - Majromax 5y ago
      > Do those foreign investors leave the house empty? Who cares if we can just build more? I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would. Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.
AzzieElbab 5y ago
Lets see. Assume I am a realtor, I earn outrageous commissions of 2.5%. Does it make sense for me to jack up price of 1M condo by say 15% above the market and spend a month trying to sell it or to lower the price by 10% below and possibly sell two similar properties in the same month?
- Valgrim 5y ago
  But every house that is on the market IS being sold, even at outrageous price, because buyers don't believe the price hike will slow down anytime soon (why would they? this segment of the market is guaranteed to be protected by any government who wishes to get re-elected) So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
  - AzzieElbab 5y ago
    that is classic cause and effect. realtors are just tagging along. I bet even if they make realtors accept second highest price instead of first(aka google adds) the impact would be minimal overall
    - cpwright 5y ago
      It isn't the Realtor accepting the price, it is the owner. At least in my state they are obligated to present every offer. Price is not the only dimension to factor in either. Just off the top of my head: (1) inspection contingency (2) mortgage contingency (or how much to make up for the appraisal) (3) timing for closing (4) lease back option Can all affect what you would select, not just the price.
- Alan_Dillman 5y ago
  Yes, it does. Because you don't know if it will take a month, and if you have any confidence (maybe too much) in your abilities, you will likely assume you will sell it quickly. And a second one too. Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.

ch4s3 5y ago

> Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. I'm all for building more houses in cities/high demand areas, but doesn't Canada only have a population growth rate of around 1%/yr? It seems like you could easily build your way past that without giving up the advantages of immigration and a little population growth.

michael1999 5y ago
Canada is a big country. But immigration goes where the jobs are, and those are concentrated in 3-5 large cities which are hitting the limits of sprawl (congested highway commute time) and geography (water and mountains). Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.
- edgyquant 5y ago
  Can they not move to nearby cities and commute?
  - techsupporter 5y ago
    No, that's what the person you replied to mean when they wrote: > hitting the limits of sprawl (congested highway commute time) There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively. In cities where sprawl isn't physically prohibitive, like Calgary or Toronto, the upper bound of "this shit ain't worth it" for time and money is a limiting factor. I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more. Remote work might help with this but even there, you have people who are moving "a little further out" but not leaving the region because they want to stay nearby for other reasons (or because they're not entirely convinced that full remote is actually on the table long term).

stjohnswarts 5y ago

If you cut off foreign buyers then you absolutely will have cut out some competition for the purchase so I don'd see how you can possibly say what you're saying? I mean it's a basic economics principle.

hello_moto 5y ago
Might not move the needle. Plus there are a few stories of rich int'l students eventually becoming PR holder and get their monies from parents.
- chaostheory 5y ago
  Sure if someone wants it bad enough, they’ll jump through all the hoops. I feel that while deterrents aren’t full proof, they do their job of limiting the overall amount of undesired behavior.

vkou 5y ago

1%/year is not a crazy-high rate, considering that Canadian fertility is below replacement. If the country can't figure out how to deal with a population growth of ~1%/year, the problem is not the growth, the problem is somewhere else.

imtringued 5y ago
The problem is the allocation of jobs in a handful of city centers.
- vkou 5y ago
  Then it sounds like the obvious solution is to ban rural people from moving into the cities! ... Or build more.
CountSessine 5y ago
I completely agree. 1%/year should be very manageable. Especially for the country with the 2nd largest landmass in the world. And yet here we are. Folks love their suburbs. And they love those laws protecting their suburbs and excluding everything else the market might want to try.
3qz 5y ago
It’s not population growth, just immigrantion. 1.3 million in the next 3 years and 430k this year when the population is not even 40 million. That’s not even including the hundreds of thousands of foreign students and temporary workers. There are several cities where the majority of residents were not born in Canada so it obviously has an enormous strain on everything.
- vkou 5y ago
  1. So, it's a mere 1% of the population/year, in a country that has below-replacement fertility. 2. Of course you shouldn't count foreign students or temporary workers, they get counted if they choose to stay. If you were counting them, as well as immigrants, you'd be double-counting the same people. 3. I didn't realize that the singular suburb of Vancouver called Richmond, BC (Population: 216,000) can be referred to as 'several cities'. 4. Why does a young[1], educated[2] person moving into the country in the prime of their life 'put an enormous strain on everything'? Would you care to elaborate? To me, it seems like a gift of all the costs of early-life childcare, plus the cost of a K-12-post-secondary education from their country of origin. [1] https://www.statista.com/statistics/443305/international-migrants-in-canada-2014/ https://www.statista.com/statistics/443305/international-mig... [2] https://www.statista.com/statistics/555224/number-of-landed-immigrants-in-canada-by-education-level/ https://www.statista.com/statistics/555224/number-of-landed-...

legulere 5y ago

No it’s just classic abuse of power what’s described. Information asymmetry is one of the classic reasons for market failure.

deleted 5y ago

[deleted]

Melatonic 5y ago

So.......built up in big cities? Isn't that what a big city is supposed to have in the first place?

