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Canada bans most foreigners from buying homes

464 points by vincent_s 4y ago

Slava_Propanei 4y ago
[dead]
ls15 4y ago
This seems like a good idea and it carves out exceptions for foreigners who are residents. I presume this puts pressure on other countries to do the same, since investors are looking for other opportunities.
- deleted 4y ago
  [deleted]
- smnrchrds 4y ago
  It is important to note that according to Canadian law, permanent residents (equivalent to green card holders in the US) are not considered foreign nationals. They enjoy roughly the same rights and privileges as Canadian citizens, with very limited exceptions such as voting, running for office, serving as a jury, and some high-level government positions. > Foreign national: A person who is not a Canadian citizen or a permanent resident. https://www.canada.ca/en/services/immigration-citizenship/helpcentre/glossary.html#f https://www.canada.ca/en/services/immigration-citizenship/he...
  - kashunstva 4y ago
    However the law does seem to exclude people who reside in Canada on a work permit, many of whom are accruing time to apply for PR status. Since those who reside in Canada on a temporary work permit pay income taxes, it seems unjust to limit their housing choices. Ideally the law could have been worded with more specificity around prohibition of income generation by the property and still allow work permit holders to buy property.
  - hippich 4y ago
    I think you can say the same about green card holders in the USA. Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada?
    - smnrchrds 4y ago
      > Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada? This is not a topic I am super familiar with, but I believe the answer is yes. For example, in Canada, permanent residents have the right to enter the country, similar to Canadian citizens. In other words, they enter the country by right, not at the discretion of CBSA officers. This is not necessarily the case in the US. Trump's travel ban initially prevented green card holders who happened to be outside of the US when it came into force from re-entering. This was loosened later on after protests [1]. Another example is that new immigrants to the US (those who have gotten their green card within the last 5 years) are not eligible to buy Medicare [2] or if low-income, to get Medicaid [3]. Permanent residents of Canada have the same rights and access to public healthcare as Canadian citizens. In the US, American citizens do not have to carry or present any form of ID, but according to a law that is thankfully rarely enforced, not having your green card on your person at all times is a criminal offence. ("Failing to have your green card with you is a criminal misdemeanor. If you are found guilty you can be fined up to $100 and put in jail for up to 30 days. (I.N.A. Section 264(e), 8 U.S.C. Section 1304.) " [4]). Canada does not have discriminatory laws like this applying only to permanent residents. So the difference is both in specific laws, and the general attitude in lawmaking. Existing Canadian laws and new legislation tend to give the same rights to permanent residents as Canadian citizens (with some exceptions), but in the US, the legal framework creates a bigger gap between the rights of those two groups. [1] https://www.reuters.com/article/usa-trump-immigration-idUSL1N1FK0JM https://www.reuters.com/article/usa-trump-immigration-idUSL1... [2] https://www.insubuy.com/medicare-for-new-immigrants-green-card-holders/ https://www.insubuy.com/medicare-for-new-immigrants-green-ca... [3] https://www.healthcare.gov/immigrants/lawfully-present-immigrants/ https://www.healthcare.gov/immigrants/lawfully-present-immig... [4] https://www.nolo.com/legal-encyclopedia/do-i-really-need-carry-green-card-me.html https://www.nolo.com/legal-encyclopedia/do-i-really-need-car...
- asdff 4y ago
  Such opportunities for investors only exist if the government artificially strangles the housing supply as many local western governments have done over the past century. If a nation wanted to effectively end such investment into the housing stock, then lawmakers should devalue this asset by allowing production of an excess by updating restrictive zoning codes, not ban foreign investment which could very well bring in benefits in some cases.
MarkusWandel 4y ago
So if you're the stereotypical rich foreigner who wants to invest in real estate here, what's the stop them from incorporating a company locally, and then having that own the house(s)? And that's just one workaround I can think of in the first 30 seconds. As with all well-intentioned simplistic schemes, this will hurt normal folks - immigrants who don't have their paperwork sorted out yet - and do absolutely nothing to the big $$ driving home prices up.
- emsixteen 4y ago
  Not being able to stop it entirely doesn't mean it's not a good idea. Increasing the hurdles that need to be jumped through will be off-putting to some who would have otherwise went down this road, and provides the state with more avenues to actually have control over foreign buying. Immigrants who don't have their paperwork sorted out yet shouldn't be buying homes imo. Get your ducks in a row.
- refurb 4y ago
  It's already covered in the law. Most provinces are requiring that "beneficial ownership" of any corporation is reported to the government. https://www.jdsupra.com/legalnews/british-columbia-finalizes-corporate-50138/ https://www.jdsupra.com/legalnews/british-columbia-finalizes... What is more likely is that some foreigner would use a relative in Canada, who has PR or citizenship, to buy the property on their behalf. But foreigners buying home in Canada was never that big of an issue. I think in the hottest areas it was high single digits. It did have an impact no doubt, but it was mostly Canadians running amuck on cheap debt that ran home prices into the stratosphere. But the funny part is that home prices are already dropping fast (due to rising interest rates) so I can't wait until some politician claims this legislation works.
  - jleyank 4y ago
    While I didn’t follow the news closely, this seems to have come from the Vancouver and Toronto real estate markets. City level laws might have been tried but they lack teeth. This issue is also leading towards a vacancy survey and tax for vacant houses to provide material to escalate (I feel) if necessary. And worldwide, people might want cheaper housing but they din’t want their own house value to decline. The former occurs in the neocortex while the latter seems to lie deep in the lizard brain.
pestatije 4y ago
In Spain they'll give a residency permit to foreigners buying a home over 500k euros.
- garbagecoder 4y ago
  Costa Rica it’s $150,000 US and they just lowered it in 2021 from 200. Portugal also has/had a similar setup, but it seems gridlocked by the bureaucracy. I thought Canada actually had a similar law several years back, but maybe not. There are easier ways to get residency in Portugal and Spain, the difference is these let you be absentee 90% of the time. This Canadian law is typical of left-isolationism as opposed to right-isolationism. Keep out the rich instead of keep out the poor.
  - blitzar 4y ago
    Eligible applicants must invest CAD $350,000 into a Canadian “authorized designated organization”. Accredited investors must also demonstrate their net worth with an income of at least $200,000 or proof of $1,000,000 of financial assets https://www.goldenvisas.com/canada https://www.goldenvisas.com/canada
- kennend3 4y ago
  This is where Canada's new law gets really weird. We also have an "investment" class visa and almost everyone who has used this bought a house to meet the "minimum requirements" https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=653&top=6 https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=653... So.. earlier they encouraged foreigners to buy houses in order to get PR cards, now they ban it??
  - runnerup 4y ago
    >> So.. earlier they encouraged foreigners to buy houses in order to get PR cards, now they ban it?? Yes, because at one point they thought they had enough property and could use more money. Either they were wrong or at some point that changed, and now they’ve reacted in acknowledgment that Canadians need local property more than they need foreign cash.
hestefisk 4y ago
Good symbolic act, but as the fine article states, it’s unlikely to have material effect on housing affordability for the average person until supply is increased.
- tomohawk 4y ago
  Exactly. This is only attracting foreign interest due to th artificially constrained supply. If they were serious about the issue, they would increase supply.
  - JacobThreeThree 4y ago
    Imagine if the government of Canada used just 1% of the 89% of crown land it owns out of all the land in Canada to give to people for housing.
    - asdff 4y ago
      There's no shortage of land in Canadian cities or really any western city in a housing crisis today. The problem is that this land is squandered on lower density development that is illegal to improve into higher density development thanks to zoning mandating low density. Zoning must keep up with job growth or else you end up with the situations we see today: wealthy people entering bidding wars on an 80 year old originally working class home.
      - JumpCrisscross 4y ago
        > no shortage of land in Canadian cities or really any western city in a housing crisis today Adding to this: various parts of America still homestead [1]. [1] https://www.cnbc.com/2010/11/16/7-Towns-Where-Land-is-Free.html https://www.cnbc.com/2010/11/16/7-Towns-Where-Land-is-Free.h...
    - bparsons 4y ago
