Sold Podcast: How do we create sustainable housing?
I just wanted to highlight the two new episodes of the excellent CBC Podcast Sold! which examines the housing situation in BC from many angles.
Two new episodes have been released, the first is a recording of a live town hall they hosted to discuss housing with an expert panel from the research, industry, development, and regulatory sides. You can listen to that episode here or in your podcasts app: Episode 7 – Heaven help us
Even more interesting is the followup episode where they speak to a number of people both in the real estate industry and in government to find out who is really to blame for the mess we find ourselves in, and how to fix it. Episode 8 – Blame Game
My take
CBC is doing a good job with this podcast, especially by presenting the issues without attacking any one group which puts people on the defensive. A more nuanced understanding of the inherent biases and motivations of the players will allow us to figure out more collaborative strategies to attack the problem rather than just casting all developers as greedy or all politicians as corrupt and by extension excluding them from the solution. I would strongly recommend listening to these episodes, especially number 8.
If anything is clear to me, it’s that the path to a more sustainable housing market cannot be built on just one pillar. We’ve heard for years from the industry that supply is the solution, but after building flat out for years we know that it is not enough to solve the problem. More supply, easier and faster approvals on the municipal level, and fewer zoning restrictions are a necessary, even critical, part of the solution but they are not sufficient on their own. At the same time, banning foreign buyers, or speculators, or raising taxes is also not sufficient to solve the problem and any actions on that side need to work in concert with the other.
What is encouraging to me is that the conversation is opening up and that a lot of the long standing beliefs or myths are now being challenged. This is likely because the maintainers of the status quo (RE industry, established NIMBY residents, regulators, etc) are being increasingly outnumbered by the population of people that have been left out of the real estate gravy train and just want a place to live. That population has ever more political power and we will see more shifts in policy as a result of that.
Outside of seeking the truth of what is going on in the market, what can we as individuals do to make the market more sustainable?
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Caveat, I should have been more clear. The taxes are paid but you have a lien against the title. I thought it was clear for most people reading that my point was about clear title and how the banks don’t want a lien that would jeopardize the bank’s loan.
Your point is taken that it isn’t paying back the taxes but a lien that is determined by the amount of taxes you have deferred plus a modest interest and other charges.
Give yourself a pat on the back for a well played obfuscation of the original intent of the post to show that the banks would want this lien/tax deferment paid off at mortgage renewal time.
From the program website:
If your tax deferment application is approved, we will pay your property taxes on your behalf and place a restrictive lien on your property.
Deferring your taxes does reduce your flexibility to make title changes without first paying off your deferment loan.
Jack I repeat. There are no back taxes to be paid if you defer. The provincial government has paid your taxes. Of course the amount is not forgiven and if you read what I wrote below I never implied it was forgiven. Instead of taxes you now owe the government an amount equal to the amount of taxes they paid for you, plus (simple) interest, plus the setup and annual fee. Don’t take my word for it. It is all explained with SIMPLE examples at the government website.
I’m not to sure that back taxes are in second position to a mortgage. The government retains the right to taxation on your property and that would supersede a mortgage. That’s why not paying your taxes jeopardizes the loan. The more you owe the government the less likely a bank will recover its full loan made to you. At renewal time the bank will ask that you clear that charge against your property before they renew your mortgage. If you have enough equity then you just have to increase your mortgage and pay off the charge. If you don’t have enough equity then you may need to sell your home.
You may have heard stories in the past that a home owner is not in default of their mortgage but still the bank has started foreclosure proceedings. This is one of those cases.
Caveat there is a charge against your mortgage for the back taxes. That appears on your title. You didn’t really think that those property taxes were forgiven by the government? You or your estate still has to pay them back.
I really didn’t think there was anyone that didn’t understand that.
QT,
Nothing is being built in Kitimat at this time. We have an awarded contract, which is entirely conditional on several other investment corporations agreeing on whether they wish to invest in this project in BC. If they do not agree, then this whole thing is moot.
But let’s suppose they do, and it gets built. It’s entirely possible.
Firstly, construction of the plant is estimated to employ about 1,500 people at its peak, and about 3,000 over the whole period. Not tens to hundreds of thousands. Secondly, construction of the plant will take about half a decade to complete. There’s no doubt that its successful completion would be good for the BC economy and that region. But this has nothing to do with what’s happening in Vancouver and Victoria RE right now and its completion is unlikely to have any material impact on either market, probably ever. Why not?
This project was always touted as a tool to revitalize an area of the province that is very depressed economically. They are wanting to build the plant on leased land from Haisla, whom would be working directly with the proponents and would be retained as a primary stakeholder in this project. Any construction jobs will be fulfilled by First Nations peoples to the extent possible, with other labor coming in from the remainder of the community. Labor or expertise shortage from there would bring in additional staff. The regional nature of this project is why they can be so confident they are primarily hiring “Canadian workers”, but it’s not everyone far and wide. And an operating LNG plant doesn’t need tens of thousands, or hundreds of thousands, of employees. Good grief.
If there was 10 LNG plants opening next year including one on the south island, I would say your assertion may have merit. But that’s not what’s happening, and the investment climate here atm is very ugly to boot. If you wish to assert that RE in this province is taking off from where it is now (that is what what you said), then you’re banking on a new, enormously propulsive force other than that even potentially offered by the awarding of this lone contract.
Good luck.
Half way through the month and we have 13.81 bi-weekly of inventory for houses in the core. If sales and listings continue at this pace we would hit 6 months of inventory for houses in the core by the end of the month. Between 5 to 7 months of inventory has historically been considered a balanced market. We have not had this high of inventory since 2013 resulting in two years of flat house prices in 2013 and 2014.
New listings are now being added at the rate of 3 new listings for every sale. That’s getting into buyers market with lots of selection. As the number of active listings continues to rise and is now at the highest level since mid 2015.
In contrast, the number of house sales in the core for the month of July will likely hit the lowest level in the last 15 years.
We are no longer in a hot real estate market for houses in the core and it appears that we are moving rapidly towards a bear market. Some would call that a buyers market but I don’t think high prices are that enticing for buyers. Maybe it’s better to call it a soft market.
Because of this change in the marketplace someone thinking of moving up the property ladder might want to re-think retaining their original home as a rental. Retaining the home might mean negative cash flow for the next few years with the possibility of selling in a declining market.
