‘Vesta’ and ‘jesse’ treated us to a fine exchange yesterday (and in the early hours of today, Wedn 14 Sep 2011) regarding possible actions that could be taken by citizens concerned about Vancouver’s housing predicament. Take a look at the posts starting here. Other posters chimed in, including yours-truly. The exchange has some posters calling for various actions, including the lobbying of policy makers. Vesta and jesse treated us to lists of possible actions, jesse adding to some he had previously mentioned.
When one calls for action, it is wise to have a fairly good idea of the likely outcome. After all, as your Mom always said “Be careful of what you wish for”.
So, before attempting to ask for specific changes, let’s first clarify which changes we think may be useful (and why).
We may attempt to collate them (along with prior suggestions).
Here are two thought experiments, to this end:
1. Broad Thought Experiment:
You are the ‘Vancouver Czar of Housing and the Economy Pertaining to Housing’.
What changes would you implement immediately, and what consequences do you anticipate?
2. Specific Thought Experiment:
Imagine that the City completely and immediately discards all laws preventing densification. Multiple units can be built anywhere in the greater metro area.
What are the consequences?
Just curious: do Canadian cities have rental brokers?
In large American cities you can pay “rental brokers” one month rent to hook you up with a good rental unit. For busy people it’s worth the cost and reduces the hassle of renting quite a bit. You also end up with a good landlord who is usually known to the broker.
When I moved to my western (not Vancouver) Canadian city, I expected to use a rental broker to find a place. But they don’t exist in this city.
Such a pain for renters. So what’s the situation in Vancouver?
When I lived in Boston in the late 1990s you HAD to have a rental agent to rent an apartment. Landlords would not talk directly to tenants. Renting an apartment meant coming up with four months’ rent at once (first, last, security, and the non-refundable commission to the agent). That’s what a landlord’s market looks like…
Canadians are notoriously cheap and the idea of paying a 3rd party to find renters probably ranks right up there with paying extra taxes.
In terms of the blog post: for a change to really be effective, many would need to come from the federal level. The usual – tax cap gains after a certain point on houses (250K or 500K for married couples.) Lower the number that CMHC will give for mortgages. Don’t allow jumbo mortgages — mortgages over 500K. Look at the investor immigrant visa — change it so one has to actually employ 10 people full time — get rid of the interest-only-loan option.
Things Vancouver could do include transportation changes: possible better ferry transport or fast trains out of the city center to open up residential areas outside the city.
In the city center and Burnaby add more family friendly and middle-class friendly apartments or co-ops. 3 and 4 bedroom units are needed. NYC did a good job with this.
I don’t know what’s going on with agricultural land restriction, but something to think about.
Fast trains are implausible, we have the West Coast Express which runs during a limited small window during the morning and afternoon/evening in one way directions (West morning, East evening) due to our rail system being required for cartage of goods at all other times. It doesn’t run on weekends either….
For real change the city Vancouver needs organization and political pressure to be generated on this issue.
VEERA is right — the people who want to encourage higher propertry prices are funding your political representatives. Likewise, there will be no interest in, say, decreasing housing prices or prioritizing people over goods on trains unless there is political pressure.
Vesta is also right — Vancouver might want to try to turn this around. Israel is a good recent example. Also NYC’s housing policy in the last three decades. Local political organization would be the first step.
In regards to question 1. I’d set up a task force on illegal rental housing. The amount of unregistered rental income, poor maintenance of rented suites and ignorance toward building permits and requirements could generate a large amount of work for the construction industry and fill city coffers with funds. This could all be done without displacing the people in rental suites beyond small periods of construction and/or if ‘landlords’ are renting out suites illegally or that have been not zoned/permitted correctly, the displacement of the tenant during periods of construction is .. get this .. at the landlords cost! Imagine that, a consequence for taking advantage of others and not contributing to the tax structure. I’ll take my idealist hat off now.
Possible consequences?:
1. Landlords are forced to go into more debt to fund these forced changes; RE_ATM borrowing increases.
2. Landlords attempt to pass-on extra expenses to tenants.
3. Some casual landlords cannot make the changes; some suites close; fewer rental suites; upward pressure on rents.
4. Some landlords are forced to sell; downward pressure on prices.
5. Suites become less attractive to buyers as there is a higher hurdle to them being ‘mortgage helpers’; less buying power; downward pressure on prices.
