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In Canada, specifically Toronto, an average single family house in 2014 used to cost 400K. Now it’s 1.2M. Wages haven’t gone up, quality of healthcare and other

In Canada, specifically Toronto, an average single family house in 2014 used to cost 400K. Now it’s 1.2M. Wages haven’t gone up, quality of healthcare and other services such as public transport have gone down. Meanwhile, taxes have gone up. I always laugh at how politicians and media ignite the culture war as if it’s not all part of the design. Keep everyone distracted over things that don’t ultimately matter while a very small segment of the society essentially plunders and loots the wealth and already asset owning and well connected part of society keeps owning bigger and bigger share of the pie. Under the surface, the entire last decade since GFC has been a class war waged by the elites. Upward mobility is dead and with it the whole “American dream” or “Canadian Dream” or “immigrant dream”. Welcome to the age of generational wealth and wealth transfer much like Europe a century ago.

tivert 3y ago
> In Canada, specifically Toronto, an average single family house in 2014 used to cost 400K. Now it’s 1.2M. Wages haven’t gone up, quality of healthcare and other services such as public transport have gone down. Meanwhile, taxes have gone up. What's the cause, specifically? I recall reading somewhere that the current Canadian government is pursuing a "Maximum Canada" policy to grow the population through immigration, but they're not building the housing required to meet the increased demand. If that's the cause, it's seems like it would be pretty oppressive to do what the OP is advocating for: increasing property taxes. It seems like it would just lead to people losing their homes: government policy causes home prices to rise out-of-control, then the less well-off get kicked out of their once-affordable homes because they can no-longer afford the tax bill.
- gottorf 3y ago
  > What's the cause, specifically? Home price gains that have far outstripped inflation or the average wage all have the same cause wherever it happens in any developed country. It's entirely self-inflicted, on one end by policies that favor home ownership by privileging it above other kinds of assets (mortgage interest deduction, etc.), and on the other by policies that deter simply building more, whether to fight gentrification, preserve the character of the neighborhood, or reduce environmental impact.
  - tivert 3y ago
    Having the average home price triple in a single decade is such a massive and rapid level of appreciation that I don't think you can reasonably attribute it to "the same cause wherever it happens in any developed country." There's going to be some unusual policy or economic situation driving it. The things you mention are only exacerbating factors that cause the effects to show up in home prices, rather than in some other metric. So, what specifically is happening in Toronto that's driving this (e.g. causing demand to go up, up, up)? Edit: I think I found the article I was referring to earlier: https://www.noahpinion.blog/p/maximum-canada-is-happening https://www.noahpinion.blog/p/maximum-canada-is-happening. It says Canada's population has increased by 15% over the last decade (35 million -> 40 million). Apparently Canada has one of the fastest population growth rates in the world, all from immigration since it's birth-rate is sub-replacement. US population only increased 7.5% over the same period.
    - gottorf 3y ago
      > It says Canada's population has increased by 15% over the last decade (35 million -> 40 million). Canada is a developed country with a lot of natural resources; by a lot of metrics, it is one of the top 10 countries with the most natural resources per capita. It should easily be able to increase its housing stock by 1.5% a year at at a national level. It looks like Greater Toronto went from 5.7 million in 2013 to 6.4 million, ten years later in 2023[0], for a slightly lower rate of growth than the nation as a whole. A cursory search didn't reveal any sources for the number of dwelling units in the GTA over the same time period; but I'm willing to bet that if you combined that plus the expansion in the supply of Canadian dollars, you'll explain most of that growth in home prices. The money supply in Canada alone more than doubled in the past 10 years[1] vs. the 15% growth in population; so all else equal, you'd expect houses to transact for roughly 74% more CAD in 2023 than in 2013. The Toronto housing price index went from 154.36 in July 2013 to 360.78 this past July, at a 134% growth over the same time period. Most of that difference may be explained by a lack of building in Toronto. I'm sure some of it is other socioeconomic factors (increasing centralization of wealth in cities, etc.), but I don't think any of them are particularly unique to Canada. If anything else, due to its abundance of open land (granted, not all of it is economically valuable) as well as its natural resource advantages, Canada should be much better suited than other developed countries to be able to handle its housing challenges. The fact that it's not is mostly due to policy choice, which I posit are choices similar to those made in other developed countries. [0]: https://www.macrotrends.net/cities/20402/toronto/population https://www.macrotrends.net/cities/20402/toronto/population [1]: https://fred.stlouisfed.org/series/MABMM301CAM189S https://fred.stlouisfed.org/series/MABMM301CAM189S [2]: https://housepriceindex.ca/#chart_change=on_toronto https://housepriceindex.ca/#chart_change=on_toronto