      Crown land is controlled by the provinces. The feds only control national parks, military bases and areas covered under Indigenous title. The provinces hand over crown land to municipalities for development all the time. Land isn't the problem. The lack of density within desired metropolitan areas is the problem.
garbagecoder 4y ago
A better title would be “absentee foreigners.” I think this is part of Airbnb blowback to some extent. Are these people really competing for even middle class housing? Seems weird to me. A few wealthy foreigners pipping millionaire Canadians for penthouses doesn’t really seem like a problem for normies. Am I understanding this wrong? Portugal is also de facto eliminating its “golden visa” which basically lets you be an absentee owner with residence, but it’s still easy to move there if you want to you know actually live there. Some countries are embracing this. Costa Rica just lowered its residence through real estate threshold to 150k USD.
- brailsafe 4y ago
  Middle class housing is a ridiculous investment vehicle in the primary few viable Canadian cities, and has provided wild returns to people who bought a few years ago, to the point where only the rich can really afford anything now. Even people who live in modest old 1 bedrooms that they bought a few years ago couldn't afford their own places if they needed to. It's not by any stretch exclusively wealthy foreigners influencing the market though, otherwise the government probably wouldn't be enacting any legislation that specifically targets them.
- Tiktaalik 4y ago
  I think yes this is the real concern. There's heaps of people from mainland china coming over here to retire in Vancouver, becoming a permanent resident and so forth. I don't think the government cares about that at all. The concern is the foreign investors with no interest in moving to Canada (read: foreign capital), people who look at secondary condo ownership in Hong Kong and get sticker shock and decide "oh I'll buy a bunch of condos in Canada instead." Worse than that are the super rich who were buying condos to leave empty as pied a terres and not even rent them out.
credit_guy 4y ago
Killing the golden goose?
AbrahamParangi 4y ago
Of all the things that a person can own, land seems the least justified to me. There is a finite amount of it, you did not create it, you cannot destroy it, and essentially all ownership derives from conquest, in recent or ancient history.
- daqhris 4y ago
  Land is where you can build a shelter. My current experience as a refugee made me realize the importance of shelter and food. The rest comes afterwards. Basically, all land on Earth has an owner. Be it individuals, corporations or governments. It's finite, so highly valuable. I'm currently unable to return safely to my homeland because the current land owners marked me as an adversary. I wish it wasn't the case but societal rules have been this way since ever. It's thousand times easier to me to build something, by using software, in the metaverse/on internet. In the real world, I now have no place to call home, except refugee camps and squats in abandonned buildings.
- xkcd-sucks 4y ago
  Land seems like one of the oldest and most "natural" forms of ownership -- Many animals, plants, bacteria, fungi will establish territory and defend it against conspecfics and competitors
  - tpush 4y ago
    Natural doesn't imply good.
  - asdff 4y ago
    They aren't defending land though, they are really defending access to resources contained in that land. If you drop a plant on empty land with no relevant resources for it, the plant will die. It will not become a landowner. Land ownership is a very recent concept in our history. Most of human history on this planet happened with no concept of owning land.
- dzhiurgis 4y ago
  Cue Georgism
Jemm 4y ago
Canada is also bringing in one million immigrants a year to feed the exploitative low paying job market and to try to stave off recession. These immigrants tend to gravitate in either Toronto or Vancouver. Meanwhile corporate and rich investors are snapping up any property they can get their hands one. In Ontario the Premiere is reclassifying conservation land owner by his buddies to allow them to build developments. In Toronto they tore down a vital section of the main highway to allow their buddies to build condos. The also allowed polluted lands to be developed a residential by simply putting a thin layer of top cover over the industrial pollution. The foreign ban is only for high density areas. Small towns and rural land have become unaffordably for the people who grew up there. It is a major catasrophe that is not being solved, just postponed by a year.
- ravendug 4y ago
  It’s nowhere near 1 million per year. The record from 2021 was 405,000 and the plan for the next 3 years is < 1.5 million in total. https://www.canada.ca/en/immigration-refugees-citizenship/news/2022/11/an-immigration-plan-to-grow-the-economy.html https://www.canada.ca/en/immigration-refugees-citizenship/ne...
  - breitling 4y ago
    That's 405,000 permanent residents only. Add to that hundreds of thousands international students + hundreds of thousands temporary workers + tens of thousands asylum seekers + etc + etc
    - pkaye 4y ago
      Based on a Google search, Canada builds 200k homes, condos and other dwellings in a year. Looks like the pace needs to be doubled.
      - ravendug 4y ago
        I’m not disagreeing that a lot more should be done on the supply side but the suggestion of it needing to double comes across as the additional demand equaling 1 home per immigrant which is simply not the case. I would like to see the hard numbers but I would expect a significant proportion to be 2+ families.
2devnull 4y ago
Next thing you know, they’ll establish border controls.
diceduckmonk 4y ago
There is still the immigration-by-visa route, no? https://en.wikipedia.org/wiki/Canadian_Immigrant_Investor_Program https://en.wikipedia.org/wiki/Canadian_Immigrant_Investor_Pr...
- brailsafe 4y ago
  "With the passing of Economic Action Plan 2014 Act (Bill C-31) on June 19, 2014, the program was terminated and undecided applications were cancelled."
- smnrchrds 4y ago
  No. Out of all the provinces, territories, and federal immigration schemes, only Quebec still has an immigration by investment program, and they have changed it to make it super difficult. It's no longer enough to just have or invest large amounts of money. One has to score enough points from a selection grid, which for example requires B2-ish level in French. The language component alone disqualifies most of the people who benefited from the original program and the current prospective applicants. https://www.quebec.ca/en/immigration/immigrate-business/investors/conditions https://www.quebec.ca/en/immigration/immigrate-business/inve...
  - jkaplowitz 4y ago
    It goes beyond that: https://www.quebec.ca/en/immigration/immigrate-business/investors/applying https://www.quebec.ca/en/immigration/immigrate-business/inve... Applications have been on hold for a while now, with no talk of re-opening it. There is no active immigrant investor program in Canada. There are several other immigration paths open to many skilled tech professionals, but the details of one's specific situation matter greatly and it is quite far from open immigration.
- klipt 4y ago
  It's super easy to grant your kids Canadian citizenship, just give birth there.
smnrchrds 4y ago
If you think this law will be easy to sidestep, please read this post first: https://old.reddit.com/r/canadahousing/comments/zz92li/prohibition_on_the_purchase_of_residential/ https://old.reddit.com/r/canadahousing/comments/zz92li/prohi... It appears that the law is well-designed to avoid such abuses and loopholes. Relevant xkcd: https://xkcd.com/1494/ https://xkcd.com/1494/
- rippercushions 4y ago
  > "The ban doesn't apply to properties with 4 units or more" - good. If the goal is to allow single family homes and duplexes, condos, etc. to drop in price, it's providing aid in the right place. The goal wasn't to make life easier for people buying investment properties. This seems like a massive gap though, and the counterargument doesn't make sense. Surely high-density housing is (should be) cheaper than the alternatives, and provides fine homes for many people who can't afford/don't want a suburban single family home with all the expenses that entails? (Car, maintenance, etc.)
  - sgerenser 4y ago
    It sounds like the exemption is referencing entire buildings (e.g. apartment complexes) sold as one property. Not individual condos, etc. which would still be subject despite being in a building of >4 units.
  - HWR_14 4y ago
    Someone who buys a single family home is depriving a family of the ability to own a home. A 4+ unit complex is unlikely to fall into the same situation. Those are often rented out. You're right that it might prevent owned condos from forming instead of apartments, but the only thing that gap allows is the sale of an entire complex, and the only thing it prevents is conversion of new apartment buildings to condos. Once they are condos, a foreign investor would need to buy them all at the same time.
    - kelnos 4y ago
      I think there's more to it, though. If landlords or management companies are competing to buy a 4+ unit building, that having more potential buyers (foreign buyers) will tend to make the final purchase price higher than it would have been if there'd only been local buyers, regardless of who ends up with the winning bid. And certainly the higher cost of purchase will influence the amount the new owner charges tenants to live there.
BurningFrog 4y ago
One good rule of thumb is that whenever people are blaming foreigners for their problems, they're wrong. Investment in housing and price increases are related. But it's the price increases that cause the investments, not the other way around.
