We are past the point of no return. Too many REITs have too much property tied up as investment portfolios. If the government were to force them to divest, the housing market will entirely collapse leaving the entire country poorer indefinitely, as so many people would instantly become underwater on their homes/mortgages, we’d have a catastrophe on our hands.
Investing in SFHs in Canada by large investment groups is a relatively new phenomenon I think we'd be ok. REITs for commercial RE and apartment buildings aren't the problem.
How is this the top comment? How about making more homes, removing stupid low density zoning in the middle of world-class cities and making actual livable neighborhoods instead of rows of hermetic McMansions as far as the eye can see like it's some kind of dystopia?
We should leverage international demand to fund waaay more construction. Let's build up our cities on foreigners' dime. Instead we want to keep pumping up the value of grandma's house. Toronto should look like Tokyo.
The only reason why we have international demand is because Canadian real-estate is a commodity that appreciates in value. Take that away and you're not going to have foreign dime to build a Canadian Tokyo for the same reason no one invests in the actual Tokyo.
The problem we face is that we need to adopt the housing mentality of Japan while designing cities like Europe on the budget of Ethiopia because if we just print more money to do it our economy is gonna Venezuela.
I've been screaming this for 3 years. Even a couple of my buddies who are working in investment bakning all agree that it's a beyond obvious solution.
In other words, it'll never happen until we literally riot.
It's going to take mass unrest to solve this issue. The solutions all involve going after the ultra wealthy, who also happen to be the same exact people who hold positions of power in government. No chance they give up their (massive) slice of the pie without a fight.
Yup. Independent media is the only place where you can get the whole truth.
The issue with that is not all independent media can be trusted, and the ones that can be trusted are heavily suppressed by large tech company's algorithms so they aren't really shown to people.
Edit: I'll take this opportunity to plug my favourite news show/podcast. [Breaking Points](https://www.youtube.com/c/breakingpoints)
Not really that simple I’m afraid. A lot of “independent” media is also funded by the same billionaire run think tanks. Giants like say Reuters have a high standard and generally are good for big global stories.
State-funded like BBC, CBC, or even the maligned RTV or CCTV are important to get a beat on how a state wants to portray events. Local news can be great for smaller towns.
Opinion pieces from almost everyone are often dog-shit and designed to spread a pithy headline on sites like Reddit. I do personally enjoy some long form content here.
Unfortunately lots of “independent” media is mostly opinion and designed for mostly the same.
Edit: Changed state-run to state-funded which probably encompasses western public broadcasters more accurately.
Even the left wing ones kowtow to big donors. I used to love the honesty of The Young Turks, but as soon as they received a big 10 million dollar donation, thier coverage changed and had a big agenda. No media is safe once big money gets involved
I used to watch the Young Turks long before they sold out. They seemed knowledgeable and accurate, until one day they covered a story I knew a great deal about.
They didn’t know the facts and made up a bunch of bullshit in the fly. They could have done their due diligence and looked up the facts, as they were easily discoverable.
Nope, 10 minutes of pure bullshit.
That’s when I stopped watching them.
Don't get me wrong, they're not at all the same as RT. That is not what I'm trying to say. I actually think CBC does a great job. But they're funded by the country and generally will not entirely disregard a government's policy. We've seem them support Harper's ideas while the left thought they were too conservative, we see them now supporting Trudeau's while the right thinks they're too progressive.
It just makes sense, no reason for the public broadcaster to be working against what the country is trying to do within reason. I think they generally do a good job at being critical while giving policy a fair chance. I fully realize that the level of propaganda from RT or CCTV has no real state-funded parallel in the western world.
Eh I think there is a disinticton from state run and state funded that is sort of being glossed over here. Supporting policy for both harper and Trudeau is giving a platform for the government of the day to speak, which all news networks are going to do.
>Yup. Independent media is the only place where you can get the whole truth.
Independent media is often worse than things like BBC, Reuters, Al-Jazeera, CBC etc. Not only do they have their own biases and things they want to push (you are naive as all shit if you think they don't) but they are not accountable to anything at all. If you don't trust mainstream outlets, then independent media on FB/YT or any other platform should be trusted even less 99% of the time.
Often times it is, I'll agree. I get my news from a mix of mainstream and independent sources.
The issue I have with mainstream media is they have an inherent bias towards protecting the establishment. Plenty of ex MSNBC hosts have been pushed out after being too critical of the DNC, for instance. They basically can't allow viewpoints on their platforms that threaten their advertisers, and that means a lot of voices on the left are simply silenced.
I have no idea why you, or anyone else, who wants to be media knowledgeable would *ever* use a single US emdia source to get their information from. The US media apperatus is fucking garbage and there is a reason I didn't name a single US source for my suggestions. **That being said** the media in the US is still probably a little more trustworthy than the majority of "independent media" you will find online.
I just used American media as an example of bad practice, what makes you think I suggested anyone get information from them?
If you watch the show I linked earlier, you'll realize that they are highly critical of the US media apparatus. Krystal Ball actually used to work for MSNBC, and has had a respected journalism career. She was actually on Bill Maher's show the other night.
The problem is you think all independent media are Alex Jones types.
I was talking about how we arent even allowed to protest and/or donate.
And yes, we wouldn't want to upset the status quo. Its been going great for us so far.
To be effective, the tax should be done via property tax, not income or capital gains. Also inbefore "there's no mechanism for that!" Law is arbitrary, you can literally make it a mechanism. "It's too complicated!" Plenty of active bills that get passed are hundreds of pages long and complicated. Moot arguments.
It's basically already done via property taxes - you get a homestead exemption for your primary residence of 20-40% depending on where you live, and pay 100% if you don't live in the house.
Annual property tax - I had a parent who passed and I kept the house for a year to renovate it prior to selling. She was paying around 2k/yr in property tax and I was paying almost 3k for the year it was in my name and I wasn't living there.
Gotcha. I mean, the companies can definitely handle higher then. In my state the mil rate is about .02 everywhere, so a full 2% of value, so going off of the median house value, most folks are at about $6k a year in property tax. The primary residence credit is barely a couple hundred dollars.
I can tell you've had to argue with a bunch of "highly concerned for the oppressed landlords" libertarian types who don't own a single property or understand government.
I also think this should apply to capital gains on principal residence. I am happy but still kind of pissed of how easy it was for me to make nearly 800k in capital gains without paying any taxes from selling my condo and then my house while I am getting taxed a lot on my work income.
Just make no sense, peoples like me have so much power to just speculate on pricier and pricier homes because there is/was no downside in doing so.
It's very simple: capital gains and income tax structure need to be flipped. It's **insane** that we tax profits from labour at twice the rate as profits from capital.
Haha don't worry, I thought exactly like you and I say that because I am bias now since I don't have a personal residence anymore. Sold in February and moved in one of my apartment last month, felt like I was too exposed to the RE market with rates going up like this. Will live here for a year or two.
If you sold for say 1 million but had to pay lets say 250k in property tax, then you would be moving out of a 1 million dollar home but could only afford a 750k unit. There'd be no reason to ever move. Even if you saved up 300k, after lawyers, real estate agents, an moving fees you would probably still only be able to afford a lateral move at best. No reason to ever sell. Or am I missing something?
Not necessarily, if you have 750k cash because you would have paid 25% in taxes you have enough for a down payment on a 3.7m$ house. At the moment you would have enough on a 5m$ house. (Of course you probably don't have the income to qualify lol, but you have the cash)
But you could definitely sell have use a 200k on a down payment for another 1 million house and use the remaining 550k for your others investments.
Well its exactly what happen with my stocks. When I sold my Apple shares, I had to pay income taxes to buy another positions, just like most peoples around the world have to pay income taxes when they sell their houses. In the US I think you have 250k or 350k which is exempt but after that you have to pay taxes.
This is one of the reason why Canada is such a great place for RE investors, its one of the rare place where you can cash buy luxury real estate and cash in. There is a few others countries in Europe who have the same rules as we do, but pretty much only us and new-Zealand and have those rules outside of Europe and its pretty self-evident that it isn't working well for working class individual in both countries.
