How to fix the housing crisis
The housing crisis is complex and multi-faceted. If anyone ever tells you that we only need to do one thing to fix it, you know they have no idea what they’re talking about. So the title of this post is somewhat tongue in cheek as of course I realize there are other actions to take. However I’m increasingly convinced that there’s one major thing we can do to control house prices and improve people’s living situations, and that is to build rentals and tons of them.
Why? And how does building rentals affect house prices? Well if you spend some time in any housing discussion it won’t take long until someone brings up the problem of investors. The theory goes that prices are high because investors are competing with owner occupiers, and there’s no point in building anything because those new builds will just be snapped up by those investors. In Victoria, about 14% of single family homes and 37% of condos are not owner occupied (and thus mostly rentals). Just over a fifth of properties in the region are not owner-occupied, and thus likely investor owned (the Speculation & Vacancy tax has minimized empty vacation homes).
Investors are one source of pure demand, just like first time and out of town buyers. When an investor buys they remove one house from inventory that then is no longer available for an owner-occupier to purchase. In the condo market as long as the supply side is relatively elastic, this shouldn’t make much difference to prices. If there’s more demand from investors, then developers will simply build more to satisfy that additional demand (in theory, although supply frictions can get in the way temporarily). That’s different in the single family house market. We can’t realistically make more of those in the core, so investors drive prices up by competing for a fixed quantity with owner occupiers.
That has motivated many people to call for measures to discourage investors as a means to control prices. Tax them heavily, increase required down payments, or limit the number of houses that people can own. I’m not personally opposed to looking at those measures, but we have to realize that investors owned homes are also tenant occupied homes. If we want those investors to sell we need to have a plan to house those people. I believe that high investor ownership is a symptom of our housing crisis, not the cause of it. We can try to treat the symptoms (and some of that may be wise), or we can treat the root cause, which is that we have a severe shortage of purpose built rental housing.
The problem is immense.
Since 1991, Victoria has added 2062 purpose built rental units to the rental stock while the population grew by 113,000. Given our local ownership rate and household sizes, that means we fell short by over 16,000 rental homes. We’re not alone with that problem either. In Canada as a whole in the last 30 years, we’ve added 355,052 units of purpose built rental housing while the population has grown by 10 million people.
That’s really an undercount of the shortage as well since I only have the rental stock data back to 1990, but widespread rental construction stopped after the 70s.
Another way to look at the need is by our total population. As of 6 years ago we had 60,745 renter households compared to only 28,206 purpose built rental homes. If we wanted space for all current tenants in purpose built rentals, we would need at least 32,000 more rental homes. Of course, rental construction has ramped up hard in recent years, and we should be finally seeing the rental universe expand in the coming years. But while we were barely building rentals in the 90s and 2000s, we were losing about 320 per year to demolitions. It took 10 years from 2008 to 2018 just to build back the losses from the previous 17 years. Given that the majority of our rentals are now 40 to 60 years old, the pace of those demolitions will only increase in the future.
Of course those 32,000 households we didn’t build for aren’t homeless, they’re renting from private mom & pop investors in condos, basement suites, and houses around the region.
What’s wrong with relying on private investors for our rentals?
Some might argue that this is not an actual problem. Why not just let the free market solve our rental problems? Well the major reason is that the secondary rental market doesn’t provide secure tenure. In a purpose built rental, your housing is quite secure. Yes there is still a problem of renovictions, but if you’re living in a well maintained rental you can pretty much rely on being able to stay there as long as you pay the rent.
Not so if you’re renting from a private individual. Although BC has relatively strong tenant protections, if the owner decides to take over the suite for their own use, or – as commonly happens – they sell the property, then you can get kicked out with just a couple months notice. Not that big of a deal if you’re a single individual perhaps, but a life changing disruption for families that are tied to a neighbourhood through schools and work.
Many renters are living in constant fear of losing their housing, secretly fixing problems in their homes that should be the landlord’s responsibility to avoid planting the idea in their landlord’s head to sell the place out from under them. For people who have been living in one rental for a long time, being forced to move likely means having to pay hundreds of dollars more per month or not being able to find housing at all. BC has the highest rate of forced moves in the entire country. While these data aren’t specific to rentals, we know that foreclosures are extremely low, so it’s safe to assume that this comes mostly from tenants being forced out of their housing.
Why do people rent from private investors?
Given the uncertainty and fear involved in having your housing security constantly at risk, it raises the question why anyone is renting from these private investors. Outside of the obvious answer that there simply aren’t nearly enough purpose built rental apartments, the other big issue is that the purpose built rentals we have don’t fit the needs of many Victorians.
First of all, only 3% of purpose built rentals have 3 or more bedrooms. So anyone with a family is essentially out of luck. Want a modern build? Up until recently, that wasn’t an option. Want a townhouse or other ground-oriented housing? Too bad. Want to live in a certain neighbourhood? Zero options in most of them.
It’s obvious then why investors have jumped in and bought up housing everywhere in the region. There is an immense need for family-suitable rentals in the city and when there’s that much unmet demand it means there’s money to be made. No one should be surprised at the proliferation of investors in markets across the country. It’s a choice we made when we stopped building rentals.
It can be fixed, but we need to fundamentally change the system
For decades there was essentially no government money going into rental housing, and without that support it was hard to make projects pencil. That turned private money towards more profitable condo developments. The government money is now back, but the uncertainty of rezoning and layers of government process make projects difficult to get off the ground even if fully funded and theortically approved. That kills lots of projects, and adds millions in cost to those that survive (nevermind your tax dollars that fund the obstructive process). If we keep up the rental construction rate we have going now for another 10 years or so, it’s possible that we may get to a point where we’ve recovered from decades of neglect for the smaller rental apartments. However that will still do nothing to address the needs of families that need other housing types to rent.
To fix that problem we need to end the rental ban that currently exists on the vast majority of the land in the region.
With one vote, local councils could upzone all residential areas to allow rental townhouses and lowrise apartments (say 3 floors) by right, and then further upzone along transit and major corridors to allow mid rises with bonus density for projects incorporating below market or social housing units.
This might sound radical, but it’s a concept that’s rising to the surface in several cities. Vancouver recently waived rezoning for affordable rental housing up to 6 stories in some medium density areas, and are now considering doing the same for affordable housing up to 12 stories, while directing staff to investigate similar options for single family zoned neighbourhoods. Victoria is considering waiving public hearings for certain affordable housing projects as well this week. It’s not nearly as broad as I think is necessary, but it’s clear that the tide is turning on housing supply, and cities are realizing that spending years considering an individual project will never be sufficient. Victoria has grown at an average rate of 18 people per day the past 5 years, so it’s clear a system that takes years to approve a handful of homes for those simply cannot keep up.
If you ask me, we should extend the upzoning to all tenure types and incentivize rentals on top of that. However I suspect the Overton window on housing may not have shifted enough to make this politically feasible yet. Broad upzoning for ownership and rentals faces opposition from both the NIMBY crowd and affordable housing advocates, who fear it will just be a giveaway to existing land owners. Limiting it to just rentals at first gives it a political chance, and may have more of an impact on house prices than you might think.
What’s the potential impact on the rental market and house prices?
The impact of abundant purpose built rentals on tenants is clear. New purpose built housing is secure, modern, and safe. When we build enough to get to about a 4% vacancy rate, rents stop increasing. Even though the new builds will be expensive at first, research shows that even market rate units help affordability through filtering. A recent study showed that new rental buildings decrease nearby rents by 6%. Broadly upzoning will reduce the pressure to redevelop older affordable buildings and reduce displacement, rather than optimizing for it like our current zoning.
However what about the impact on house prices? Well first of all this is a long term solution. Even with rezoning out of the way, it would take years for enough supply to come onboard to change the dynamics of the rental market. But eventually if successful and tenants had the option of family-suitable secure rental housing in all areas of the city with a healthy 4-5% vacancy rate, there would be little reason for people to rent from private investors, causing many to sell those investments.
How many is that? Well let’s go back to the chart about investor ownership at the beginning of the article. According to 2018 data from the Housing Statistics Program, there are 9725 investor owned single family or row/townhouse properties in Victoria. Given there are currently only 487 single family houses or townhouses for sale in the entire region, it would have a big impact on market balance if those gradually came back to the resale market. There’s just as many non owner-occupied owned condos out there, which would also become less attractive to investors once abundant dedicated rentals come onboard.
I’m no fan of the bugaboo of the financialization of housing. The froth in the market is a symptom of the housing shortage, and I think it’s within our reach on a local level to solve. Counterintuitively, I think one of the best long term steps we can take to tackle high prices is to fix the rental supply side. Many of the pre-requisites for this are already in place, we only need a few local councilors with the political courage to make it happen.