6. The “large amount of work for the construction industry” works to maintain our economy’s over-dependence on the RE industry.
7. Taxes on suites increases overall tax burden on community.
8. ‘Illegal Rental Housing Squad’ jobs, with lifelong benefits, cost the taxpayer how much?
9. Other
There’s plenty of 9, I won’t deny that. Hence my nod to my idealism at the end of the post. There obviously would be a trickle down effect and the tenants would lose out at the end of the day. There must be some ground in the middle which could be met to raise the quality of suite rentals. I have met very few people who have had positive rental experiences in a suite situation, not none, but few.
Perhaps the requirement of an landlord educational course to anyone who wishes to rent a suite on regulations, city codes, laws, etc as part of the requirements to rent would be a good idea to begin with?
Just turn the CHMC policy back to the 90s where they would only fund primary residences at a fix multiple of income/maximum loan size, and only large family rental housing complex like co-ops, family friend apartment buildings/etc and you just solved a lot of the issues. The down payment must be cold hard cash, not borrowed funds.
No more support for speculators buying 10 condos pre-sale with 5% downl that’s borrowed from credit cards or LOC.
Seconded.
Are there no journalists in this country/province/city who can see a story in how far CHMC strayed from it’s initial purpose, and explain it in simple terms (with a bit of indignation)?
Or are they all too invested in RE? Seriously, that would be a story in itself
#1) This is entirely esoteric, but I would revisit/change the HOMES BC contract that underpins many of the co-ops and housing societies. These places have the rule that “you can’t pay more than 30% of your income to housing”, but they also have a rule that sets housing cost relative to the cost of what’s geographically close by (85 to 95%).
What you end up with is apartments that are meant to be low end of market appraised and priced higher than 30% of local rental incomes. Where there’s also an income cap for getting into a place, there are vacancies – or more often, societies turning a blind eye and NOT looking at the financials of would-be tenants. I know of several couples in such places paying about 50% of their income to housing costs… and suddenly toilet paper becomes a credit expense. Instead of appraisals, I would cost our “low end” on median income. Since those stats are only available every five years, I would then raise by inflation (not +2%), each year after those rents were set.
—Would I expect MUCH of a change? No, not really, because as a percentage of offered dwellings this is small – although there are some societies who have a more instable form of tenant than they used to. Mainly, this would educate the political and housing classes that we’re in a place where asked rents are not the same as paid rents, and that rents are being pulled away from income baseline, maybe by only a couple percentage points, but enough. The way HOMES BC is now, it feeds bubble psychology in those wonks analyzing market numbers all the time. —-
I would (if possible) zone for townhouses specifically any place with falling elementary school enrolments (adjusted for local private school attendance). Hell, I’d zone for town and row houses generally in any but the downtown core. I don’t think this would have a huge market change NOW, but in the future, it’s definitely more family oriented inventory.
I would consider doing something about foreign ownership. I don’t know what that would look like. Right now, there’s racial tension growing I’m worried about. I had a door to door salesperson come up and make remarks about the number of immigrants in my neighbourhood, for example. Whatever I might do, however, it would mainly be to change the psychology that HAM is omnipresent and taking over, more than anything else.
“I don’t think this would have a huge market change NOW, but in the future, it’s definitely more family oriented inventory.”
The thing with zoning is there already is high density by ways of multi-suite detached dwellings; changing the zoning is simply a reflection of what the market has figured out on its own.
Cooperatives are an interesting angle and don’t necessarily need to be subsidized to be successful. They are common in other cities (including a “Big” one that shall not be named lest we draw unpopular and unfair comparisons). The problem here is that due to density constraints people have large amounts of their expected return tied up in selling the land; cooperatives make this near impossible and difficult to set one up when the setup costs are so high. Concentrating on only those in lower income tiers leads to more entrenchment at the fringes and ignores the middle class; as I mentioned before, the middle class have been the ones either forced out or forced into debt, the former will be the luckier in the long run
Rowhouses or townhouses are, in my experience, simply nicer for families to live in than basements or apartments. So it might be changing the zoning to what the market figured out in terms of more density, but there are more livable ways of achieving that density that are currently not popular development options. Well, and a SFH owner defrays the risk of increased density – that there may not be the demand.