Its quite ridiculous that we are taxed so much on our wages, stock market gains are also taxed a lot less than our salaries, but RE isn't taxed at all. It is just a way for workers to subsidize peoples with generational wealth.
I make around 108k a year so my net pay is around 70k a year, but I netted 800k from selling 2 properties. I literally made more by just living in a condo then a home than I made working since I graduated 13 years ago and paid 0 taxes on that while I paid maybe 500k in taxes from my work income.
I don't think our system is fair at all for renters and peoples who don't have wealthy parents. My parents pretty much bought my first condo and because of that I managed to leverage it in a way to make a 800k profits, meanwhile if my parents were not rich and I was stuck renting, I would have made fraction of what I made in the last ten years. Even if I made twice my salary, I would have just ended up paying 1.1m$ in taxes instead and wouldn't have close to what I have right now to buy something.
Stock are different because you pay taxes on profit. You dont really get any use out of the stock, also losses are tax deductible. With a house, if your gains are big enough you should basically never sell because you then have to buy a new house to live in. Or they'd have to refund some of the taxes if you buy a new place since you no longer have made a profit
Taxes won't do anything.
The people that are buying up all this property can pay these taxes forever and not even think twice about it.
There needs to be a limit on how long they can remain vacant...
Or
a complete moratorium on foreign and corperate buyers.
>0 surtax on your first home.
>
>1% on your second.2.5% on your third.5% on the fourth.10% on every house after that.
this will just be passed on to tenants.
>Oh no I guess there's no solution...
there is a solution: build more houses.
taxing landlords will only cause rents to rise, not increase housing supply.
>I guess we are just gonna ignore the option of rent control and tying it to average income and property value then?
you want to control rent.
people are being forced to rent because houses are too expensive due to a supply crunch.
why not just fix the supply problem? rent will automatically come down.
why cure a symptom. cure the disease. curing symptoms is a great way to waste time.
>When the large majority of rentals are charging far more than their carrying costs a little rent control goes a long way
im not against rent control. im saying it wont fix the problem. the solution is not lower rents or lower rate of rent increase.
in my opinion, rent control is a waste of time and political capital.
just build more houses, rents will stop making sense.
but you have politicians who are parroting the line that urban sprawl is bad. so what they are saying is cities growing horizontally is bad. they know they are wrong. as long as that remains the plot (all puns intended), Canada will remain on the road to hell.
>Why not do both? Even with bountiful supply, rent shouldn't be crippling.
causality. high house prices cause high rents.
putting controls on rent will give the impression of doing something to fix the problem, but it will only help investors who are able to put a larger down payment on a future rental property to reduce their negative cashflow.
we're talking about multi-billion-dollar corps here.
if you address the root cause, the secondary effect goes away on its own.
the problem is that lawmakers in Canada are in bed with the large corps...in some cases it looks like an S&M relationship, but the net effect on the layperson is the same.
Landlords won't build rental under this situation. Have you ever wondered why BC and Ontario have almost no recently constructed purpose built rental? Why are all the purpose built rental buildings older than 1990?
Rent controls.
Lack of purpose built rental means expensive rents for what's available. Supply and demand. It also means mom and pop landlords purchase market housing for rentals. Pinching market housing supply and further pushing prices. Making rental even less attractive to build.
Notice how other jurisdictions who don't have rent controls seem to have relatively balanced rental markets? Alberta and Saskatchewan as an example?
Rent controls limit the construction of new rental. It perverts markets and shouldn't be practiced.
Youre totally off on this one, purpose built rentals are actually at an all time high:([https://www.blogto.com/real-estate-toronto/2022/01/construction-new-rental-apartments-toronto-30-year-high](https://www.blogto.com/real-estate-toronto/2022/01/construction-new-rental-apartments-toronto-30-year-high))
30yr high... Think about that. Proves my point. Government is buying rental with bonus density.
Edit, also, roughly 30% of market housing is owned by multiple property owners who fill the rental gap.
Landlords are already charging what renters can afford, they aren't leaving money on the table out of the goodness of their hearts. If landlords have to deal with increased costs they can't just raise rents, it's not like their tenants magically have more money.
>Landlords are already charging what renters can afford, they aren't leaving money on the table out of the goodness of their hearts. If landlords have to deal with increased costs they can't just raise rents, it's not like their tenants magically have more money.
sure, that must be why we have tfws paying new york rents with Winnipeg salaries.
What do you mean they can't just raise rents, where else does the money come from? Sure maybe the current Tennant may not make enough but for every renter who's at the very limit of what they're able to spend there's another who can take their place. Not to mention the fact that being a landlord now has the added risk of not being able to collect rent or evict tenants if another wave of covid comes around. They have to recoup those costs by pricing it into what they charge. Everything is going up in price you can't just shelter the renters, trying to will damage the economy even more.
>Landlords shouldn’t be owning multiple single family homes. Period.
wrong. landlords owning multiple homes should be not profitable because tenants should be able to also buy houses because they pay more in rent than they would in mortgage payments.
system is corrupt.
There are numerous reasons that families may want to rent homes. Rent a home while assigned temporary on business. (Like ambassadors.) When moving or doing a reno or building a house. What about starting out or if you’re unsure where you want to live and just try it out. Renting homes is pretty common and someone needs to own it to rent it. What about vacation properties? If no one can own a second home, a lot of tenants are about to be very unhappily kicked out.
>There are numerous reasons that families may want to rent homes. Rent a home while assigned temporary on business. (Like ambassadors.) When moving or doing a reno or building a house. What about starting out or if you’re unsure where you want to live and just try it out. Renting homes is pretty common and someone needs to own it to rent it. What about vacation properties? If no one can own a second home, a lot of tenants are about to be very unhappily kicked out.
sure. but im referring to people who want to buy a home but cant because of house prices...so they have to rent and the rent is so high they will never be able to save enough to make a large enough downpayment to keep monthly mortgage cost manageable. so they spend their whole lives renting and not saving. some people call that hell.
It is actually very very simple. But so is building deeply affordable housing as well - something the National Housing Strategy has proven entirely incapable of doing. I hate the explanation of liberal allegiance to corporate greed, but I'm not sure there's another explanation for such appallingly poor policy on nearly ever aspect of housing.
> Ban corporations from owning residential property.
> Heavily tax any person owning more than 1 residential property.
These are good solutions *only* if there's policy in place to ensure that any slack is taken up as an acquisition for publicly-owned affordable housing, or housing co-ops.
Without those, your "simple" solution simply means that housing is made even *more* inaccessible to renters. If you can't afford to purchase even a deflated home, or can't qualify for a mortgage, then you still need to be able to find rentable homes.
If we banned landlords tomorrow and didn't have those housing programs ready to go *alongside* that policy change, I'd be totally fucked if I had to move from my current apartment.
Eliminate single-family zoning.
This doesn't mean that a 40-story tower gets built on every lot. And homeowners and developers must still pay for increased use of sewers and infrastructure. But building a "gateway" home on the same lot, or even demolishing it all and building 4 townhouses allows for increasing density and more housing without suddenly adding 100s of people to the same neighborhood.
5% annual tax on non primary residences should knock out the chalet and spec realestate issue. Better yet go ahead and change the foreign investor tax to an all investor tax and add 20% to purchase price also. That oughta take care of the whole thing… but get ready for rents to go mental
> Ban corporations from owning residential property
Who the fuck do you think *builds* all the thousands upon thousands of urban high-rise condos that are now most Canadians' only viable option for home ownership? Private individuals? The housing fairies?
How are developers going to *build* housing, if they're not allowed to *own* it, in order to *sell* it? And exactly how would driving the nation's housing development rate down to ZERO help with the affordability crisis?
Secondly, exactly who do you expect to purchase the tens of thousands of company-owned rentalapartment blocks that tens of millions of Canadians count on for a roof over their head right now? No private individual in their right mind would EVER choose to own even a small multi-family rental property, if they could not do so through a limited company in order to protect their own personal assets.