Thoughts? Let me have it in the comments.
Also the weekly numbers courtesy of the VREB:
| May 2021 |
May
2020
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 259 | 532 | 457 | ||
| New Listings | 365 | 716 | 1095 | ||
| Active Listings | 1495 | 1505 | 2544 | ||
| Sales to New Listings | 71% | 74% | 42% | ||
| Sales YoY Change | +151% | +178% | |||
| Months of Inventory | 5.6 | ||||
Sales stayed roughly flat last week as some of the beginning of month new lists were absorbed. In the last two weeks, the percentage of over-asks in the single family market pulled back to 49% from an average of 57% in April. The median sale over assessment held constant at 30%, same as it was in March and April. So far it’s a cooling from a melt your face off market to a burn your hand off market, but at least we’re going in the right direction. The condo market has not shown any drop in activity, with both the percentage of over-asks and median sales/assessment up slightly from April. Given that market is often on a lag from the detached side and the price gap is still stretched, that’s not particularly surprising.
While we’re still up substantially from normal levels, we should be seeing drops in the seasonally adjusted sales rates in the end of month figures.
Without getting into the details (likely should be for much longer than 10 years), but I think rather than having this be subject to individual negotiation on the project level, cities should create predictable density bonusing systems so that developers can plan for the formulas to be in place. For example, projects get an extra 2-4 floors if they incorporate a certain percentage of affordable housing, rental housing, or family sized housing (whatever the city judges as most in need and least likely to be supplied by the free market).
Some developers are asking municipalities for increased density for MF buildings in exchange for a promise that the building will be for rentals for 10 years, with 20% of units offered at CMHC Affordable rates.
I’m interested to hear comments on pros (if any) and cons.
Terri
Long article to argue: upzone.
That is one of many things gov has to do to foster more rentals.
Another one is reducing immigration – say 50% – which is far too high in Canada. Barring that given our socialist vote-buying federal overlords far FAR more is required to dramatically lower cost AND approval times, likely at least a gov subsidy of $100,000 per unit, likely more in expensive cities like Vancouver or Victoria. CACs, DCCs, dev levies and dev taxes ALL need to be reduced to build more rentals. Or land had to be subsidized or city owned and then leased to developer for $1 to build a certain amount of rentals !
Implications for today’s smaller real estate investors: buy as many single family homes as you can as they not only making don’t make any more they make fewer ! Or buy existing apartment buildings as the price to build new is far FAR higher.
Happy New Year.
PS: There’s those that think gov can fix their problems. And then there’s those that think !!
New post: https://househuntvictoria.ca/2021/05/25/do-high-priced-cities-attract-the-wealthy/
Based on the number of people going through so far in May, this was obviously going to change.
They should be done the first doses on most eligible people in a few weeks here.
edit: just checked, based on current rate, we’d have completed 100% of eligible people(12+) in 5 weeks. We won’t get to 100%, so I suspect that they’ll start ramping up 2nd doses in 2-3 weeks.
Biden signs bill opening door for Alaska cruises to resume, bypassing Victoria
https://www.timescolonist.com/news/world/biden-signs-bill-opening-door-for-alaska-cruises-to-resume-bypassing-victoria-1.24322479
Richard Zussman
@richardzussman
NEW – BC has changed the gap between first and second doses of COVID vaccine to 50 days for Pfizer vaccines.
you left out the Juliet Marco 😉
Not sure why AirBnB gets so much talk time…I’ve posted this before, now likely take the Falls off. It is a handful of buildings that will become a smaller and smaller % as new buildings are built (going forward no new building will be able to have short term rental zoning). There are more buildings in the rezoning stage the COV is dragging their *** on than the list below, but somehow the list below is some massive problem. How about addressing why it takes 5 years to rezone something?
Building with short term rental zoning.
1) Janion- 1610 Store st/456 Pandora
2) Era- 787 Yates st
3) Union- 517 Fisgard st/528 pandora
4) Falls- 707 Courtney st
5) the Oriental- 562 yate
6) Leiser- 534 Yates
7) Astoria – 751 Fairfield
8) Mermaid wharf- 409 swift
9) 595 Pandora-595 Pandora
10) Leiser- 524 Yates st
11) Vogue -599 Pandora
12) Cityzen- 613 herald
13) Legato-960 Yates
14) Palladian- 1602 quadra
15) Monacco- 610 johnson
16) SoHo- 848 Mason
And that is ending at Q4 2020, add another 10%. Insane.
GRAPHIC SHOWING HOUSE PRICE INCREASES IN CANADA COMPARED TO 7 OTHER MAJOR WESTERN COUNTRIES SINCE 2000.
https://m.facebook.com/story.php?story_fbid=10158916416535240&id=549640239&sfnsn=mo
Anyone walked through this house? https://www.realtor.ca/real-estate/23229455/4395-torrington-pl-saanich-gordon-head
If the basement suite addition is as easy as the listing says then you can probably get around 3500 for the basement suite and the garden suite.
Interesting thanks.
In Vancouver each listing has a regulatory ID field where you put in your license number. That gets displayed on your listing page. So looks like Victoria simply didn’t bother to properly work with AirBnb to get this supported here
“Victoria required STVR operators to be licensed and display their license number in online advertising in 2018. As far as I can tell the compliance rate is 0% to the display of the license # and no response from the city when I asked about it.”
I ran a STVR in DT Vic for a few years and have since sold the unit. This rule was pretty funny when it came into play. I tried to add my license # to my listing and airbnb auto-blocks any combination of numbers from being displayed. I think this is meant to prevent phone numbers from being shared publicly. It physically wasn’t possible to add the number to my listing. So I just left it and never heard anything from the city. To no ones surprise, that rule wasn’t properly researched or thought through.
It may surprise some to know that I was contacted by the city a few times regarding my listing, so there were/are people trying to enforce STVR rules from my experience. There are some problems though. They told me I was renting my place too many nights to be licensed as an owner occupied unit. I asked how many nights is ok to be owner occupied and they told me there wasn’t a specific number. I replied that it is difficult to follow rules that don’t exist and never heard from them again.
Edmonton concludes urban sprawl is a money losing proposition subsidized by taxpayers in denser housing and businesses.
“For these three new areas, total revenue for 50 years is expected to be $9.2 billion. Total expenses, including operations, maintenance and renewal for 50 years, is expected to be $10.6 billion. That means building homes in those neighbourhoods will be a net loss to the city of $1.4 billion. The loss is subsidized by local business and other homeowners. ”
https://edmontonjournal.com/news/local-news/edmonton-kicks-off-debate-on-cost-of-urban-sprawl-now-pegged-at-1-4-billion-over-50-years#:~:text=City%20council%20is%20setting%20itself,to%20the%20series%20of%20neighbourhoods.
Give us a break. airbnb and similar short term rental services have only been around for about a decade. It’s the airbnb amateur hoteliers who have been trying to change the existing use, not ordinary residents.
Want a correct counterpart to your farm analogy? Buying a unit in a condo hotel, moving in, and then trying to get the other units to restrict to residents only. Speaking of condo hotels, that is the legitimate vehicle for individuals who want to invest in short term rentals.
My realtor noticed she had seen an uptick and also thought this was the reason.
More restriction, so there would be less investment in the area. Amateur hoteliers or not, they are local and likely to spend the money locally and invest locally instead of multi national companies. Yes, it is knee jerky, because those buildings originally designated/allowed airbnb, and people who bought into it wanted the rule to change to fit them (similarly people who buys houses next to farms wants to shut farms down because of manure smells, etc…). And, no I don’t own an airbnb.
Saanich has a bylaw that rental to strata conversions are banned if the rental vacancy rate is less than 4%. Could do the same thing for AirBnB for whole-homes. Needs enforcement though. Victoria required STVR operators to be licensed and display their license number in online advertising in 2018. As far as I can tell the compliance rate is 0% to the display of the license # and no response from the city when I asked about it.
How about a murder in Ottawa just last year? Ottawa has since brought in restrictions similar to Vancouver.
https://www.cbc.ca/news/canada/ottawa/gilmour-street-shooting-arrest-ottawa-1.5561050
https://www.cbc.ca/news/canada/ottawa/gilmour-street-shooting-airbnb-tenant-1.5426489
I was on the strata council at the Era for two years and despite 30+ AirBnB operations we had no complaints/issues.
In other buildings where I own when the AirBnB issues comes up I ask the council how many complaints they’ve had, and I usually get a reply of “that is not the point.”