- mwbajor 3y ago
  Wages haven't gone up since 72. That wealth that should have been there due to a well paying job is now coming from your house appreciating. No one wants their largest investment to depreciate so to keep everyone happy, more demand is created through immigrants thus building a price floor. The american association of realtors is very up front about this, you can find many articles where they talk about immigrants boosting real estate prices and its by quite alot.
- djkivi 3y ago
  It's called the Century Initiative to try to grow Canada's population to 100M by 2100: https://www.centuryinitiative.ca/why-100m https://www.centuryinitiative.ca/why-100m Canada recently passed 40M this year: https://www.statcan.gc.ca/en/subjects-start/population_and_demography/40-million https://www.statcan.gc.ca/en/subjects-start/population_and_d...
gottorf 3y ago
> Welcome to the age of generational wealth and wealth transfer much like Europe a century ago. This inevitably happens as a society grows to the point where it values stability and maintenance over freedom and growth. The chaotic nature of individual liberty encourages both creation and creative destruction, which makes wealth change hands often. When government steps in to save the people from themselves, you get stasis, and it becomes increasingly harder to make your own lot in life, whether upwards or downwards. > Upward mobility is dead At least in the US, this still isn't nearly as true as a lot of people think it is. Sure, someone on their first job isn't going to be able to afford a house in any one of the most desirable cities in the world (let alone the country); but in vast areas of "flyover country", people make a living, buy homes with yards, and raise children.
- Justsignedup 3y ago
  This trend is starting to reverse. Most suburban areas in the US are being assaulted by investment firms.
  - mwbajor 3y ago
    1) Be investment firm 2) buy houses 3) lobby govt for more immigrants saying "diversity is our strength" 4) Hire PR firms to say "diversity is our strength" 5) Immigrants need to live somewhere so housing prices go up because of demand 6) Profit
    - Simulacra 3y ago
      [flagged]
    - nkjnlknlk 3y ago
      Immigration is not a significant (or at least not top three in significance) factor in the housing crisis. If you believe it is then please cite the data.
      - mwbajor 3y ago
ajhurliman 3y ago
What if the solution is for people who can’t afford to live there to move to a city where they can afford?
- bettercallsalad 3y ago
  Well goodluck finding a job in Saskatchewan or Manitoba or uninhabitable upper North. Unless you work for oil and gas but oh wait those industries are now also struggling and along with them the jobs they would bring are also dying.
- tharmas 3y ago
  In smaller towns in Canada the rent for a 500 sq ft apartment is over $2000/month. And there is the question of jobs in these places that people supposedly can "afford".
marcusverus 3y ago
> Keep everyone distracted over things that don’t ultimately matter while a very small segment of the society essentially plunders and loots the wealth and already asset owning and well connected part of society keeps owning bigger and bigger share of the pie. I buy a house. The government pegs interest rates near zero. I realize I can buy a much more expensive house for a similar monthly payment. I buy a more expensive house. Millions of others respond to the same incentives. Prices rise. Somewhere a leftist sheiks, "stop plundering me bro!" > Upward mobility is dead and with it the whole “American dream” or “Canadian Dream” or “immigrant dream”. This is nonsense. The home ownership rate is above the historical average and trending up.[0] Median household income is up ~50% since 1970.[1] The only possible way to argue that the 'American dream' is dead is to cherry pick data and/or hot-swap the actual American dream (of building a reasonably prosperous, middle-class life for yourself and your family) for some handwavy progressive analog. [0] https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N [1] https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewresearch.org/social-trends/2020/01/09/trends-...

