Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

«‹›1518 »

namaste friends: Sep 18, 2004; by Smythe

Jumpingmanjim posted:

Hey CI wanna go on a baby boomer killing spree?

I will bring the guns

# ? Oct 27, 2014 14:33

Adbot: ADBOT LOVES YOU

# ? May 16, 2024 19:13

ascendance: Feb 19, 2013

Cultural Imperial posted:

I will bring the guns

Free capital. Burn down some retirement homes.

# ? Oct 27, 2014 14:54

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

It's cool guys, just let them stew in the mess they made for themselves. The number of people marching penniless into retirement because of houses soon is probably going to be enomous.

And they were the ones that theoretically ~~bought~~invested cheap.

# ? Oct 27, 2014 16:21

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

ocrumsprug posted:

And they were the ones that theoretically ~~bought~~invested cheap.

That really depends, doesn't it? My friend's place, which is an apartment in a good building in a desirable location, is paid off and worth three times what he paid for it. Even in the event of a significant collapse, he'll still probably break even on the value of the condo itself, not even counting what he's currently saving in rent. He didn't view it as an investment to be sold, though, but rather a nice, paid-off place to live.

# ? Oct 27, 2014 17:02

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

PT6A posted:

That really depends, doesn't it? My friend's place, which is an apartment in a good building in a desirable location, is paid off and worth three times what he paid for it. Even in the event of a significant collapse, he'll still probably break even on the value of the condo itself, not even counting what he's currently saving in rent. He didn't view it as an investment to be sold, though, but rather a nice, paid-off place to live.

Agreed. Worth acknowledging that a good number of people have done very nicely out of this housing thing.

# ? Oct 27, 2014 17:22

namaste friends: Sep 18, 2004; by Smythe

http://www.theage.com.au/business/markets/worst-is-yet-to-come-goldman-sachs-20141027-11chrc.html

quote:

For Goldman Sachs, the worst is ahead for Australia and housing-bubble concerns will fade as the focus shifts to slowing jobs growth and inflation.

The only hurdle keeping the Reserve Bank of Australia from adopting an "easing bias" is a property boom, as mining investment is set to drop further along with raw material export prices and government revenue, said Tim Toohey, Goldman's head of economics, commodities and strategy for Australia.

There's about a 32 per cent chance of a cut to the benchmark interest rate over the next year, a Credit Suisse index based on swaps shows.

"It's going to come down to the unemployment rate, inflation and, as I say, house prices are more of a second-order concern," he said. "Into that March, April period next year, that's when it's going to get interesting."

While markets are pricing in rate-cut risks, none of the 26 analysts surveyed by Bloomberg this month predicted a move lower after RBA Governor Glenn Stevens expressed concern about high house prices and said monetary policy can't directly create the "animal spirits" needed to spur economic activity.

The RBA's job will be made more difficult by the resilience of the Australian dollar as expectations for a Federal Reserve rate increase get pushed back and Europe slows, Toohey said.

A drop-off in mining investment is still to come and will probably have a greater negative economic impact than currently assumed, Toohey said.

In addition, he sees an "income shock" hitting the economy over the next few quarters following the decline in prices of exports like iron ore and coal.

Aussie Resilient

A Deutsche Bank index that tracks the prices of commodities important to Australia slid 20 per cent this year with iron ore and thermal coal touching five-year lows in the past month.

The RBA's trade-weighted index for the local currency has declined just 0.2 per cent since December 31.

The Australian dollar was trading at 88.13 US cents on Monday afternoon, down 1.2 percent since December 31.

"The currency has to be lower, but it's lower relative to where commodity prices actually are going," said Toohey.

"It's going to feel like a very, very long time, I think, before that shift in Fed policy can actually give you a breakage in the currency without potentially additional policy easing on the local front."

Futures contracts indicate about a 50 per cent chance the US central bank will boost its benchmark rate by October 2015.

As recently as October 3, the odds of a July increase were at 52 per cent. The Fed begins a two-day meeting tomorrow and is on track to end bond purchases that have helped weaken the greenback against major counterparts.

Boom-Bust Cycle

RBA Governor Stevens said in August the economy needs an injection of confidence rather than lower interest rates to stimulate growth.

He signalled last month it was unwise to use monetary policy to spur activity and risk a "boom-bust cycle" given increases in house prices.

Sydney home values jumped 14 per cent in the 12 months through September to a median $655,000, according to researcher RP Data. The average dwelling price across Australia's major cities rose 9.3 per cent.

"There's really only one hurdle standing in front of the RBA in terms of adopting back an easing bias and it is pure and simply house prices," said Toohey.

"We were the last ones in the market to take the rate cut out, somewhat reluctantly, and I guess I've just made the case as to why the balance of risks still skew in that direction."

Goldman dropped in August its call for a cut to the nation's benchmark rate to 2.25 per cent from 2.5 per cent.

Toohey predicts the inflation rate will fall this year below the RBA's 2 per cent floor and economic growth will be 2.3 per cent next year.

That compares with the median forecast for the consumer price index to rise 2.6 per cent in 2014 with economic growth of 2.9 per cent in 2015, according to forecasts compiled by Bloomberg.