- db48x 4y ago
  Luckily you can depress prices really quickly by forbidding sales of property :)
  - BurningFrog 4y ago
    The value of housing comes from how much you can charge people who want to live in them. That number doesn't change because foreigners can't buy.
    - db48x 4y ago
      By definition it will. Fewer potential buyers always means lower top prices. Especially in this case, where the whole point is to prevent rich foreigners from outbidding poor locals.
      - BurningFrog 4y ago
        No. Owning housing produces a certain income for the owner. Either as the rent you can charge from tenants, or increase in the resale price. Both depend on the local supply/demand situation.
        db48x 4y ago
        Yes, supply and demand. Excluding buyers reduces demand, and thus reduces prices.
        orwin 4y ago
        But buyers will just become renters then, changing nothing for the prices.
voisin 4y ago
Foreign buyers had an insignificant impact relative to the Bank of Canada leaving interest rates way too low for way too long.
jay_kyburz 4y ago
The problem is not rich people overseas, its rent seeking rich people everywhere. 1 person - 1 property. Commercial property should be state owned with perpetual leases.
- dan-robertson 4y ago
  14.1M occupied private dwellings[1] 39M Canadians[2] Looks like there isn’t enough property to go round. Maybe the problem is that people want to live in places where they get paid, and not share with parents/roommates and they’re competing to occupy dwellings where there aren’t enough? But what do I know? I just wrote down some numbers that aren’t equal. [1] https://www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016005/98-200-x2016005-eng.cfm https://www12.statcan.gc.ca/census-recensement/2016/as-sa/98... [2] https://en.m.wikipedia.org/wiki/Population_of_Canada https://en.m.wikipedia.org/wiki/Population_of_Canada
  - jay_kyburz 4y ago
    Looks like they need to build more dwellings.
  - happyopossum 4y ago
    That’s roughly 2.7 people per home - what’s your ideal ratio?
    - dan-robertson 4y ago
      I don’t think one should care about the ratio. I think it’s fine if people have big families or multigenerational households or lots of roommates so long as that’s what they want. And I think it’s fine if lots of people live alone or in small households so long as that’s what they want. And I think it’s fine if the average Canadian family has a second home in the woods somewhere. I think the problem is that, for lots of people, they can’t have what they want because there aren’t enough housing.
  - acchow 4y ago
    Are you aiming for each dwelling to be occupied by only 1 person?
fleddr 4y ago
I want to give some push-back regarding the often-heard phrase that governments should stop restricting supply. I'll be using the situation in the Netherlands to explore some complexities. These may not apply everywhere, but it serves to illustrate that the situation is far more complex than "stupid zoning". First, the reason the Netherlands is in a similar situation as Canada (400K home prices, very tight supply) is not because the government has restricted (much) of anything. It's because in the aftermath of the 2008 financial crisis, very few homes got built. All the way up to 2014. Builders build homes, not governments. Builders do not build homes without a buyer, and nobody buys in a crisis. Hence, a 6 year deficit in supply in comparison to implied demand from population growth. Even in our tiny country this adds up to hundreds of thousands of homes not built. Not because of zoning. The deficit would be there with or without zoning. This is the true reason for the restricted supply. Second, low interest rates are the multiplier as they expand lending capacity. These two factors combined, not continuing to build in an economic downturn and low interest rates, is what I believe is responsible for the housing situation in many parts of the world. And when you think about this, it totally makes sense. The entire world faced the financial crisis and its impact, yet zoning is very local and diverse. And there's of course secondary factors to add insult to injury. Homes are more expensive to build due to more expensive materials, more environmental regulation, and a shortage of workers that have increasing wages. Don't get me wrong, zoning can be a factor in restricting supply, but there's far more going on.
- plantain 4y ago
  >Builders build homes, not governments. Why? Why did the government just watch this crisis develop? Why not... build some homes?
  - ch4s3 4y ago
    I can’t speak for other places, but the last time governments in the US tried building a bunch of housing it turned out very poorly. They went all in on Le Corbusier’s “Towers in the Park” nonsense and they ended up as run down ghettoes set far back from the streets by a bunch of dead or overgrown brush. Chicago in particular designed theirs without children or young people in mind and ended up creating incubators for street crime. I know some places in Northern Europe have managed to build nice and mixed income public housing, but the US failed miserably.
beyond_based 4y ago
It’s too late and the problem isn’t even with the foreign buyers anyway. It never has been. Much like complaining about zoning, It’s a dumb misdirection play that people fall for every time.
- meowtimemania 4y ago
  What is the problem?
  - ehsankia 4y ago
    I agree with GP that foreign buyers are mostly a scapegoat, but unlike GP, I do believe zoning is the main issue. Giving zoning power to local politics will always end up with the same issue. Rich homeowners voting for board members who pass laws which limit supply, resulting in the value of their assets going up. It's the same issue all over the world. Single detached houses do not belong in cities. This is a great playlist around the subject: https://www.youtube.com/playlist?list=PLTNrJFli7ocgtZNW5IzFs33DsXPudL_Cl https://www.youtube.com/playlist?list=PLTNrJFli7ocgtZNW5IzFs...
- Pxtl 4y ago
  How is zoning not a contributing factor to a shortage of housing?
plantain 4y ago
I really don't understand why governments around the globe just throw their hands in the air and pretend housing is an unsolvable problem for which they have no obligation to fix. It wasn't always like this - in 1922 in Australia we realised there was a shortage of 25,000 homes, so they just made it happen [1]. Why are we so impotent today? Do we just not care enough? Are the vested interests too powerful? [1] https://pbs.twimg.com/media/FlSIML5aYAAVmvf?format=jpg&name=large https://pbs.twimg.com/media/FlSIML5aYAAVmvf?format=jpg&name=... https://nla.gov.au/nla.obj-2947838631/view?sectionId=nla.obj-2959070613&searchTerm=%22high+rent%22&partId=nla.obj-2947971754# https://nla.gov.au/nla.obj-2947838631/view?sectionId=nla.obj...
- Fire-Dragon-DoL 4y ago
  In Vancouver is pretty common to buy homes and sit on them empty as organization mean. Can you blame them? The price is meant to double on 10 years, but any apartment or house quadrupled in price over the last 15, giving incredibile yields... I don't have access to the data, our realtor showed us many times data across the last 50 years.
- TedShiller 4y ago
  I really don't understand why people are thirsty in the desert when they don't have water. Why are they so impotent?
- fullshark 4y ago
  A very large % of the population's entire wealth is in their home, and their life plans involve that asset appreciating forever.
- pxue 4y ago
  Supply is artificially controlled by voters who don't want density to increase, masked behind preservations, environmental concerns or just plain corruption
  - plantain 4y ago
    What changed? Governments used to aggressively intervene in the housing market.
eunos 4y ago
Hahaha now Trudeau prioritizing house issue because Poilievre couldn't stop talking about them.
LAC-Tech 4y ago
They tried this in NZ too; it did nothing. Canada - Like New Zealand, and like Australia - relies on simply increasing the population through mass migration to "grow" the economy. This benefits enough powerful people that it will never stop for the sake of mere renters.
- rr808 4y ago
  Western countries are all trying to encourage immigration because without it their populations will collapse. Right now populations are rising and causing house prices to rise but soon boomers will start dying leaving huge numbers of homes empty.
  - ec59cb1659 4y ago
    If that was the case, immigration quotas would be set to maintain a steady-state population.
    - rr808 4y ago
      The problem is baby boomers are retiring en masse, and we need workers to take over. The housing problem is squeezed as a side effect for now.
  - LAC-Tech 4y ago
    Global population will peak this century. Birth rates are dropping everywhere, and yes this includes the developing world (West Africa is half what it was, India is below replacement rate). The pool of working age immigrants will grow smaller and smaller. How much longer will we kick this can down the road?
    - roncesvalles 4y ago
      For very long. As long as a country is a more desirable place to live, it will continue to get immigrants. It doesn't matter whether the source country has a growing or shrinking population.
screye 4y ago
I don't blame Canada. The country is running out of space really fast and they lack the technology to build more than 1 floor of house. Unlike massive countries like South Korea, they can't fit 50 million people. Can you imagine being forced to live in slum like conditions without a half-acre yard or at least 3 parking spots? We are a developed country, do you expect us to park on the streets like the 3rd world ? If only Canada had access to hammers & wood & nails. They could have built something. But, where might someone be able to buy any of those I wonder ? ____________ Watching sprawly nations one up each other with moral grandstanding while acting as if no one sees the elephant in the room is frustratingly funny. If you are going to go this route, at least institute a high tax penalty for unit vacancy. _________ edit: didn't think it was possible for people to miss such obvious sarcasm, but here we are