But really, a lot of family inventory is pretty dismal here.
I agree about not just concentrating on the lower income tiers for co-ops. And not all do, happily.
The HOMES BC system, as I understand it, was a loan program from the government for co-ops and housing societies, and fulfillment of these two disparate, unrelated and yet qualifying criteria (30% of income, 90% of market) is necessary for the loan not to be called in. Yet another badly thought out mortgage program…
Cooperative financing rates are usually facilitated with some sector support and are significantly higher than prime mortgage; yet another reason why they aren’t overly popular.
Rowhouses will likely have limited popularity; it all depends on building costs as well as sales prices. I just think there is some demand for it and the option should be on the table because family formation is severely lacking in the City and in the long run it will make for a hollow city IMO.
Oh, and if I were to be totally self-serving and whimsical with my dictatorship status, I’d put some sort of development equation in place that required a certain shelf-area & shelf-height of cabinets in the kitchen corresponding to number of bedrooms in a house, plus I’d mandate linen and broom closets. (Come the revolution, you will have broom closet and LIKE IT.) This might take out all those wee powder rooms and jack n’ jill bathrooms, but I’m sick of homes that actively work against the inhabitants cooking, reusing, storing, or constructing their own things. Less storage = throw away and buy again.
Now, of course, this is my preference forced to market, but I also know (from open houses) that the ‘word on the street’ is that these two cupboard kitchens are what people want… but I’m skeptical the market’s saying anything rational about *design* right now. What people want is anything for sale. No matter how crappy. Plus, what looks good in a show room before it’s even built is not what’s most livable, in the end.
With more closets, more skeletons can be hidden. I fear this may be an easy change to usher in with ample political backing!
I don’t think the two cupboard kitchen is what the cabinet maker wants either, but certainly what the developer prefers.
Perhaps a good outside the box moment: I would say that, if people come to terms with the fact that house prices are too high, that a giant blanket rezoning of the City should take place, enabling lots to be subdivided into ground-level row housing or multiplex on demand. Screw “neighbourhood appeal” or other excuses used to justify certain dwelling types. Find ways of producing non-strata medium-density housing, and not just on the main streets. Flood the City with the ability to densify into family-oriented dwellings, a quantitative easing of housing supply.
Another “outside the box” suggestion for the school board: start offering specialty language programs at underutilized schools as a matter of course. (You may find that non-Chinese are as interested in the program as otherwise.)
Row houses are great. And very family friendly.
Unfortunately there are some technical hurdles to true rowhouses (you know, the ones “world class” cities have
). Michael Geller, a local urban planning boffin, thinks (IIRC) they are nonstarters for various bureaucratic (read specious) reasons. The big problem is instituting stratas, which many people don’t like. I think PoCo and other cities have figured out ways of building rowhouses and even some non-strata properties in Vancouver share structures in various forms (like shared garages). We know it’s possible but there is resistance to the idea, for whatever reasons. I say that’s a bunch of hooey; think harder.
http://gellersworldtravel.blogspot.com/2009/11/what-is-fee-simple-rowhouse.html
Here is where lobbying the provincial government may have some effect, perhaps a little project to pass the time during the impending crash. Any excuse the city hall gives should be treated with the utmost suspicion; look at the City of San Francisco’s housing mix as a guide.
I should clarify that there are fee-simple rowhouses in Vancouver, pilot projects mostly, but it’s a great start. The issue I’m raising is that the rowhouse concept should be broadly spread to RS zoned lots in some fashion. The idea — and I’m not a planner by training or occupation, obviously — would be that there would be a subdivision front-back or “shotgun” style (long and thin) houses extending over standard depth (122′ or so). If the City could figure out how to make alleyways a primary street that would solve some issues, and there are some neat proposals I’ve seen, but they keep hitting “brick walls” why they are impractical or have to resort to being classified as strata-title. The other issue is how to shoehorn in rowhouses into existing RS-zoned neighbourhoods where turnover is on the order of several decades. Here’s the biggest stumbling block but with some creative easements for how to subdivide wide lots, and potentially reconstituting alleyways, the transition could progress.
Laneway housing is a bit of a cop-out IMO. The concept here is to produce free-title properties without secondary dwellings. I don’t want the freaking land or the “right” to become a landlord; I want a place to live and I don’t mind having a slightly smaller back yard, just like they do “across the pond”.