Inflation Outlook

The consumer price index climbed 2.3 per cent in the third quarter from a year earlier, the least in a year and down from 3 per cent in the previous period, a report last week showed. The central bank aims for inflation of between 2 per cent and 3 per cent on average.

The difference in yields between Australia's 2018 debt that's protected against inflation and securities that aren't implies prices will rise 1.95 per cent a year over the life of the bonds, down from the 2014 high of 2.37 per cent in June.

"There's obviously a global disinflationary impetus through the economy, but the impetus of the income shock we think will be a very significant one," he said.

"We've been pushing a view all year that inflation will finish this year below 2 percent at the headline level and I still think that's going to be the case."

Some aussie schadenfreude.

# ? Oct 27, 2014 23:26

etalian: Mar 20, 2006

Lexicon posted:

Agreed. Worth acknowledging that a good number of people have done very nicely out of this housing thing.

The lottery is a good investment too since a select number of people made millions of dollars after buying a winning ticket!

# ? Oct 28, 2014 02:04

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

So this poo poo showed up in the mail today.

Of course it is a $350,000 condo in Langley.

# ? Oct 28, 2014 02:37

namaste friends: Sep 18, 2004; by Smythe

who in vancouver actually has 5k in cash

# ? Oct 28, 2014 02:53

I would blow Dane Cook: Dec 26, 2008

https://www.youtube.com/watch?v=DJh1tUsYhNg

Video on Australia Auctions in Mandarin

# ? Oct 28, 2014 03:12

etalian: Mar 20, 2006

I wonder who thinks investor visa programs are a good idea in the long term.

As if a country like Australia or Canada needs a bigger surplus of rich foreign assholes.

# ? Oct 28, 2014 04:44

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

etalian posted:

The lottery is a good investment too since a select number of people made millions of dollars after buying a winning ticket!

If the lottery had massively better odds 30 years ago, to the point where it had a positive EV, that would be different.

The fact that home ownership is a bad choice in many markets right now doesn't mean it's been a horrible decision in every place throughout history.

# ? Oct 28, 2014 04:49

namaste friends: Sep 18, 2004; by Smythe

etalian posted:

I wonder who thinks investor visa programs are a good idea in the long term.

As if a country like Australia or Canada needs a bigger surplus of rich foreign assholes.

well we wouldn't want to deplete our domestic supply of assholes who migrate overseas would we

# ? Oct 28, 2014 05:11

blah_blah: Apr 15, 2006

PT6A posted:

If the lottery had massively better odds 30 years ago, to the point where it had a positive EV, that would be different.

The fact that home ownership is a bad choice in many markets right now doesn't mean it's been a horrible decision in every place throughout history.

You shouldn't estimate the EV of a decision by looking at the outcome, either.

# ? Oct 28, 2014 06:54

etalian: Mar 20, 2006

Cultural Imperial posted:

well we wouldn't want to deplete our domestic supply of assholes who migrate overseas would we

On the bright side you can have fun sneaking gravestones onto their property at night.

nothing ruins the mainland Chinese real estate experience like having spooky ghosts flying around.

# ? Oct 28, 2014 07:14

LemonDrizzle: Mar 28, 2012; neoliberal shithead

blah_blah posted:

You shouldn't estimate the EV of a decision by looking at the outcome, either.

I think home ownership in general has a respectably positive EV. Per Shiller, the capital value of the property can be expected to hold steady in the long term, and on top of that you get a "dividend" in the form of the imputed rent. In a healthy market, the imputed rent may be 5-7% of the price so even after you take off 1% of the property's value per year for maintenance, you're left with an asset that provides a real return of 4-6% per annum. That's not bad at all, especially since you pay no tax on the return and neither do you pay capital gains tax if/when you sell.

Obviously this is not an argument for buying in a bubble, I am not saying this means that now is a good time to buy in Canada, blah blah blah

# ? Oct 28, 2014 09:21

ascendance: Feb 19, 2013

etalian posted:

On the bright side you can have fun sneaking gravestones onto their property at night.

nothing ruins the mainland Chinese real estate experience like having spooky ghosts flying around.

so we can hire native protestors to go around and claim that vast swaths of Richmond and Vancouver are ancient Indian burial grounds, and enjoy the resulting dip in prices?

# ? Oct 28, 2014 13:09

melon cat: Jan 21, 2010; Nap Ghost

melon cat fucked around with this message at 04:33 on Mar 16, 2019

# ? Oct 28, 2014 15:36

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

LemonDrizzle posted:

I think home ownership in general has a respectably positive EV. Per Shiller, the capital value of the property can be expected to hold steady in the long term, and on top of that you get a "dividend" in the form of the imputed rent. In a healthy market, the imputed rent may be 5-7% of the price so even after you take off 1% of the property's value per year for maintenance, you're left with an asset that provides a real return of 4-6% per annum. That's not bad at all, especially since you pay no tax on the return and neither do you pay capital gains tax if/when you sell.

Obviously this is not an argument for buying in a bubble, I am not saying this means that now is a good time to buy in Canada, blah blah blah

If you buy a house with a mortgage, you owe interest on that mortgage which you must include in your estimate of EV. And transaction costs.