- acyou 4y ago
  Would you be able to please expand on this and explicitly say what you want to say? Wondering what you mean by "sprawly nations".
  - adventured 4y ago
    Nearly the whole post is in sarcastic jest. By sprawly the parent means nations that don't build upwards with highrise approaches as a solution to building more residences (and instead sprawl sideways, taking up large amounts of land per residence).
  - deleted 4y ago
    [deleted]
  - screye 4y ago
    Car-centric nations. Canada and the US lead the way.
- deleted 4y ago
  [deleted]
- jimmaswell 4y ago
  Sardine-can conditions become less necessary by the day as more industries move to WFH. Who chooses to live in Manhattan if their job doesn't demand it? Demand for nicer living conditions with lawns, space, garages, and fresh air will rise as the urban exodus continues. The city is obsolete in the era of WFH. Let these unnatural aberrations recede. Humans were meant to live in small tribes and we see how their programming breaks down in cities rampant with crime and antisocial behavior.
kelnos 4y ago
Will this actually do anything, though? The Vancouver and Toronto metro areas implemented foreign investor taxes on home purchases a bunch of years ago. I believe the data shows that the taxes did dramatically reduce foreign real estate investment, but it wasn't clear that it did much to make home prices more affordable for citizens. Granted, it's possible that foreign investment would have made the situation worse. But it seems like it's a lever that didn't really do much to move the needle. The only real solution is to build more and more housing in places where people want to live, increasing density where necessary. I know a lot of people don't like this for a variety of reasons, but: tough shit. Buying a house doesn't give you the right to stop time. Yes, increased density does bring some negatives, but I don't see a world where those negatives are worse than the effects of skyrocketing housing prices.
- JanisErdmanis 4y ago
  The proposal would impact expats the most, and wealthy foreign investors would probably find a way around it. Also, I bet internal housing prices have resulted from internal investment/cash parking. Thus, building housing is not the only real solution. In my opinion, a simple, progressive land tax would go a long way in addressing the housing shortage.
- Tiktaalik 4y ago
  The taxes in BC certainly caused prices to stall out but then there was a once a century pandemic, the Bank of Canada dropped interest rates to about zero, and real estate once again took off like a rocket. Who knows how the market would have gone had that not happened.
stevespang 4y ago
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lobstersammich 4y ago
One thing that I'm not seeing mentioned in any capacity in the comments on this HN page is role of institutional investors. Prior to 2008 'single family homes' did not exist as an asset class that the asset management companies - Blackstone, etc. - were able to invest their client's/investor's money into. Long story short, the Savings & Loan implosion of the 1980s in the United States soured investor's money on SFHs. But when 2008 rolled around asset prices were depressed; the banks were flush with cash thanks to a bailout bonanza, and thus began the bulk purchasing of residential real estate by asset management firms. Read it from the horse's mouth, Redfin: in Q3 2021 investors bought 18% of single-family homes sold in the United States. 1 in 5. https://www.redfin.com/news/investor-home-purchases-q3-2021/ https://www.redfin.com/news/investor-home-purchases-q3-2021/ In 2016, 2017, 2018 we were averaging around 50,000 to 60,000 homes being bought each quarter by institutional investors. Then, when the pandemic fun bucks got released (and I'm not talking about the $1200 'relief' checks that went out) we were looking at 80,000 to 90,000 homes bought by institution investors each quarter in Q2 2021 and Q3 2021, respectively. Add in Airbnb / the short-term rental markets decimating housing stock in many cities and countries, plus intentionally restrictive zoning ordinances in the US and in Canada, and it's no wonder that North America's housing market looks the way it does in 2022. Also from that Redfin article: > Investors Have the Highest Market Share in Atlanta, Phoenix > >In Atlanta, nearly one-third (32%) of homes that sold in the third quarter were purchased by investors—the highest share of the 40 U.S. metropolitan areas Redfin analyzed. Next came Phoenix (31.7%), Charlotte, NC (31.5%), Jacksonville, FL (28.3%) and Miami (28.1%). > > Atlanta also saw the largest year-over-year gain, with investor market share rising to 32% in the third quarter from 12.9% a year earlier (+19.1 ppts). The second-biggest jump was in Charlotte (+18.2 ppts), followed by Phoenix (17.7 ppts), Jacksonville (+15.2 ppts) and Las Vegas (+14.6 ppts). I'm curious (and hopeful) to see how the Canadian situation plays out. I hope that increased enforcement of antimoney laundering laws will also result in a return of many thousands of single-family housing units to the market. If the Canada law works well it would be encouraging to see it applied in the United States with additional funding at the federal level for the construction of dense apartment housing in cities near transportation hubs as well dense housing in suburbs/exurbs with the creation of mini walkable downtowns in those denser pockets.
benbojangles 4y ago
A little bit off topic and also conspiratorial but could buying up property be a type of social weapon? I mean why drop bombs on a nation when you can make the native population homeless through pricing them out of the market?
- MonkeyMalarky 4y ago
  India, who once suffered a devastating famine under their colonial master's hands, does not allow foreigners to purchase farmland.
- pnt12 4y ago
  That's an interesting thought! The problem is that the "attacked" country could just seize the homes for themselves in a moment - you end up just giving an enormous fortune to your enemy. The only way it would work does would require quite the conspiracy: thousands of buyers of homes colluding in secret over many years without raising suspicions, until the other country is weakened by decades of poor housing and then striking before they have a chance to pull the rug.
AlbertCory 4y ago
> Many experts have also said the ban on foreign buyers — who accounted for less than 5% of home ownership in Canada, according to the national statistical agency — would not have the desired effect of making homes more affordable. "Many experts have also said" : garbage "journalism." Who are these "experts"?
bhouston 4y ago
Empty homes are a real problem in Canada. Where I live right now of the 8 neighbouring houses within 50m and 2 of them are empty. I believe they were bough as speculative investment or for renting but they have been sitting empty for some time.
qualudeheart 4y ago
It is time?
deleted 4y ago
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yumraj 4y ago
I'm genuinely curious, as to why a country, any country, should not limit home purchase to residents (note I'm saying residents and not citizens). What benefit does it provide to a country or its residents if home purchase is opened to foreign residents?
- cvalka 4y ago
  Why limit to housing? What about shares of a company?
- rcme 4y ago
  It increases the demand for real estate, which increases the price of real estate. This benefits those who own real estate. Many residents own real estate, so they do benefit from the policy.
  - yumraj 4y ago
    I’ll actually argue that it artificially inflates the price beyond the means of those who do not own yet and even those who own but are priced out of upgrading to a better home/location, by bringing in investment money from outside. Housing is a necessity, and should be limited to residents, IMHO at least.
  - pnt12 4y ago
    Some need a house to live in, others want estate to invest in. I say we should prioritize housing: it is a basic necessity with few alternatives, if any. If you want to invest your money, (1) it means you already have money so you aren't struggling and (2) you can invest elsewhere that isn't as harmful for others.
- loeg 4y ago
  How does someone become a resident if they can’t buy a place to live? This is a chicken and egg problem that is similar to banning foreign purchases entirely.
  - freshpots 4y ago
8bitsrule 4y ago
It sure took its sweet time passively applying this bandage. I guess that foreign money pouring in was just too easy to favor over the interests of CA citizens. I don't suppose the USA will follow suit?
2143 4y ago
So, are wealthy foreigners allowed to build their own house in Canada (after procuring the land, permits etc)? (Just asking whether it's theoretically possible).
garfieldnate 4y ago
Foreigners are not the only ones who buy up properties as investments! I would love to see them ban mega-landlords, too, foreign or not.
r00fus 4y ago
Does Canada have a reasonable tax model for corporate home ownership? Because the US could really use some changes to corporate ownership of homes.
pgib 4y ago
I doubt this will have that much of an impact on preventing it. Foreign investors will set up shell companies, get local realtors to help/hold title, etc. It's a cat and mouse game, and the government is rarely the cat.