Lots of good ideas in the comments; I think the City has open houses and forums on housing issues from time to time. If anyone is interested advertise them here and elsewhere. There has been a lot of thought put into many ideas at city hall and I am hoping they continue to actively share their thoughts, experience, and ideas with the public.
Political activism sounds like fun, but with between a job and a family, I really don’t have time.
Fortunately I have job skills that are in demand and highly portable. It’s far easier just to move somewhere else, where the salaries are better and the politicians aren’t trying to suffocate the young middle class.
Thanks to everybody for a wonderful discussion and some terrific ideas!
Look at all the good ideas generated just by an exchange in the past 16 hours! WOuldn’t it be marvelous if people all over the city could be having conversations like this AND taking their concerns to the appropriate places, as the next step?
VREAA host: You suggested in your most recent reply to my postings that what I was saying is all “sound and fury” (cf. Macbeth speech about life being “a tale told by an idiot, signifying nothing”). Just want to reassure you I’m not an idiot and I’ve thought about these issues for a long time too. I realized I was being a bit inflammatory last night, and I want to say I also do very much appreciate a). your thoroughness in your approach to these issues b). your knowledge c). your calm rationality. I love calm rationality as well! However, calm rationality isn’t for everybody, and I must say after seeing what I’ve seen and experiencing what I’ve experienced I myself would have to have been lobotomized to stay calm. Revolutions need their Tom Paines too (please forgive U.S. reference; I mentioned I’m a dual citizen. Paine was an agitator). I want Canada to be protected from what’s happening! I respect what you’re saying and I am very grateful you’ve created this forum. However, your long list of “this can never/will never happen” seems to me way too discouraging. I myself don’t want to twiddle my thumbs waiting for the apocalypse just to indulge in some Schadenfreude when it happens (I’m not at all saying that’s what you’re doing; obviously, you’ve taken good action just by setting up this website). Real people are suffering every day because of housing issues in Vancouver, and I think there ARE actions that can be taken that MIGHT help. I simply can’t get my head around the idea of doing nothing at all, and I wish even if you strongly disagree with me you wouldn’t discourage other people from trying to at least have their voices heard. If one says nothing, yes, one is signifying nothing. If one says something, though, there’s a chance someone will hear. People here really shouldn’t be urged to stifle themselves more than they already do, in my opinion.
Peter Ladner had a wonderful idea that I think Jesse would endorse, and that is that for every tear-down, a duplex or triplex be built in its place. Jesse also mentioned co-ops, and Yank did too I think — why not a lot more of them, yes? Let’s bring that up to City Council!
MM, I’m totally with you in your puzzlement as to why the media aren’t covering these issues more. Do write the Sun, call the TV stations!
Yank, I too have lived in cities where there were rental agents, not sure why there are none here when they could make a killing.
Jesse, thanks very much for your very well-informed and intelligent analyses and proposals (and everyone else here too, Absinthe, Yank, Aldus). I have done a lot of research, on various committees and in my communication with various housing activists around the city, so I do feel well-informed about various CONDITIONS here, but I’m no tax expert. However, that won’t stop me from writing my MLA, MP etc. with the suggestion that Vancouver consider the example of many other cities around the world when it comes to taxing foreign ownership. I agree with you that the effects of that ownership are very real.
To the barricades! (or should I say the scaffolding!) (or, VREAA host, and thanks for this implicit suggestion, the banks?!)
Thanks again VREAA host, hope I haven’t been too aggravating. Love these debates, and we all owe you for facilitating them.
Any suggested intervention here is to address how the market currently functions: i.e. the market has created a failure (externality) in the sense that housing is no longer affordable based on some benchmark metrics.
This situation is not unlike native Hawaiians telling me they can no longer afford to purchase their own home in Honolulu (and this was back in 2001!).
As is the case in any democratic political economy, the only way to effect change is through the taxation system. In equilibrium, only tax rates that the proletariat majority places on the elite is effective in order to maintain order and placate both sides. However if the tax rates are excessive, the elites will leave and that has the potential to really shake things up. But will the shake up be good for Vancouver? Anyways that’s my paradigm (courtesy a bastardization of Acemoglu/Robinson).
I’d like to also say that making land parcel further sub-dividable only makes the underlying land more “valuable”. That might be a policy of shooting oneself in the foot in terms of “affordability”.