# ? Oct 28, 2014 16:22

namaste friends: Sep 18, 2004; by Smythe

http://www.terry.ubc.ca/2014/10/28/these-guys-live-in-vancouver-pay-next-to-nothing-for-rent-and-throw-epic-parties-somewhat-nsfw-photos/

quote:

Andrew says the house is not all about partying. He runs a business out of the space and likes that his dog can run around in the backyard. Their friends have covered the walls in art and poetry. Actually�most of the time the house is pretty quiet, he tells us.

�It�s a special moment I guess. Every flophouse I�ve lived in it feels like it�s going to be the last but then it�s not, I don�t know.�

Something we couldn�t totally convey on the radio show was just how interesting looking Vlad and Andrew�s house is. Here�s a selection of photos I took while reporting there. Just a warning: one of the photos is a sort of erotic sketch. Not necessarily the sort of thing to look at at work.

these guys are pretty metal

# ? Oct 28, 2014 18:11

Rime: Nov 2, 2011; by Games Forum

Cultural Imperial posted:

these guys are pretty metal

There's a fair number of these around the city, at least a dozen. There used to be an anarchist / drug addict commune in a big old edwardian across from the WISE Hall on Adenac, but I haven't gone past it in like a year so I dunno if it finally got demolished or not. Probably did, the place was a trash pile full of assholes. :shrug:

This radio piece is really fantastic though, the closing statement hits the nail on the head. Cheers for that link.

Rime fucked around with this message at 19:37 on Oct 28, 2014

# ? Oct 28, 2014 18:51

LemonDrizzle: Mar 28, 2012; neoliberal shithead

MickeyFinn posted:

If you buy a house with a mortgage, you owe interest on that mortgage which you must include in your estimate of EV. And transaction costs.

That's true but if you buy with a mortgage you can also expect above-inflation capital growth thanks to your leverage. Going off Shiller's statement that houses retain their value in real terms (and assuming that the central bank succeeds in keeping inflation at around the 2% target rate), a house bought for 200k will see its nominal value rise by 4k after the first year of ownership. If you bought with 20% downpayment of 40k, that'd be 10% nominal capital growth for you before you consider other costs; basically, provided that your mortgage payments are not significantly greater than the imputed rent + maintenance costs + relevant taxes, you'll almost certainly come out ahead.

# ? Oct 28, 2014 19:29

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

LemonDrizzle posted:

That's true but if you buy with a mortgage you can also expect above-inflation capital growth thanks to your leverage. Going off Shiller's statement that houses retain their value in real terms (and assuming that the central bank succeeds in keeping inflation at around the 2% target rate), a house bought for 200k will see its nominal value rise by 4k after the first year of ownership. If you bought with 20% downpayment of 40k, that'd be 10% nominal capital growth for you before you consider other costs; basically, provided that your mortgage payments are not significantly greater than the imputed rent + maintenance costs + relevant taxes, you'll almost certainly come out ahead.

None of this should at all be controversial in places with sane housing markets.

# ? Oct 28, 2014 19:34

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

LemonDrizzle posted:

That's true but if you buy with a mortgage you can also expect above-inflation capital growth thanks to your leverage. Going off Shiller's statement that houses retain their value in real terms (and assuming that the central bank succeeds in keeping inflation at around the 2% target rate), a house bought for 200k will see its nominal value rise by 4k after the first year of ownership. If you bought with 20% downpayment of 40k, that'd be 10% nominal capital growth for you before you consider other costs; basically, provided that your mortgage payments are not significantly greater than the imputed rent + maintenance costs + relevant taxes, you'll almost certainly come out ahead.

Well yeah, but "provided that owning is a superior financial decision, owning will be a better financial decision" is very different from what you originally said, that "I think home ownership in general has a respectably positive EV." Anyway, you can find out if any particular scenario has positive EV by going here. It is fun to play with regardless.

# ? Oct 28, 2014 20:12

Pixelboy: Sep 13, 2005; Now, I know what you're thinking...

Cultural Imperial posted:

who in vancouver actually has 5k in cash

Anyone who isn't a failure?

# ? Oct 28, 2014 23:28

Kafka Esq.: Jan 1, 2005; "If you ever even think about calling me anything but 'The Crab' I will go so fucking crab on your ass you won't even see what crab'd your crab" -The Crab(TM)

Pixelboy posted:

Anyone who isn't a failure?

Haha, right.

# ? Oct 29, 2014 00:14

namaste friends: Sep 18, 2004; by Smythe

Pixelboy posted:

Anyone who isn't a failure?

So no one?

# ? Oct 29, 2014 00:26

Pixelboy: Sep 13, 2005; Now, I know what you're thinking...

Cultural Imperial posted:

So no one?

Well, to be fair... I moved to Seattle, so you may be correct, apparently.

# ? Oct 29, 2014 01:38

namaste friends: Sep 18, 2004; by Smythe

https://businessincanada.com/2014/10/28/canada-housing-bubble-home-prices-macroprudential-measures-cmhc-bank-of-canada-joe-oliver/

quote:

Do We Need To Take The Wind Out Of The Housing Market�s Sails Again?