tivert 3y ago

> In Canada, specifically Toronto, an average single family house in 2014 used to cost 400K. Now it’s 1.2M. Wages haven’t gone up, quality of healthcare and other services such as public transport have gone down. Meanwhile, taxes have gone up. What's the cause, specifically? I recall reading somewhere that the current Canadian government is pursuing a "Maximum Canada" policy to grow the population through immigration, but they're not building the housing required to meet the increased demand. If that's the cause, it's seems like it would be pretty oppressive to do what the OP is advocating for: increasing property taxes. It seems like it would just lead to people losing their homes: government policy causes home prices to rise out-of-control, then the less well-off get kicked out of their once-affordable homes because they can no-longer afford the tax bill.

gottorf 3y ago
> What's the cause, specifically? Home price gains that have far outstripped inflation or the average wage all have the same cause wherever it happens in any developed country. It's entirely self-inflicted, on one end by policies that favor home ownership by privileging it above other kinds of assets (mortgage interest deduction, etc.), and on the other by policies that deter simply building more, whether to fight gentrification, preserve the character of the neighborhood, or reduce environmental impact.
- tivert 3y ago
  Having the average home price triple in a single decade is such a massive and rapid level of appreciation that I don't think you can reasonably attribute it to "the same cause wherever it happens in any developed country." There's going to be some unusual policy or economic situation driving it. The things you mention are only exacerbating factors that cause the effects to show up in home prices, rather than in some other metric. So, what specifically is happening in Toronto that's driving this (e.g. causing demand to go up, up, up)? Edit: I think I found the article I was referring to earlier: https://www.noahpinion.blog/p/maximum-canada-is-happening https://www.noahpinion.blog/p/maximum-canada-is-happening. It says Canada's population has increased by 15% over the last decade (35 million -> 40 million). Apparently Canada has one of the fastest population growth rates in the world, all from immigration since it's birth-rate is sub-replacement. US population only increased 7.5% over the same period.
  - gottorf 3y ago
    > It says Canada's population has increased by 15% over the last decade (35 million -> 40 million). Canada is a developed country with a lot of natural resources; by a lot of metrics, it is one of the top 10 countries with the most natural resources per capita. It should easily be able to increase its housing stock by 1.5% a year at at a national level. It looks like Greater Toronto went from 5.7 million in 2013 to 6.4 million, ten years later in 2023[0], for a slightly lower rate of growth than the nation as a whole. A cursory search didn't reveal any sources for the number of dwelling units in the GTA over the same time period; but I'm willing to bet that if you combined that plus the expansion in the supply of Canadian dollars, you'll explain most of that growth in home prices. The money supply in Canada alone more than doubled in the past 10 years[1] vs. the 15% growth in population; so all else equal, you'd expect houses to transact for roughly 74% more CAD in 2023 than in 2013. The Toronto housing price index went from 154.36 in July 2013 to 360.78 this past July, at a 134% growth over the same time period. Most of that difference may be explained by a lack of building in Toronto. I'm sure some of it is other socioeconomic factors (increasing centralization of wealth in cities, etc.), but I don't think any of them are particularly unique to Canada. If anything else, due to its abundance of open land (granted, not all of it is economically valuable) as well as its natural resource advantages, Canada should be much better suited than other developed countries to be able to handle its housing challenges. The fact that it's not is mostly due to policy choice, which I posit are choices similar to those made in other developed countries. [0]: https://www.macrotrends.net/cities/20402/toronto/population https://www.macrotrends.net/cities/20402/toronto/population [1]: https://fred.stlouisfed.org/series/MABMM301CAM189S https://fred.stlouisfed.org/series/MABMM301CAM189S [2]: https://housepriceindex.ca/#chart_change=on_toronto https://housepriceindex.ca/#chart_change=on_toronto
mwbajor 3y ago
Wages haven't gone up since 72. That wealth that should have been there due to a well paying job is now coming from your house appreciating. No one wants their largest investment to depreciate so to keep everyone happy, more demand is created through immigrants thus building a price floor. The american association of realtors is very up front about this, you can find many articles where they talk about immigrants boosting real estate prices and its by quite alot.
djkivi 3y ago
It's called the Century Initiative to try to grow Canada's population to 100M by 2100: https://www.centuryinitiative.ca/why-100m https://www.centuryinitiative.ca/why-100m Canada recently passed 40M this year: https://www.statcan.gc.ca/en/subjects-start/population_and_demography/40-million https://www.statcan.gc.ca/en/subjects-start/population_and_d...