I use AirBnB personally a lot when I travel….I don’t remember being disrespectful and trashing places/causing problems. Everyone still references some house that got trashed in Calgary, 12 years ago.
That all being said I’ve never understood AirBnB on the owner side of things when you can rent a 1 bedroom for >1,500/month. That is $50 a night 365 nights a year zero work involved. You really have to be cleaning house on the nightly rate with AirBnb to compensate for the effort.
Banning airbnb would increase housing costs? I would expect the opposite, since a revenue source for would-be amateur hoteliers would disappear. The few stratas left allowing airbnb would likely get more expensive, yes, but who cares really?
And decisions make by strata boards regarding residents’ security and privacy, and building wear and tear, are not what I’d call “knee jerk”.
https://www.marketwatch.com/story/who-head-slams-scandalous-inequity-in-covid-vaccines-with-10-countries-accounting-for-75-of-doses-administered-11621866783
And here we are, over privileged Canadians are complaining of inequality.
Racing to beat the June 1st dead line.
More sales than new listings again last 7 days. What the heck…..
Or maybe it’s just the system being weird, but definitely uptick in sales and drop in new lists
Exactly, knee jerk policies means well, but often it have the exact opposite effect, and in this case will increase housing costs and chase investment elsewhere.
Will just increase the value of the very few buildings left that
a) have the zoning
b) the strata hasn’t banned short term rentals yet
Interesting so an airbnb investor is at the mercy of the strata at all times. Be interesting to see if there will be a flood of listings from the falls if it is banned.
Reuters “U.S. house prices to keep racing ahead” “House prices is forecast to outpace GDP growth and consumer inflation rising at a blistering pace to 10.6% this year; almost double the 5.7% predicted in February. If realized, it would be the fastest annual house price inflation rate since 2013.”
Re: 3319 Fircrest- I think the question to ask is- Why did it sell so cheaply last year? Must have been neglected and in need of major repairs. I guess that’s the market value now.
The new intergenerational wealth transfer – based on increasing debt for the older generation.
https://www.theglobeandmail.com/business/article-anxious-parents-pony-up-as-their-kids-get-priced-out-of-real-estate
Happy Victoria Day everyone
Anyone know why 3319 Fircrest sold for 1.4m plus? Sold approx 1 yr ago for 765k from what I see. Major reno? This seems whacko.
does anyone know what 909 Wollaston sold for? Thanks.
$1,407,230
That is correct. If it goes through there would be one less building that allows short term…down to 15 total with no new ones ever to be added again.
Thank you Patriotz, That might be a surprise to some owners.
anyone know how much 3319 fircrest sold for? thx
Yes, province wide.
https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/bylaws-and-rules/short-term-rental-bylaws
Are strata allowed to ban AirB&B if the zoning allows it?
Heard the strata at the falls are voting to ban air bnb, can anyone confirm?
patriotz- When rates are high people stop borrowing. The savers also curtail any alternative riskier investments and economic activity grinds to a halt. I graduated from university in 1982, I clearly remember 15-20% interest rates and what was considered a high end home going for $100,000. When I opened my business, people were lined up to work for $5 an hour. They had a hard time finding a job. That’s how it works.
Money deposited in banks doesn’t “sit” there, it gets loaned back out. That’s what banks are for.
The way it actually works is that the BoC creates money supply by buying bonds. If the BoC sells bonds, money supply goes down. Higher interest rates would result from this decreased supply.
No surprise that the BoC has been on a bond buying spree over the last year. However it is tapering off. Rush4flife is quite correct that even flat rates at today’s historic lows would create a new paradigm from the falling rates post-1982.
https://www.bnnbloomberg.ca/bank-of-canada-set-to-slow-its-bond-buying-ahead-of-g-7-peers-1.1581540
Hey Thumps could you elaborate on your experience? I havent been around the dt core for about 3 weeks and your post is curious.
So just out of curiosity..has anyone else found that driving in Victoria has become worse than normal as of late?
There just seems to be some really weird shit going down on the roads….like zombie apocalypse weird.
Everyone will need to qualify at the new stress test rate as of June 1st whether preapproved or not. There may be some panic buying this week before the change.
I have a question regarding the new rates for the stress test and pre-approval. If a person is pre-approved at the lower rate for the stress test prior to the new rules that come into effect 1June does that pre-approval stand until it expires or is it done 1 June. Basically will it cause a short term bump up in demand as people try to use their current pre-approval before buyers have to re-qualify or is this not an issue Thanks in advance
I agree – not suggesting a spike or even an increase but I’m curious to see what impact flat rates over the next decade has on housing. Or even slowly climbing rates if this inflation continues.
I’m well aware of interest rates, I bought in 1986, 1989, 1991, and 1994. If rates go up, money supply will dry up as people let it sit in the bank not wanting to take any risks. That will cause an economic collapse that the government does not want to happen. Plus our astronomical debt will cost tax payers billions in interest, somehow I think rates will stay low for a long time to avoid a massive depression.
Sorry on my phone and pasted the unedited image – here is a better one Frank
You have also only see rates drop over that time frame:
And I see you’ve pulled back the goalposts. Fact is declines >10% happen, for example metro Vancouver 2008-2009. Bigger than that if you want to go farther back or farther afield of course.
Marko, you are absolutely wrong if you really believe that the hand deconstruct policy will create one new position at the city. It will absolutely be a lot more than just one. You cant be a department head with nobody under you. It will grow and spread like cancer.
I too think it cannot be fixed at this point. I was just at a blower test at one of our projects yesterday talking to the energy consultant and damn things are going to get complicated. I am betting on there being no solution; therefore, my strategy is to leverge up and keep projects as rentals instead of selling the finished product. Seems like there is better money to be made in appreciation than actual value add.
Market will go up and down with interest rates and other factors, but long term trendline my personal belief is newer homes in the core will be for the 1%ers and the middle-upper class will live in townhomes in subdivisions like Royal Bay/Westhills and middle will be in a townhome in Duncan.
When markets do go down construction will simply drop off the cliff. If nothing is selling and construction is slow it is not like people will be lining up to hand deconstruct a home for free….it will still be ridicolous expensive to build just based on the beauracy.
Right now, it seems like we have 2 people physically working on a house and 8 consultants/bureaucrats, but need 10 houses for all of them to live in.
patriotz- In the last 35 years that I have been in the real estate market, I’ve only seen prices rise with the exception of minor pullbacks, of course this refers to certain markets, I’m not talking Detroit.
Kenny G- There are hundreds of companies on the stock market worth billions of dollars that most of us would be better off if they didn’t exist: Tobacco industry, cannabis, social media b.s., the list is endless.
“Great investment” condo in Vancouver at price/rent = 345. Read the comments.
https://www.theglobeandmail.com/real-estate/vancouver/article-investor-buyer-bids-38600-over-asking-for-rented-condo/#comments
Demonstrably false. Or do you mean this time it’s different?
Housing is a tangible, necessary commodity, the rest is B.S.
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Yeah ok, let’s see you avoid using the services or products of the biggest companies in the stock market for one day, including the phone or computer you used to write this message and the internet provider you used.
So, the housing market is “not normal “. The stock market is “not normal “, as is the cryptocurrency market, the lumber market etc, etc… The only difference is, most markets, like bitcoin, can collapse 30-40% in an instant. However, housing markets can correct 10% at best and takes time to develop. This is what makes it such an appealing investment choice, there is much less gambling involved. Housing is a tangible, necessary commodity, the rest is B.S.
From: https://financialpost.com/news/economy/exuberant-housing-markets-in-toronto-hamilton-montreal-pose-threats-to-financial-stability-bank-of-canada-says
Ya, duh….lol
I’m sure you know that urban planning studies are largely bunk.
Intensive development implies intensive government and corresponding inefficiencies.
It will never be fixed because taxes and red tapes are the golden goose for the government.
https://stevesaretsky.com/vancouver-construction-costs-are-the-highest-in-canada/
And, the CRD is not far behind Vancouver.
Analyst on BNN on real estate stated that the housing storage, in the US., is primarily due to a labor shortage, not enough skilled tradesmen available to meet the demand. He also added that the increased price in lumber adds $36,000 to the cost of an average house, again, in the US. So getting projects approved to increase density will probably have little effect until we get people off their ass. Looks like there is no quick solution to the housing shortage.
I was just talking about value compared to the other “less desirable neighborhoods” not notional prices. I thought that house on Yale with a suite was pretty good for $1.26 if people are paying the same for houses in oaklands or strawberry vale.
You too Leo.
Offline for a couple days, have a great weekend everyone!