Posted by Lucas Kawa On October 28, 2014

Canada�s housing market is running hot. Maybe too hot.

Perennially defying calls for a moderation (or even a crash) in real estate values, the rate of home price appreciation has picked up steam in 2014 � and the Bank of Canada has noticed.

In September, the Governing Council noted that �activity in the housing market has been stronger than anticipated.� Last week, Poloz & Co. said �the financial stability risks associated with household imbalances are edging higher.�

�Since the last Monetary Policy Report, there has been a bit of a heating up, even in the seasonally-adjusted data,� said CIBC chief economist Avery Shenfeld.

The Bank has maintained that the nation�s housing market is in for a soft landing � a period in which real estate values plateau � rather an an abrupt crash. But it�s foolhardy to speak of the housing market as a cohesive whole: regional disparities are immense. When it comes to the national figures, Toronto, Calgary, and Vancouver continue to play an outsized role in pumping up home prices. In some places, such as Regina, values are falling, while in other metropolitan areas, like Ottawa and Montreal, home price growth has stalled.

�Toronto, Vancouver, Calgary have seen price increases that the rest of the country have not,� said Finance Minister Joe Oliver during a recent press conference.

The Bank of Canada�s October Monetary Policy Report touched on the same theme as the finance minister.

�In general, with historically low price increases and sales volumes, markets in Eastern Canada appear to show signs consistent with a soft landing,� the Governing Council. �This contrasts with major cities in Ontario, Alberta and British Columbia, where housing markets are generally robust and much tighter.�

Monetary policymakers may be worried that this rate of home price appreciation in major metro areas would set the stage for the type of precipitous drop-off in values they�d like to avoid; in other words, that the bigger they are, the harder they�ll fall.

The growth in home prices has been fuelled in no small part by a prolonged period of low interest rates. When money�s cheap it�s easier to service your debts, which enables households to take out larger mortgages relative to their income than the historical norm without getting crushed by monthly payments. In that sense, it�s not altogether unsurprising that the ratio of household debt to income exceeds 160 percent.

Mark Carney�s Bank of Canada was very outspoken about the need for Canadians to stop gorging on credit at ultra-low interest rates. The tightening bias held by the Bank became a warning to Canadians that rates would eventually go up � and they�d be facing higher rates when renewing their mortgages five years down the road.

Residential mortgage credit is up just 5.1 percent year-over-year as of September, a far cry from the double-digit growth seen in 2007 and 2008. This would seem to suggest that Canadians heard, and heeded, Carney�s calls. In addition, CIBC deputy chief economist Benjamin Tal concluded that Canadians are paying $11 billion in annual principal payments above what the official statistics would indicate � another sign of prudent behaviour.

But hold on a second � both of those things can�t be (fully) true. As Ben Rabidoux, President of North Cove Advisors, observed, if Tal is right, that means we�re also underestimating the growth of new mortgage debt. This is an identity issue, as changes in total outstanding mortgage credit are determined by the flow of new mortgage credit minus principal repayments. As such, one way or another, Canadians� prudent borrowing habits are being overstated.

If nothing else, what we should take away from the central bank of Sweden�s move to lower its policy rate to zero despite worries about an overheated housing sector is that monetary policymakers aren�t as willing to raise rates due to financial stability concerns as some believe.

That�s especially true for the Bank of Canada.

A discussion paper authored by Governor Stephen Poloz indicated that the Bank of Canada �perceives monetary policy to be the fourth line of defence against [risks to financial stability].� Research co-authored by Bank of Canada Senior Deputy Governor Carolyn Wilkins concluding that leaning against a potential bubble might make matters worse �by effecting a tightening on the economy simultaneously with the bubble bursting.�

By and large, the Bank�s chatter about risks to financial stability is just that � talk. The Bank of Canada is using its bully pulpit to dissuade Canadians from taking on too much debt, but it�s very unlikely that monetary policymakers will actually hike rates because of overly indebted households. At the very least, Poloz�s �lines of defence� explanation implies that we�d see macroprudential measures to cool the housing market before the idea of raising rates to mitigate financial stability risks became anything more than a rhetorical tool.

Four rounds of major macroprudential measures � like reducing the maximum amortization period and instituting a minimum down payment � have been introduced since 2008 to take some of the wind out of the market�s sails. As this chart from the Bank of Montreal shows (see right), these measures have led to a moderation in sales, though activity rebounded after the market digested these changes.

Researchers at the International Monetary Fund found that most of these moves were effective. �The evidence does suggest the last three rounds of measures dampened mortgage credit growth and home prices,� wrote Ivo Krznar and James Morsink.

So if the Bank of Canada is indeed worried about the strength in home values � more accurately, of the prospect of a reversal of this performance � advising the Canada Mortgage and Housing Corporation and the Finance Department to implement additional macroprudential measures seems to be a logical next step.

However, we run into this problem: as mentioned, robust home price appreciation is concentrated in a few metropolitan areas. Most areas of Canada don�t need measures to cool the market; across-the-board tightening of mortgage insurance rules would likely be counterproductive in many regions.

However, North Cove�s Rabidoux has an answer for that. In an op-ed published in The Globe and Mail at the beginning of this year, one of his recommendations was for the CMHC to reinstate the regional mortgage cap, which was abolished in 2003.