464 points by vincent_s 4y ago

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ls15 4y ago

This seems like a good idea and it carves out exceptions for foreigners who are residents. I presume this puts pressure on other countries to do the same, since investors are looking for other opportunities.

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smnrchrds 4y ago
It is important to note that according to Canadian law, permanent residents (equivalent to green card holders in the US) are not considered foreign nationals. They enjoy roughly the same rights and privileges as Canadian citizens, with very limited exceptions such as voting, running for office, serving as a jury, and some high-level government positions. > Foreign national: A person who is not a Canadian citizen or a permanent resident. https://www.canada.ca/en/services/immigration-citizenship/helpcentre/glossary.html#f https://www.canada.ca/en/services/immigration-citizenship/he...
- kashunstva 4y ago
  However the law does seem to exclude people who reside in Canada on a work permit, many of whom are accruing time to apply for PR status. Since those who reside in Canada on a temporary work permit pay income taxes, it seems unjust to limit their housing choices. Ideally the law could have been worded with more specificity around prohibition of income generation by the property and still allow work permit holders to buy property.
- hippich 4y ago
  I think you can say the same about green card holders in the USA. Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada?
  - smnrchrds 4y ago
    > Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada? This is not a topic I am super familiar with, but I believe the answer is yes. For example, in Canada, permanent residents have the right to enter the country, similar to Canadian citizens. In other words, they enter the country by right, not at the discretion of CBSA officers. This is not necessarily the case in the US. Trump's travel ban initially prevented green card holders who happened to be outside of the US when it came into force from re-entering. This was loosened later on after protests [1]. Another example is that new immigrants to the US (those who have gotten their green card within the last 5 years) are not eligible to buy Medicare [2] or if low-income, to get Medicaid [3]. Permanent residents of Canada have the same rights and access to public healthcare as Canadian citizens. In the US, American citizens do not have to carry or present any form of ID, but according to a law that is thankfully rarely enforced, not having your green card on your person at all times is a criminal offence. ("Failing to have your green card with you is a criminal misdemeanor. If you are found guilty you can be fined up to $100 and put in jail for up to 30 days. (I.N.A. Section 264(e), 8 U.S.C. Section 1304.) " [4]). Canada does not have discriminatory laws like this applying only to permanent residents. So the difference is both in specific laws, and the general attitude in lawmaking. Existing Canadian laws and new legislation tend to give the same rights to permanent residents as Canadian citizens (with some exceptions), but in the US, the legal framework creates a bigger gap between the rights of those two groups. [1] https://www.reuters.com/article/usa-trump-immigration-idUSL1N1FK0JM https://www.reuters.com/article/usa-trump-immigration-idUSL1... [2] https://www.insubuy.com/medicare-for-new-immigrants-green-card-holders/ https://www.insubuy.com/medicare-for-new-immigrants-green-ca... [3] https://www.healthcare.gov/immigrants/lawfully-present-immigrants/ https://www.healthcare.gov/immigrants/lawfully-present-immig... [4] https://www.nolo.com/legal-encyclopedia/do-i-really-need-carry-green-card-me.html https://www.nolo.com/legal-encyclopedia/do-i-really-need-car...
asdff 4y ago
Such opportunities for investors only exist if the government artificially strangles the housing supply as many local western governments have done over the past century. If a nation wanted to effectively end such investment into the housing stock, then lawmakers should devalue this asset by allowing production of an excess by updating restrictive zoning codes, not ban foreign investment which could very well bring in benefits in some cases.

MarkusWandel 4y ago

So if you're the stereotypical rich foreigner who wants to invest in real estate here, what's the stop them from incorporating a company locally, and then having that own the house(s)? And that's just one workaround I can think of in the first 30 seconds. As with all well-intentioned simplistic schemes, this will hurt normal folks - immigrants who don't have their paperwork sorted out yet - and do absolutely nothing to the big $$ driving home prices up.

emsixteen 4y ago
Not being able to stop it entirely doesn't mean it's not a good idea. Increasing the hurdles that need to be jumped through will be off-putting to some who would have otherwise went down this road, and provides the state with more avenues to actually have control over foreign buying. Immigrants who don't have their paperwork sorted out yet shouldn't be buying homes imo. Get your ducks in a row.
refurb 4y ago
It's already covered in the law. Most provinces are requiring that "beneficial ownership" of any corporation is reported to the government. https://www.jdsupra.com/legalnews/british-columbia-finalizes-corporate-50138/ https://www.jdsupra.com/legalnews/british-columbia-finalizes... What is more likely is that some foreigner would use a relative in Canada, who has PR or citizenship, to buy the property on their behalf. But foreigners buying home in Canada was never that big of an issue. I think in the hottest areas it was high single digits. It did have an impact no doubt, but it was mostly Canadians running amuck on cheap debt that ran home prices into the stratosphere. But the funny part is that home prices are already dropping fast (due to rising interest rates) so I can't wait until some politician claims this legislation works.
- jleyank 4y ago
  While I didn’t follow the news closely, this seems to have come from the Vancouver and Toronto real estate markets. City level laws might have been tried but they lack teeth. This issue is also leading towards a vacancy survey and tax for vacant houses to provide material to escalate (I feel) if necessary. And worldwide, people might want cheaper housing but they din’t want their own house value to decline. The former occurs in the neocortex while the latter seems to lie deep in the lizard brain.

pestatije 4y ago

In Spain they'll give a residency permit to foreigners buying a home over 500k euros.

garbagecoder 4y ago
Costa Rica it’s $150,000 US and they just lowered it in 2021 from 200. Portugal also has/had a similar setup, but it seems gridlocked by the bureaucracy. I thought Canada actually had a similar law several years back, but maybe not. There are easier ways to get residency in Portugal and Spain, the difference is these let you be absentee 90% of the time. This Canadian law is typical of left-isolationism as opposed to right-isolationism. Keep out the rich instead of keep out the poor.
- blitzar 4y ago
  Eligible applicants must invest CAD $350,000 into a Canadian “authorized designated organization”. Accredited investors must also demonstrate their net worth with an income of at least $200,000 or proof of $1,000,000 of financial assets https://www.goldenvisas.com/canada https://www.goldenvisas.com/canada
kennend3 4y ago
This is where Canada's new law gets really weird. We also have an "investment" class visa and almost everyone who has used this bought a house to meet the "minimum requirements" https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=653&top=6 https://www.cic.gc.ca/english/helpcentre/answer.asp?qnum=653... So.. earlier they encouraged foreigners to buy houses in order to get PR cards, now they ban it??
- runnerup 4y ago
  >> So.. earlier they encouraged foreigners to buy houses in order to get PR cards, now they ban it?? Yes, because at one point they thought they had enough property and could use more money. Either they were wrong or at some point that changed, and now they’ve reacted in acknowledgment that Canadians need local property more than they need foreign cash.

hestefisk 4y ago

Good symbolic act, but as the fine article states, it’s unlikely to have material effect on housing affordability for the average person until supply is increased.

tomohawk 4y ago
Exactly. This is only attracting foreign interest due to th artificially constrained supply. If they were serious about the issue, they would increase supply.
- JacobThreeThree 4y ago
  Imagine if the government of Canada used just 1% of the 89% of crown land it owns out of all the land in Canada to give to people for housing.
  - asdff 4y ago
    There's no shortage of land in Canadian cities or really any western city in a housing crisis today. The problem is that this land is squandered on lower density development that is illegal to improve into higher density development thanks to zoning mandating low density. Zoning must keep up with job growth or else you end up with the situations we see today: wealthy people entering bidding wars on an 80 year old originally working class home.
    - JumpCrisscross 4y ago
      > no shortage of land in Canadian cities or really any western city in a housing crisis today Adding to this: various parts of America still homestead [1]. [1] https://www.cnbc.com/2010/11/16/7-Towns-Where-Land-is-Free.html https://www.cnbc.com/2010/11/16/7-Towns-Where-Land-is-Free.h...
  - bparsons 4y ago
    Crown land is controlled by the provinces. The feds only control national parks, military bases and areas covered under Indigenous title. The provinces hand over crown land to municipalities for development all the time. Land isn't the problem. The lack of density within desired metropolitan areas is the problem.