If you look at the data it’s pretty sketch too. There’s obviously economies of scale, but their “U” relationship is based on just a couple data points that are higher cost per person (probably basically Toronto). Could be a million factors that play into this. There tends not to be international gangs in small cities for example.
This analysis has been done dozens of times in cities everywhere. High density subsidizes low density within the same city where everyone shares the same expenditures, not across cities with different expenditures. Tax revenue is higher in high density and infrastructure costs per person are lower. I don’t think you’ll find anyone that disputes this.
Another one, but there are many https://www.baconsrebellion.com/archive/pdfs/2013/02/McKeeman.pdf
It’s probably because at a certain size, police start buying tanks and robo-dogs so their costs go up.
I would not be surprised if this temporary change does not become permanent for the cruise ships. Some will be pleased by that and others will be shocked at the loss of business.
I’m with the Americans on this issue. Their solution proposed in the article is reasonable, and wouldn’t pose any significant COVID risk.
“The Americans have proposed allowing their cruise ships to hold “technical stops” in Canadian ports, where they clear customs remotely and no passengers disembark, to limit the spread of COVID-19 but also satisfy the existing foreign ports law. Such a compromise would see the U.S. back off its bill and any risk it could be permanent.“
Temporary suspension of the Jones Act in the US that might become permanent.
https://www.cheknews.ca/u-s-passes-cruise-ship-bill-to-bypass-b-c-ports-798228/?amp
Before too many celebrate believing that it will limit pollution and etc.. here locally. The inside passage is an international strait of navigation. The cruise ships will likely just continue through Canadian waters on their way to Alaska enjoying all the coastal scenery on the way. So, we get to accept the environmental risk without any of the economic benefit as the cruise ships ply their trade through Canadian waters under innocent to conduct their commerce. Just the news the downtown businesses were hoping to get coming out of Covid.
“ looks like north oak bay and Henderson is where the value lies currently”
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Maybe if you want to buy right on Henderson street otherwise most 2000 sq foot homes in the 1.3 to 1.7MM range
That Henderson house went for 1.22M. looks like north oak bay and Henderson is where the value lies currently.
https://www.cbc.ca/news/business/bank-of-canada-financial-system-review-1.6034006
Stress test will rise for both insured and uninsured mortgages to 5.25%
https://www.google.ca/amp/s/globalnews.ca/news/7880498/canada-mortgage-stress-test-rules-osfi/amp/
Compare with Saanich instead then.
As for the cost of the “crime and business centre”, perhaps you are ignoring the substantial taxes derived from the business component.
I don’t see the relevance of the home ownership as it doesn’t affect the tax rate.
Can’t really compare accross munis like that. Victoria has the cost of old infrastructure, Langford it’s all new (paid by developers). Victoria has the cost of the region’s crime and business centre, Langford is a commuter hub. Victoria 39% ownership rate, Langford 70%.
Same in Victoria, Saanich and Oak Bay – along with water and sewer. These are considered separately charged services not paid for with tax revenues I believe.
Well you’re right, that mansion is ugly. And it’s also built way too close to the neighbour’s property line, IMO.
I still have many issues and concerns including Saanich and the City of Victoria “going it alone” in terms of upzoning and other measures, induced demand that will result, the fairness of one region trying “solve” the housing crisis while others sit back and maintain relatively lower density and better quality of life for those who value the benefits of lower-density city living (see: Oak Bay), etc.
Langford businesses, box stores, and condos carried the bulk of the tax and services costs, however residential still have to pay for our own garbage collection separately from property tax.
Could be. Seems like a credible source though and they did study 1985 data for 247 communities and then did an update in 2008 using data from 487 municipal governments.
City of Vancouver and Surrey should each be broken up into 10 or 20 cities to save costs? Saanich maybe 2 or 3?
I will bet you that is not a real relationship and caused by an external factor they didn’t look at. The idea you can save costs by dividing a larger municipality into 50k or 20k chunks for the purpose of police/fire service is funny though.
The CRD disproves that.
Each municipality is paying for its own services. If suburbs were as inefficient as claimed, then property taxes in Langford would be ~4 times that in Victoria, yet they are actually lower.
Seems true, but a bit more complicated than a straight line analysis due to the apparent u-shape of the economy of scale applied to municipal service and infrastructure costs.
The more you look at research about municipal expenses and budgets the more apparent it becomes that there is not a straight line correlation to other expenditures such as infrastructure and roadways based on density – it is about overall population size as well. More people in a smaller space may be more cost effective to a point, but past that point there is a tipping over into new infrastructure and greater repair and maintenance costs.
High density subsidizes low density, a well established fact. Commercial is part of it, but even without that it’s true. Of course commercial is only enabled by sufficient residential to support it so it goes hand in hand.
Yes, the study out of Washington that I posted below.
In addition, this study out of TO shows that the economy of scale for police and fire is u-shaped and allocated on a per household basis. That is that there is an ideal cost-effective service range based on population and costs increase exponentially for smaller or large population areas – ideal for police is 50,000 and fire is 20,000. Interesting as this does not support the call for amalgamation. In addition, there is a small but noticeable uptick in crime rates per person as density rises.
https://munkschool.utoronto.ca/imfg/uploads/215/imfg_no_12_adamfoundonline_jan3.pdf
Yeah my bad it is 400,000 “immigrants” per year not “citizens”
Do you have any data showing that these costs per household increase with higher density, other factors remaining equal?
Agreed.
I think the relatively higher costs associated with condo complexes paid for by property taxes might come from density-associated increases in costs for police and fire protection, emergency rescue services, and greater wear and tear on roads.
Comparing the outlier 21,000 square foot lot in Rocklands with the 800k/year condo downtown is one end of the spectrum. I think the more common and significant comparison would be commercial vs. residential tax revenues. The City of Victoria makes far more from commercial taxation than residential – 3x as much with no homeowner grants.
Looks like north oak bay isn’t getting any love, but surely a decent updated house with a suite there is gotta be worth more than a house roughly the same size with no suite in strawberry vale?
The market is all over the place,someone spent 1.2M on 3837 Mildred St.
1625 yale street sold for $1.26M. Another relatively good value buy in the current market I think
https://victoria.evrealestate.com/ListingDetails/1625-Yale-St-Oak-Bay-BC-V8R-5N5/875046
“We have to be clear that Patrick Condon stands alone with his theories here. His idea that if you divide land then it appreciates linearly to cancel out any benefits is completely unsupported by any data. When you upzone a single family lot to duplex zoning, the land value doesn’t double, and if you upzone to allow 4 units it doesn’t quadruple. Land per m^2 goes up, but land cost per dwelling unit goes down.” (sorry, I don’t know how to quote properly)
I wasn’t aware that was his position, that doesn’t make a ton of sense. You would expect land value to be closely related to how income could be earned from rent/use of the land. Meaning, certainly an increase with upzoning, but not necessarily linear.
Here is another article which looks at the effects of broad upzoning which was done in Brisbane over the past 20 years. They find that only a small amount of construction was actually completed each year. It was not enough to create a torrent of supply and shock the system and instead…prices increased. Paper: https://www.researchgate.net/publication/346713407_We_zoned_for_density_and_got_higher_house_prices_Supply_and_price_effects_of_upzoning_over_20_years
The authors raise two other points, which are valid even if there was a wave of construction starts:
1) Location of construction will be chosen based on maximum profit to the developer, and will not necessarily mean maximum benefit to the community.
2) It’s much more difficult/impossible to make a coherent long-term transportation plan to handle the increased density.
I’m all for targeted upzoning, the creation of mixed-use developments/communities, promoting active transportation, and so on. I believe it’s a more sustainable way to live (in all senses of the words, environmentally, socially, and economically). In fact, I wrote a paper myself on the virtues of developing communities in this manner. All that being said, I don’t believe that even this is a solution for affordable housing. In fact a planning issue that has to be addressed when trying to develop communities in this way is how to deal with the increase in land prices and the resultant exodus of lower-income individuals to suburbs (which counteracts all those sustainability benefits). Requiring that some/most of the units be affordable is certainly part of the solution.
An ancedote to finish this off: a have a friend who lives in Strasbourg with his wife, both early 30s professionals. They are having a child soon and want to buy a larger place (they have been renting the same place for around 8 years but now want an extra bedroom, and want to own instead of rent). To stay in Strasbourg, they are looking at around 740k CAD for a ground level 3 bedroom apartment which requires extensive renovations and is across the road from the French equivalent of “Our Place.” Instead, they are most likely going to move out to the “suburbs” of Strasbourg, meaning a nicer 3 bed apartment for around the same price which will require them to drive to work instead of walk. It’s either that, or stretch their budget to the limit and dole out 800k+ for decent unit in the city.
