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We need to stop treating real restate--especially residential real estate--as a mechanism for creating wealth. there are enough homeowners that they vote for p

• latenightcoding 2y ago
  The prime minister of Canada literally said housing can't come down because it's the retirement plan of a lot of boomers.
  • charlie0 2y ago
    Which is odd because I don't see a lot of downsizing from any boomer I know, the equity is locked away on the home until they sell.
    • smeej 2y ago
      Is it? There are several ways to draw against the equity of the house in the U.S. Are these absent in Canada?
    • smiley1437 2y ago
      > the equity is locked away on the home until they sell. Some people get reverse mortgages so they can spend some of the equity of the home while they still live in it: https://www.canada.ca/en/financial-consumer-agency/services/mortgages/reverse-mortgages.html https://www.canada.ca/en/financial-consumer-agency/services/...
      • t-writescode 2y ago
        This is the same tax trick that the obscenely wealthy use with their stock portfolios. It's a "fantastic" way of accessing accrued wealth without paying taxes on it. I think I would prefer that we investigate this more thoroughly, as well, to reduce some of these tricks that further stratify the haves and the have-nots.
        • lesuorac 2y ago
          The thing being omissed here is that there's a cost-basic step-up when you die. So, if the value of the home increased by say 2x the taxes on it are 0 because the cost-basis on it isn't the price your parents bought it for; it's the price when they died and you got it. This works out a lot better for stocks because when you created the company and gave yourself a million stock units for a total of $1 (not each) and those stocks appreciated to be $300 each that's a ton of capital gains. Except when you die and it's stepped up its not. -- https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.investopedia.com/terms/s/stepupinbasis.asp
        • nradov 2y ago
          What do you propose we "investigate" exactly? There are no tricks here. Everyone with a basic understanding of finance knows exactly how it works. People have always been allowed to borrow money and use their assets as collateral.
  • ilrwbwrkhv 2y ago
    Canada also has a dearth of startups, or new ways of making wealth. The only two ways are resource extraction and squatting on property. If Canadians can become more used to risk and put some of the pension fund into startups and new technology, things could be different. It is shocking that the godfather of the modern AI boom taught at University of Toronto and yet Canada is not even in the picture when it comes to AI and it won't ever be.
  • stonethrowaway 2y ago
    Anyone who wants to see the current state of how the alt-mainstream thinking on this subject is shifting is welcome to indulge in the inventories over at [r/Canada, r/CanadaHousing, r/CanadaHousing2, r/TorontoRealEstate]. Anything that is not related to immigration or housing is essentially treated as a distraction. There is a simmering build up of disillusionment, anti-immigration and perhaps xenophobia that was usually not tolerated/allowed (hence the more spicy off-shoot CanadaHousing2), but the emotions have more or less found a stable equilibrium, and it’s not pretty. I don’t have answers here, I can just observe the situation and blink.
• swatcoder 2y ago
  No political remedy will work until there's a culture shift, and that's probably still a generation or two away. The baseline that people seek isn't just a reliable place to sleep, eat, and clean themselves. They want the television-depicted life: a home which they only (at most) share with a partner and some pre-adult children, where everyone has their own bedroom, and there's probably at least one more bedroom to enjoy as an office or rec room, a kitchen suitable for entertaining, maybe a finished basement, parking for a few cars, no shared walls, and convenient access to whatever their work and whatever they like to attend in their free time. They'll tolerate a little less, but will refuse to take the social issue as resolved if they have to. That's a far far cry from both the traditional history of multi-generational homes, boarding houses, and one room cottages and the modern political vision of "social housing". You can award contracts to all the builders you want, or open the market for them to chase whatever money you think is out there, but you're not going to be able to practically deliver the homes people want for everybody who wants them. Expectations need to be reconciled too, and we have almost no means to affect that.
  • cpursley 2y ago
    Nailed it.