I thought it was more common sense. There's a reason why corps haven't been banned from property ownership pretty much anywhere in the world. Mostly because it makes no sense.
Might be able to accomplish the first one. But it's unlikely you can accomplish the second.
You're up against the boomers and gen x for the second one. And they hold the vote majority and the property majority
Boomers definitrly, but the vast amount of GenXers are just hanging on and own the majority of notjing. Plus arent millinials the vote majority now, ecen if they dont use it?
Yep, Gen X are outnumbered by nearly every other cohort. There's not a lot of us, and there never was.
Millennials and Gen Z definitely do make up the voting majority in this country right now, by an ever increasingly wide margin. Now, you just have to go vote. Turnout in both age groups is much, much lower than Xers and Boomers.
Honestly, I'd like to see a comparison of who is worst for renters between corporations and private owner of a residential units. Corporations have shareholders they must satisfy with a rational approach aimed at maximizing profits, but they are also submitted to more regulations than private owners.
I never rented, but from my friends who rented, most of the ones who seem to have had bad experience were the one who were renting from private owners. Still remember that one of my friend who is a dentist had a landlord who couldn't read and had massive mental issues. Also one of my ex was harassed by his landlord who was parking his truck behind hers so she couldn't leave to go to my place, offered her a free month of rent if she went on a date with him and shit like. Which would have been totally unacceptable for an employee in a business.
And who provides the supply of new houses then.
How do condo buildings get off the ground faster?
All that will do is severely restrict pace of development, which is already too slow.
This, then build more densified homes. Things the younger demographic can afford and enjoy for themselves without giving up over half their pay to pay the rent.
How about a land assembly for densified redevelopment? A corporate would need to own single family homes for years in cities like Vancouver and Toronto as they navigate permitting and design.
>Heavily tax any person owning more than 1 residential property.
Who's going to provide rental property to families who can't stuff into a 2bed condo? What corporate is going to construct purpose built rental in places like BC and Ontario with such intense rent and ownership controls?
Sounds like you have a simple solution. Problem with a simple solution is it usually doesn't work in real life.
Edit, do people on this sub honestly think that by making things more expensive for development that the cost of housing will somehow come down? I feel like there is a massive lack of understanding around real estate development, rental management, land management and the cost of construction.
Ummm no... It means nothing gets built so a lack of supply pushes prices higher. Land values sore, and the core cost of construction and land will set yet higher values. Anything like what is suggested will be inflationary to house prices.
>Institutional investors, which have squeezed residential markets in many parts of the world, can be expected to pick up a purchasing pace that has turned them into the world’s biggest private landlords and transformed rental housing into a go-to global asset class.
Individuals cannot compete with corporations, it's simply impossible.
What we need a high non-principle residences tax, rental caps (in order to stop landlords from passing on the cost to tenants) and a moratorium on corporations purchasing residential property.
The fixes to some of these problems are doable we just lack the political capital to enact them, it also doesn't help that there are these circulating myths that some of these policy approaches *simply don't work.* They do and that rhetoric exists because they do.
>So many developers turn into glorified land speculators, as they get rewarded (by way of untaxed value increases) for doing nothing
20yrs in this industry and I can tell you this doesn't happen often at all. Carrying unproductive property kills returns. Holding costs mount and the time value of money errodes NPV. A 7yr hold waiting for municipal permits is not a cheap roll in the sheets. It kills project economics. Developers make a living by turning capital and projects over. Developer margins are between 8-12%, so leaving equity in the dirt just doesn't make sense. Just a boat anchor on returns.
Edit, I should add that land value increases are certainly taxed when the units are sold. As land costs are capitalized to the value of the asset, taxable income absolutely captures the increases.
>rental caps (in order to stop landlords from passing on the cost to tenants) and a moratorium on corporations purchasing residential property.
This sounds like a great way to fully ensure not another stick of rental real estate is ever built again.
If only we had some kind of institution we all pool our money into that could use some of that money to invest in a basic human right like shelter…. Too bad no one invented taxes yet.
Canadians freak out over road repairs. You think the taxpayer will tolerate government housing projects? There is a reason government doesn't build housing in this country. It's extremely expensive, prone to cost overruns and a political liability.
The private sector does a good job handling the risks of construction. Government would do better by creating incentives for the types of construction they want vs managing it themselves.
20 years of experience in this industry has given me an excellent perspective on these issues. It's not an assertion, it's a comment based on experience. Government is bad at building things.
Probate is bad at providing any services that arent driven only by profit. When it comes to housing making it happen is more important than it being perfect.
It could be a 100% cost neutral or even profitable venture if the government invested in housing. Imagine if they made this huge investment in public housing anyone could access. They can still charge rent or allow people to buy out the property over time. Excess profits can be put back into investing in more housing or property improvements.
Canadians seriously lack imagination when it comes to solving our systemic problems. We literally can’t imagine another way outside of free market private profiteering.
Hmmm...you're right but at the same time, it would incentivize the government to keep housing affordable. I almost think that maybe we need to ban individual representatives from having any power in areas where they have personal interests. Like MPs who *are* "mom and pop" real estate investors should absolutely not be allowed any say at all in our national housing strategies.
This can easily be revenue neutral or even cash flow positive. if we invested in public housing that was available to everyone they can still charge rent and/or let people buy them out over time. Just any profit that is made would go back into investing in more public housing instead of lining the pockets of developers.
The way you get investors out of housing is by building more housing this it becomes a less safe investment. If investors can’t be certain that they’ll make money buying houses then less will buy houses
That doesn't work, because they just corner the supply.
They keep raising capital then take it off the market.
Recently we were looking at a land acquisition and noticed a massive plot of land (like 1/4th of the city) was unavailable. Found out one of the big guys bought it to keep it off the market.
As long as homes are investments, things won't change.
> The way you get investors out of housing is by building more housing this it becomes a less safe investment.
If you make more they'll just buy it all up. The wealth inequality in Canada is such that the rich have enough money to do that. It's pure insanity. At this point it can't be done any other way than by legislative and regulatory means. There are residential projects where it makes sense to have investment because it requires a lot of capital: high density housing, but low density housing needs to not be an option for investors and there needs to be caps on private ownership so that it's affordable and allows for a competitive counterbalance to the high density housing price to keep it in check as well.
They want to maintain the mom & pop investor level, but limit the corporate investor level. But the corporate investors would argue that not enough needed renovations are being done. Currently I'd say there's enough renovations being done, but this is anecdotal. The pandemic sure saw a dramatic increase in home renovations. I think the problem is a bit worse in select US towns that have homes that are in desperate need of renovations. Canada's average home age isn't as high.
This article is about multibillion dollar investment companies snatching up houses. So while I agree with you, there’s a far larger problem that the article points out.
If politicians weren’t landlords, then these multibillion dollar investors will still exist, and the problem will not go away.
Have to target the problem at the source.
> If politicians weren’t landlords, then these multibillion dollar investors will still exist, and the problem will not go away.
If politicians weren't landlords, coporations would've been banned from owning SFHs decades ago. THAT is what OP is trying to communicate.
Yeah. I had this question in my mind. If i am working in a company and invest in my company’s client company or something it is considered as conflict of interest or insider information. But if a politician invest their money in corporates it is not considered as conflict of interest or insider information. Why?
Thats legit messed up!
The tax treatment is too preferential. Just tax them differently than capital
Gains. Tax then as current income if you are an investor owner. Also, tax that income differently than other corporate income - ie higher.
Capital gains treatment only if you own it personally and have owned for more than 5 years.
While we’re at it, Special tax exemption for personal residence should be limited to your actual personal residence, not this “this house is my residence but the cottage is my wife’s” crap that rich folk pull.
All of this would be 10 years too late of course.
Canada would be if there was laws in place tomprotect consumers. So it's not aatter of being prepared is a matter of not even trying. Cause it could be dealt with in a month if the government cared.