As for the thought experiment, why not tax capital gains on primary residences over a certain amout (inflation adjusted cost base; or, say, above $100k). Or how about a ‘land transfer tax’ proportional to the increase above the cost base? The provincial government could institute either. I’m sure most houses sold today are primary residences and not investment properties already subject to capital gains taxes. In short, why not make changes to the tax code to discourage speculation?
this is an excellent idea — will curb speculation and outside investment if capital gains are taxed.
When most people here think of non-strata housing, they think of detached SFH with front and back yard and clearance on both side of the house. Non-strata row houses will require a big culture shift here.
The property transfer tax already does what some here suggest as a tax on RE gains. Granted the % levied is low relative low and most people don’t even know/think about it when they put offers down to buy the place. I’m not sure charging higher % will necessary restrict/restrain speculation without unintended consequences. It might very well lead to land hoarding, side deals to avoid the taxes, creating a corporate to hold the land/property and then buy/sell the shares of the company, etc.
“Non-strata row houses will require a big culture shift here.”
If it provides any inspiration, a large percentage of the City rents, so I like to think the “culture shift” isn’t as radical an undertaking as one might think. Heck, a lot of couples owning downtown condos are doing the math and planning their exodus to the ‘burbs; do you think adding more rowhouses in the City might be popular with some of them? All of a sudden you have a significant portion of the voting population who might just give a vote for a brave candidate who gets behind a “much-needed” overhaul of the City’s zoning and building code schema.
I’d take a single family brick built two floor w/attic terrace house over dealing with a strata any day.
Queen Rachelle would…
1 – Remove all rent controls.
Part of the problem with affordable housing is that the tenant constituency is one of the largest voting blocks and one of the tricks the government has is to institute laws that make landlords bear the brunt of their social housing problems. The landlords vote but there are relatively few of them.
In Ontario for example multi res housing is one of the highest property tax rates about double the cost of an identical condo building. So if you are a developer what are you going to build?
No one is building proper rental housing because it doesn’t make financial sense.
Furthermore real change will happen when enough people vote for it. So there has to be broad public support. So remove rent controls and let the chips fall where they may and let the screaming begin. Then we’ll see change
Tenants are not children. If your lease says don’t smoke don’t f$%^king smoke or move the hell out. Leases should mean something. Tenants are capable of paying their rent on time and signing contracts and then following through. If they don’t follow through get out. This should be simple for landlords to enforce.
2 – Stop protecting bad tenants by allowing registration of bad tenants.
Here in Ontario bad tenants are protected from disclosure by privacy laws. There is now a whole contingent of people who move in pay their deposit and move out when they get evicted 4-6 months later.
These losses are not small change…they are big bucks that would go a long way towards paying for repairs and maintenance.
Also the tenants here pay the application fee for evicting them but not the legal costs. For instance I have one case alone here with over $2000 in legal fees that will never be recovered.
The good tenants deserve to have their suite repaired and maintained but when we’re spending that kind of money on legals and rent losses we can’t.
We even have one tenant who works for the Landlord & Tenant Board and who never pays and gets evicted then pays up for the last few years.
3 – Criminal prosecution for fraudulent builders.
People who build condo’s are well aware of the fact that in 3-4 years they are home free with their money. After that it’s the condos problem. This is why you see so much bad construction in condos. Make it stop by sending them to jail for fraudulently ripping people off.
4 – Criminal Fraud charges for politicians who lie.
You’d better watch your campaign promises and follow through. Otherwise you are defrauding the entire canadian public that voted for you. I’m sick of these bastards saying all kinds of bullshit to get elected and then screwing us all over by doing nothing they said they would. Go to jail, do not pass go, do not collect $200.
5 – People who are on public assistance should be required to pay their rent from the money they get from the government uhmm to pay their rent. A while back the government here decided to allow tenants to get the rent sent directly to the landlord. About 5 seconds later the government decided it would be ok for these tenants to call and cancel the program whenever they want. Without security and some kind of guarantee that the rent will be paid in full and on time, no one wants these social assistance cases, they’re not garnishable and dysfunctional in many cases. Then the Human rights commission decided to legislate that landlords can’t discriminate against income source even though these people make up for almost 100% of the losses we suffer. Instead of making stupid laws you can’t enforce how about you make sure the money you give people to pay rent goes to pay the rent? Then landlords will rent to them…
6 – Also all people must bow down and call me Queen Rachelle.