Personally, I just don’t think it’s a good time to gamble on house prices rising in the immediate future. And you may be better off selling some of your surplus properties that are not giving you an adequate return on your investment.
The big wild card in this market is new home construction. A contraction in construction would put a lot of hurt in our local economy as so many jobs and mortgages rely on building.
But there are no back taxes to be paid. The government will have paid your taxes in full and on time. Instead you now have another loan on your property, junior to your first mortgage.
As I have pointed out previously, this is not the case because they’re not legally back taxes, rather a junior lien. The Clark government had the same thought as you which is why it’s implemented that way.
Certainly it would cause problems with getting a new mortgage as you have pointed out.
Actually there were hundreds of complaints filed about the temporary foreign worker program as quite a few Canadians were laid off from the high paying jobs & replaced w/ cheaper foreign workers. Hiring foreign workers wasn’t so much due to high demand, low supply of labor as a desire driven purely by profit.
https://www.thestar.com/opinion/commentary/2014/06/23/oilsands_wages_driving_push_for_temporary_foreign_workers.html
“Fort McMurray is ground zero for the use and abuse of this program,” says AFL president Gil McGowan. “It’s here that the program has been used to displace Canadians and it’s here the program is being used by too many employers to suppress wages. It’s particularly bad in a community like Fort McMurray where the cost of living is so high.”
Now that said the Alberta oil sands do employ something like 120,00 or so workers. Many live elsewhere and commute in. Many in the community I used to live in would drive the 12+ hours each way to get to camp (generally car-pooling). Reasons? Loved where they lived. Cheaper cost of housing especially compared to Edmonton & Calgary.
Just because Kittimat may begin booming doesn’t mean that all BC real estate will follow suit.
If you have a mortgage and then you defer your taxes that puts the loan in jeopardy. The bank will ask that you pay your back taxes at the end of the term. Otherwise they will call in your loan and start foreclosure proceedings.
Of course if you have a clear title then there is no problem with deferring the taxes. But you won’t be able to get a mortgage or a home equity loan without first paying the back taxes.
Check out this link for more info on job creation numbers from this project:
https://canada.chevron.com/our-businesses/kitimat-lng-project/employment-and-supplier-opportunities
It is common for oil and gas workers to fly to and from work, as Vancouver Island has experienced. Most oil and gas development requires ten to hundred of thousands skilled workers that a small town or even cities can’t provide (hence there were hundred of thousands oil foreign workers were employed in AB).
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers
https://www.cmhc-schl.gc.ca/en/buying/financial-information-and-calculators/government-of-canada-programs-to-support-homebuyers
These are all tax payer subsidies for new buyers and ones trying to make their place better. There are programs for everyone and I have never heard once a home owner pissed off about a first time grant and tax credit for a renter trying to get into the market. (but I have read on here about other renters pissed that these programs may impact their ability to buy a home in the future, go figure but I am sure they use it come the time)
NIMBY/regs is people trying to protect their investment. I think we need to increase density and allow lots to be severed. As I Mentioned I find it crazy the gold courses are not taxed at business rates. Two courses taking out 200 acres in the Heart of the core is crazy. All this is not going to bring prices down per sq ft. I think people need to get use to living in a smaller foot print or commuting.
Affordable core housing is gone, The affordable SFH dream will involve a commute. We need to spend money on better infrastructure to move people.
When you let in 250k to 300k people into our country a year. People pay the price in housing costs.
I think I’ll make Kitimat my inaugural fly/drive 🙂
$40 billion has to be one of the largest projects in Cdn history. Much larger than Fort Hills.
I agree it is destructive but when a tribe draws that line to not be crossed (NIMBY, restrictive regs, tax deferrals that advantage only one class), there will be friction on all sides – those in the group and those outside of the group. Open minds have to occur on both sides of that line.
CS:
We seemed to have reached at least a starting point of agreement. I am sort of waiting to see if a major quake hits the island.
I agree with you that the older generation needs to be involved in looking for solutions but this splitting of people into tribes who are pitted against each other is destructive.
I am going to stop here so that I can formulate my thoughts and more significantly take my neighbour to their doctors appointment.
Last night, the board wrapped up with the claim that we’re soon to be a nation of flying cars and trucks.
Not to be outdone, this morning, one of the largest RE bubbles in the world is summarily cancelled – and will begin re-inflating – because…Kitimat, 1400km away. How could a potential boom in Kitimat possibly re-inflate RE bubbles in southwestern BC? It’s not like Vancouver and Victoria are suburbs of Kitimat from which we can commute.
But then, I remembered – flying cars. Now it makes sense.
We’re all so desperate to defend our respective positions that we’ll apparently say anything, no matter how completely fugazi it is. Heaven help us…
@ Barrister:
True. Probably neither you nor I had much to do with the creation of the housing situation that today’s 20- to 30-year-olds have to deal with.
But certainly it was our generation that created today’s world, a world of mass higher education of dubious value but of great cost to the supposed beneficiaries; a world of off-shored jobs of great benefit to the corporate bosses and shareholders almost all of whom are of the older generation; and mass immigration (whatever the younger generation may think of it) that drives down wages particularly at the bottom end where the younger generation must get on the employment ladder; and a world of cheap finance with minimal regulation that forces young home buyers to commit a huge proportion of their life-time earnings to paying bank interest.
Agreed. So we should exert what influence we have to deal with the problems they face.
My absolute position is that if no other province sees the need for such a program, there is no real need in BC. And as I have noted, I am walking the talk.
The purpose of the program is to buy votes and push up prices by keeping properties off the market.
They do. But the BC deferral is not an unpaid property tax. What happens is that the BC government gives the homeowner a loan, that loan is used to pay the current property tax (to all jurisdictions), and that loan is registered against the title. If there’s already a mortgage on the property it becomes a 2nd (or 3rd, etc) mortgage.
This is the only way that the program could operate for properties with an existing mortgage, because all mortgage contracts require the owner to keep up to date on property taxes and arrears are grounds for foreclosure.
It look like the RE party is not going to have a hangover before the next ramp up in BC. And, I hope the bears learn from the past instead of blaming foreigners, baby boomers, their parents/grandparents, speculators/vacationers/part-time residents for their demise.
https://www.cbc.ca/news/canada/british-columbia/kitimat-housing-market-heats-up-with-lng-anticipation-1.4742866
https://www.theglobeandmail.com/canada/british-columbia/article-lng-project-in-bc-to-hire-mainly-canadian-workers-for-40-billion/
I wonder if people will fly just like they drive in Victoria. The flying photo has provided a lighter moment here which is a good thing.