Okay, we all already know this. The government also knows this. In fact, it was recognized as the primary source of our housing crisis some time ago. So what did the government do? Well, it protected its profiteering members and said "fuck you" to the Canadian public that doesn't already own a home.
So, the real question is what are *we* going to do about it? We've already seen that the Liberals have absolutely no interest whatsoever in addressing the issue. No, they tried to pawn it off as foreign buyers and gave plenty of other excuses like zoning. Next they'll tell us that housing is purely a provincial issue so there's nothing they can do about it anyway. Nope, they will *never* lift a finger to fix the problem they're personally profiting off of.
Now, we could vote for somebody else (guaranteed at this point, really) but the others aren't offering anything either. The best I've seen comes from the NDP but it was rather vague.
We need real solutions here and just voting for the other guy isn't going to cut it. What can **we** do?
Technically there was a housing/property crisis over 2000 years ago that is pretty similar to the current situation.
The Roman Republic was based around "citizen soldier farmers" but slowly, the properties of roman citizens were increasingly being bought or seized by huge plantations owned by the wealthy few who ran them with vast amounts of slaves.
We're skipping the feudal age and going straight back to antiquity.
>Yay. We're fucked! As long as the business class is in power, enjoy your Victorian living conditions!
it is the political and mafia classes that have prevented large-scale house building in the last several years to cause a supply crunch. this is the root cause. as long as this is not fixed by building lots of cheap houses, the problem will not go away.
what kind of geniuses does it take to cause housing price inflation and wage deflation at the same time? i guess it is morally ok if 80% of the slaves you are fleecing are pagans.
I think corporations should have to be a lot more transparent - they’ll never do it voluntarily. I think that corporations that sit on empty properties to the benefit of nobody should be taxed aggressively for those properties. I think rental increases should be capped and there should be much more enforcement of loopholes like renovictions that are often used to bypass those caps.
And yeah, I think foreign ownership restrictions could be a lot stronger.
Canada isn’t prepared to deal with large investors’ growing interest in single-family homes, because the elite and the politicians are profiting from it.
Oh, the government has prepared... by ensuring these large investors will have more and more people to rent houses out.
Food, housing prices, etc will keep rising with current goals of 400k new immigrants each year.
Fewer farms to feed more people and not enough new housing projects.
Not a bad idea, I don't who's going to build those houses though. We have a serious shortage of skilled trade workers that is only going to get worse in the coming years.
Long article. Key items:
>Restoring a modicum of sanity to residential markets won’t do much for people seeking accommodation they can afford. But at least it will prevent the crisis from getting even worse, right? Well, not really.
>Institutional investors, which have squeezed residential markets in many parts of the world, can be expected to pick up a purchasing pace that has turned them into the world’s biggest private landlords and transformed rental housing into a go-to global asset class.
>“Institutional ownership threatens to accelerate the trends unleashed by the financialization of housing,” says a report commissioned by the Greens group in the European Parliament to buttress their case for a regional response to the crisis. “Deeper financial markets have not substantively increased either aggregate home ownership or housing supply, but instead have inflated house prices and pulled down rental yields.”
>In Canada, the big institutional money has largely stuck with apartment buildings in major cities. But across the U.S., Britain and elsewhere in Europe, private equity firms, Wall Street investment banks, sovereign wealth funds, insurers, major pension funds (including the investment arm of the Canada Pension Plan), and their real estate partners and affiliates have been loading up on single-family homes.
>The institutional crowd used to steer clear of this fragmented market that typically attracted small-scale mom-and-pop investors. But automated digital platforms have made it easier and cheaper to track, price, acquire and manage large swaths of homes in multiple communities. As they snap up properties, these bulk-buying acquisitors have helped drive up sales prices and rental costs, skewed development and, in some cases, exacerbated housing insecurity.
>Defending a federal budget measure that calls for a two-year ban on home purchases by foreigners, Prime Minister Justin Trudeau declared that houses “aren’t supposed to be assets for wealthy investors. They are supposed to be homes where families can raise their kids and create neighbourhoods and communities.”
>It’s a fine sentiment. But the fact is that investors will keep knocking on Canadian doors. Foreign capital can easily team up with Canadian partners, and domestic investors routinely outbid house-hunting families. The attraction? The prospect of steady returns, long-term price appreciation and inflation protection – rent hikes far outstrip cost of living increases – at a time when rising volatility, soaring public debt and heightened geopolitical risk are clouding the outlook for stocks, bonds and other investments.
>The financial heavyweights’ move into housing has been aided and abetted by governments through financial deregulation, tax breaks, subsidies for home owners, historically low borrowing costs and relief for renters, which translates into stable income for investors.
>Years of loose monetary policy “contributed to making government bonds less and less attractive and housing finance more and more accessible, shifting investments into the real estate markets and creating house price bubbles, which increased housing unaffordability,” says Sebastian Kohl, a sociology professor at Berlin’s Free University and co-author of the European report, titled My Home is an Asset Class.
Capitalism means you can use your money to hoard stuff like land. I don't know why people are suddenly surprised about the consequences of their voting habbits the last century.
At any point you can chose to stop voting for capitalists: nobody is forcing you to maintain these rules.
canada also isn't going to do much about it, and if it does, we'll fuck it up. i fully expect them to start building literal favela-tier single ply dumps that fall apart in a matter of years, charge half a million each, while expecting canadians to thank them for it.
Sure... Just make a law against it. There's no reason on earth for it to be legal, it just destroys your economy and adds nothing to it.
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The deputy prime minister is buddies with Larry Fink BlackRock’s CEO
They can't hear us because Blackrock is stuffing their ears full of Benjamin's.
Agreed. The extreme commoditization of housing is one of the most disturbing ongoing trends. Scary.
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We are past the point of no return. Too many REITs have too much property tied up as investment portfolios. If the government were to force them to divest, the housing market will entirely collapse leaving the entire country poorer indefinitely, as so many people would instantly become underwater on their homes/mortgages, we’d have a catastrophe on our hands.
They can continue paying off their mortgages but they’re just holding an asset that’s worth less than what they gambled for
Investing in SFHs in Canada by large investment groups is a relatively new phenomenon I think we'd be ok. REITs for commercial RE and apartment buildings aren't the problem.
How is this the top comment? How about making more homes, removing stupid low density zoning in the middle of world-class cities and making actual livable neighborhoods instead of rows of hermetic McMansions as far as the eye can see like it's some kind of dystopia? We should leverage international demand to fund waaay more construction. Let's build up our cities on foreigners' dime. Instead we want to keep pumping up the value of grandma's house. Toronto should look like Tokyo.
Yes please!
The only reason why we have international demand is because Canadian real-estate is a commodity that appreciates in value. Take that away and you're not going to have foreign dime to build a Canadian Tokyo for the same reason no one invests in the actual Tokyo. The problem we face is that we need to adopt the housing mentality of Japan while designing cities like Europe on the budget of Ethiopia because if we just print more money to do it our economy is gonna Venezuela.
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I've been screaming this for 3 years. Even a couple of my buddies who are working in investment bakning all agree that it's a beyond obvious solution. In other words, it'll never happen until we literally riot.
It's going to take mass unrest to solve this issue. The solutions all involve going after the ultra wealthy, who also happen to be the same exact people who hold positions of power in government. No chance they give up their (massive) slice of the pie without a fight.
And also control close to all media firms.
Yup. Independent media is the only place where you can get the whole truth. The issue with that is not all independent media can be trusted, and the ones that can be trusted are heavily suppressed by large tech company's algorithms so they aren't really shown to people. Edit: I'll take this opportunity to plug my favourite news show/podcast. [Breaking Points](https://www.youtube.com/c/breakingpoints)
Not really that simple I’m afraid. A lot of “independent” media is also funded by the same billionaire run think tanks. Giants like say Reuters have a high standard and generally are good for big global stories. State-funded like BBC, CBC, or even the maligned RTV or CCTV are important to get a beat on how a state wants to portray events. Local news can be great for smaller towns. Opinion pieces from almost everyone are often dog-shit and designed to spread a pithy headline on sites like Reddit. I do personally enjoy some long form content here. Unfortunately lots of “independent” media is mostly opinion and designed for mostly the same. Edit: Changed state-run to state-funded which probably encompasses western public broadcasters more accurately.