Over and out!
Booya for Dame Rachelle, my favourite and fairest landlord blogger on the interweb.
The problem with rent controls is first that a lazy owner-landlord who refuses to raise the rent produces problems for future owners or his/herself, second that ongoing renovations and improvements cannot be easily passed on to the tenants. This is a toughie because it is ripe for abuse by disingenuous landlords.
I say failing to raise the rent and maintain the dwelling, then crying foul, is entirely the fault of the landlord. I know a few who raise the rent and maintain the suite to good repair and have few issues with cash flows. Others take the easy way out then complain when the rules they should have known existed when they bought bite them in the rear end. If you don’t understand the risks and the legal environment, don’t be surprised if you’re the minnow on the outside of the school who gets eaten. It’s why properties normally trade at cap rates starting as low as 7%.
But I hear Rachelle and having seen a few horrible tenant situations I sympathize. Build it into your business case beforehand is my suggestion, in absence of any legislative changes.
Too many amateur landlords are in over their head and can’t afford repairs or their mortgages.
As I discovered when I moved to my fair city in western Canada. Couldn’t find a rental broker so I asked a friend to interview the landlord and check out the place. Didn’t have time to visit myself. Next time I’ll skip the interview and just do a credit check.
This joker went into foreclosure a few months after I moved in. And this was after he couldn’t pay to repair the heat, which went out in the dead of winter. Luckily we had our escape plan ready. Later I could see from the legal notices that this idiot had two mortgages and was completely over-leveraged. Rent didn’t begin to cover his costs.
I have no tolerance for people who tell me that Canada doesn’t allow crazy-ass “subprime” mortgages.
I agree with many above posters — take CMHC back to the rules from the 1990s. Get the over-extended amateurs out of the buisness.
And Row Houses! Nice brownstones and brick.
So if we allow landlords to kick out every tenant who breaks a rule, where does the burden fall? Who takes care of the suddenly homeless? Taxpayers and charities. I’d rather have the burden fall on landlords. You choose bad tenants, they are your problems. Just take out another mortgage.
Why you would NOT want me as housing czar….
First, I would amalgamate the entire metro Vancouver area into one jurisdiction to ensure even application of all municipal policy within the job market area. Then I would change taxation to make municipal tax revenue 100% sourced from a land value tax (tax economic rent value of the land only, not improvements). The consequence would be an immediate real estate crash that eliminates entirely the speculative aspect to the market. There will be much wailing and nashing of teeth but after the dust settles there will finally be sanity in the housing market with a self regulating mechanism to ensure much better land use decisions and more appropriate levels of affordable housing. As a side benefit stronger communities will emerge with greater social cohesion, better municipal services, and a more sustainable future.
I would not attempt to centrally plan housing density. This is something that should be decided by a free market with no government induced distortions. A land value tax would support free market determination of appropriate density levels.
And that’s why I will never be vancouvers housing czar!
one problem with all these suggestions. The City doesn’t give a damn what you say since you’re not taxpayers.
fail. This isn’t Upper Canada.
Rollie wishes that he lived in the 18th-century.
with the exception of France.
Hmmm… It’s complicated. Ain’t it?
Or is it?
As in… are we merely addressing the symptoms of a far deeper malaise whose origins/solutions lie elsewhere?
Needs a book.
On the other hand [given the trendline in SAT reading scores released earlier today] – we’d better do a movie (besides! soundtracks are so much fun!)
So. Who will be the villains? The Heros?
More to the point – will we get a happy ending?
(SpoilerAlert: HappyEndings are typically defined by one’s POV and in that regard – ‘the victors’ normatively construct ‘the history’/official account).
Wow. What a great discourse you ‘guyz’ (see what you’ve done, ED?!).
Ultimately, Vesta (OH! how I wish that was “Vespa” – but that’s just me – as in ‘Nem’ suffers from a two-wheeled ‘hang-up’) neither political elites nor the corporate media are going to rush to your aid… You just aren’t their ‘constituency’.
That said, if you still want to ‘fight the good fight’ in aid of more equitable housing outcomes…
Remember this… Capitalism is just another “ism”. And in some regards, it’s rather like ice cream… Which, of course, comes in many different flavours.