�One possible solution would be to set the maximum mortgage cap to the average resale price in each census metropolitan area and have that cap change annually to reflect changing house prices,� he wrote.

In light of Joe Oliver and the Bank of Canada�s recognition of the localized strength in real estate, such a move � or something similar to it � looks like a bit of a no-brainer in an environment in which the risks to financial stability due to household imbalances are increasing. But both the finance minister and Evan Siddall, president and CEO of CMHC, have said that there are no major changes in the offing.

It would be na�ve to presume there isn�t a political aspect to this matter. Understandably, the finance minister might be reluctant to introduce measures that would slow activity in the housing market and ease home price growth in the run-up to the 2015 federal election. However, he has stated on several occasions that the government is committed to gradually reducing its exposure to the housing market.

# ? Oct 29, 2014 02:44

namaste friends: Sep 18, 2004; by Smythe

http://thetyee.ca/News/2014/10/28/Vancouver-House-Price-Crunch/?utm_source=editor-tweet&utm_medium=twitter&utm_campaign=281014

quote:

Early in the election campaign Mayor Gregor Robertson went to a park off Commercial Drive (turf previously owned by Vision Vancouver, perhaps not anymore) to unveil the heart of his affordable housing package -- 1,000 new rental units annually over the next four years.

Renting is typically cheaper than owning and centre-left Vision Vancouver has done more to create rental housing than any city administration in decades. But given that Vancouver is arguably North America's most unaffordable city, there was some skepticism among the media assembled for the good-news briefing.

One reporter questioned whether the units would be affordable for middle-income earners? And when Robertson announced he would demand that 35 per cent of units in large new developments have enough rooms for families, another journalist asked whether these units would require government subsidies.

The suspicious tone of the media left Vision councillor Geoff Meggs, who stood beside Robertson at the podium, piqued.

"I think people misunderstand how far we can actually go," Meggs told The Tyee afterwards. "It's like today. We are making an unprecedented commitment to build rental, which our opponents (two Non-Partisan Association councillors) have voted against. And the question is: Will we subsidize rents?

"You know, all of those things are beyond the city's powers or capacity."

Premier has far more power over housing: Yan

The Vision Vancouver majority on council consists mostly of former or current New Democrats, social democrats like Meggs who have spent decades arguing for greater government funding for social and rental market housing.

Now in power, these activists-turned-politicians find themselves presiding over a city marked by housing unaffordability and social inequality -- with few levers to do anything about it. The federal and provincial governments have far more tax dollars and jurisdictional heft. But Ottawa and Victoria have mostly withdrawn from funding housing programs aimed at middle-income earners.

"What a lot of folks don't realize are the limitations of that office," says Andy Yan, about Vancouver city council.

"In the Canadian system the most limited offices are municipal offices. If you really want change, it's got to include the provincial and federal levels of government," said Yan, a planner and social trends analyst frequently relied on by the media to explain what is happening to this city.

"Who is the most powerful city-shaper in Vancouver? Whoever the premier of British Columbia is. That's where the power and money is."

City hall's ability to influence affordability is especially constrained, added Yan, given Vancouver's new role as global "hedge city," a safe and secure place where house prices are partly high because some of the world's wealthiest people, many from mainland China, are parking some of their riches here.

Then there are all the other factors outside of the city's control -- the steady arrival of domestic and foreign newcomers since Expo 86, years of low interest rates and a marketplace where flipping and speculation are part of the culture.

"It's the culpability many of us have," said Yan. "If you were lucky enough to buy into real estate in the last few decades, you've probably made more money on real estate than in a lifetime of work.

"For some, housing is a necessity. For others, it's a revenue stream."

For civic leaders this means, said Yan, "you're damned if you do and damned if you don't. Think about his way: If Vision was able to decrease property values by 30 per cent, how fast would they be forced out?

"So you see the intractable position we put our political leaders in the production of affordable housing. It's really a no-win situation for a lot of governments until you have public consent on sacrificing current financial gains for the sake of future generations."

Tweaking what developers will build

Vision councillor Raymond Louie has encountered more than a few angry constituents who believe the city isn't doing enough to slow the upwards trajectory of housing prices. "I tell them that it's not within our ability to stop people from selling houses at a high price. Or to stop a person paying that high price."

Louie acknowledges that anger over housing unaffordability has hurt his party. But he said the Vision council has put more money into affordable housing than any council in memory "despite the fact that we only get eight cents of every tax dollar."

Vision's approach to affordability remains largely based on providing incentives, or relaxing rules, to encourage developers to increase the supply of market and rental housing aimed at middle-income and lower-income earners. The new units are at the high end -- maximums of $1,443 per month for a studio, $1,517 for a one-bedroom. But Vision's hope is that the new supply will slow the upward trajectory of rents for basement suites and older apartments.

Critics on the right and left argue that Vision isn't doing enough. But the solutions from the Non-Partisan Association and Coalition of Progressive Electors are so unspecific or improbable that they only highlight the lack of real-world options available to city government.