On a related note, he tells me that the “Eco Quartier” push in Strasbourg to end the sprawl (of apartment buildings) and create sustainable neighbourhoods is (slowly) gaining popularity.
http://www.ecoquartier-strasbourg.fr/
https://www.strasbourg.eu/eco-quartier-danube
Fun facts.
The post WWII era was called the “baby boom” because birth rates rose by 100k from 250k/year (pre war) to 350k/year . Now in Canada in 2021, we have immigration rising suddenly from 300k/year to 400k/year – perhaps this era will be an Immigration Boom.
This is relevant because the millennial generation are the main homebuyers (>50%).
These demographics should help the economy, and keep upward pressure on housing demand and prices. We need a corresponding boom in construction to accommodate this.
It’s clearly both.
Immigration has been higher under Trudeau (300k/year), than Harper (260k/year). Since it takes immigrants 4 to 30 years to become a citizen, annual numbers of new naturalized citizens would largely reflect immigration policies of predecessor prime ministers. https://www.statista.com/statistics/443063/number-of-immigrants-in-canada/
The poster is likely referring to immigrants (not citizens). There are 400k immigrants expected this year (2021) and more in 2022 and 2023. Most immigrants become citizens, but It takes at least 3 years for a permanent resident to become a citizen. Some countries don’t recognize dual citizenship (e.g. China (including Hong Kong) and Japan) , which may discourage them getting citizenship in Canada. 41% of immigrants become citizens within 5 years, and that rises to 86% if they stay 30 years. https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2019015-eng.htm
https://www.cicnews.com/2020/10/canada-to-release-2021-2023-immigration-levels-plan-1016133.html
“Canada to target over 400,000 immigrants per year
Canada will aim to welcome 401,000 immigrants in 2021, another 411,000 in 2022, and 421,000 in 2023. The only time Canada welcomed over 400,000 immigrants in a year was in 1913, when it admitted 401,000 newcomers. It has never come close to this figure again.”
.
21,000 sqft downtown you can put up a 200 unit condo tower paying $800,000 in taxes per year. One sewer connection (holding tanks often required which pump overnight to reduce strain on system), one water line connection, 200′ of linear snow removal, zero city trees, etc.
21,000 sqft SFH lot in Rockland $10,000/taxes. One sewer connect, one water line connection, 200′ of linear snow removal, a bunch of city trees to manage, etc.
What am I missing here? There is no way city is spending 80x resources on the condo tower.
I have no problem having 400,000 new immigrants coming to Canada every year so long as they are all multimillionaires and contribute one million dollars each towards the infrastructure that Canada already has and the expansion it will need to accommodate them. In other words, pay for membership into the Canada Club, you need a membership to shop at Costco, every year!
I’m not sure exactly what you’re trying to say, but that certainly isn’t true. In 2019 (last year of data shown) there were 249,684 new naturalized citizens. The total numbers for JT’s first 4 years were actually lower than for Harper’s last 4 years.
https://www.statista.com/statistics/555911/new-naturalized-citizens-canada-2010-2015/
I know Kelowna very well. The core areas on the map generating a tax surplus to costs are also areas with significant commercial development which is assessed at a much higher tax rate and these areas also have a higher market value and therefor higher residential tax assessments. This has always been the case for municipalities. It is true that purely suburban communities do not pay their share of the costs overall, but that it is not because condo owners are subsidizing them, it is because businesses are. This does make a case for greater mixed use developments closer to business properties.
I do like the focus on long term capital cost of infrastructure maintenance, repair and replacement in the report.
We have to be clear that Patrick Condon stands alone with his theories here. His idea that if you divide land then it appreciates linearly to cancel out any benefits is completely unsupported by any data. When you upzone a single family lot to duplex zoning, the land value doesn’t double, and if you upzone to allow 4 units it doesn’t quadruple. Land per m^2 goes up, but land cost per dwelling unit goes down.
But either way, Patrick Condon’s proposed solution is also broad upzoning, so the experts agree this is required to solve the problem. The only difference is that he wants it all reserved for affordable housing, so no upzoning for resale. I’d like to see both, but I think politically it may be easier to upzone for rentals and affordable housing first because then you only have to win against the NIMBYs, and you aren’t fighting the (in my opinion misguided) affordable housing folks at the same time.
Yes. Kelowna has done this analysis. The denser city pays for more than 100% of the costs, while the suburbs pay less than 25% of what it costs
“Using the MCI tool, it becomes very clear that different land use types have very different infrastructure
impacts. Two factors appear to drive cost: proximity to the city’s Core Area, and residential density of a
neighbourhood. That is to say, the more central a development is and the more dense a development
is, the better it performs from a financial sustainability perspective. Figure 1 shows the per cent of longterm costs covered by each neighbourhood.”
Read more: https://kelownapublishing.escribemeetings.com/filestream.ashx?DocumentId=28780
This presentation is a great overview too: https://kelownapublishing.escribemeetings.com/filestream.ashx?DocumentId=28781
Is there data that supports this? Seems like the calculation is pretty complicated when it comes to property taxes vs. services.
This article out of Washington might be relevant: https://mrsc.org/Home/Stay-Informed/MRSC-Insight/Archives/But-What-About-Multiple-Family-Housing-Does-it-Pay.aspx
That Capital Daily article quoted Patrick Condon, this is a good interview with him: https://thetyee.ca/Culture/2021/05/07/Sick-City-Pandemic-Housing-Crisis/
He clearly articulates what I was attempting to say earlier: that the problem is land inflation, and upzoning only further concentrates wealth for landowners if no other restrictions are put into place.
A key point from the article is this: “Well, I have a chapter that focuses on new policies implemented by Portland and Cambridge. The one in Cambridge is particularly relevant. They have just last fall passed an “Affordable Housing Overlay” zone that covers the entire city. It allows a doubling of density on any parcel, if and only if the entire building is permanently affordable to those making median area wages or less.”
A policy such as this (among others) is needed, otherwise the problem of unaffordable housing won’t be solved. Yes, with a bunch of supply rolling in maybe you’ll see a 5% rent reduction for a bit, but long-term I think it’s actually counter-productive. All we’ll get is a larger, still unaffordable city largely owned by the very wealthiest in society.
From: https://www.bnnbloomberg.ca/the-second-largest-country-in-the-world-is-running-out-of-land-1.1605274
I think they make a bit of a mistake here making an analogy to the Canadian market possibly progressing towards to a Euro or Japanese scenario of homeownership (maybe in a few urban centres). Since people want what they want and we really do have a lot of land in terms of the size of the country, people are just likely to move and we will see other places grow into cities (make the place they can afford what they want it to be). I have directly seen the challenge of worker retention already in people refusing to come to Victoria or Vancouver; and separate from remoting, business is looking more and more to more to where their employees are located (gotta keep your talent, but still mange to have a successful bottom line). It should be an interesting couple of decades of transformation of the business centres in Canada along with a changes in the population distribution in country from the traditional urban/rural structures we have become accustomed to seeing.
Last time I checked the environment was a global problem.
Aside from 1907 during Sifton’s policies, Canada historically had far lower levels of immigration than currently. Pierre Trudeau had 95000 people a year obtaining citizenship. Justin Trudeau has 400,000 people a year obtaining citizenship. In fact, Canada’s immigration levels per capita are way over DOUBLE that of the US including under the Obama and previous administrations. Canada has the highest levels per capita in the world. So yeah, let’s talk numbers.
Introvert, just because we went at a slower pace previously doesn’t mean we shouldn’t speed up to address today’s issues. Best time to plant a tree is 20 years ago. Second best time is today.
Also, we’re severely constrained by material and labour supply. It’s not going to be overnight change on every lot.
The global population increases 70+ million every year.
I wonder how the people that were priced out of single family homes or townhouses feel that they are subsidizing the people in those single family homes with their tax dollars.
That’s the whole point: reduce the population so there is more room overall or at least stabilize
the population.
One of the best quotes in that prezoning article is from Mark Holland. He’s right and it’s starting to happen.
https://www.capitaldaily.ca/news/blanket-zoning-pre-zoning-city-initiated-rezoning-victoria
I wish I had enough to money to get denied on a light density application and then to build the ugliest house on earth, within the zoning bylaws 🙂
Cities draw an enormous amount because they have an enormous population. If you spread this population out the combined resources required would be way higher unless you are going to put people up in places with no infrastructure and dirt roads.
“Why should families be subsides even more“
‘
‘
Families are no where near as subsidized as seniors
About 1.05 in April
Not really. We used to have a lot of greenfield land, and that got developed very quickly. What we’re saying now is that everything must grind to a halt forever.