@Patriotz:
I might be very well wrong but I believe property tax claims take super priority over mortgage debt in a foreclosure. Perhaps someone here knows for sure.
If you are worried that deferred tax might not be paid back then why dont we talk about the level of equity required. But I am sure you will keep coming up with more objections.
My point is that you are pushing an absolute position rather than really being interested in a discussion.
Don’t worry, I don’t.
The ones above Township Coffee cost around $600K, I believe.
CS: I think that you are making a lot of assumptions about the younger generation being somehow screwed and hard done by the older generation. My first house cost me the equivalent of seven years income and was more than a bit of a wreck with single pane windows, old radiators and arborvitae counter tops. It was vintage 1933 and not in a good way. My mortgage rate was at 16% and most important it was an hours commute to downtown. And I did that commute for the next thirty years by the way. My guess is that a young person with similar education can get a lot better deal today in the West Shore with a shorter commute and unimaginably low interest rates.
Overall I also suspect that the younger generation has had more help in buying a home than my generation. With six kids to raise there was not a lot of money to help with a down payment for a car much less a house. The younger generation, in time, will also inherit a lot more than my generation. After paying for nursing homes I got about a bathroom worth of house as my share of the inheritance. And I had it a lot easier than all the kids on the east coast who had to move for any type of work to Ontario or later to Alberta. And I sure as hell had it a lot easier than my dad’s generation.
What we can agree on is that house prices in select cities such as Toronto, Vancouver and Victoria are unreasonable and make it difficult for young people and that this is a problem. But it is a real stretch of reason and logic to lay the blame on the older generation. There is a strong argument to be made that a lot of the government policies that have contributed to parts of the housing boom and price inflation have been primarily supported politically by the younger generation. Artificially low interest rates have eroded the value of savings of the older generation and benefited the younger generation. Having net immigration of 300,000 a year has been more strongly supported by the younger generation but has left us in a constant race to increase supply just to keep up. There are arguments on the other side as well which I acknowledge.
Saying that the older generation has somehow screwed the younger generation is a fairly large leap at best. Are there challenges that we need to overcome at the moment; most definitely. If there is a positive note here I dont know anyone in the older generation that does not want their children or their grandchildren to not do well.
For a start, lets take a deep breath and recognize that in the next five to seven years the baby boomers will either be dying or going into nursing homes at a faster rate than retiring. Actually, I dont see a lot of baby boomers rushing out and buying spec houses. Mostly I see my generation already downsizing or moving to Parksville or Sidney.
Personally I am rather appalled with lack of attempting to find real solutions.
Do you have access to an airstrip for it?
Meanwhile we are in a runaway real estate market with prices out of control and no sign of it stopping. If you haven’t bought yet, there is the mad panic feeling that if you don’t get in soon you will end up living in a tent somewhere
Cut and paste from VV. Personally I suggest avoiding panic.
CS, the property is cheaper because it is smaller but on a price per square foot basis the consumer is paying more.
This has got to be up there with the best/most “out-there” lines put on this site all year, and I’ve seen some beauties.
To some extent that is true – it’s much harder for the younger generation to have the same level of success as those with a similar education, training and drive as those 50 years ago.
On the other hand (puts on grandpa hat) my nieces and nephews and many of their friends are so incredibly spoiled, lazy and indifferent to the quality of their lives, it’s shocking.
These two things together are a wicked 1-2 combination.
Soon to be a nation of flying cars and trucks, and there will be implications for RE.
I’ll be getting one of these once they’re FAA approved.
Goes from a car to plane in minutes. Requires less than 50m to land. Range 1315km.
https://www.pal-v.com/
TLDR: Too long didn’t read. A summary version of your post, if lengthy. Could apply to many in this thread.
TIA folks!
I think the older generating feels the younger generation wants a lot without working for it. The older generation worked their asses off to get to their point in life. Not sure the younger generation has the same work ethic and feel very entitled. I moved to The big city after school with 1k in the bank. Paid for my school and all. Lived in a house renting a room before I got established. Did not complain what everybody had just worked hard.
You get what you work for.
@ Barrister
“Increasingly there is a strong elemental of tribalism entering politics (in this case the young versus the old) that I feel damages the social fabric.)”
You may be correct, but if so, it surely reflects a feeling among the younger generation that they have been screwed by the older generation. I think there is more than a grain of truth in that. Therefore, to repair the damage that has already been done to the social fabric, it behooves the older generation to provide some thought to how to alleviate the troubles of the younger generation.
The accumulation of housing wealth by the older generation at the expense of the debt enslavement of the younger generation is not a good thing, and should be recognized as a problem that urgently needs to be fixed.
“Densifing Gordon Head is a band aid solution. It’s great for current home owners as it makes their property more valuable but lost on subsequent owners as they have to pay market price.”
That’s incorrect, Jack, for what the “subsequent owner” is buying is a cheaper house than he could have bought in the absence of densification.
It is cheaper for two reasons. First, supply has been increased, which all other things being equal will lower the price. Second, it is house on a smaller lot than that of the owner who created the lot by subdivision of a pre-existent lot. For that reason also, the house will, all other things being equal, be cheaper than the buyer could have bought in the absence of densification.
@ VB
” I fear that if you don’t understand that, then all hope is lost.”
If that’s what you fear, I thank God I never attended a class in economics.
” So, simply making one (supply) does not create demand for it [it may create demand for other things,”
First, note, we were discussing Says Law and in particular what Say said. Specifically, he said,
“It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value.’
Further, he said:
“When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products.”
And note the word I have italicize “immediately.” From that we can infer that he who produces an extra salable item of any description, will adjust the price as necessary to achieve a sale if not immediately, certainly without undue delay.
That can be taken to be true of houses as of anything else. Certainly, it could only be a graduate of a university program in economics who would argue that increasing the supply of houses at lower cost by allowing greater subdivision of urban land, will not increase the demand for, i.e., total sales of, new houses.
Densifing Gordon Head is a band aid solution. It’s great for current home owners as it makes their property more valuable but lost on subsequent owners as they have to pay market price.