NPA mayoral candidate Kirk LaPointe, for instance, wants to punt the issue of housing affordability to some future "City Plan" discussion. "It would be our great conversation on the Vancouver we want," said the ex-newspaperman, referencing a similar process called City Plan during the 1990s in Vancouver.

When asked how he would create affordable housing without the traditional tools of rent subsidies or incentives such as bonus density for developers, LaPointe said: "I'd like to see what City Plan has to say about that."

Gordon Price, who served as a NPA councillor during City Plan, is skeptical about whether a return of such a planning process is feasible or warranted. The original City Plan, he said, set directions for how to accommodate growth "very gently" and did not include zoning changes, which are inevitably contentious. But even with such modest goals, there was still acrimony with neighbourhoods resistant to even minor changes. "Even when it came to a proposal for a single building or two, the blowback was intense -- and it always is.

"So I told one of the NPA candidates: C'mon guys, do you think you are going to be having a conversation for a city wide plan right across the city with all neighbourhoods to deal with growth? Really?

"And why?"

LaPointe rejects Vision's 4000-rental unit goal

Price, who now heads the City Program at Simon Fraser University, said the city already has the local community plan process to deal with growth.

"And it's tough to do even at that scale," he noted. "Vision was criticized, and I think justly, for trying to do too much with four community plans going simultaneously. So the NPA's idea that this could happen on a citywide scale is breathtaking."

LaPointe has also rejected Robertson's plan to build 4,000 new rental units, saying that Vision Vancouver's Rental 100 program (which has resulted in 3,000 new apartments over the past three years) doesn't work. "What it's done is permitted a great deal of speculation."

LaPointe's claim that apartments created under the program are being flipped appears questionable given that the program's units are secured as rental for 60 years. The NPA candidate has provided no data to back up his charge.

LaPointe has called for tax credits to stimulate rental housing. But he acknowledged that such credits would depend on the federal and provincial governments because "we don't have that capacity." Ottawa has been unwilling since the '70s to provide tax incentives to spur apartment construction.

Vancouver's slim social housing coffers

COPE mayoral candidate Meena Wong has called for a public housing authority along the lines of similar agencies in Hong Kong Vienna, Stockholm and Singapore.

But the ability of Vancouver to raise tax revenue to fund a serious public housing program is minuscule compared to these cities, which have far greater legislative and fiscal capacity -- and have been building public housing for several decades.

"The problem isn't just wanting more public housing. It's how to pay for it," said planner Yan.

"Hong Kong, Singapore, Vienna, even some of the American cities, are so different from Vancouver in terms of the taxation powers and revenues. Vancouver can't raise the kind of taxes these cities can, nor can it borrow money to the levels you would need.

"It's great to do these global surveys of solutions. But you have to be able to adapt the solution locally, and that is where things fall apart as cities in Canada face constraints other cities around the world do not have."

Yan said city governments in Europe have close linkages to other levels of government that simply don't exist in Canada, where municipalities can only do what provinces allow them to do.

"In Vancouver it's the city government that gets all the anger and pressure. But people don't realize that the housing mess is connected to federal and provincial actions and inactions in housing and finance."

Yan said a public housing authority in Vancouver, if it was permitted by Victoria, might generate a few hundred units. "But we are talking about a city in need of tens, if not hundreds, of thousands of units. I don't mean to diminish those who are looking for solutions. But the level of need is so much greater than what can be achieved at the municipal level."

SFU's Price similarly said that Wong's praise of public housing models elsewhere fails to recognize the differences between Vancouver and the other cities.

"In Europe, and in Vienna, in particular, there is a tradition of renting with secure tenure. There is a culture of renters. That is not our culture. In Hong Kong the state owns land, that's how they finance transportation, they sell the leases for the land."

What about 'empty homes'?

Wong also wants to slap an "empty home" tax or fee on foreign investors who buy Vancouver condos or houses but do not live here full-time. This tax revenue, suggests Wong, could be used to fund affordable and social housing.

But Yan, who is currently conducting a study of empty homes, said it is not easy determining what is an "empty home." Yan said such a tax may not generate as much money as its supporters believe and would probably require provincial approval.

"It's worth talking about because it's what hedge cities are facing around the world. But it's not a silver bullet. If anything, it could be a red herring on other much more robust policy tools of creating affordable housing given the complexities of how residential real estate markets have become.

"I'm not arguing that Vancouver become complacent about "empty homes", but rather make decisions and policies informed by evidence."

SFU's Price broke into laughter over Wong's proposal to compel property owners to "report usage information" to the city.

"My gosh, imagine if that was implemented. Fill out this form that tells the government what you've been doing for the last half year. That would blow back so fast. Again, I don't think anyone seriously believes it is implementable. But people like a politician who is offering some policy to deal with an unfair situation."

Like Yan, Price believes that it would be very difficult to determine how long a condo or home needs to be vacant before it is officially deemed "empty."

"And it would be pointless," added Price. "No one has demonstrated to me that the numbers are seriously high enough to warrant that degree of intrusion and cost."

Both Vision and the NPA have agreed the best approach is to collect data on the "empty home" phenomenon -- and then examine which regulatory tools could be effective without sparking a thousand lawsuits.

Does Whistler experiment apply?