  • panick21_ 2y ago
    Wrong. People respond to incentives. If you have 50 years of intensives pointing to one system, then that's what you are gone get. And then you have commenters going all 'see this is what people want'. The reality is, there is plenty of evidence that people still like other types of building and other types of neighborhoods. They were simply made illegal, economically terrible or destroyed with some other means. You act like there wasn't a massive top-down government program to produce exactly the system the US has. There is a reason only the US looks like the US (expect for maybe Canada). Its because its was top down government policy. The US systematically red-lines pretty much all inner-cities. Created a mortgage market that financed only single family homes in suberbia. These were often cheaper then rent you had to pay in social housing at the time. This was then cast in concrete with some of the most strict zoning regulation anywhere. Making it basically impossible to do any other kind of development outside of the already existing city (that was redlined). To support this a massive highway building program, with highways rammed right into the city center. Destroying large parts of existing cities (not paying people properly). Then in those cities laws were imposed to create massive amounts of parking, at direct expense of the poorer people that lived in these cities. And of course the tax system made it profitable to rip down houses and put in place surface parking-lots. Private cars blocked public transport (often private back then) and made it non-competitive, destroying mostly car free neighborhoods that depended on that. And of course it continues. The way the tax system works it systematically distributes tax dollars from city centers to the outside. Even poorer districts closer to city centers are more productive then suberiba. So you have those areas that get neglected, but even if they weren't neglected, they would still overpay on their taxes. The same kind of unfair structure exists when it comes to utility as well. With existing urban cores overpaying and suberiba under-paying. Suberbia using massively more shared infrastructure to produce the same service but paying the same or less. And of course lets not forget that all those new roads and new highways were a massive infrastructure investment, something that street-car, bus and trains didn't get. This isn't even all. We could go on to talk about how fundamentally unfair tax assessment rules for different housing types and income groups. But yeah, it was totally 'culture' that lead to situation. It wasn't at all a top down system. To be sure, there were lots of willing people in power on the local level that were more then happy to follow those things. People respond to intensive. If all of a sudden subberbia would pay fair taxes and far utilities. And that goes even more for Walmart and friends, the predators of the current system. If the zoning laws didn't exist. If those highways were ripped away. If parking all of a sudden had to pay. If highway money was reinvested in high intensity bases and trains. If all those things happened I described above changed, this 'culture' wouldn't survived for even generation. Unfortunately people are mostly blind to the systematic structure that produce 'culture'. > And one room cottages and the modern political vision of "social housing". Clearly you have no understanding how 'social housing' works in places like Vienna. > but you're not going to be able to practically deliver the homes people want for everybody who wants them. There is plenty of evidence that there is high demand for things other then single family homes. This is simply a fact. You can see this in the property prices alone. Anywhere that has a nice mixed used development, prices go threw the roof because demand is so high. The issue is supply, not demand. Go look at the data analysis by urban3, their data shows this pretty clearly.
• ww520 2y ago
  "Social Housing" sounds like a bad idea. Whenever something is "socially owned," it means it is controlled by a few who have wormed their way into the power position to control whom get to utilize that something. It comes down to who decides who can live in this social housing, and whether one could be kicked out by the whim of some bureaucrats or some committees. It's the HOA nightmare multiplies 100 times. Basically it's what is your right and claim to this "social housing"? Pretty soon that right will become a personal ownership right, and private real estate ownership is back and so is commercial real estate.
  • downrightmike 2y ago
    Then just call it what it is, a dorm.
• bryananderson 2y ago
  I’m sorry to be negative because I agree with the general sentiment that society needs to stop treating “home value go up” as its primary retirement plan, and get rid of our allergy to social housing, but that first Guardian article about banning rental housing is just so bad on so many levels. He says Britain doesn’t have a housing shortage because the ratio of homes to households hasn’t changed even as prices have gone up—but treating Britain as one big housing market is ridiculous, there have been massive shifts in economic geography over the last 5 decades. There is a housing shortage in the areas with well paying jobs and a housing surplus in the areas with no jobs. People should get to choose to move to a place where they can make a living! He also says London’s population hasn’t changed in the last 50 years as prices have gone up without new housing being built—uhh no shit! If very little new housing was built in that period, how could the area’s population go up significantly? What happened instead is that, because demand rose and supply didn’t, the population stayed the same and the static supply went to the highest bidder. This is just mind-numbing economic illiteracy. Where does he think a population increase would go in London if London doesn’t increase housing supply?? The static supply is WHY the population didn’t grow! Literally exact same issue as NYC and the expensive parts of California. He says developers would never build enough housing because it would drive down the price they can command—has this guy ever heard of the tragedy of the commons?? This is literally how markets work when there’s adequate competition. Econ 101. (And I’m not talking about fringy free-market-absolutist econ; Marx understood perfectly well that market competition drives down prices.) For a couple examples, Austin and Minneapolis have generated enough new supply to tank the price of rent. And imagine how ridiculous this argument sounds about anything but housing. “TV companies would never produce more TVs because that would bring down the price they can charge.” Oh wait… It’s also totally left out (because there is no answer) how overall affordability would get better by getting rid of renting and only having owner-occupied housing. It’s the same amount of demand for the same amount of supply! Finally, please just don’t take away my ability to rent! At my current place in life I don’t want to lock up a ton of money in real estate and be stuck in one place (much harder to move frequently due to transaction costs). Maybe later in life I’ll buy, but right now I want to rent (and invest my money in other things instead of a home). We need both kinds. Ughhh. This author’s way of thinking is exactly why many of the most productive and ostensibly progressive cities (London, SF, NYC…) are prohibitively expensive, denying everyone but the rich the ability to live there. It’s easy to understand the right’s desire to send property values to the stratosphere (“fuck the poor, and fuck you too, I got mine”). But the left ties itself in these crazy knots to bring about the same result, hurting the working class we claim to care about, and it’s baffling. Don’t overthink it, just build a fuckton of housing where there’s the most economic opportunity, both private sector (because central planning is notoriously not the best at creating enough supply) and social housing (because the market never works for literally everyone, and also because why not, more housing is good).