Redistributing the value of neighborhoods by improving the road ways would be helpful. As it isn’t just the distance from downtown that makes a neighborhood valuable but the time it takes to get to that neighborhood. For example, Esquimalt is closer in distance to the core than Gordon Head but the bridges make it more time consuming to get home. Improve the roads and the neighborhoods will adjust in value.
We are still a nation of cars and trucks. Bike lanes are cute and politically appealing but its the personal vehicle that dominates. All the bike lanes have done is take the bus ridership down with very little impact on those that use a personal vehicle to travel from A to B. The personal vehicle will continue to dominate us for the next century and will be a major component in the determination of neighborhood values. When it rains in Greater Victoria we shift from bikes to personal vehicles and buses and overwhelm our traffic system. It would have been better to ban the bikes from arterial roads and improve the secondary streets for the bikes use rather than choke the city’s ingress and egress.
Another way would be to decentralize the provincial government offices and spreading the wealth of lucrative government leases into the adjoining cities of Esquimalt and Saanich. The loss of time being stuck in traffic by a thousand government workers trying to squeeze into a tiny downtown core outweighs the cost of a minister having a perk of a view of the harbor.
We could also develop other shopping destinations. A Costco and Home Depot in Central or North Saanich would better distribute the traffic, instead of overwhelming a single traffic corridor.
These are questions I have asked city planners and one of the reasons why they don’t want to go this route is because they want a rapid transit system like Vancouver. And they are going to make your life hell as a commuter so that you vote for one. But they are underestimating that the personal vehicle is here to stay as you are not going to get the public to sit next to a stranger while juggling six bags of groceries and two kids. Just not going to happen in a city where people don’t even know or want to know who their neighbors are.
First of all I will point out that if I were still a BC homeowner (I am currently a homeowner elsewhere) I would be eligible for the deferral, although I don’t need it (obviously, since I’m getting by in a province that doesn’t offer it).
A subsidy by definition is the government offering something for less than the private sector does or would. The private sector offers loans against home equity for seniors with no payment until sale or death. They have to account for their borrowing costs plus admin costs and risk of default.
And the risk of default is lower for the private programs. Why? Because they won’t loan if the house isn’t paid off, and they will not allow less than 45% equity. The BC government allows outstanding mortgages, which are senior to the government loan, and will allow as little as 25% equity.
This added default risk is another subsidy that you don’t see just by looking at interest rates.
As for tribalism, it’s the government that has pit the 55+ homeowners against everyone else with this program.
Patriotz:
Lets see if a practical compromise might address your points about deferred taxes. Your primary objection seems to center about it being a subsidy (and we agree it is a subsidy).
What I suggest is that we increase the interest rate to whatever the governments borrowing cost is at any given time and add a quarter point or even a half point for administration costs. Nor do I have a problem to increasing the age threshold to 65.
There is value to society in helping people stay in their homes at a point in their lives where their income is generally reduced. I am aware that you made a number of other arguments but I am concerned about the tenor of our public discourse. Increasingly there is a strong elemental of tribalism entering politics (in this case the young versus the old) that I feel damages the social fabric.)
What I am suggesting would remove the subsidy aspect of the program and at a half point above cost would provide a small profit to the government if administrated efficiently.
Plumwine:
While I generally avoid making insulting comments but you are a disgusting human being.
CS – you have made my point squarely. Without demand for the widget being present first, no one in their right mind would build a widget. Same with housing, absent a demand for the SFH first, one one in their right mind would build a SFH. As there is no demand for a beta-video player, no one is building them. So, simply making one (supply) does not create demand for it [it may create demand for other things, but not demand for that widget]. I fear that if you don’t understand that, then all hope is lost.
On the trade front, I would encourage you to take Economics 405A [International Trade Theory and Policy] at UVic. Or not.
The zoning aspect and approvals is already an open point and an identified problem. Kicking at an open door does not further the solution.
LeoS – the podcost [particularly the second] was interesting and underlines one of the points I made. It was said that in 1996, in Vancouver, the median hope sold for 7.1 [or some figure close] times the median household income. Now, it is 29.5 [or similar] times. This is the “affordability” measure used historically and one that I raised long ago. It is local incomes that set housing prices.
VB
Not around it, but in it. Also UBC is not part of the City of Vancouver so it could do what it wanted without worrying about council approval or NIMBY voters.
Curious question. Allow townhomes to replace sfh which is already happening in GH. What do you think the cost of those TH would be? Not sure how affordable they would be
Golden Head should be opened up wide to developers to densify bigtime. It’s in the demand area for UVic and would take pressure off the core as well as the transit system. Look how many buses are packed to the hilt going up Richmond etc.
I bet most of those students would rather live out there then take the bus plus save travel costs. The ugly box housing doesn’t make the area any more special other than location to UVic. UBC built major housing around it, Golden Head can too.
Vive la France ! 🙂
It has just occurred to me that John Horgan, Andrew Wilkinson, and Andrew Weaver are all eligible for the “senior’s” property tax deferral.
Is there a better way to express how stupid this program is?
If someone is stupid and lazy enough to kill themselves than go plant some trees and listen to David Suzuki.
I am okay with this.
The discussion below suggested changing senior way of living, changing the neighborhood dynamics in the name of progressive. Just because you want it, you shouldn’t take away from others. Building something new for yourself instead.
(ie. Develop a “new” DT, Vic, Oak Bay, GH in the Westshore. Let the selfish old fucks dying with the failing infrastructure in the Core.)
Keep in mind that we’re not talking about just “elderly” but 55+ here, i.e. many of those eligible still have many working years ahead. Also only one joint owner need be 55+, the other could be 45 or whatever.
Also a surviving spouse of any age is eligible.
By the way Introvert, a rezoning to duplex/TH would immediately increase the value of your house.
It becomes a big problem when it becomes a big problem, not just from more population.
.
More to do with the design.
This is why there needs to be some blanket rezoning though. The fight about every little lot is a big part of why prices are so high.
Neighbourhoods should gradually densify over time. If eventually that gets too busy for you, then move. Just because you live in an area doesn’t mean you should have control over the whole area.
True, but sort of like the advice of “kill yourself” as a solution to those concerned about climate change. Effective but not practical.
The only rate that matters for the elderly is the 1.2% value, which is substantially below inflation. At the very least the government should explicitly call this a subsidy, because that’s what it is. Otherwise, why must those under 55 pay two percentage points more?