garbagecoder 4y ago

A better title would be “absentee foreigners.” I think this is part of Airbnb blowback to some extent. Are these people really competing for even middle class housing? Seems weird to me. A few wealthy foreigners pipping millionaire Canadians for penthouses doesn’t really seem like a problem for normies. Am I understanding this wrong? Portugal is also de facto eliminating its “golden visa” which basically lets you be an absentee owner with residence, but it’s still easy to move there if you want to you know actually live there. Some countries are embracing this. Costa Rica just lowered its residence through real estate threshold to 150k USD.

brailsafe 4y ago
Middle class housing is a ridiculous investment vehicle in the primary few viable Canadian cities, and has provided wild returns to people who bought a few years ago, to the point where only the rich can really afford anything now. Even people who live in modest old 1 bedrooms that they bought a few years ago couldn't afford their own places if they needed to. It's not by any stretch exclusively wealthy foreigners influencing the market though, otherwise the government probably wouldn't be enacting any legislation that specifically targets them.
Tiktaalik 4y ago
I think yes this is the real concern. There's heaps of people from mainland china coming over here to retire in Vancouver, becoming a permanent resident and so forth. I don't think the government cares about that at all. The concern is the foreign investors with no interest in moving to Canada (read: foreign capital), people who look at secondary condo ownership in Hong Kong and get sticker shock and decide "oh I'll buy a bunch of condos in Canada instead." Worse than that are the super rich who were buying condos to leave empty as pied a terres and not even rent them out.

credit_guy 4y ago

Killing the golden goose?

AbrahamParangi 4y ago

Of all the things that a person can own, land seems the least justified to me. There is a finite amount of it, you did not create it, you cannot destroy it, and essentially all ownership derives from conquest, in recent or ancient history.

daqhris 4y ago
Land is where you can build a shelter. My current experience as a refugee made me realize the importance of shelter and food. The rest comes afterwards. Basically, all land on Earth has an owner. Be it individuals, corporations or governments. It's finite, so highly valuable. I'm currently unable to return safely to my homeland because the current land owners marked me as an adversary. I wish it wasn't the case but societal rules have been this way since ever. It's thousand times easier to me to build something, by using software, in the metaverse/on internet. In the real world, I now have no place to call home, except refugee camps and squats in abandonned buildings.
xkcd-sucks 4y ago
Land seems like one of the oldest and most "natural" forms of ownership -- Many animals, plants, bacteria, fungi will establish territory and defend it against conspecfics and competitors
- tpush 4y ago
  Natural doesn't imply good.
- asdff 4y ago
  They aren't defending land though, they are really defending access to resources contained in that land. If you drop a plant on empty land with no relevant resources for it, the plant will die. It will not become a landowner. Land ownership is a very recent concept in our history. Most of human history on this planet happened with no concept of owning land.
dzhiurgis 4y ago
Cue Georgism

Jemm 4y ago

Canada is also bringing in one million immigrants a year to feed the exploitative low paying job market and to try to stave off recession. These immigrants tend to gravitate in either Toronto or Vancouver. Meanwhile corporate and rich investors are snapping up any property they can get their hands one. In Ontario the Premiere is reclassifying conservation land owner by his buddies to allow them to build developments. In Toronto they tore down a vital section of the main highway to allow their buddies to build condos. The also allowed polluted lands to be developed a residential by simply putting a thin layer of top cover over the industrial pollution. The foreign ban is only for high density areas. Small towns and rural land have become unaffordably for the people who grew up there. It is a major catasrophe that is not being solved, just postponed by a year.

ravendug 4y ago
It’s nowhere near 1 million per year. The record from 2021 was 405,000 and the plan for the next 3 years is < 1.5 million in total. https://www.canada.ca/en/immigration-refugees-citizenship/news/2022/11/an-immigration-plan-to-grow-the-economy.html https://www.canada.ca/en/immigration-refugees-citizenship/ne...
- breitling 4y ago
  That's 405,000 permanent residents only. Add to that hundreds of thousands international students + hundreds of thousands temporary workers + tens of thousands asylum seekers + etc + etc
  - pkaye 4y ago
    Based on a Google search, Canada builds 200k homes, condos and other dwellings in a year. Looks like the pace needs to be doubled.
    - ravendug 4y ago
      I’m not disagreeing that a lot more should be done on the supply side but the suggestion of it needing to double comes across as the additional demand equaling 1 home per immigrant which is simply not the case. I would like to see the hard numbers but I would expect a significant proportion to be 2+ families.

2devnull 4y ago

Next thing you know, they’ll establish border controls.

diceduckmonk 4y ago

There is still the immigration-by-visa route, no? https://en.wikipedia.org/wiki/Canadian_Immigrant_Investor_Program https://en.wikipedia.org/wiki/Canadian_Immigrant_Investor_Pr...

brailsafe 4y ago
"With the passing of Economic Action Plan 2014 Act (Bill C-31) on June 19, 2014, the program was terminated and undecided applications were cancelled."
smnrchrds 4y ago
No. Out of all the provinces, territories, and federal immigration schemes, only Quebec still has an immigration by investment program, and they have changed it to make it super difficult. It's no longer enough to just have or invest large amounts of money. One has to score enough points from a selection grid, which for example requires B2-ish level in French. The language component alone disqualifies most of the people who benefited from the original program and the current prospective applicants. https://www.quebec.ca/en/immigration/immigrate-business/investors/conditions https://www.quebec.ca/en/immigration/immigrate-business/inve...
- jkaplowitz 4y ago
  It goes beyond that: https://www.quebec.ca/en/immigration/immigrate-business/investors/applying https://www.quebec.ca/en/immigration/immigrate-business/inve... Applications have been on hold for a while now, with no talk of re-opening it. There is no active immigrant investor program in Canada. There are several other immigration paths open to many skilled tech professionals, but the details of one's specific situation matter greatly and it is quite far from open immigration.
klipt 4y ago
It's super easy to grant your kids Canadian citizenship, just give birth there.

smnrchrds 4y ago

If you think this law will be easy to sidestep, please read this post first: https://old.reddit.com/r/canadahousing/comments/zz92li/prohibition_on_the_purchase_of_residential/ https://old.reddit.com/r/canadahousing/comments/zz92li/prohi... It appears that the law is well-designed to avoid such abuses and loopholes. Relevant xkcd: https://xkcd.com/1494/ https://xkcd.com/1494/

rippercushions 4y ago
> "The ban doesn't apply to properties with 4 units or more" - good. If the goal is to allow single family homes and duplexes, condos, etc. to drop in price, it's providing aid in the right place. The goal wasn't to make life easier for people buying investment properties. This seems like a massive gap though, and the counterargument doesn't make sense. Surely high-density housing is (should be) cheaper than the alternatives, and provides fine homes for many people who can't afford/don't want a suburban single family home with all the expenses that entails? (Car, maintenance, etc.)
- sgerenser 4y ago
  It sounds like the exemption is referencing entire buildings (e.g. apartment complexes) sold as one property. Not individual condos, etc. which would still be subject despite being in a building of >4 units.
- HWR_14 4y ago
  Someone who buys a single family home is depriving a family of the ability to own a home. A 4+ unit complex is unlikely to fall into the same situation. Those are often rented out. You're right that it might prevent owned condos from forming instead of apartments, but the only thing that gap allows is the sale of an entire complex, and the only thing it prevents is conversion of new apartment buildings to condos. Once they are condos, a foreign investor would need to buy them all at the same time.
  - kelnos 4y ago
    I think there's more to it, though. If landlords or management companies are competing to buy a 4+ unit building, that having more potential buyers (foreign buyers) will tend to make the final purchase price higher than it would have been if there'd only been local buyers, regardless of who ends up with the winning bid. And certainly the higher cost of purchase will influence the amount the new owner charges tenants to live there.