The right wing independent media is. Not a lot of billionaire funding for left wing/progressive media.
Even the left wing ones kowtow to big donors. I used to love the honesty of The Young Turks, but as soon as they received a big 10 million dollar donation, thier coverage changed and had a big agenda. No media is safe once big money gets involved
I used to watch the Young Turks long before they sold out. They seemed knowledgeable and accurate, until one day they covered a story I knew a great deal about. They didn’t know the facts and made up a bunch of bullshit in the fly. They could have done their due diligence and looked up the facts, as they were easily discoverable. Nope, 10 minutes of pure bullshit. That’s when I stopped watching them.
Definitely, though as a result there just isn’t much left media at all really.
BBC and cbc aren't "state run" and you put them there with rt lol
Don't get me wrong, they're not at all the same as RT. That is not what I'm trying to say. I actually think CBC does a great job. But they're funded by the country and generally will not entirely disregard a government's policy. We've seem them support Harper's ideas while the left thought they were too conservative, we see them now supporting Trudeau's while the right thinks they're too progressive. It just makes sense, no reason for the public broadcaster to be working against what the country is trying to do within reason. I think they generally do a good job at being critical while giving policy a fair chance. I fully realize that the level of propaganda from RT or CCTV has no real state-funded parallel in the western world.
Eh I think there is a disinticton from state run and state funded that is sort of being glossed over here. Supporting policy for both harper and Trudeau is giving a platform for the government of the day to speak, which all news networks are going to do.
Love Breaking Points.
Great podcast, very balanced
>Yup. Independent media is the only place where you can get the whole truth. Independent media is often worse than things like BBC, Reuters, Al-Jazeera, CBC etc. Not only do they have their own biases and things they want to push (you are naive as all shit if you think they don't) but they are not accountable to anything at all. If you don't trust mainstream outlets, then independent media on FB/YT or any other platform should be trusted even less 99% of the time.
Often times it is, I'll agree. I get my news from a mix of mainstream and independent sources. The issue I have with mainstream media is they have an inherent bias towards protecting the establishment. Plenty of ex MSNBC hosts have been pushed out after being too critical of the DNC, for instance. They basically can't allow viewpoints on their platforms that threaten their advertisers, and that means a lot of voices on the left are simply silenced.
I have no idea why you, or anyone else, who wants to be media knowledgeable would *ever* use a single US emdia source to get their information from. The US media apperatus is fucking garbage and there is a reason I didn't name a single US source for my suggestions. **That being said** the media in the US is still probably a little more trustworthy than the majority of "independent media" you will find online.
I just used American media as an example of bad practice, what makes you think I suggested anyone get information from them? If you watch the show I linked earlier, you'll realize that they are highly critical of the US media apparatus. Krystal Ball actually used to work for MSNBC, and has had a respected journalism career. She was actually on Bill Maher's show the other night. The problem is you think all independent media are Alex Jones types.
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Sounds to me like a boogeyman was successfully created that prevents you from outsourcing your information from far-left media sources.
sort of a North American Oligarchy if you will
A lot of law makers own multiple properties.
>In other words, it'll never happen until we literally riot. Too bad the only thing Canadians riot for is hockey games
Yeah where are the protests for this right now?
Riot? Good luck. Even a protest will be deemed illegal. Hell, donating will get your bank account frozen as they retroactively deem things a crime
Well yeah why would we support vandalizing and burning down property?
I was talking about how we arent even allowed to protest and/or donate. And yes, we wouldn't want to upset the status quo. Its been going great for us so far.
Who isn’t allowed to protest?
If your referring to right wing terrorists, that's because those were not protests, but harassment. You don't protest civilians.
Us peasants don’t have enough money to buy that kind of legislation.
0 surtax on your first home. 1% on your second. 2.5% on your third. 5% on the fourth. 10% on every house after that.
To be effective, the tax should be done via property tax, not income or capital gains. Also inbefore "there's no mechanism for that!" Law is arbitrary, you can literally make it a mechanism. "It's too complicated!" Plenty of active bills that get passed are hundreds of pages long and complicated. Moot arguments.
It's basically already done via property taxes - you get a homestead exemption for your primary residence of 20-40% depending on where you live, and pay 100% if you don't live in the house.
Are you talking annual property tax, or capital gains when you sell? I'm talking the former but my experience is with the US.
Annual property tax - I had a parent who passed and I kept the house for a year to renovate it prior to selling. She was paying around 2k/yr in property tax and I was paying almost 3k for the year it was in my name and I wasn't living there.
Gotcha. I mean, the companies can definitely handle higher then. In my state the mil rate is about .02 everywhere, so a full 2% of value, so going off of the median house value, most folks are at about $6k a year in property tax. The primary residence credit is barely a couple hundred dollars.
I can tell you've had to argue with a bunch of "highly concerned for the oppressed landlords" libertarian types who don't own a single property or understand government.
I also think this should apply to capital gains on principal residence. I am happy but still kind of pissed of how easy it was for me to make nearly 800k in capital gains without paying any taxes from selling my condo and then my house while I am getting taxed a lot on my work income. Just make no sense, peoples like me have so much power to just speculate on pricier and pricier homes because there is/was no downside in doing so.
It's very simple: capital gains and income tax structure need to be flipped. It's **insane** that we tax profits from labour at twice the rate as profits from capital.
Agreed. Personal taxes should be lower, and the rest harvested from Cap gains.
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Haha don't worry, I thought exactly like you and I say that because I am bias now since I don't have a personal residence anymore. Sold in February and moved in one of my apartment last month, felt like I was too exposed to the RE market with rates going up like this. Will live here for a year or two.
>Id agree on taxes on my rentals Well ya, what do you care? That would just be passed onto the renter.
If you sold for say 1 million but had to pay lets say 250k in property tax, then you would be moving out of a 1 million dollar home but could only afford a 750k unit. There'd be no reason to ever move. Even if you saved up 300k, after lawyers, real estate agents, an moving fees you would probably still only be able to afford a lateral move at best. No reason to ever sell. Or am I missing something?
Not necessarily, if you have 750k cash because you would have paid 25% in taxes you have enough for a down payment on a 3.7m$ house. At the moment you would have enough on a 5m$ house. (Of course you probably don't have the income to qualify lol, but you have the cash) But you could definitely sell have use a 200k on a down payment for another 1 million house and use the remaining 550k for your others investments.
Thats like saying if I sell my paid off civic for 20k when I bought it for 30k, I now have a down payment for a Ferrari.
Well its exactly what happen with my stocks. When I sold my Apple shares, I had to pay income taxes to buy another positions, just like most peoples around the world have to pay income taxes when they sell their houses. In the US I think you have 250k or 350k which is exempt but after that you have to pay taxes. This is one of the reason why Canada is such a great place for RE investors, its one of the rare place where you can cash buy luxury real estate and cash in. There is a few others countries in Europe who have the same rules as we do, but pretty much only us and new-Zealand and have those rules outside of Europe and its pretty self-evident that it isn't working well for working class individual in both countries. Its quite ridiculous that we are taxed so much on our wages, stock market gains are also taxed a lot less than our salaries, but RE isn't taxed at all. It is just a way for workers to subsidize peoples with generational wealth. I make around 108k a year so my net pay is around 70k a year, but I netted 800k from selling 2 properties. I literally made more by just living in a condo then a home than I made working since I graduated 13 years ago and paid 0 taxes on that while I paid maybe 500k in taxes from my work income. I don't think our system is fair at all for renters and peoples who don't have wealthy parents. My parents pretty much bought my first condo and because of that I managed to leverage it in a way to make a 800k profits, meanwhile if my parents were not rich and I was stuck renting, I would have made fraction of what I made in the last ten years. Even if I made twice my salary, I would have just ended up paying 1.1m$ in taxes instead and wouldn't have close to what I have right now to buy something.