gottorf 3y ago

> Welcome to the age of generational wealth and wealth transfer much like Europe a century ago. This inevitably happens as a society grows to the point where it values stability and maintenance over freedom and growth. The chaotic nature of individual liberty encourages both creation and creative destruction, which makes wealth change hands often. When government steps in to save the people from themselves, you get stasis, and it becomes increasingly harder to make your own lot in life, whether upwards or downwards. > Upward mobility is dead At least in the US, this still isn't nearly as true as a lot of people think it is. Sure, someone on their first job isn't going to be able to afford a house in any one of the most desirable cities in the world (let alone the country); but in vast areas of "flyover country", people make a living, buy homes with yards, and raise children.

Justsignedup 3y ago
This trend is starting to reverse. Most suburban areas in the US are being assaulted by investment firms.
- mwbajor 3y ago
  1) Be investment firm 2) buy houses 3) lobby govt for more immigrants saying "diversity is our strength" 4) Hire PR firms to say "diversity is our strength" 5) Immigrants need to live somewhere so housing prices go up because of demand 6) Profit
  - Simulacra 3y ago
    [flagged]
  - nkjnlknlk 3y ago
    Immigration is not a significant (or at least not top three in significance) factor in the housing crisis. If you believe it is then please cite the data.
    - mwbajor 3y ago

ajhurliman 3y ago

What if the solution is for people who can’t afford to live there to move to a city where they can afford?

bettercallsalad 3y ago
Well goodluck finding a job in Saskatchewan or Manitoba or uninhabitable upper North. Unless you work for oil and gas but oh wait those industries are now also struggling and along with them the jobs they would bring are also dying.
tharmas 3y ago
In smaller towns in Canada the rent for a 500 sq ft apartment is over $2000/month. And there is the question of jobs in these places that people supposedly can "afford".

marcusverus 3y ago

> Keep everyone distracted over things that don’t ultimately matter while a very small segment of the society essentially plunders and loots the wealth and already asset owning and well connected part of society keeps owning bigger and bigger share of the pie. I buy a house. The government pegs interest rates near zero. I realize I can buy a much more expensive house for a similar monthly payment. I buy a more expensive house. Millions of others respond to the same incentives. Prices rise. Somewhere a leftist sheiks, "stop plundering me bro!" > Upward mobility is dead and with it the whole “American dream” or “Canadian Dream” or “immigrant dream”. This is nonsense. The home ownership rate is above the historical average and trending up.[0] Median household income is up ~50% since 1970.[1] The only possible way to argue that the 'American dream' is dead is to cherry pick data and/or hot-swap the actual American dream (of building a reasonably prosperous, middle-class life for yourself and your family) for some handwavy progressive analog. [0] https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N [1] https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewresearch.org/social-trends/2020/01/09/trends-...