BurningFrog 4y ago

One good rule of thumb is that whenever people are blaming foreigners for their problems, they're wrong. Investment in housing and price increases are related. But it's the price increases that cause the investments, not the other way around.

db48x 4y ago
Luckily you can depress prices really quickly by forbidding sales of property :)
- BurningFrog 4y ago
  The value of housing comes from how much you can charge people who want to live in them. That number doesn't change because foreigners can't buy.
  - db48x 4y ago
    By definition it will. Fewer potential buyers always means lower top prices. Especially in this case, where the whole point is to prevent rich foreigners from outbidding poor locals.
    - BurningFrog 4y ago
      No. Owning housing produces a certain income for the owner. Either as the rent you can charge from tenants, or increase in the resale price. Both depend on the local supply/demand situation.
      - db48x 4y ago
        Yes, supply and demand. Excluding buyers reduces demand, and thus reduces prices.
        orwin 4y ago
        But buyers will just become renters then, changing nothing for the prices.

voisin 4y ago

Foreign buyers had an insignificant impact relative to the Bank of Canada leaving interest rates way too low for way too long.

jay_kyburz 4y ago

The problem is not rich people overseas, its rent seeking rich people everywhere. 1 person - 1 property. Commercial property should be state owned with perpetual leases.

dan-robertson 4y ago
14.1M occupied private dwellings[1] 39M Canadians[2] Looks like there isn’t enough property to go round. Maybe the problem is that people want to live in places where they get paid, and not share with parents/roommates and they’re competing to occupy dwellings where there aren’t enough? But what do I know? I just wrote down some numbers that aren’t equal. [1] https://www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016005/98-200-x2016005-eng.cfm https://www12.statcan.gc.ca/census-recensement/2016/as-sa/98... [2] https://en.m.wikipedia.org/wiki/Population_of_Canada https://en.m.wikipedia.org/wiki/Population_of_Canada
- jay_kyburz 4y ago
  Looks like they need to build more dwellings.
- happyopossum 4y ago
  That’s roughly 2.7 people per home - what’s your ideal ratio?
  - dan-robertson 4y ago
    I don’t think one should care about the ratio. I think it’s fine if people have big families or multigenerational households or lots of roommates so long as that’s what they want. And I think it’s fine if lots of people live alone or in small households so long as that’s what they want. And I think it’s fine if the average Canadian family has a second home in the woods somewhere. I think the problem is that, for lots of people, they can’t have what they want because there aren’t enough housing.
- acchow 4y ago
  Are you aiming for each dwelling to be occupied by only 1 person?

fleddr 4y ago

I want to give some push-back regarding the often-heard phrase that governments should stop restricting supply. I'll be using the situation in the Netherlands to explore some complexities. These may not apply everywhere, but it serves to illustrate that the situation is far more complex than "stupid zoning". First, the reason the Netherlands is in a similar situation as Canada (400K home prices, very tight supply) is not because the government has restricted (much) of anything. It's because in the aftermath of the 2008 financial crisis, very few homes got built. All the way up to 2014. Builders build homes, not governments. Builders do not build homes without a buyer, and nobody buys in a crisis. Hence, a 6 year deficit in supply in comparison to implied demand from population growth. Even in our tiny country this adds up to hundreds of thousands of homes not built. Not because of zoning. The deficit would be there with or without zoning. This is the true reason for the restricted supply. Second, low interest rates are the multiplier as they expand lending capacity. These two factors combined, not continuing to build in an economic downturn and low interest rates, is what I believe is responsible for the housing situation in many parts of the world. And when you think about this, it totally makes sense. The entire world faced the financial crisis and its impact, yet zoning is very local and diverse. And there's of course secondary factors to add insult to injury. Homes are more expensive to build due to more expensive materials, more environmental regulation, and a shortage of workers that have increasing wages. Don't get me wrong, zoning can be a factor in restricting supply, but there's far more going on.

plantain 4y ago
>Builders build homes, not governments. Why? Why did the government just watch this crisis develop? Why not... build some homes?
- ch4s3 4y ago
  I can’t speak for other places, but the last time governments in the US tried building a bunch of housing it turned out very poorly. They went all in on Le Corbusier’s “Towers in the Park” nonsense and they ended up as run down ghettoes set far back from the streets by a bunch of dead or overgrown brush. Chicago in particular designed theirs without children or young people in mind and ended up creating incubators for street crime. I know some places in Northern Europe have managed to build nice and mixed income public housing, but the US failed miserably.

beyond_based 4y ago

It’s too late and the problem isn’t even with the foreign buyers anyway. It never has been. Much like complaining about zoning, It’s a dumb misdirection play that people fall for every time.

meowtimemania 4y ago
What is the problem?
- ehsankia 4y ago
  I agree with GP that foreign buyers are mostly a scapegoat, but unlike GP, I do believe zoning is the main issue. Giving zoning power to local politics will always end up with the same issue. Rich homeowners voting for board members who pass laws which limit supply, resulting in the value of their assets going up. It's the same issue all over the world. Single detached houses do not belong in cities. This is a great playlist around the subject: https://www.youtube.com/playlist?list=PLTNrJFli7ocgtZNW5IzFs33DsXPudL_Cl https://www.youtube.com/playlist?list=PLTNrJFli7ocgtZNW5IzFs...
Pxtl 4y ago
How is zoning not a contributing factor to a shortage of housing?

plantain 4y ago

I really don't understand why governments around the globe just throw their hands in the air and pretend housing is an unsolvable problem for which they have no obligation to fix. It wasn't always like this - in 1922 in Australia we realised there was a shortage of 25,000 homes, so they just made it happen [1]. Why are we so impotent today? Do we just not care enough? Are the vested interests too powerful? [1] https://pbs.twimg.com/media/FlSIML5aYAAVmvf?format=jpg&name=large https://pbs.twimg.com/media/FlSIML5aYAAVmvf?format=jpg&name=... https://nla.gov.au/nla.obj-2947838631/view?sectionId=nla.obj-2959070613&searchTerm=%22high+rent%22&partId=nla.obj-2947971754# https://nla.gov.au/nla.obj-2947838631/view?sectionId=nla.obj...

Fire-Dragon-DoL 4y ago
In Vancouver is pretty common to buy homes and sit on them empty as organization mean. Can you blame them? The price is meant to double on 10 years, but any apartment or house quadrupled in price over the last 15, giving incredibile yields... I don't have access to the data, our realtor showed us many times data across the last 50 years.
TedShiller 4y ago
I really don't understand why people are thirsty in the desert when they don't have water. Why are they so impotent?
fullshark 4y ago
A very large % of the population's entire wealth is in their home, and their life plans involve that asset appreciating forever.
pxue 4y ago
Supply is artificially controlled by voters who don't want density to increase, masked behind preservations, environmental concerns or just plain corruption
- plantain 4y ago
  What changed? Governments used to aggressively intervene in the housing market.

eunos 4y ago

Hahaha now Trudeau prioritizing house issue because Poilievre couldn't stop talking about them.

LAC-Tech 4y ago

They tried this in NZ too; it did nothing. Canada - Like New Zealand, and like Australia - relies on simply increasing the population through mass migration to "grow" the economy. This benefits enough powerful people that it will never stop for the sake of mere renters.

rr808 4y ago
Western countries are all trying to encourage immigration because without it their populations will collapse. Right now populations are rising and causing house prices to rise but soon boomers will start dying leaving huge numbers of homes empty.
- ec59cb1659 4y ago
  If that was the case, immigration quotas would be set to maintain a steady-state population.
  - rr808 4y ago
    The problem is baby boomers are retiring en masse, and we need workers to take over. The housing problem is squeezed as a side effect for now.
- LAC-Tech 4y ago
  Global population will peak this century. Birth rates are dropping everywhere, and yes this includes the developing world (West Africa is half what it was, India is below replacement rate). The pool of working age immigrants will grow smaller and smaller. How much longer will we kick this can down the road?
  - roncesvalles 4y ago
    For very long. As long as a country is a more desirable place to live, it will continue to get immigrants. It doesn't matter whether the source country has a growing or shrinking population.