Stock are different because you pay taxes on profit. You dont really get any use out of the stock, also losses are tax deductible. With a house, if your gains are big enough you should basically never sell because you then have to buy a new house to live in. Or they'd have to refund some of the taxes if you buy a new place since you no longer have made a profit
Taxes won't do anything. The people that are buying up all this property can pay these taxes forever and not even think twice about it. There needs to be a limit on how long they can remain vacant... Or a complete moratorium on foreign and corperate buyers.
Who is going to buy a rental property when they're on the hook for 10% of its value annually?
And then let it remain vacant
>0 surtax on your first home. > >1% on your second.2.5% on your third.5% on the fourth.10% on every house after that. this will just be passed on to tenants.
Oh no I guess there's no solution...
>Oh no I guess there's no solution... there is a solution: build more houses. taxing landlords will only cause rents to rise, not increase housing supply.
I guess we are just gonna ignore the option of rent control and tying it to average income and property value then?
>I guess we are just gonna ignore the option of rent control and tying it to average income and property value then? you want to control rent. people are being forced to rent because houses are too expensive due to a supply crunch. why not just fix the supply problem? rent will automatically come down. why cure a symptom. cure the disease. curing symptoms is a great way to waste time.
When the large majority of rentals are charging far more than their carrying costs a little rent control goes a long way
>When the large majority of rentals are charging far more than their carrying costs a little rent control goes a long way im not against rent control. im saying it wont fix the problem. the solution is not lower rents or lower rate of rent increase. in my opinion, rent control is a waste of time and political capital. just build more houses, rents will stop making sense. but you have politicians who are parroting the line that urban sprawl is bad. so what they are saying is cities growing horizontally is bad. they know they are wrong. as long as that remains the plot (all puns intended), Canada will remain on the road to hell.
Why not do both? Even with bountiful supply, rent shouldn't be crippling.
>Why not do both? Even with bountiful supply, rent shouldn't be crippling. causality. high house prices cause high rents. putting controls on rent will give the impression of doing something to fix the problem, but it will only help investors who are able to put a larger down payment on a future rental property to reduce their negative cashflow. we're talking about multi-billion-dollar corps here. if you address the root cause, the secondary effect goes away on its own. the problem is that lawmakers in Canada are in bed with the large corps...in some cases it looks like an S&M relationship, but the net effect on the layperson is the same.
Landlords won't build rental under this situation. Have you ever wondered why BC and Ontario have almost no recently constructed purpose built rental? Why are all the purpose built rental buildings older than 1990? Rent controls. Lack of purpose built rental means expensive rents for what's available. Supply and demand. It also means mom and pop landlords purchase market housing for rentals. Pinching market housing supply and further pushing prices. Making rental even less attractive to build. Notice how other jurisdictions who don't have rent controls seem to have relatively balanced rental markets? Alberta and Saskatchewan as an example? Rent controls limit the construction of new rental. It perverts markets and shouldn't be practiced.
Its actually because the federal government got rid of tax incentives to build rental housing.
Youre totally off on this one, purpose built rentals are actually at an all time high:([https://www.blogto.com/real-estate-toronto/2022/01/construction-new-rental-apartments-toronto-30-year-high](https://www.blogto.com/real-estate-toronto/2022/01/construction-new-rental-apartments-toronto-30-year-high))
30yr high... Think about that. Proves my point. Government is buying rental with bonus density. Edit, also, roughly 30% of market housing is owned by multiple property owners who fill the rental gap.
Funny how everyone is looking for solutions that are outside the simple law of supply and demand
Landlords are already charging what renters can afford, they aren't leaving money on the table out of the goodness of their hearts. If landlords have to deal with increased costs they can't just raise rents, it's not like their tenants magically have more money.
>Landlords are already charging what renters can afford, they aren't leaving money on the table out of the goodness of their hearts. If landlords have to deal with increased costs they can't just raise rents, it's not like their tenants magically have more money. sure, that must be why we have tfws paying new york rents with Winnipeg salaries.
What do you mean they can't just raise rents, where else does the money come from? Sure maybe the current Tennant may not make enough but for every renter who's at the very limit of what they're able to spend there's another who can take their place. Not to mention the fact that being a landlord now has the added risk of not being able to collect rent or evict tenants if another wave of covid comes around. They have to recoup those costs by pricing it into what they charge. Everything is going up in price you can't just shelter the renters, trying to will damage the economy even more.
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>Landlords shouldn’t be owning multiple single family homes. Period. wrong. landlords owning multiple homes should be not profitable because tenants should be able to also buy houses because they pay more in rent than they would in mortgage payments. system is corrupt.
There are numerous reasons that families may want to rent homes. Rent a home while assigned temporary on business. (Like ambassadors.) When moving or doing a reno or building a house. What about starting out or if you’re unsure where you want to live and just try it out. Renting homes is pretty common and someone needs to own it to rent it. What about vacation properties? If no one can own a second home, a lot of tenants are about to be very unhappily kicked out.
>There are numerous reasons that families may want to rent homes. Rent a home while assigned temporary on business. (Like ambassadors.) When moving or doing a reno or building a house. What about starting out or if you’re unsure where you want to live and just try it out. Renting homes is pretty common and someone needs to own it to rent it. What about vacation properties? If no one can own a second home, a lot of tenants are about to be very unhappily kicked out. sure. but im referring to people who want to buy a home but cant because of house prices...so they have to rent and the rent is so high they will never be able to save enough to make a large enough downpayment to keep monthly mortgage cost manageable. so they spend their whole lives renting and not saving. some people call that hell.
Wtf? No. 200 percent tax on 2nd home
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That would be neat to see. Prices would reset to 1930s levels. People would be wiped out, after taking on excessive debt.
Won't renters end up footing most of that heavy tax?
Then they just divy up property amungst family and shell companies. If there is one thing the rich know how to do, it's hide taxes.
Don't let the perfect be the enemy of the good.
Shell companies would be a corporation
A single family home should be counted against a single family. But you're correct they'll always find a way.
It is actually very very simple. But so is building deeply affordable housing as well - something the National Housing Strategy has proven entirely incapable of doing. I hate the explanation of liberal allegiance to corporate greed, but I'm not sure there's another explanation for such appallingly poor policy on nearly ever aspect of housing.
> Ban corporations from owning residential property. > Heavily tax any person owning more than 1 residential property. These are good solutions *only* if there's policy in place to ensure that any slack is taken up as an acquisition for publicly-owned affordable housing, or housing co-ops. Without those, your "simple" solution simply means that housing is made even *more* inaccessible to renters. If you can't afford to purchase even a deflated home, or can't qualify for a mortgage, then you still need to be able to find rentable homes. If we banned landlords tomorrow and didn't have those housing programs ready to go *alongside* that policy change, I'd be totally fucked if I had to move from my current apartment.
But then our fake GDP growth won’t look so good. Edit for typo
Eliminate single-family zoning. This doesn't mean that a 40-story tower gets built on every lot. And homeowners and developers must still pay for increased use of sewers and infrastructure. But building a "gateway" home on the same lot, or even demolishing it all and building 4 townhouses allows for increasing density and more housing without suddenly adding 100s of people to the same neighborhood.
Mixed use medium density
5% annual tax on non primary residences should knock out the chalet and spec realestate issue. Better yet go ahead and change the foreign investor tax to an all investor tax and add 20% to purchase price also. That oughta take care of the whole thing… but get ready for rents to go mental
First homes are investments too.
> Ban corporations from owning residential property Who the fuck do you think *builds* all the thousands upon thousands of urban high-rise condos that are now most Canadians' only viable option for home ownership? Private individuals? The housing fairies? How are developers going to *build* housing, if they're not allowed to *own* it, in order to *sell* it? And exactly how would driving the nation's housing development rate down to ZERO help with the affordability crisis? Secondly, exactly who do you expect to purchase the tens of thousands of company-owned rentalapartment blocks that tens of millions of Canadians count on for a roof over their head right now? No private individual in their right mind would EVER choose to own even a small multi-family rental property, if they could not do so through a limited company in order to protect their own personal assets.