In the end, how much is this subsidy about keeping the elderly in their houses as opposed to giving their heirs a larger inheritance?
They deserve exactly as much dignity and respect as anyone else and for the same reasons. In other words, in accordance to what they’ve earned. One does not deserve dignity and respect by being old any more than they do by being tall. Meritocracy, not gerontocracy.
A: Sell your place below market price / move away.
Walk the walk, talk the talk. Don’t ask others to pay for your ideology.
West Van has an interesting program. The houses near Ambleside that are on the waterfront, when the owner dies, they get torn down and turned into park and a seaside walking trail for the community to enjoy. I don’t think it’s fair to kick seniors out of their homes, but I do think you can implement creative zoning like this as an example.
On a side note, my PCS for SFHs up island has gone from few price changes to 63% of new “listings” are price changes in the last few days. Granted, most of those are overpriced to begin with.
I suppose it depends on your definition of “big problem”. A 50% increase in population would dramatically change Gordon Head. And a 100% increase? At what point would you consider it a big problem? 200%? 400%?
You have a suite in your house introvert. So a guy living under your floorboards is totally ok but a neighbor in a well designed sound isolating townhouse will degrade your quality of life? Gimme a break.
There are no appreciable problems with noise, pollution, parking, or traffic in Gordon Head now so a 50% increase or even doubling in population won’t be a big problem. You design schools to fit the population so that’s no issue either.
I think with this housing problem, every factor should be looked at, and there are people “tying up” the housing supply longer than they need to. As well, they are often in poorly maintained houses that could be torn down, and with zoning changes make better use of the lot.
I personally know two people in Victoria who recently were in that situation, and I do care about them, so I am not just picking on seniors. The thing is, their house was not the best place for them, but there weren’t any alternatives that allowed them to maintain their lifestyle (e.g. quiet street, yard, no shared walls, etc.). In one case it wouldn’t have made a difference because the onset of dementia left the person unable to make rational decisions around moving. However, the other person was willing to downsize but not move into a condo.
So, suppose zoning in Gordon Head, for example, allowed for two smaller houses on a 7000 sq.ft. lot. This could be a win for “Grandma”, since she could stay in her neighbourhood and live in a new house without health concerns like mould. As well, a small family could move into the other house. So, you could have 4 to 8 people housed on the same lot as one person.
As I am writing this, I did a quick calculation, and, at $800K for the lot, it still might not work out. Grandma would have to pay the same amount of money to come out with half the living space and half the lot. To have a new house for that probably isn’t worth the trade to her.
It might work with 9000 or 10000 sq. ft. lots and 3 or 4 houses. I wonder if we’re at the point where land and construction costs are so expensive it’s not even possible to have something affordable unless it is the more standard condo or townhouse?
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes/interest-fees#fees
Interest rates are 1.2 and 3.2% reset every 6 months
6months t bill rates are about 1.6% so yes there is a small expense to the government oh well. Those senior and other using the program. Horrible they are taking away from the millennials.
Really some twisted thinking about seniors on here today. They deserve dignity and respect for what they have contributed to society in their time. Finding ways to get them out of their homes by taxing them is just beyond reprehensible. Whether that is taking their deferal program or attempting to say they are not using their home enough. Either way.
I can see that we are now into the mindless labeling and less than thought out positions.
There is definitely an ugly undercurrent of polemic that saddens me.
@ Josh
” I wouldn’t want anyone telling me where I’m able to live just because my kids moved out and my wife died. I don’t know how anyone thinks that would be reasonable.”
As one of an age to be pushed out of the igloo on a frosty night, I appreciate the sentiment. Yet, I am not surprised that some take a different view.
Disposing of the elderly when they become a serious burden is not such an outrageous idea and has been adopted in more than one society, and would probably be adopted in any society if sufficiently stressed.
No civilization is eternal and most last a remarkably short time. Ours is in serious trouble and we should be looking for solutions: one being to the outrageous burden of housing costs, which result from the absence of responsible regulation of financial institutions, and the self-serving policies imposed by those who profit from land-use regulations that cause urban sprawl, a loss of economic dynamism, and the massive waste of time, energy and infrastructure investment on long-distance commuting.
@ Intro
“It says that in Official Community Plans and in Local Area Plans”
Yes, but that is simply the diktat of the monopolistic property owners. It does not represent the view of society.
A family we know recently secured financing through RBC for the purchase of a third house. They are puting one of their two existing houses up for sale and because they had a listing agreement in place RBC excluded this existing house and the money owed against it from the financing calculations.
Risky move in market that is trending slower. Would have been wiser to move into the existing home they are not selling and sell the home they want to sell first.
More people in a fixed area = more problems with noise, pollution, parking, traffic, school overcrowding, etc. = lower quality of life.
It’s not a coincidence that neighbourhoods that don’t suffer from many of the above issues are priced higher than the ones that do.
It says that in Official Community Plans and in Local Area Plans. It’s also the reason why applications to subdivide must first be approved by city council.
@ Intro
“nowhere does it say that one is entitled to live in Gordon Head or in any other neighbourhood in Victoria.”
And nowhere does it say we should deny property owners the right to develop their property as they see fit, a right that includes the right to subdivide as an owner finds profitable or otherwise desirable.
Your enjoyment of the wide open spaces of Gordon Head comes at the cost of arbitrary and anti-soclal restrictions on the use of property.
@VB:
Yeah, but you sell more widgets by creating more supply. Remember, consumption is a function of both supply and demand, the balance achieved through price adjustment.
Thus, Say says:
An extra widget can only “afford a market for other products to the full extent of its own value” if it is sold. And it is sold, because the producer is forced to accept whatever the current market price for widgets happens to be.
Same with houses. Build another house, sell another house at a price equal to “the full extent of its value.”
But you cannot build another house if there is no SFH lot to build it on, and our monopolistic zoning laws preclude the creation of more lots.
What we have now is a zoning system that limits housing supply where people most want to be, and a system of financial regulation that allows lending to drive prices to the max, i.e., the maximum that buyers can repay over a working life-time.
Its a system of debt slavery that is destroying the fertility and the productivity of the Western nations, and it is why we have an imploding economy, now heavily dependent on the export of commodities and, apparently, the sale of RE to foreign drug dealers.