Vision considered some kind of levy on speculation when it took office but decided it would pursue other avenues, such as rental housing construction, to reduce unaffordability. "In 2008 there were zero rental housing units being built. I can guarantee you that put more pressure on the marketplace than any empty home on the West Side," said Vision councillor Andrea Reimer.

Despite the legal complexity, the next council is bound to face public pressure for some measure, however symbolic, to address the impact of foreign investment on Vancouver's housing crisis.

The Green Party's key solution on affordability is inspired by a Whistler bylaw which requires developers in the resort municipality to either build resident housing or contribute to a housing fund. But Whistler is a single-industry town in need of housing for a relatively small group of employees. It's unclear how easily such a model could work in a huge city where developers would be far less willing to accept such a regulation.

The Whistler model is an interesting one -- and other jurisdictions are looking for similar ways to create affordable housing. Seattle, for example, is considering a tax on all commercial and apartment projects in the city's denser neighbourhoods to pay for more affordable housing.

It is uncertain how easily the Whistler program linked to workforce housing in a small single-industry town could be effective in large city. And it's unclear how the Greens' proposal is different from the existing rules in Vancouver requiring that 20 per cent of all units in new neighbourhoods created as a result of rezoning be "affordable." Vancouver also uses community amenity contributions on large projects, plus density bonuses, to spur middle-to-lower income housing.

In the end, many voters will recognize that Vision has limited ability to influence an unhinged real estate market in which one generation owns million-dollar homes while its millennial children scramble to rent $1,000-a-month basement suites.

But others -- perhaps former Vision supporters -- won't be motivated by what city hall can actually achieve in the here-and-now.

These voters will make a political statement about what, they feel, the city should be.

# ? Oct 29, 2014 03:34

etalian: Mar 20, 2006

subsidizing affordable rentals is impossible, living off a god tier credit bubble is much easier.

# ? Oct 29, 2014 04:20

Baronjutter: Dec 31, 2007; "Tiny Trains"

http://www.lvblcity.com/blog/2014/10/rgpsj8w87a6c9xvujm3xd7jnoqsrew

Sweden is lowering interest rates to 0%

# ? Oct 29, 2014 15:32

Ceciltron: Jan 11, 2007; Text BEEP to 43527 for the dancing robot!; Pillbug

Baronjutter posted:

http://www.lvblcity.com/blog/2014/10/rgpsj8w87a6c9xvujm3xd7jnoqsrew

Sweden is lowering interest rates to 0%

I approve of this as it reflects my long-held view that usury is a sin.

# ? Oct 29, 2014 15:56

Baronjutter: Dec 31, 2007; "Tiny Trains"

So it's been a few years since BC changed the code to allow 6 stories wood frame. This was slightly controversial as the maximum has always been 4 story, then you have to go to non-combustable construction. The excuse for it though was that wood engineering has come a long way, and with a sprinkler system the fire risk was very low. But the main pushes came from the "affordability!" and "BC jobs!" angles. They said by allowing 6 story wood frame buildings it would massively cut costs and we'd see a boom of 6 story apartments not unlike in the 70's with the boom of 4 story wood apartments. Also, BC makes lumber so we should be patriotically supporting the lumber industry and building a province out of wood.

A few years later I'm getting a lot of unofficial feedback and analysis from builders and developers about the change.

It hasn't done jack poo poo for affordability. Land remains the biggest part of why everything is expensive so reducing construction costs is just a drop in the bucket. That is IF it reduced construction costs, they haven't,at least according to the builders I've talked to. 6 story wood requires so much engineering, so much "engineered wood products" and extra hardware (the extra hardware is extremely expensive) vs normal timber framing that it's basically a wash. Some builders say they're going to keep giving 6 story wood a chance, it's new and maybe once the industry gets more experience doing it costs will come down, but others have sworn off it already.

# ? Oct 29, 2014 17:45

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Is there a particular reason that governments do not adjust mortgage rules to maintain housing affordability stability, when they lower (and raise) rates like this?

- Is it because they need to keep up appearance of being arms length from their central bank?
- Do they just forget or not realize the effect?
- Is this actually the goal? If so, why don't they want consumers spending their debt on cars and durable goods?
- Is it effective lobbying?
- Is the housing boom/bust considered a desirable outcome of it?
- Is it some combination?

Normally not attributing to malice what can explained by incompetence would apply, but it seems like stretch for so many governments to be making the exact same mistake.

# ? Oct 29, 2014 17:53

sbaldrick: Jul 19, 2006; Driven by Hate

Guest2553 posted:

It really depends on the circumstances. Buying a condo in Toronto is pretty lolworthy whoever does it, but things like the oil boom in Alberta create some pretty lovely conditions that see people lose tens of thousands. It's hard to find affordable rent in cold lake because troops can't compete with oil firms who pay top dollars for hovels with no questions asked for their workers. This inflates the cost of housing on base because it's by law tied to the local economy and actually resulted in a rent increase cap to delay a spike.