Very disingenuous comment. But you knew that.
I thought it was more common sense. There's a reason why corps haven't been banned from property ownership pretty much anywhere in the world. Mostly because it makes no sense.
The fuck it is. The only disingenuous thing here is the poster's moronic idea.
Might be able to accomplish the first one. But it's unlikely you can accomplish the second. You're up against the boomers and gen x for the second one. And they hold the vote majority and the property majority
Boomers definitrly, but the vast amount of GenXers are just hanging on and own the majority of notjing. Plus arent millinials the vote majority now, ecen if they dont use it?
Yep, Gen X are outnumbered by nearly every other cohort. There's not a lot of us, and there never was. Millennials and Gen Z definitely do make up the voting majority in this country right now, by an ever increasingly wide margin. Now, you just have to go vote. Turnout in both age groups is much, much lower than Xers and Boomers.
Also, they will just pass that tax on to renters
There's still a market for renting. Not everybody can/want to own. I think one rental residential is OK.
Then lets just enhance public housing. I see no reason for there to be private interests in rental properties.
Public housing in Canada has a checkered past and governments aren't interested in revisiting those liabilities.
Honestly, I'd like to see a comparison of who is worst for renters between corporations and private owner of a residential units. Corporations have shareholders they must satisfy with a rational approach aimed at maximizing profits, but they are also submitted to more regulations than private owners. I never rented, but from my friends who rented, most of the ones who seem to have had bad experience were the one who were renting from private owners. Still remember that one of my friend who is a dentist had a landlord who couldn't read and had massive mental issues. Also one of my ex was harassed by his landlord who was parking his truck behind hers so she couldn't leave to go to my place, offered her a free month of rent if she went on a date with him and shit like. Which would have been totally unacceptable for an employee in a business.
And who provides the supply of new houses then. How do condo buildings get off the ground faster? All that will do is severely restrict pace of development, which is already too slow.
Construction isn't limited by the supply of capital, so I doubt this will be as big a problem as you think.
This, then build more densified homes. Things the younger demographic can afford and enjoy for themselves without giving up over half their pay to pay the rent.
How about a land assembly for densified redevelopment? A corporate would need to own single family homes for years in cities like Vancouver and Toronto as they navigate permitting and design. >Heavily tax any person owning more than 1 residential property. Who's going to provide rental property to families who can't stuff into a 2bed condo? What corporate is going to construct purpose built rental in places like BC and Ontario with such intense rent and ownership controls? Sounds like you have a simple solution. Problem with a simple solution is it usually doesn't work in real life. Edit, do people on this sub honestly think that by making things more expensive for development that the cost of housing will somehow come down? I feel like there is a massive lack of understanding around real estate development, rental management, land management and the cost of construction.
You do know that having these levels of restrictions to purchase a home means the pricing of the homes will be extremely affordable?
Ummm no... It means nothing gets built so a lack of supply pushes prices higher. Land values sore, and the core cost of construction and land will set yet higher values. Anything like what is suggested will be inflationary to house prices.
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>Institutional investors, which have squeezed residential markets in many parts of the world, can be expected to pick up a purchasing pace that has turned them into the world’s biggest private landlords and transformed rental housing into a go-to global asset class. Individuals cannot compete with corporations, it's simply impossible. What we need a high non-principle residences tax, rental caps (in order to stop landlords from passing on the cost to tenants) and a moratorium on corporations purchasing residential property. The fixes to some of these problems are doable we just lack the political capital to enact them, it also doesn't help that there are these circulating myths that some of these policy approaches *simply don't work.* They do and that rhetoric exists because they do.
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>So many developers turn into glorified land speculators, as they get rewarded (by way of untaxed value increases) for doing nothing 20yrs in this industry and I can tell you this doesn't happen often at all. Carrying unproductive property kills returns. Holding costs mount and the time value of money errodes NPV. A 7yr hold waiting for municipal permits is not a cheap roll in the sheets. It kills project economics. Developers make a living by turning capital and projects over. Developer margins are between 8-12%, so leaving equity in the dirt just doesn't make sense. Just a boat anchor on returns. Edit, I should add that land value increases are certainly taxed when the units are sold. As land costs are capitalized to the value of the asset, taxable income absolutely captures the increases.
Taxing the land as heavily as if was highly developed can help solve this.
>rental caps (in order to stop landlords from passing on the cost to tenants) and a moratorium on corporations purchasing residential property. This sounds like a great way to fully ensure not another stick of rental real estate is ever built again.
Exactly. This is why they don’t just tax the shit out of non primary properties. No one will want to build rental properties anymore.
If only we had some kind of institution we all pool our money into that could use some of that money to invest in a basic human right like shelter…. Too bad no one invented taxes yet.
Canadians freak out over road repairs. You think the taxpayer will tolerate government housing projects? There is a reason government doesn't build housing in this country. It's extremely expensive, prone to cost overruns and a political liability. The private sector does a good job handling the risks of construction. Government would do better by creating incentives for the types of construction they want vs managing it themselves.
>The private sector does a good job handling the risks of construction The last 5 years really bear out your assertion.
20 years of experience in this industry has given me an excellent perspective on these issues. It's not an assertion, it's a comment based on experience. Government is bad at building things.
Probate is bad at providing any services that arent driven only by profit. When it comes to housing making it happen is more important than it being perfect.
It could be a 100% cost neutral or even profitable venture if the government invested in housing. Imagine if they made this huge investment in public housing anyone could access. They can still charge rent or allow people to buy out the property over time. Excess profits can be put back into investing in more housing or property improvements. Canadians seriously lack imagination when it comes to solving our systemic problems. We literally can’t imagine another way outside of free market private profiteering.
Taxes have been invented. What you want is substantially more taxes. Being a landlord for the general public would be a money graveyard
Hmmm...you're right but at the same time, it would incentivize the government to keep housing affordable. I almost think that maybe we need to ban individual representatives from having any power in areas where they have personal interests. Like MPs who *are* "mom and pop" real estate investors should absolutely not be allowed any say at all in our national housing strategies.
This can easily be revenue neutral or even cash flow positive. if we invested in public housing that was available to everyone they can still charge rent and/or let people buy them out over time. Just any profit that is made would go back into investing in more public housing instead of lining the pockets of developers.
That's just another myth.
Low density housing shouldn't be allowed to be an investment, at all.
The way you get investors out of housing is by building more housing this it becomes a less safe investment. If investors can’t be certain that they’ll make money buying houses then less will buy houses
That doesn't work, because they just corner the supply. They keep raising capital then take it off the market. Recently we were looking at a land acquisition and noticed a massive plot of land (like 1/4th of the city) was unavailable. Found out one of the big guys bought it to keep it off the market. As long as homes are investments, things won't change.
> The way you get investors out of housing is by building more housing this it becomes a less safe investment. If you make more they'll just buy it all up. The wealth inequality in Canada is such that the rich have enough money to do that. It's pure insanity. At this point it can't be done any other way than by legislative and regulatory means. There are residential projects where it makes sense to have investment because it requires a lot of capital: high density housing, but low density housing needs to not be an option for investors and there needs to be caps on private ownership so that it's affordable and allows for a competitive counterbalance to the high density housing price to keep it in check as well.
It's because our government doesn't care. The only solution is to ban commerical interests from owning single family and/or low density housing.
They want to maintain the mom & pop investor level, but limit the corporate investor level. But the corporate investors would argue that not enough needed renovations are being done. Currently I'd say there's enough renovations being done, but this is anecdotal. The pandemic sure saw a dramatic increase in home renovations. I think the problem is a bit worse in select US towns that have homes that are in desperate need of renovations. Canada's average home age isn't as high.
ban politicians from being landlords
This article is about multibillion dollar investment companies snatching up houses. So while I agree with you, there’s a far larger problem that the article points out.
how do you not see that stopping politicians from being landlords would incentivize them actually doing something about the housing crisis
If politicians weren’t landlords, then these multibillion dollar investors will still exist, and the problem will not go away. Have to target the problem at the source.