I don’t agree it’s a radical change. Upzoning will gradually result in infill over years and decades. It will allow Victoria to keep growing sensibly instead of choking it and pushing families further and further away. As for the population opposing it, the population hasn’t even thought about it yet. And with every person that moves to the area the population that supports strong action on housing increases. The people who have been left behind by this are getting angry and things are starting to change.
The house on the right was built by right and is legal everywhere
This house (duplex) is illegal almost everywhere and you believe it will destroy the neighbourhood if allowed. In what world does that make any amount of sense?
Accepted unconditional offer but no price published yet.
Gonales: using a computer voice program and it is occasionally weird. Sorry, should pay more attention although at my age naps are often a priority.
Does anyone know what this townhouse sold for:
UNit 8 at 735 Moss Street. Heard it was over ask.
Sincere thanks
Also, so tired of the barista argument — “who will make our coffees if there are only million-dollar houses all around?”
The answer is, the same people who are making our coffees today with only million-dollar houses all around.
Can anyone please tell me what the months of inventory is for single family homes, please? Thanks very much.
Yes, that would be a last resort. But since an ounce of prevention is worth a pound of cure, I think I’ll continue to oppose radical zoning change.
Having a family is a choice. A choice that often includes financial and time sacrifices. There are already numerous benefits giving to families through tax credits and every property owner contributes to the cost of the next generation’s education. The choice is usually between living in the core and having a large family. Why should families be subsides even more? Core real estate is driven by market and it is most beneficial to build one bedroom units. If family’s were coming to the table offering market value then developers would build it. Also remember population growth is one of the four major contributing factors to climate change.
Right, Victoria is quite different now than it was 20 or 40 years ago. And most of that change happened relatively slowly, over decades, mainly through spot-zoning. That degree and pace of change in a city is inevitable and I think EVERYONE accepts that.
What not everyone accepts, if you can wrap your head around it, is that, suddenly, in 2021, we MUST aim for radical change, leaving no square metre of the city unaffected, as fast as possible — with a significant chunk of the population opposing it, no less.
and you also noted
“In the meantime, more traffic, lower quality of life for residents, and more damage to the environment. North America was teeming will life 300 years ago — ask any biologist, today is a different story. Population growth makes people less happy and destroys habitats.”
Right. So Instead of plunking 200 people on 21,000 sq/ft downtown we should plunk these people on 2,000,000 sq/ft so everyone has some land to grow organic veggies. After all we didn’t evolve in a box.
And of course, 200 people on 2,000,000 sq/ft won’t have an negative impact on traffic, environment, biology etc.
Next I have to listen to people that don’t want any development, but want affordable housing.
Then it is the anti-pipelines but complain about price of gas and drive ICEs.
I don’t mind people having a position, but what is the deal with everyone have positions that completely contradict each other.
It must be very frustrating for you, weaving together statements into a pre-existing narrative that describes half the world as quite stupid.
The Vision should be smaller, local communities without perpetual population growth. There are many small population farming communities in Canada to this day and the ecological footprint when done right is far less than a city. Cities draw in enormous resources including water, hydro, wood, minerals, and all of the other materials that go into producing them. There’s no reason the direction cannot be fewer people with good use of space for everyone.
People live in condos? I would have thought it would all be vacant units owned by foreigners and speculators.
< And I bet you’d have trouble finding anyone who thinks a townhouse going in right beside them, no questions asked, would be just fantastic.
I live by one of Abstract's new condo's in Saanich that has a few exterior access townhomes in it. Aside from the short term road construction I have 0 complaints, they've re-paved our street and we have a new sidewalk, I've met a few of the new people who moved in including a couple with cute dogs and a few kids who play with my kids. We can see a couple of balconies from our yard so therefore they can see us in our yard, doesn't bother me. What's the big deal?
There's another Abstract building planned near me on Shelbourne/McRae and the community board by Bowker creek has a livid homeowner sticking letters in it, about how it's going ahead without consultation, they'll be losing "morning sun" and other nonsense. Saanich and Abstract have been running ongoing consultations since we moved here over a year ago, with changes to the design based on I assume this one person's complaints. The only issue I have with it is they're not building any 3 bedroom units suitable for families, but 1 and 2 bedroom homes, 80 of them, is a huge benefit to my neighbourhood especially on a route to both UVic and Camosun.
“That’s right, Marko. Everyone should have a house and ideally land as well. We didn’t evolve to live in a box. Volunteers anyone?”
and you also noted
“In the meantime, more traffic, lower quality of life for residents, and more damage to the environment. North America was teeming will life 300 years ago — ask any biologist, today is a different story. Population growth makes people less happy and destroys habitats.”
Right. So Instead of plunking 200 people on 21,000 sq/ft downtown we should plunk these people on 2,000,000 sq/ft so everyone has some land to grow organic veggies. After all we didn’t evolve in a box.
And of course, 200 people on 2,000,000 sq/ft won’t have an negative impact on traffic, environment, biology etc.
Next I have to listen to people that don’t want any development, but want affordable housing.
Then it is the anti-pipelines but complain about price of gas and drive ICEs.
I don’t mind people having a position, but what is the deal with everyone have positions that completely contradict each other.
For a barrister, you sure don’t know your law terms that well
“I hope you realize that there are already town houses at 10 mile point….”
Yes and some fairly high density condos, too, all in the Wedgewood Estates section. Taller than most you would find in Gordon Head or Cadboro Bay Village near commercial areas.
The idea was to have a node of high density to allow the rest of 10 mile point to retain the signature urban forests and estate properties. No doubt up zoning would end much of that.
Up zoning the whole area to what would no doubt be luxury townhouses/condos would cause the standard $2.5 million non waterfront properties to suddenly jump to $5 million.
Only real issue I can see are the loss of street parking and if you previously thought you had a private backyard, but now taller multi unit structure is next door and you lose that privacy.
lol introvert, you live in an area that is full of student rentals. I would argue that having a family occupied townhouse development next door is probably better for you than a street full of SFH rented out to 5+ student each.
I honestly cannot wrap my head around why that would bother you.
I don’t get this either. You will never be forced to do anything with your own property. You own that piece of land. Keep it as a single family home, or tear it down and live amongst nature in the trees that’s all fine.
But you don’t own anything around you. Moving to a city and expecting it to be preserved in amber is so detached from reality I just don’t understand it at all. Victoria is quite different now than it was 20 years ago, different than it was 40 years ago, 60, 80, 100. If there’s one thing you can be sure of, it will be very different again in 20 years. If eventually it changes so much that you don’t enjoy it anymore, then you move. Nothing wrong with that.
Exactly, if someone has a 20k sqft lot and can carve off 14k of it for a nice profit they might just do that. You see this currently.
Yes, and if we want to get precise then there is an argument of whether CPI is an accurate portrayal of real cost of living. My point is that I am just curious if most people’s incomes are increasing at the same rate as their actual cost of living year over year. I have certainly noticed that the prices in restaurants have increased much more than 3%.
Victoria is a very nice place. That’s why I moved here but I sort of expected the drawbridge to be pulled up behind me. The arrival of the rest of you has been a bit of a rude shock.
The words of Saint Frey and the Abbot Henley appear to be true:
“And you can see them there
On Sunday morning
Stand up and sing about
What it’s like up there
They call it paradise
I don’t know why
You call someplace paradise
Kiss it goodbye”
“Things no one in Ten Mile Point says:
“You know what this quiet, tranquil, private peninsular paradise needs…more density!””
I’m sure there are those who would be very happy to have an opportunity to redevelop their land and make off with a nice profit. Not everyone thinks like you.
That’s right, Marko. Everyone should have a house and ideally land as well. We didn’t evolve to live in a box. Volunteers anyone?
Things no one in Ten Mile Point says:
“You know what this quiet, tranquil, private peninsular paradise needs…more density!”
I hope you realize that most Ten Mile Point residents probably don’t want dozens more of them in Ten Mile Point.
And I bet you’d have trouble finding anyone who thinks a townhouse going in right beside them, no questions asked, would be just fantastic.
“Inflation came in at 3.4% for April Canada (3.2% for Victoria). For those of you on none commission jobs, do you expect your salary increase to keep up?”
What you are referring to is the change in the All Items CPI from April 2020 to April 2021, and much of it is attributed to the difference in energy costs between those two periods. Remember that CPI fell in April 2020.
I hope you realize that there are already town houses at 10 mile point….