Most of those houses are in bad condition and contain asbestos. Heating bills can hit 300/mo in winter because there is next to no insulation. The difference between capped rent and assessed market value is considered a taxable benefit which costs an extra hundred or more a month. There aren't enough houses on base, however lovely they may be, and with stupid low interest rates, the cost of ownership can be competitive with rents (especially given the lovely condition of a lot of the available housing). Something like a third of the people posted there rely on food banks or second jobs to make ends meet, but alternative for many is suck it up and try to make it work or get fired.

Not everybody who suffers a loss is eligible for full renumeration, and losses of ten thousand here or there are expected, but there are a non trivial number of people who have their finances long term destroyed because the system that was supposed to prevent it doesn't work. The treasury board also did some gerrymandering with geographical boundaries in the wake of the 2008 meltdown which resulted in nowhere being considered a depressed market so tl;dr: gently caress the troops I guess

The government it seems has changed the program so you can only get it in some high cost areas like Cold Lake and Victoria. It's considered to be one of the main reason housing prices have crashed in Orleans.

# ? Oct 29, 2014 18:55

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

Baronjutter posted:

So it's been a few years since BC changed the code to allow 6 stories wood frame. This was slightly controversial as the maximum has always been 4 story, then you have to go to non-combustable construction. The excuse for it though was that wood engineering has come a long way, and with a sprinkler system the fire risk was very low. But the main pushes came from the "affordability!" and "BC jobs!" angles. They said by allowing 6 story wood frame buildings it would massively cut costs and we'd see a boom of 6 story apartments not unlike in the 70's with the boom of 4 story wood apartments. Also, BC makes lumber so we should be patriotically supporting the lumber industry and building a province out of wood.

A few years later I'm getting a lot of unofficial feedback and analysis from builders and developers about the change.

It hasn't done jack poo poo for affordability. Land remains the biggest part of why everything is expensive so reducing construction costs is just a drop in the bucket. That is IF it reduced construction costs, they haven't,at least according to the builders I've talked to. 6 story wood requires so much engineering, so much "engineered wood products" and extra hardware (the extra hardware is extremely expensive) vs normal timber framing that it's basically a wash. Some builders say they're going to keep giving 6 story wood a chance, it's new and maybe once the industry gets more experience doing it costs will come down, but others have sworn off it already.

Oh. It's going to get better.

http://www.vancouversun.com/Vancouver+architect+advocate+wooden+skyscrapers+Michael+Green+makes+speak+global+conference/6704546/story.html

quote:

A Vancouver architect with a passion for building wooden skyscrapers will make a bid to become one of the presenters at a major ideas conference in California next year.

Michael Green is one of 23 people hoping to secure a place at the TED2013 conference in Long Beach as an official speaker.

[...]

Green wants to change the way buildings are constructed by championing a shift to materials � like wood � that have a minimal impact on the environment.

�[Wooden skyscrapers are] provocative and interesting,� he said in a telephone interview. �Fifty per cent of climate change issues are related to the building industry. Concrete and steel have huge carbon and energy footprints whereas wood is rapidly renewable.�

TED is in my mind a giant, self-congratulatory circlejerk full of asinine ideas like this. Fire departments do not have ladders that can exceed ten stories or so and they want to build 20+ story wooden skyscrapers? Might as well make them out of used tires.

# ? Oct 29, 2014 21:29

etalian: Mar 20, 2006

OSI bean dip posted:

Oh. It's going to get better.

http://www.vancouversun.com/Vancouver+architect+advocate+wooden+skyscrapers+Michael+Green+makes+speak+global+conference/6704546/story.html

TED is in my mind a giant, self-congratulatory circlejerk full of asinine ideas like this. Fire departments do not have ladders that can exceed ten stories or so and they want to build 20+ story wooden skyscrapers? Might as well make them out of used tires.

lmao

http://www.ted.com/talks/michael_green_why_we_should_build_wooden_skyscrapers?language=en

# ? Oct 30, 2014 00:44

Baronjutter: Dec 31, 2007; "Tiny Trains"

There's a few ok ted talks but yeah, it's the biggest rich white "creative class" circle jerk. "How cheap tablets will solve contaminated water in Africa" "Self driving cars will change the way we look at cancer" "How crowd-funded bio-tech will allow hackerspaces to mine asteroids"

# ? Oct 30, 2014 00:48

Adbot: ADBOT LOVES YOU

# ? May 16, 2024 19:13

etalian: Mar 20, 2006

Baronjutter posted:

There's a few ok ted talks but yeah, it's the biggest rich white "creative class" circle jerk. "How cheap tablets will solve contaminated water in Africa" "Self driving cars will change the way we look at cancer" "How crowd-funded bio-tech will allow hackerspaces to mine asteroids"

lol

http://www.ted.com/talks/michael_green_why_we_should_build_wooden_skyscrapers/transcript?language=en

We need to reduce the concrete and steel and we need to grow bigger, and what we've been working on is 30-story tall buildings made of wood. We've been engineering them with an engineer named Eric Karsh who works with me on it, and we've been doing this new work because there are new wood products out there for us to use, and we call them mass timber panels.

These are panels made with young trees, small growth trees, small pieces of wood glued together to make panels that are enormous: eight feet wide, 64 feet long, and of various thicknesses.

# ? Oct 30, 2014 00:54

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

«‹›1518 »