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Until we can get a firmer grasp on housing supply in this country, we should reduce the throttle on heavy immigration. I don't buy the notion that we need more immigrants now to build homes. The construction sector in Canada is actually losing jobs. How is it possible that we have huge housing demand yet we are losing construction jobs. Well, interest rates have soured not only the appetite but the ability for individuals to finance a mortgage. Double whammy is that interest rates haven't just gone up for prospective homebuyers, but also for developers to finance new projects. The only reason housing is still so expensive in the GTA and other parts of Canada is extremely low supply. It is certainly not increases in wages which in this country, have been relatively stagnant for decades (which is another story but is linked to lower productivity investments in Canada than other western nations).
We have some significant structural issues in this country when it comes to housing and right now, it isn't a good environment at all to be feeding more demand where supply is precipitously low.
Finally we agree on something fusion. What you say also applies to the rest of Canada. Not just Ontario. Good post.
The O.P. seems to think that government has an obligation to order the increase of housing and keep the supply of housing steady with population growth. In some authoritarian or hardcore socialist nations that may be the rule but not in a free market economy such as that of the U.S. and Canada. There is no other straightforward explanation as to why the housing market in the Golden Horseshoe Region is behaving like this other than demand is simply outstripping supply. As to increasing supply, developers have to have incentive to increase supply and population growth alone is not enough or otherwise there'd be sufficient housing for everyone already.
The O.P. seems to think that government has an obligation to order the increase of housing and keep the supply of housing steady with population growth. In some authoritarian or hardcore socialist nations that may be the rule but not in a free market economy such as that of the U.S. and Canada. There is no other straightforward explanation as to why the housing market in the Golden Horseshoe Region is behaving like this other than demand is simply outstripping supply. As to increasing supply, developers have to have incentive to increase supply and population growth alone is not enough or otherwise there'd be sufficient housing for everyone already.
Government used to build housing through crown corporations and federal subsidies until the 80s before Mulroney’s neoliberalism took over. The government should do it again, since the free market is not filling the need sufficiently. I agree we should get rid of development fees, zoning, minimum setback and square footage laws, etc but the government must play a role. I don’t see what’s authoritarian about that unless you’re banning private companies from building, which I don’t think anyone except communists would suggest as a solution
Government used to build housing through crown corporations and federal subsidies until the 80s before Mulroney’s neoliberalism took over. The government should do it again, since the free market is not filling the need sufficiently. I agree we should get rid of development fees, zoning, minimum setback and square footage laws, etc but the government must play a role. I don’t see what’s authoritarian about that unless you’re banning private companies from building, which I don’t think anyone except communists would suggest as a solution
Development fees are necessary, because to support the new homes the city has to build infrastructure and service them... plus like any other fees, they are a necessary evil for the government to raise necessary revenues to pay for services. Also I really doubt developers are "hurting" that much, I'm willing to bet the most successful developers are making a very healthy net income even after the fees.
Not sure what you mean by zoning... residential / commercial? Or just high density allowances. I suspect the latter. I think in that case it's a case of NIMBY for residents who oppose huge high rises near their precious neighborhoods.
As of May 2021, the average price of a single-family home in Victoria BC is approximately $1.2 million. This is a staggering 25% increase from the previous year. https://newcanadianlife.com/what-is-...revious%20year.
Other communities on Vancouver Island are not a lot cheaper.
Also I really doubt developers are "hurting" that much, I'm willing to bet the most successful developers are making a very healthy net income even after the fees.
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Interesting you say the most successful developers but are all developers the most successful. For those who aren't be interesting to see how important they are for housing development. I say this because I have reviewed a number of items on the topic and the general consensus is that increased borrowing costs for them and slower sales is starting to negatively impact development. This at a time when the last thing we need is slowing development.
Quote:
Originally Posted by Urban Peasant
The O.P. seems to think that government has an obligation to order the increase of housing and keep the supply of housing steady with population growth. .
Canada is bringing in 2X the number of immigrants in relative terms than the U.S. So in that case, the government does and is impacting demand. The market for a variety of complex reasons, is not able to provide for this. Additionally, Per capita GDP in the U.S is quite a bit higher both in nominal and PPP terms - so I think Americans are generally a bit more able to weather general increased cost of living better than Canadians. They are more productive and are remunerated more for that increased productivity. Did you know per worker Canada has 33 Percent less investment in productivity than the U.S. This doesn't mean Canadian workers are lazier - it is that U.S firms invest more in their workers than Canadian one's in order to increase worker productivity ie technology and process improvements. So while cities like Toronto, Montreal and Vancouver have very healthy growth rates due to Canada's immigration policy- the economic conditions are not as favourable as their comparable American cousins. So i'm not sure Canada has any business having 2X the immigration rate as the U.S, when we have a fundamental shortage of housing due to a complex set of circumstances. Sometimes you need to slow things down a bit - see what you need to fix and create those conditions and then once that happens start ramping inflow up again.
Development fees are necessary, because to support the new homes the city has to build infrastructure and service them... plus like any other fees, they are a necessary evil for the government to raise necessary revenues to pay for services. Also I really doubt developers are "hurting" that much, I'm willing to bet the most successful developers are making a very healthy net income even after the fees.
Not sure what you mean by zoning... residential / commercial? Or just high density allowances. I suspect the latter. I think in that case it's a case of NIMBY for residents who oppose huge high rises near their precious neighborhoods.
We’ll agree to disagree. There’s drawbacks to both standpoints but I think property taxes as a whole are pretty low compared to the services property owners benefit from. Development fees are like a tax on homebuyers, and with these crazy prices we should do everything we can to lower that initial cost to get people into their first home. As far as zoning goes, I mainly mean in terms of density but even commercial/residential seems a bit heavy handed in a lot of cases. Industrial obviously makes sense to keep away from residential but a lot of residential neighbourhood lack amenities nowadays because of zoning that prohibits commercial and I think that’s an issue too. I just think municipal governments who demographically attract a lot of nosy, fussy type people to run them; have too much power to create a negative impact on the greater good of the province.
Fusion, your point about immigration I understand and agree with to an extent but I think while reducing immigration might be the obvious answer, it could be a win win for our tax base and economic growth driven by immigration if we can also provide enough housing at the same time. I think it is possible if we think outside the box. Things like prefab homes, redrawing municipal boundaries, “new towns” or planned communities I.e. the post war era, federal subsidies for construction of rental properties. I think eventually the immigration “taps” are going to “run dry” so to speak as world population stops growing and formerly developing nations in places like Latin America and Asia become developed nations, like what’s happened in Europe. The economic consequences to Canada can be delayed by increasing our working age population now while world population is still rising.
Canada is bringing in 2X the number of immigrants in relative terms than the U.S.
Does that include migrants seeking legal status? They take up housing too. I would have thought the U.S. takes in more than Canada, even after adjusting for population.
I just checked the cost of renting in Victoria, not good.
Renting is not going to be cheap either. Average rent for a one bedroom unit in Victoria is $2,351.00, and for a three bedroom house it is $4,590.00 No wonder we have a growing homeless problem.
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