If Saanich eventually approves its radical upzoning-the-entire-district-to-“missing middle” plan I can’t wait to see the reaction of homeowners in Ten Mile Point when the first 3-storey townhouse gets built within 5 feet from either side of two peaceful single-family houses nestled in the trees.
Ah yes the perennial favourite “It’s so crowded no one comes here anymore” line of argument.
As for valuing quiet, space, and privacy, that is one thing Canada is not and never will be short of.
I totally agree with the highlighted part.
As for “probably end[ing] up creating a city nobody would want to live in”…well lots of people would want to live in a city like that, just not those who value relative space, quiet, and privacy.
Inflation came in at 3.4% for April Canada (3.2% for Victoria). For those of you on none commission jobs, do you expect your salary increase to keep up? I suppose all the government union workers are stuck at 2%?
If income increases don’t keep up with inflation then I don’t see the argument how debt can be inflated away. It will be the opposite as you have less and less disposable income to live the same lifestyle.
That explains why humans have been a miserable bunch for so long outside of isolated periods of happiness like the Black Death and the introduction of smallpox to the Americas with colonization.
Density is rather a mute point for me. Which part of “I am married” seems to suggest a selection process that involves me?
The core town of Lugano, while beautiful, is probably similar or greater density than Victoria. The municipal boundaries include a bunch of agricultural and unsettled land. The canton of Ticino where Lugano is located is similar in surface area and populations to the CRD. Feels more crowded though, probably because it is just a stone’s throw from a 4 million person metropolis.
Close but moving to Lugano (if the damn renos ever get done sometimes this decade). Lower density than Victoria with a total pop of about 70k. On the other hand, a much larger population of my wife’s relatives.
Weren’t you going to be moving to Lucerne which is denser than core victoria?
Why can’t we put them in metchosin or some where like that? Why do we need to house them in the core where it is easier for them to commit crimes and buy/sell drugs?
I recall similar articles in 2008 about peak oil when oil was at 140/bbl. Hopefully the Calgary folks who bought houses then finally broke even now.
https://ichef.bbci.co.uk/news/1632/idt2/idt2/44076790-1c8e-42df-8c32-cd9cb168f328/image/816
Interesting article on similar subjects discussed here: https://www.bnnbloomberg.ca/the-second-largest-country-in-the-world-is-running-out-of-land-1.1605274
Yes, I realize my response was a little over the top. However, the original poster stated “Population growth makes people less happy” as fact instead of an opinion.
A good case studies might be Japan which is dealing with population declines. Is this making them happier?
Good article on prezoning in the Capital
https://www.capitaldaily.ca/news/blanket-zoning-pre-zoning-city-initiated-rezoning-victoria
As long as big enough to have a reputable sauna company.
Dear Former: You often have some great points but you are being rather disingenuous here which is a shame since you have insights of value often. The point is that people are happiest, overall, in communities of a certain size which generally involve a very limited amount of high density. (Obviously there are significant exceptions on both ends of the spectrum and it is a more complicated matter than simplistic pronouncements which is what we so often get).
If it really makes you so unhappy there are still plenty of places to move to in Canada without any population.
Maybe this would be somewhere you would be happier: https://realtor.ca/real-estate/23188849/4456-titetown-road-quesnel
AS discussed previously, a great majority of homeless people have serious mental health issues, addiction, brain damage, etc. They are incapable of maintaining living quarters and would soon destroy anything that was provided for them. The maintenance would be unsustainable. A few homeless people, maybe 20% at best, have the capabilities to maintain an apartment. What most homeless people require is institutional care. The government abandoned this approach years ago and are reluctant to ever go down that path. These poor people are left to fend for themselves and therefore, live in hell. The tax burden to provide for them would be extreme and result in loss of other services we have become accustomed to receiving. Definitely a tough situation, I certainly don’t have any answers.
Is there a reputable sauna company in Victoria or that provides sauna to home owners?
Josh: Careful what you are saying dont want people to start calling them druggies and criminals. Homeless is a much better term. People with a job are privileged to start with so they should not complain about the homeless getting good water views. If it is really such an issue then give them lower floor units. The five year plan should be to expand the high-rises to couver all of North Park and Fernwood.
CMHC housing market outlook for Victoria with it’s usual amazing level of accuracy. 2021 YTD prices already outside their full year forecast range. Maybe we get back into the range though if prices stay flat for longer or pull back a bit.
I am not opposed to decreasing immigration as long as everyone understands quality/standard of life/purchasing power would likely decrease for everyone. Given how much we consume doubt that would sit well with the majority.
That’s a fair issue to raise. A lot of countries face the same fertility rate problems as Canada. Norway has not had significant population growth. Japan and Russia are using other measures. It’s more a question of cultural preference and creativity. I don’t believe this is truly driven by economic pragmatism. It’s more a confluence of political, cultural, and economic interests.
That’s not how it works. Denser living means less traffic and less damage to the environment.
Seems pretty unremarkable to me.
Thing is most immigrants are well educated and willing to do jobs CNDs may not be willing to do. It’s great to cut off immigration, until you can’t staff an old folks home and your grandmother is in there.
I am not opposed to decreasing immigration as long as everyone understands quality/standard of life/purchasing power would likely decrease for everyone. Given how much we consume doubt that would sit well with the majority.
The city needs to work for the $150K a year people too. They are the ones paying the freight, so to speak, and the city will die without them.
The SJW are going to have a field day with this.
To me it make more sense to stretch the dollar by building low income and social housing where it is inexpensive so it can serve more people that need assistant.
Moreover, any drastic attempt by Victoria to “solve” the housing crisis will induce more demand than usual, and we’d return to “crisis” in no time flat.
All cities and towns across the country would have to attempt to “solve” the housing crisis simultaneously to avoid relatively large migrations of people from cities that are doing little to cities that are doing a lot.
People must be really addicted to unhappiness what with flocking to cities since the industrial revolution.
The problem with building to fix the housing crisis, is that more people will keep coming anyway. All it does is postpone the inevitable. In the meantime, more traffic, lower quality of life for residents, and more damage to the environment. North America was teeming will life 300 years ago — ask any biologist, today is a different story. Population growth makes people less happy and destroys habitats.
Much better to curtail the housing crisis at its source. Reduce immigration levels to what they have been historically, about 95,000 a year as what was the number under Pierre Trudeau and those before him.
I mean… they wouldn’t be homeless anymore now would they?
That is prime downtown vicinity waterfront area property for homeless shelters. We should develop luxury condos in James Bay and the extra tax revenue from those can be used to pay for homeless housing somewhere less desirable. Can’t justify have homeless people living on the 50th floor with water views mean while hard working tax payers are living in a basement suite in Langford.
KS112 We should definitely have the homeless based in the high-rises in James bay. Should be able to accommodate at least eight thousand along with apartments for those providing wrap around services. If needed we could also build high rises in BHP which should add tens of thousands of units.
To answer my own question, maybe it’s because the Housing Strategy recommendations won’t be ready to be voted on until after the upcoming election?
” Election is coming up, one or two more pro-housing councillors get in and this can happen”
Time for you to gear up for your council run, Leo!
Ahh I see, I think i saw that Viking air was laying off people too last year, I wish you best of luck going forward. Don’t knock skip the dish, the big CERB scam was for someone to collect CERB and drive for skip the dish using someone else’s account or get someone else to make a skip the dish profile. Money would be provided to make the other person whole with respect to any income tax implications etc.
“But you got paper gains on your property though! 10% pay cut? dang, is your employer in the transportation or hospitality industry?”
paper gains will certainly help when we sell, to live in the car, or move to Moosecrotch SK.
employer is in an archaic industry segment called “manufacturing”. As in “To make or process (a raw material) into a finished product”. something i dont think we do in this country anymore. although we do employ talented and hardworking engineers, designers, welders, millwrights, electrical and instrument trades, it probably is time to wind the thing down, and move the business to Asia. we could all be retrained for careers at “Skip the Dishes”
That is a fair comment on its own, however when the government is out right saying that their polices will ensure home prices to only rise then I think it is fair for those whom aren’t currently in the market to ask for polices to help them also. If government polices are only enriching the top end (asset price inflation) and the bottom end (stay home and still get paid) without anything for those in the middle, then I can sympathize with them wanting their cut too.
Another example of self importance is the unreal expectation of a couple anywhere in Canada earning over $120K per year to expect government support to assist them in purchasing a home when there are thousands of people in the same area as them earning the minimum wage and haven’t got time to sit all day on a blog complaining about their lot in life.
First of all these metro areas have populations of 9 million and 20 million respectively. Second NYC has less than 1/2 of the metro population and there’s lot of SFH elsewhere in the metro. Actually quite a bit in NYC itself outside Manhatten, and I’m guessing your figure is for Manhatten alone. Likewise your figure seems off for Greater London.