A family we know recently secured financing through RBC for the purchase of a third house. They are puting one of their two existing houses up for sale and because they had a listing agreement in place RBC excluded this existing house and the money owed against it from the financing calculations.
Plus the cost of administering the program of lending, collecting and bad debts. Also, governments have the ability to borrow at 2.5%, extending that ability to residents would be generous to say the least.
Actually that is understating the cost because the homeowner is paying simple interest to the government, but the government is paying compound interest to its bondholders.
But the uncalulated cost to the government is the reduction in economic activity caused by keeping a scarce resource underused.
Amount deferred (2016): $822MM
Interst charged: 0.5%
BC 5 year bond yield : 2.5%
Cost to government : 822MM *(2.5%-0.5%)
= $16.44MM
Off the tax deferral program? Definitely if you ask me.
Simple example. Two couples each earn $150k/year and live in a $3M house.
One couple is 45 years old the other is 65. Why should the 45 year olds pay taxes while the 65 year olds defer them when neither has any financial need?
Let’s say Gordon head was mostly row houses instead of single family. How does that reduce your quality of life?
It’s not like the single family that is there has any kind of heritage value. They are all just spec boxes built to a budget.
Yup, I’m a NIMBY and not ashamed of it.
I’m not in favour of permanently lowering the quality of life in my neighbourhood to temporarily ease a housing shortage that will always return.
Also, nowhere does it say that one is entitled to live in Gordon Head or in any other neighbourhood in Victoria.
Leo you win. Enjoy it’s a bad program ok.
To twilight zone for me.
Where do we draw the line a couple making 150k having a 3m home that was worth 200k 20 years ago. They off.
Where do the lefties draw the line on who get what in our society.
I suggest we look at all those government/school tpensions/ benefits that are subsidized since we have a problem with this senior subsidy . Why the hell should these people get it and non government not. Why the hell do tax payers subsidize that.
Indeed it is. So let’s just review the facts and put this to bed.
Seems to me it’s hard to argue with finding a way to minimize the number of people under the last point.
“So one group of people get an entitlement (below market tax deferral) and you think the group that doesn’t get that benefit is entitled? Not logical.
Also not useful to spin the question of whether tax policy should be used to encourage people to stay in homes that are way too big into “the gestapo is coming to throw out your grandma”
Sorry Leo never thought I have to go down this road with you also.
It is too crazy and stupid to even continue. They defer with interest and the money is paid back. Insanity at a whole different level anyone who is against helping seniors stay in their property that they raised their family in.
Only one here being logical is me and a couple others, rest of you need to check your priorities.
Leo S hit the nail on the head.
Income test would be absolutely appropriate.
Further to the point, I think having a maximum value at which we allow this deferral would also be appropriate, or have a market interest rate.
This is essentially a form of social welfare. Not opposed to welfare, but it should be reasonable. Our blanket approach currently is unreasonable.
@GWAC what if I told you that property tax deferral was a form of social assistance, which means that I’m kicking people off welfare, which means that I’m actually a right-winged capitalist pig. insert shocked Neo Matrix Meme
No more or less insane than booting out anyone else who can’t pay their property taxes. It’s a basic obligation of property ownership.
The market has already come up with a solution for older people who have lots of equity but may be short of cash. You have probably seen their TV ads.
Who do you think is paying the difference between market interest rates and the 0.7% they charge for tax deferral?
Taxing or booting old people out of their homes is pretty insane and I can’t see the effect being net-positive.
There’s certainly a mental/cultural block for old people downsizing. The little old lady that used to live below me occupied 2 apartments – 2000 sqft all to herself. The only reason she thought she needed that space was that she wasn’t willing to part with her furniture. My parents are the same way – bought a place and are now thinking of upgrading because it doesn’t fit all their stuff the way they want it. But that little old lady owned the whole building and the one beside it. And my parents certainly earned their place as well. I wouldn’t want anyone telling me where I’m able to live just because my kids moved out and my wife died. I don’t know how anyone thinks that would be reasonable.
Leo all good should have been done. This issue I have it is not a subsidy since it is deferred with interest and does not cost the government
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes
Since we are going after the seniors. Go after the people with disabilities too. Why should they have a house in the core! They have a program to that may take away from a millennial having a house in the core.
You are getting closer to the meat of it. What is the purpose of tax deferral? It is to avoid the situation where low income seniors lose their house because of taxes. Great program.
So why not income test it? The poor seniors stay in their houses, and the others pay taxes like everyone else. That addresses your concern without the program subsidizing Tomato’s multimillionaire parents. Everyone wins
The irony is a leftist wants to turf seniors out of their house so they can get cheap housing in the core.
Happy thought of the day brought to you by today’s younger generation
CS – Say’s Law notes that “Supply does not create its own demand”. So, by making more widgets, you do not create more demand for widgets – it creates demand for other products. Jean-Baptiste Say wrote: “A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.” And also, “As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.” So, as supply of widgets are sold, this increases aggregate demand for products (such as gadgets), not increased demand for widgets. The reason is that those employees making the widgets are paid and they spend the money which increases aggregate demand. A supply of widgets do NOT create a demand for widgets. Applying that here, supply of housing does not create demand for housing. If there was no demand first, entrepreneurs in a market economy will not invest and risk the capital to build homes to satisfy a demand that does not exist. It is the demand that comes first and the supply second to satisfy that demand. By your theory, we should make more beta-video players because that will create a demand for them. Keep trying, you may get it right at some point. You missed the point entirely.
Over the years, at least two objections to Say’s law have been raised:
The thesis of Say was generally replaced by Keynesian thought, but what survived was that “Supply does not create its own demand”. This is a common sense market principle and the simple application of it above explains it. It appears that only you and Galbraith fail to understand it.
The rest of your comment is irrelevant to the point that I raised. It is perplexing.
Old folks should NOT be forced out of their homes for any reason.
Unintended irony award of the day.
Wtf is wrong with you people, a house is not under utilized if a senior does not have the cash to pay ever increasing taxes. They just like to stay in their house that they brought up their family in.
I am just blown away about how people can even think about our seniors this way. So the right guy appreciates our seniors and the lefties want to turf them out of their house because they defer their taxes. Just wow.
So one group of people get an entitlement (below market tax deferral) and you think the group that doesn’t get that benefit is entitled? Not logical.