screye 4y ago

I don't blame Canada. The country is running out of space really fast and they lack the technology to build more than 1 floor of house. Unlike massive countries like South Korea, they can't fit 50 million people. Can you imagine being forced to live in slum like conditions without a half-acre yard or at least 3 parking spots? We are a developed country, do you expect us to park on the streets like the 3rd world ? If only Canada had access to hammers & wood & nails. They could have built something. But, where might someone be able to buy any of those I wonder ? ____________ Watching sprawly nations one up each other with moral grandstanding while acting as if no one sees the elephant in the room is frustratingly funny. If you are going to go this route, at least institute a high tax penalty for unit vacancy. _________ edit: didn't think it was possible for people to miss such obvious sarcasm, but here we are

acyou 4y ago
Would you be able to please expand on this and explicitly say what you want to say? Wondering what you mean by "sprawly nations".
- adventured 4y ago
  Nearly the whole post is in sarcastic jest. By sprawly the parent means nations that don't build upwards with highrise approaches as a solution to building more residences (and instead sprawl sideways, taking up large amounts of land per residence).
- deleted 4y ago
  [deleted]
- screye 4y ago
  Car-centric nations. Canada and the US lead the way.
deleted 4y ago
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jimmaswell 4y ago
Sardine-can conditions become less necessary by the day as more industries move to WFH. Who chooses to live in Manhattan if their job doesn't demand it? Demand for nicer living conditions with lawns, space, garages, and fresh air will rise as the urban exodus continues. The city is obsolete in the era of WFH. Let these unnatural aberrations recede. Humans were meant to live in small tribes and we see how their programming breaks down in cities rampant with crime and antisocial behavior.

kelnos 4y ago

Will this actually do anything, though? The Vancouver and Toronto metro areas implemented foreign investor taxes on home purchases a bunch of years ago. I believe the data shows that the taxes did dramatically reduce foreign real estate investment, but it wasn't clear that it did much to make home prices more affordable for citizens. Granted, it's possible that foreign investment would have made the situation worse. But it seems like it's a lever that didn't really do much to move the needle. The only real solution is to build more and more housing in places where people want to live, increasing density where necessary. I know a lot of people don't like this for a variety of reasons, but: tough shit. Buying a house doesn't give you the right to stop time. Yes, increased density does bring some negatives, but I don't see a world where those negatives are worse than the effects of skyrocketing housing prices.

JanisErdmanis 4y ago
The proposal would impact expats the most, and wealthy foreign investors would probably find a way around it. Also, I bet internal housing prices have resulted from internal investment/cash parking. Thus, building housing is not the only real solution. In my opinion, a simple, progressive land tax would go a long way in addressing the housing shortage.
Tiktaalik 4y ago
The taxes in BC certainly caused prices to stall out but then there was a once a century pandemic, the Bank of Canada dropped interest rates to about zero, and real estate once again took off like a rocket. Who knows how the market would have gone had that not happened.

stevespang 4y ago

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lobstersammich 4y ago

One thing that I'm not seeing mentioned in any capacity in the comments on this HN page is role of institutional investors. Prior to 2008 'single family homes' did not exist as an asset class that the asset management companies - Blackstone, etc. - were able to invest their client's/investor's money into. Long story short, the Savings & Loan implosion of the 1980s in the United States soured investor's money on SFHs. But when 2008 rolled around asset prices were depressed; the banks were flush with cash thanks to a bailout bonanza, and thus began the bulk purchasing of residential real estate by asset management firms. Read it from the horse's mouth, Redfin: in Q3 2021 investors bought 18% of single-family homes sold in the United States. 1 in 5. https://www.redfin.com/news/investor-home-purchases-q3-2021/ https://www.redfin.com/news/investor-home-purchases-q3-2021/ In 2016, 2017, 2018 we were averaging around 50,000 to 60,000 homes being bought each quarter by institutional investors. Then, when the pandemic fun bucks got released (and I'm not talking about the $1200 'relief' checks that went out) we were looking at 80,000 to 90,000 homes bought by institution investors each quarter in Q2 2021 and Q3 2021, respectively. Add in Airbnb / the short-term rental markets decimating housing stock in many cities and countries, plus intentionally restrictive zoning ordinances in the US and in Canada, and it's no wonder that North America's housing market looks the way it does in 2022. Also from that Redfin article: > Investors Have the Highest Market Share in Atlanta, Phoenix > >In Atlanta, nearly one-third (32%) of homes that sold in the third quarter were purchased by investors—the highest share of the 40 U.S. metropolitan areas Redfin analyzed. Next came Phoenix (31.7%), Charlotte, NC (31.5%), Jacksonville, FL (28.3%) and Miami (28.1%). > > Atlanta also saw the largest year-over-year gain, with investor market share rising to 32% in the third quarter from 12.9% a year earlier (+19.1 ppts). The second-biggest jump was in Charlotte (+18.2 ppts), followed by Phoenix (17.7 ppts), Jacksonville (+15.2 ppts) and Las Vegas (+14.6 ppts). I'm curious (and hopeful) to see how the Canadian situation plays out. I hope that increased enforcement of antimoney laundering laws will also result in a return of many thousands of single-family housing units to the market. If the Canada law works well it would be encouraging to see it applied in the United States with additional funding at the federal level for the construction of dense apartment housing in cities near transportation hubs as well dense housing in suburbs/exurbs with the creation of mini walkable downtowns in those denser pockets.

benbojangles 4y ago

A little bit off topic and also conspiratorial but could buying up property be a type of social weapon? I mean why drop bombs on a nation when you can make the native population homeless through pricing them out of the market?

MonkeyMalarky 4y ago
India, who once suffered a devastating famine under their colonial master's hands, does not allow foreigners to purchase farmland.
pnt12 4y ago
That's an interesting thought! The problem is that the "attacked" country could just seize the homes for themselves in a moment - you end up just giving an enormous fortune to your enemy. The only way it would work does would require quite the conspiracy: thousands of buyers of homes colluding in secret over many years without raising suspicions, until the other country is weakened by decades of poor housing and then striking before they have a chance to pull the rug.

AlbertCory 4y ago

> Many experts have also said the ban on foreign buyers — who accounted for less than 5% of home ownership in Canada, according to the national statistical agency — would not have the desired effect of making homes more affordable. "Many experts have also said" : garbage "journalism." Who are these "experts"?

bhouston 4y ago

Empty homes are a real problem in Canada. Where I live right now of the 8 neighbouring houses within 50m and 2 of them are empty. I believe they were bough as speculative investment or for renting but they have been sitting empty for some time.

qualudeheart 4y ago

It is time?

deleted 4y ago

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yumraj 4y ago

I'm genuinely curious, as to why a country, any country, should not limit home purchase to residents (note I'm saying residents and not citizens). What benefit does it provide to a country or its residents if home purchase is opened to foreign residents?

cvalka 4y ago
Why limit to housing? What about shares of a company?
rcme 4y ago
It increases the demand for real estate, which increases the price of real estate. This benefits those who own real estate. Many residents own real estate, so they do benefit from the policy.
- yumraj 4y ago
  I’ll actually argue that it artificially inflates the price beyond the means of those who do not own yet and even those who own but are priced out of upgrading to a better home/location, by bringing in investment money from outside. Housing is a necessity, and should be limited to residents, IMHO at least.
- pnt12 4y ago
  Some need a house to live in, others want estate to invest in. I say we should prioritize housing: it is a basic necessity with few alternatives, if any. If you want to invest your money, (1) it means you already have money so you aren't struggling and (2) you can invest elsewhere that isn't as harmful for others.
loeg 4y ago
How does someone become a resident if they can’t buy a place to live? This is a chicken and egg problem that is similar to banning foreign purchases entirely.
- freshpots 4y ago

8bitsrule 4y ago

It sure took its sweet time passively applying this bandage. I guess that foreign money pouring in was just too easy to favor over the interests of CA citizens. I don't suppose the USA will follow suit?

2143 4y ago

So, are wealthy foreigners allowed to build their own house in Canada (after procuring the land, permits etc)? (Just asking whether it's theoretically possible).

garfieldnate 4y ago

Foreigners are not the only ones who buy up properties as investments! I would love to see them ban mega-landlords, too, foreign or not.

r00fus 4y ago

Does Canada have a reasonable tax model for corporate home ownership? Because the US could really use some changes to corporate ownership of homes.

pgib 4y ago

I doubt this will have that much of an impact on preventing it. Foreign investors will set up shell companies, get local realtors to help/hold title, etc. It's a cat and mouse game, and the government is rarely the cat.