Nothing says “self-importance” like comparing a 400K provincial city to two world capitals. And I thought Vancouver was full of it.
Those would be some great views! I am in if they ever do that sans the homeless people in the same area.
But you got paper gains on your property though! 10% pay cut? dang, is your employer in the transportation or hospitality industry?
I don’t disagree with upzoning, particularly along main corridors. I’m a bit unclear whether you’re advocating for privately-owned rentals, government-owned rental, or both?
For private: Looking long-term, won’t having private firms build rental buildings just shift wealth acccumulation from rent collection away from private owners and landlords to even wealthier entities? That being those having enough captial to finance the building of multi-unit rental buildings? Rent may go down short-term, sure, but at the expense of further concentrating land ownership into fewer hands. Take Germany for example: low ownership rate, most people rent, and large companies and the extremely wealthy own an enormous portion of the housing stock.
For government-owned: This avoids the above problem, but obviously the government a huge amount of money up front. I really don’t have a good idea of the costs of projects like this (meaning, how much the rent for a 3 bed apartment in a government-owned rental building would need to be for the govt to break even). Aside from that, this is more a political battle than anything because, as you say, the Overton window has not yet shifted.
Hey there… wondering if I could have a semi-annual check on the MOI for SFD please :). Thanks in advance.
What returns have we seen from single family homes in the past, when we’ve been in this position in the market?
So remove all backstopping of private mortgages?
just got my property tax bill. up 8.4% over last year. thanks Lisa and the COV for showing restraint during international pandemic and economic collapse. this should pair nicely with my employer’s 10% pay cut and suspension of our savings plan (made necessary for survival)
Simple let the free market sort it self out with out government red tapes and interventions.
It looks like Canada economy will be in a headwind in the near future as out flow of foreign investment is increasing while inflow is dragging behind.
IMO, the rise in commodities demand should increase domestic investment in Canada, but due to the recent government polices capital is leaving the country.
Canadian investors continue U.S. stock-buying binge: StatsCan — https://www.advisor.ca/investments/market-insights/canadian-investors-continue-u-s-stock-buying-binge-statscan/
Canada’s international transactions in securities, March 2021 — https://www150.statcan.gc.ca/n1/daily-quotidien/210517/dq210517a-eng.htm
We on here are not going to solve the perceived housing crisis in Victoria.
A few years back Portland Oregon was looking in to an “Affordable Housing Bond. ” Some of that programme made sense to me. Anyway, it would certainly increase employment for more unionized government workers to run and oversee it.
What ever happens, the main focus in this city and many others will be the obvious need for affordable & safe accommodation for the homeless, disabled and low income. It isn’t going to be for couples earning over $150K a year.
Marko is right. The “average” size of accommodation in London is 705 sq ft. Avg size of accommodation in NYC is 866 Sq.Ft. and half of the apartments are 700sq.ft. or less. The mindset of the newest generation is going to be entirely different than most of ours.
New tenant of just-opened shelter in Vic West arrested for arson after torching nearby building.
https://www.timescolonist.com/news/local/unease-in-vic-west-after-arson-fire-near-just-opened-shelter-1.24319774
Not suitable for North American families, somehow suitable for the rest of the world.
The AVERAGE family in BC comprises 2.8 people. So you either have one couple (usually sharing one bedroom), plus 8/10ths of one child. Or a single parent plus 1.8 kids. According to the AVERAGES, a two bedroom condominium/apartment would suffice.
If you mean income tax, they’re unlikely to have much if any taxable income after expenses.
Yes indeed. But what are the rates? Those are the rates the professional investor will use to make a decision.
Thanks for the link, was some interesting reading about the calculation of “core housing need”, helps explain why most affordable housing developments are 1-2 bedrooms when market demand is higher for 3 & up. I don’t love the definition of housing suitability currently used though:
https://www23.statcan.gc.ca/imdb/p3Var.pl?Function=DEC&Id=100731
I don’t think enough affordable two bedroom condos currently being build are really suitable for families.
The definition of housing need captures those factors.
https://www.cmhc-schl.gc.ca/en/professionals/housing-markets-data-and-research/housing-research/core-housing-need
I think a great solution would be to rezone all of James Bay for true high-rises, 40 to 50 stories , expropriate all the land and in exchange for the height allowance make sure the developers do a fair percentage of three and four bedroom units for families. Also a percentage of the units need to be made available for homeless. If we follow the Hong Kong model we should be able to accommodate at least another 200k in James Bay. Do the same in Vic West and it should solve the problem for many years to come. Plan on getting shovels in the ground about two years from now.
Hot take: The definition of affordable housing used by government(s) should include the average family’s space needs. Using this definition, in order for housing to be considered affordable it must be of an appropriate size & number of bedrooms for the average family in addition to having affordable pricing.
Reasonably priced ($2500ish per month) 3 or 4 bd units/townhouse are difficult with land and construction costs in the core. Sooke is different and likely Langford. Stacked units with families often have noise issues, so side by side is like best comfort wise but more land intensive. It is a puzzle indeed.
One thing that may also help is let people build rentals on their property and rent them out tax-free for 5-10 years to recoup some of the costs of building.
Will be interesting too see what happens to Victoria council, the stuff they have been saying and doing lately is nuts. However, they have a lot of grass roots supporters so I don’t think anything is going to change anytime soon.
Why couldn’t it happen now, with Saanich council’s current makeup? There are currently more than enough pro-housing votes at the table.
Also a big fan of Oaklands. But I think that a true apples to apples comparison of the price of a house in Oaklands to a house in say Fairfield or Oak Bay is not as great as one would expect. Need to account for differences in things like lot size, character, quality of materials, finished square footage, layout, etc. Consider places like 1743 Hampshire or 1841 St. Anne, both sold recently in the 1.4M range. If those exact houses were on one of the many quiet streets in Oaklands, would they sell for much less? I doubt it.
That’s my point yes.
Saanich and Victoria councils are getting close. Election is coming up, one or two more pro-housing councillors get in and this can happen
For this to have any real impact, purpose built rentals need to accommodate FAMILIES. 3 and 4 bdrm townhouses with garages, etc.
I think realistically this needs to happen at a policy level somewhere above municipal. Not sure if that’s possible, but since NIMBYism seems to be a primary blocker everywhere, it might take something along the lines of eminent domain at the provincial or federal level.
Not holding breath.
Any recommendations for a mortgage broker in Victoria?
It is probably no coincidence that purpose built rental collapsed in the 80s when interest rates went through the roof. I am sure a lot of companies investing in rental housing did not do so well through that.
Yes, thanks for the correction.
This isn’t secure housing though. Doesn’t solve the problem.
We have thousands of units under construction. Government money has brought back the rental construction game, and many pension funds are pouring money into rentals. Problem is vast majority of those being built at 1 and 2 bed apartments in only a few areas. We need that, but we also need tons of family suitable rental housing that is currently not being built.
« IMHO the main problem inhibiting purpose built rentals is that a rental property investor needs to look at at interest rates going out 25 years or more, but the condo buyer is only looking at interest rates today. »
Mmm false, no one has a cristal ball that far out. Apartment building Investors look at the near term return, 5-10 years max. Does one buy stocks on the stock market due to factors 25 years from now?
Lenders lend in 5 or 10 year terms for new purpose built rentals. 15 years has become an option recently.
One has to remember there are competing alternatives for capital. If rates of returns in Victoria apartment buildings is in too low. Capital will go elsewhere, such as into other assets types, office. Industrial, elsewhere in canada, other countries..
To encourage construction It would require lower construction costs and certainty in construction process, something that Victoria area is not good at. Except for Langford.
Also as to the roughly 2000 purpose built rentals in 30 years, that’s a load of BS. It is at least 3X if not 4C that. Langford alone has added that many in a 5 year period.
About lack of new purpose built rentals, the fact every second house in the CRD has a suite has been the de facto purpose built rental for 20+ years. Once majority of houses have suites, you need to look at more new purpose built construction.
Actually a rental property investor (assuming a professional one) will have access to long duration financing not available to individual investors.
IMHO the main problem inhibiting purpose built rentals is that a rental property investor needs to look at at interest rates going out 25 years or more, but the condo buyer is only looking at interest rates today. Thus the same building as condos will sell for much more than a rental property investor will be willing to pay.
Unless and until interest rates get closer to historical norms I don’t think you’ll get much open market investment in purpose built rentals.
That part of Oak Bay Ave isn’t part of Oak Bay. That’s Victoria.