Also not useful to spin the question of whether tax policy should be used to encourage people to stay in homes that are way too big into “the gestapo is coming to throw out your grandma”
If the government gives a group of owners a subsidy on their property taxes, that objectively results in under-utilization, because it interferes with the efficient allocation of resources by the market.
Teranet is for all property types, including condos. You are confusing the overall market with single family. Also quite a bit of seasonality in that data, just see what happens in the fall.
Can’t have it both ways. If you want lower prices you need to accept more density. Preserving SFH everywhere and more affordable prices are fundamentally incompatible.
It grind my gears as well, because today youth are so out of touch.
“Ask not what your country can do for you, ask what you can do for your country.” – JFK
Not In My Back Yard.
I have heard a lot of stupidity and leftist shit on here. Being pissed at old people who get to defer their taxes with interest is by far is the most screwed up thing I heard from a leftish on here. Gets some help with your over entitled perspective.
Today’s socialist is not about helping the masses it’s about helping ones self it seems.
How many retiree do you think retire on 200k. Think hard on this one.
IMHO, it make more sense to densify Gordon Head than Langford or anywhere else beside downtown, because of the influx of UVIC student population.
Perhaps we should just throw unproductive, resource hogging, house hording retires into nursing home to make room for millennials. And, maybe take a step farther and tax parents that have more than one (entitled) child.
@VB
Actually what Say said was that:
“It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products…”
A statement reasonably summarized by the claim that supply creates its own demand.
However, in Canada’s urban centers the supply of SFH’s cannot increase without change in the current zoning laws that create a land monopoly for existing owners. This is obvious if you look at RE in a town such as Houston, Texas, a city with five or six times Victoria’s population, where zoning bylaws are minimally restrictive and where you can buy a decent SFH for two, three hundred grand.
Instead, here in Canada, zoning laws in most urban municipalities restrict subdivision and densification, thus forcing young city workers to commute from places like Langford, Sooke and even Duncan. Then everyone is forced to pay huge taxes to cover the cost of new highways and transit systems to facilitate unnecessary, energy-wasting commuting.
The property bubble is, in fact, a sign of a dying civilization, with power in the hands of gerontocratic corruptionists screwing their children’s generation to maximize their own wealth.
Meantime, the fertility rate continues to fall, as many young couples despair of moving from their city-center, one-bed apartment, and other young people depart the cities where the wealth of the nation is mainly created, moving to small towns and villages where their economic potential is severely limited.
I used to be a paid member of the GHRA. I’m still on the e-mail list and pay attention to what’s happening.
I’m not in favour of densifying Gordon Head. Parts of GH are arguably already too dense thanks to secondary suites and rental houses packed with UVic students.
Densification is for downtown Victoria and Langford.
I can.
Our current solution is to subsidize these people to live in their over sized houses regardless (prop tax deferral at a 0.5% interest rate) regardless of income OR property value.
My retired parents have a pretax retirement income of 200k a year. Their house is worth 1.5m+ and defer their property taxes because it’s stupid not to. Lots of people in this situation.
I’m all for vibrant communities. Family formation is at an all time low in Canada. Hard to recruit or retain employees in Victoria because of the cost of housing. Maybe a pumped up housing price is good for your balance sheet GWAC, but it’s bad for business.
We don’t suddenly have a housing crisis because old ladies aren’t using enough rooms in their homes. I doubt that’s even much of a side factor, and adding some tax onto their home to force them to use rooms not only won’t make a shred of difference, that’s IMO, a despotic inroad upon people’s lives. How silly are we willing to get here?
The reason why we have a housing crisis is actually extremely simple. People en masse are convinced that homes can never fall in price and are a path to easy riches. So, everyone wants in.
Period.
It’s not more complicated than this. We can do all the analysis we like, look to this reason, that reason, innovative reasons, innovative solutions etc. None of it has, or is going to, make a fundamental difference other than magnify the underlying market dynamics.
So what will make a difference? The market forces inherent to the RE cycle is what’s going to make that difference. When credit tightens, house prices stop rising – the gig loses its lustre. Housing isn’t “fun” anymore. Buying an “investment home” suddenly doesn’t make sense. People either choose to particulate in something else, or, they take their monies elsewhere to greener pastures. So, RE sales volumes decline while a mountain of supply begins to come online. Guess what happens?
We’ve completely lost sight of the obvious, IMO…
Under-utilization is not vacant housing. The former is subjectively determined (you think it is under-utilized but the owner does not) while the latter is objective (it is empty – one one lives there). With regard to the former, no one and no government has the right in a free and democratic society to require a fellow citizen to vacate, move, give up, relinquish or otherwise abandon their home [we it 1 person in a 5,000 square foot home in Uplands or a 500 square foot condo in Sooke] because some caveman thinks it is not being used to capacity. Doing so would be a complete violation of the Charter of Rights and Freedoms: see section 7 and 15. The contravention of which would not be saved under section 1. If they can afford it, leave them alone in peace.
Lack of supply is a ‘problem” – but the excess demand that results in the lack of supply is a better side to analyze because supply does not create its own demand [Says Law]. I maintain and subscribe to the view that the addition of the foreign buyer, looking to “park” money in a safe jurisdiction or looking to launder drug money or looking to invest for profit, is the culprit that is causing excess demand. So, as the evidence comes out, it will either support or demolish this view. At the very least it will show that at the margin the foreign demand is creating a problem that can be addressed by some of the measures now in place. However, like New Zealand, I favour a prohibition against foreign [non-Canadian] ownership.
I am also in favor of abolishing the principle residence exemption.
Patriotz: “Sure it can. That pillar is lower prices.”
Dead on Patriotz. This particular excerpt from the article is probably a very good indication of what’s happening today, as well. The foreign buyers and casino laundering probably aren’t in the same league as these people.
I personally know 3 (average) people that have 3-5 properties … not cabins, lol. One even “joked” that “you have to fund retirement somehow”. The crash/correction is going to devastate a lot of young and old amateur real estate investors and drag a lot of good people down with it.
https://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-tried-a-speculation-tax-on-property-and-the-market-collapsed-overnight
“We had no wind of this,” said Lebow, now 69, and still a Toronto realtor. “I was 27 years old and I owned 53 houses the day (speculation tax) came in.
Mayor Lisa Helps knows you want sustainable and affordable housing and she has some radical ideas she knows you’ll love.