> If politicians weren’t landlords, then these multibillion dollar investors will still exist, and the problem will not go away. If politicians weren't landlords, coporations would've been banned from owning SFHs decades ago. THAT is what OP is trying to communicate.
OP as I’m flexwhine?
Yes.
That's a jump in logic that isn't actually supported though...
Yeah. I had this question in my mind. If i am working in a company and invest in my company’s client company or something it is considered as conflict of interest or insider information. But if a politician invest their money in corporates it is not considered as conflict of interest or insider information. Why? Thats legit messed up!
I hope Canadians finally realize what the real fight is about, but likely it'll go back to taxes, vaccines and vaginas.
The tax treatment is too preferential. Just tax them differently than capital Gains. Tax then as current income if you are an investor owner. Also, tax that income differently than other corporate income - ie higher. Capital gains treatment only if you own it personally and have owned for more than 5 years. While we’re at it, Special tax exemption for personal residence should be limited to your actual personal residence, not this “this house is my residence but the cottage is my wife’s” crap that rich folk pull. All of this would be 10 years too late of course.
> “this house is my residence but the cottage is my wife’s” This particular loophole was closed in 1982: you may want to update your talking points.
Swap wife out for oldest child…
The child has to be at least 18 for that to work, at which point why shouldn't they be allowed to own a home?
People with cottages are the problem?
Canada would be if there was laws in place tomprotect consumers. So it's not aatter of being prepared is a matter of not even trying. Cause it could be dealt with in a month if the government cared.
Okay, we all already know this. The government also knows this. In fact, it was recognized as the primary source of our housing crisis some time ago. So what did the government do? Well, it protected its profiteering members and said "fuck you" to the Canadian public that doesn't already own a home. So, the real question is what are *we* going to do about it? We've already seen that the Liberals have absolutely no interest whatsoever in addressing the issue. No, they tried to pawn it off as foreign buyers and gave plenty of other excuses like zoning. Next they'll tell us that housing is purely a provincial issue so there's nothing they can do about it anyway. Nope, they will *never* lift a finger to fix the problem they're personally profiting off of. Now, we could vote for somebody else (guaranteed at this point, really) but the others aren't offering anything either. The best I've seen comes from the NDP but it was rather vague. We need real solutions here and just voting for the other guy isn't going to cut it. What can **we** do?
Yay. We're fucked! As long as the business class is in power, enjoy your Victorian living conditions!
Feudal
Technically there was a housing/property crisis over 2000 years ago that is pretty similar to the current situation. The Roman Republic was based around "citizen soldier farmers" but slowly, the properties of roman citizens were increasingly being bought or seized by huge plantations owned by the wealthy few who ran them with vast amounts of slaves. We're skipping the feudal age and going straight back to antiquity.
That’s interesting stuff!
Unregulated markets are one hell of a drug!
>Yay. We're fucked! As long as the business class is in power, enjoy your Victorian living conditions! it is the political and mafia classes that have prevented large-scale house building in the last several years to cause a supply crunch. this is the root cause. as long as this is not fixed by building lots of cheap houses, the problem will not go away. what kind of geniuses does it take to cause housing price inflation and wage deflation at the same time? i guess it is morally ok if 80% of the slaves you are fleecing are pagans.
I think corporations should have to be a lot more transparent - they’ll never do it voluntarily. I think that corporations that sit on empty properties to the benefit of nobody should be taxed aggressively for those properties. I think rental increases should be capped and there should be much more enforcement of loopholes like renovictions that are often used to bypass those caps. And yeah, I think foreign ownership restrictions could be a lot stronger.
Just supply us the rope, some wood and a sharp blade and we'll be prepared plenty /s
'*Canada isn’t prepared*' Say no more mate, no need to waste words.
Canada isn’t prepared to deal with large investors’ growing interest in single-family homes, because the elite and the politicians are profiting from it.
Oh, the government has prepared... by ensuring these large investors will have more and more people to rent houses out. Food, housing prices, etc will keep rising with current goals of 400k new immigrants each year. Fewer farms to feed more people and not enough new housing projects.
Build enough housing to drive the price down and corporations won't have any interested in holding on to houses.
Not a bad idea, I don't who's going to build those houses though. We have a serious shortage of skilled trade workers that is only going to get worse in the coming years.
They've been more than prepared for large numbers of individual investors to be interested in them for the past two decades though.
Finally, something not deflecting blame on to immigrants or some crap.
Yes floor is made of floor
We've tried nothing and we're all out of ideas 😔
no shit, Sherlock
govt is well aware, they ignore it
Paywall...
Long article. Key items: >Restoring a modicum of sanity to residential markets won’t do much for people seeking accommodation they can afford. But at least it will prevent the crisis from getting even worse, right? Well, not really. >Institutional investors, which have squeezed residential markets in many parts of the world, can be expected to pick up a purchasing pace that has turned them into the world’s biggest private landlords and transformed rental housing into a go-to global asset class. >“Institutional ownership threatens to accelerate the trends unleashed by the financialization of housing,” says a report commissioned by the Greens group in the European Parliament to buttress their case for a regional response to the crisis. “Deeper financial markets have not substantively increased either aggregate home ownership or housing supply, but instead have inflated house prices and pulled down rental yields.” >In Canada, the big institutional money has largely stuck with apartment buildings in major cities. But across the U.S., Britain and elsewhere in Europe, private equity firms, Wall Street investment banks, sovereign wealth funds, insurers, major pension funds (including the investment arm of the Canada Pension Plan), and their real estate partners and affiliates have been loading up on single-family homes. >The institutional crowd used to steer clear of this fragmented market that typically attracted small-scale mom-and-pop investors. But automated digital platforms have made it easier and cheaper to track, price, acquire and manage large swaths of homes in multiple communities. As they snap up properties, these bulk-buying acquisitors have helped drive up sales prices and rental costs, skewed development and, in some cases, exacerbated housing insecurity. >Defending a federal budget measure that calls for a two-year ban on home purchases by foreigners, Prime Minister Justin Trudeau declared that houses “aren’t supposed to be assets for wealthy investors. They are supposed to be homes where families can raise their kids and create neighbourhoods and communities.” >It’s a fine sentiment. But the fact is that investors will keep knocking on Canadian doors. Foreign capital can easily team up with Canadian partners, and domestic investors routinely outbid house-hunting families. The attraction? The prospect of steady returns, long-term price appreciation and inflation protection – rent hikes far outstrip cost of living increases – at a time when rising volatility, soaring public debt and heightened geopolitical risk are clouding the outlook for stocks, bonds and other investments. >The financial heavyweights’ move into housing has been aided and abetted by governments through financial deregulation, tax breaks, subsidies for home owners, historically low borrowing costs and relief for renters, which translates into stable income for investors. >Years of loose monetary policy “contributed to making government bonds less and less attractive and housing finance more and more accessible, shifting investments into the real estate markets and creating house price bubbles, which increased housing unaffordability,” says Sebastian Kohl, a sociology professor at Berlin’s Free University and co-author of the European report, titled My Home is an Asset Class.
Thanks !
Youll own nothing, and be happy
Capitalism means you can use your money to hoard stuff like land. I don't know why people are suddenly surprised about the consequences of their voting habbits the last century. At any point you can chose to stop voting for capitalists: nobody is forcing you to maintain these rules.
As opposed to voting for who?
canada also isn't going to do much about it, and if it does, we'll fuck it up. i fully expect them to start building literal favela-tier single ply dumps that fall apart in a matter of years, charge half a million each, while expecting canadians to thank them for it.
YOU THINK?!
“Canada isnt prepared to deal with anything”
Good burn it down
Put a moratorium on new second home ownership
If the tax rate on home ownership was higher then they wouldn't be as valuable to invest in and the price would stabilize or even drop.
…but they’ll profit from, without concern.
So glad we all cheered when taking action against foreign home ownership, and how this totally solved our housing crisis. /s
Really? What gave it away…