kbenson 5y ago

> You're fighting scarcity. No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated. A rational actor should walk away from a system like this, but if that's all that's available around you because of scarcity, you're forced to work at a disadvantage. Banning this is akin to banning other anticomptitive behavior, such as collusion and monopolies. That is, it's up to the government to decide whether the harm outweighs the problems regulation introduces (regulation always introduces some level of friction and problems, you just hope to minimize them and maximize the benefits it brings) and is thus worth pursuing.

crooked-v 5y ago
All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.
- kbenson 5y ago
  You pick your battles, as perfect is the enemy of good. That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way.
  - CountSessine 5y ago
    That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason that housing is so expensive in popular cities, which is scarcity. None of these things will matter one whit to housing affordability. "Helps in some way" is fine as long as we understand that it has nothing to do with high housing prices. "Helps in some way" is fine as long as we measure our claims and admit that this is about basic fairness and respect for the law. "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!" Every one of these things should be dealt with. Canada should probably have anti-racketeering laws. Real-estate boards should have less power and should be compelled to publicize their sales data. Etc, etc, ... Just quit the bullsh*t about this being about addressing housing affordability.

TuringNYC 5y ago

>> illiberal zoning laws One of the problems is that once people buy into the system, their entire life's savings (plus often 4x more via leverage) is tied up in the house and the price of the house. At that point, most dont want more development, because they lose their life savings if home prices go down. Each person entering this horrible system is forced to perpetuate it, or lose it all.

throwaway2037 5y ago
In France and Germany, housing supply is more carefully planned. In most places, housing prices are flat in real price terms (including inflation). That's ideal for middle income and below. Even in places that have seen sharp rises like Paris and Berlin, there is a lot of political pressure (and action) to solve these problems.

dheera 5y ago

A better plan would be to increase the friction to buy a home without actually living in it, and tax the living shit out of homes that are empty and not occupied by anyone at all most of the time.

arcticbull 5y ago

Canada's immigration rate isn't "crazy high" it's been an average of 1% per year for the last 100 years. It's standard. What's not standard is limiting new construction.

eyelidlessness 5y ago

> Either we limit Canada's crazy-high immigration rate (1% of population every year) You could just stop there, it’s clear where your priorities lie. I’m not Canadian (and don’t worry I’m not emigrating), but I welcome a “crazy high” 1% population immigration rate and I don’t see a conflict with that and reasonable housing policy. Many major cities already see this kind of growth regardless of where people are moving from. We should be able to house and sustain that growth. Limits on immigration don’t slow the growth, they just satisfy anti immigration attitudes for a while.

monkeywork 5y ago
>You could just stop there, it’s clear where your priorities lie This is such a toxic take - listen I know there are xenophobic people out there, but just because someone brings up the fact that our immigration is high doesn't make them one. Canada builds on average something like 189K houses a year, our current immigration targets are 400-450K ppl per year. We have the LOWEST housing stock in the G8 while having one of the largest immigration numbers, plus due to the selection / scoring methods for our immigration policy they are often entering the country with a sizable nest egg which allows them to enter the housing market sooner. Add on top of all this that Canada has a blatantly broken provincial nomination process which allows people to get perm residency faster if they have a province nominate them - it was intended to get people to put down roots in those provinces, instead people use it to fast track PR status and then immediately move to Toronto, Vancouver or Montreal. This again stresses an already saturated market and infrastructure. Canada needs immigration - there is zero doubt about it - however the rate needs to be lock step with the infrastructure and housing needs that population boost brings with it. Canada needs to: 1. Slow immigration by roughly 1/3 for a period of 3-5 years. 2. Massively increase housing stock during that period, possibly shifting some of the entrance requirements for people in #1 from white collar workers to trades to help with this. 3. Close the provincially nominated loop holes, either do away with the system and not allow fast tracks or require that if you fast track you need to stay in the province until you become a full citizen - moving revokes your PR status. 4. In Canada's smaller cities start doing deed restrictions like Colorado did with Vails Indeed program, this will help with smaller towns / cities having their native population priced out by people fleeing the larger cities. None of those takes are xenophobic or anti-immigration. A person can be pro immigration but be against the current policies that surround it. You muddy the water and come off as dishonest and toxic when you automatically assume malice.

hypoxia 5y ago

Open auctions will help. In the last year, we've ended up #2 in 6 bidding wars (as disclosed by the listing agents) in one particular area of the GTA. In each case we reached our absolute max and wouldn't have paid any more. Several times we lost by $100-200k, and once by $250k. These overpayments set new price benchmarks for the area which became sticky. To continue to be competitive, we had to make hard sacrifices to increase our budget throughout the year. The fact that houses continued to move at the prices determined by these over-payments indicates there are some buyers at the higher prices. However, the market is very thin and the pace of price growth in this speculative market would've been slowed with open bidding. Beyond the blind bidding issue, I don't know why people focus on foreign and large corporate buyers. Yes, they're scary because they represent potentially large sources of demand. But are they actually buying a large percentage of the homes? No. It's the smaller investors who speculatively bought 40% of homes last fall. But we should definitely protect mom and pop investors, such as our housing minister wink Real solution? Reduce the incentive for speculation among these groups by treating all gains on non-primary residences as income.