She wants to allow 12 small dwelling units on a 6000 square foot city lot, with each unit being 500 square feet. If you read between the lines, of all her crazy proposals, she is proposing changing setbacks, allowing up to 80% lot coverage, front yard parking lots, and many other changes to residential neighbourhoods to facilitate her vision of high density in every neighbourhood.
** https://www.vicnews.com/opinion/mayors-message-neighbourhoods-are-for-everyone/ **
The solution for the ‘left’ people is to simply move next door – more pay, half the price, cycle bottom. Give it ten years and you’ll easily catch up to Vic again.
Ie. Vic’s average price in the mid-90s was 250k. Calgary was 125k. Ten years later as oil cycled higher, Calgary easily caught up to Vic again. If you’re a raging socialist and don’t think you can handle Calgary, then buy in the provincial capital (far more lefties).
Alot of people I meet here used this maneuvre in some form.
Or, you could just move to langford. However, that route will never get you a ‘catch-up ticket’ to return to the core.
Better known as Teranet. Here’s the methodology.
https://housepriceindex.ca/about/our-methodology/
Last couple months people think prices are softening due to slower high-end sales skewing the ave’s & medians, while Teranet shows what’s really happening.
Get rid of the golf course. Get ride of restriction to dividing land. Allow alr land for high dentistry housing. Allow lane houses.
Stop trying to force people out of their house their are better ways.
Grandma I know you have spent years raising your kids. Helping with grandkids. You also worked as a nurse helping. I know things are hard with dad gone but the government need to take your house now because a millennial needs a home in the core. Sorry you are old and need to get out of your house because the government says you do not use enough rooms.
That sum it up???
+1…
Housing is a manufactured product, so over time the real cost should be more or less constant or declining with advances in manufacturing technique, except inasmuch as specifications change, e.g., marble for arborite, underfloor heating for baseboards, etc.
Rising home prices thus largely reflect rising land prices where people want to live, which is mainly in the largest cities.
Why are land prices in the largest cities rising? Because, as urban populations grow, position effects on land prices escalate. If you work on Howe St or at UBC you will most likely prefer a house on a small lot in Point Grey, Kitsilano, or Shaughnessy, than on half an acre in Coquitlam. Thus, as UBC and Vancouver’s financial services and other downtown industries grow, competition for homes located in those most desirable locations increases by virtue of the universal, price-mediated, relationship between supply and demand.
So can the escalation in home prices as a consequence of urban population growth be countered or reversed?
Yes, by increasing urban density, which means revising zoning bylaws which have the effect of giving monopoly pricing powers to owners of urban real estate.
For example, in the village of Cumberland, a rather small urban center, there are houses on 30 foot lots. If Oak Bay were to revise its zoning bylaws to allow subdivision of SFH lots to a 30 foot frontage, and a total area of 3300 square feet, SFH lot prices would decline.
If Oak Bay cut the minimum SFH lot frontage to 25, then the potential number of SFH in Oak Bay would more than double. Rezone OB Avenue and a few other streets for apartments with a floor space ratio of five or ten, and you could double and redouble the population of OB, thereby greatly increasing the potential supply, and hence reducing the cost, of OB housing. Ditto, the rest of Victoria.
But as an Oak Bay RE monopolist, I am naturally dead against any such reform. No, we RE monopolists wish to keep OB as it is, a mausoleum for a declining population of retired people who are, in RE terms, at least, increasingly rich.
Probably going to join the neighbourhood association to provide some non-NIMBY perspectives. Come join me Introvert!
http://gordonhead.ca/
If I can’t afford to own a 3000 sfh home in the core here are some left wing nut job ideas to take the home away from the elderly or others so I can.
Here’s a thought buy a condo or buy outside the core and commute like every other person does in a major city.
This 100%.
Talk about an election agenda item that could easily backfire though.
No, not the government telling you where you can live but rather telling you that if you decide to underutilize available housing stock then you’ll pay a premium for it.
I said nothing about “assigning housing”.
The government has interceded in every other facet of life. Why would it be inappropriate for them to intercede here?
Building more supported housing options for seniors would help though. Wait lists are too long for res care.
I remember when mayor Helps suggested exploring some home sharing options for these kinds of cases and was crucified for it.
I’m all for efficiency but trying to optimize people’s principal residence is likely a step too far.
Gotta love the temperature swings in this city:
Tomato:
That system of assigning housing has already been tried with spectacularly bad results.
But would you be okay with the government telling you where you could live and then later deciding when you should move because someone else would better utilize your home?
Vancouver’s One-Two Punch Is Expensive Homes and Low Wages
Want to pay San Francisco housing prices on a Columbus, Ohio income? Move to Vancouver.
https://www.bloomberg.com/news/articles/2018-07-10/luxury-home-sales-plunge-in-pricey-canada-markets-as-rules-bite
For a first step we can just stop subsidizing underutilizaton. Prime culprit is property tax deferral, which IMHO was brought in with the intent of supporting underutilization and thus higher prices. You could also go after the seniors home owners grant and HOG in general. Or make all of the above means tested at least. I don’t know of any other province that offers such subsidies to owners regardless of income.
I have to conduct house visits occasionally for my job and it’s shocking how many under untilized houses there are out there. 4 or 5 bedroom homes that have 1 elderly person living in it, and they usually are immobile so only are using 1 or 2 rooms. If we could somehow tax under utilized houses to promote turn over I think it would solve a lot of our problems.
PTT doesn’t help the situation. Doesn’t make people want to move to a more appropriate sized house. It encourages you to stay where you are. They should do away with it. Maybe make an exception if it’s your primary residence.
Not a pillar though, just an outcome. Of course that is the only way to keep prices affordable, but no easy way to get there. Sounds like the capital gains tax didn’t really accomplish the goal either, although I’d be in favour of limiting tax free capital gains on principal residences for sure as well.
Reposting this as I was still posting on last story..
Wondering what the gang here thinks of the upcoming removal of this restriction in Oak Bay – any way it wouldn’t result in a relative price jump?
50% spec tax sounds good to me. Too many hoarders.
Sure it can. That pillar is lower prices. The reason so many people are pretending it’s more complicated than that, it that there are so many people who have bet their futures on prices never going down. You cannot have a sustainable housing market without these people losing their bet. And for anyone who thinks it’s hard for government to bring down prices:
https://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-tried-a-speculation-tax-on-property-and-the-market-collapsed-overnight