• BenFranklin100 2y ago
  Instead of trying to invent new property classes and try untested social theories, let’s do what is known to work: A. Stop the financialization of homes at the federal level by getting rid of the mortgage tax deduction and the sales tax exclusion on the sale of a personal home. B. At the local level, reform zoning and remove the draconian restrictions on new home construction, especially of multi-family housing near transit. This will fix the supply issue, the primary driver of high home prices in high demand metros. Once we remove these artificial government policy distortions that affect both demand and supply in the housing market, an actual free market will arise and drive down prices, especially of older, existing homes.
• panick21_ 2y ago
  Yeah anytime the whole 'we already have enough houses' has been tested it has been found false. Demand in cities is constantly growing, and cities with green belts and all kinds of regulation simply can't expand. Total stock is irrelevant. The British solution if continued would also lead to rises as demand in cities grows. > so the private sector simply can't manipulate hte market They are not 'manipulating' the market, they simply have assets that are valuable because of high demand. You can only restrict supply if some other private developer can not simply buy land and build, and take that advantage away from you. If there was actually enough places to build, then the profit maximizing strategy is to build as many high value houses as fast as you can. And that's exactly how street car subburbs were built on mass. All these theories about how nothing is possible without defeating 'landlords' are just not true. Its the currently existing laws and regulation that set the board and people just play that game. The reality is that we know the solution. We know that those places that build enough housing of the type demand by the market have lower rates, this has been proven over and over again. In Britain Labor basically created a laws that made private house building much, much harder. They of course did this because they believed they would build lots of social housing. Of course because of money issues and their political downfall this didn't continue. But also off course, the laws restricting supply were not changed. So Labor and Tory both have a hand in the problem. The problem are perfectly clear. Build more houses in places people want to live. It doesn't even matter if its social housing or private. I believe the market is perfectly capable of building the right kind of housing. But of course you can also do it with social housing. There are many ways to entourage more building. We need to stop making this about some political fight and simply look at the market basics. In Houston Texas, the market did build many houses, and prices were comparatively low. But of course because of the type of regulation that still existed, this resulted mostly US style subburban sprawl. But I guess better then simply increasing prices. There is tons of other data that shows corroboration between house building and rents. We don't have to totally re-imagine property rights law, we aren't gone abolish private property and renting isn't inherently bad. We simply need to create rules that make actual sense and provide the necessary infrastructure. I'm not necessarily against some of the rules against landlords that you suggest, but we simply can't pretend that it is a solution by itself. The notion that all private ownership and renting is inherently hurtful is one of the biggest myths that's preventing any progress on this issue. We know what to do, land-value tax, right-to-build, proper land-use planning, densification, take the space away from cars, transport oriented development. And this can be done entirely by the government if that your political bend. > All this does is simply steal money from the next generation. It actually enriches the next generation. We still have houses from the 16th century, still providing value for our community to this day.
• jjav 2y ago
  > We need to stop treating real restate--especially residential real estate--as a mechanism for creating wealth. It's not about treating it this or that way though. Owning a house is creating wealth, it's not something you can avoid. How could this ever not be the case? We all agree a home is valuable. So if you buy one (and pay for it over many years), you're acquiring something valuable. As opposed to throwing money away in rent. That's it, you built some wealth. There's no way to make it not be valuable.
  • jayemar 2y ago
    > How could this ever not be the case? If the value of the house goes down like what happened in 2008.
    • jjav 2y ago
      Those houses are now worth more, even inflation adjusted, it was just a temporary dip. So you've still built wealth even if you bought in 2007.