Here’s the thing – some are more palatable than others.
Oh yes. Tom Paine, Vesta?
Bet ya don’t where he used to call home.
HInt: Every year – without fail – it’s home to Blighty’s most magnificent GuyFawkes BonfireNight.
V is for Vesta [or was that Vendetta?... Remember... Remember... The 5th of...]
Be careful what you wish/militate for. There are always unintended consequences.
http://tinyurl.com/3snclkx
[PS - Natalie is, like, so shorter than you'd a thunk. DarnedCute! though. And not at all stuck up].
Ah.. an oversight, VESTA – what follows is old news… and could certainly use the attention of an editor like VREAA… regardless, the author nicely summarises your ‘choice’ as regards the Ladners/Robertsons of this world.
“Boy Wonders” – Mike Howell, Vancouver Courier
http://tinyurl.com/5tcqsmh
PS – Ask Peter someday about his very own ‘FantasyIsland’
http://g.co/maps/q56hk
WhoCoodaNode, eh!?…
[G&M] – Ottawa calls for probe of PEI immigration program
“The federal government is calling in the RCMP and the Canada Border Services Agency to investigate allegations of fraud and bribery in a PEI immigration program that allowed hundreds of primarily Chinese nationals to buy their way into Canada. In less than three weeks, Islanders will vote on whether to re-elect Robert Ghiz’s Liberal government. His party is leading in the polls, but has been on the defensive since 2008 because relatives of the Premier, along with cabinet ministers, deputy ministers and several MLAs, benefited financially from the immigrant investor program.”…
http://tinyurl.com/3shvfxt
Hmmmm…
Any more stories like these, and you’re going to start convincing me there may be something to all this…
“immigrant investor program”
…should be killed. Not because of house prices and lambos, because it’s a bad idea. Another thing on which to write your MP. And if you think that all former immigrants are somehow in favour of this program you’d be dead wrong.
Today’s post was one of the most interesting in a long time. It makes me realize to what extent blogs play a hugely important role in our understanding of current events. (In contrast, my brother-in-law watches Global news, and until last week had never heard of a “blog”.)
Thank you VREAA for providing such a well-organized forum. I hope that you find your efforts are somehow rewarded. (I did consider the possibility that you are actually Gregor Robertson, and as soon as the bubble bursts, you will unmask yourself and pronounce “Look, I knew it was a bubble all along!”.)
Thank you also to all contributors for your thought-provoking ideas. You have helped me to learn a lot about these topics.
[Curses! Outed! ... No, for the record, I am NOT the Mayor. Thanks for the kind words. -ed.]
I still maintain my opinion that there probably isn’t much that needs to be done currently at a government level. Again, if you believe that this bubble will lead to a 30 to 50% crash then you can let it play itself out and wait on the sidelines like what we do with stock investments.
The current RTA protects the renters very well in my opinion, so there isn’t much that needs to be changed. As for additional taxes, if it is the principle residence, then most likely it is not used for speculation purposes. Other investment properties that feeds into this mania are already taxed by the capital gains and transfer taxes. Don’t see why you need to change it there.
If anything needs to be done, perhaps change the zoning laws as some posters have suggested and allow higher density housing units come into the city and become the more affordable properties.
CMHC certainly needs to go to a policy whereby they have some sort of sane guideline on the mortgages that they insure. If they do, I suspect that the number of mortgages that they insure will go down thus making the banks more stringent with their rules on who can get a mortgage.
If these two changes are implemented, then you might bring in more supply into the market and decrease demand.
But the overall theme like VREAA says is that if you believe there is a big crash scenario, then just rent for now and wait for it all to happen. If it does happen, then you are standing pretty with your cash. If it doesn’t happen, then it probably wasn’t meant to happen in the first place. I don’t see why this is so complicated. You make your bet one way or the other and one side will win and the other side will lose. I just don’t feel that either side has it completely correct and somewhere in the middle is probably the truth.
“you can let it play itself out”
There are some underlying issues that will remain after any crash, namely the rather bizarre and unique basement suite situation Vancouver finds itself in. This is, in my opinion, a bad way of adding density for reasons already stated. If Vancouver is truly as desirable as its cheerleaders expound, they need to consider the next steps in elevating the City to the next echelon. This is not best done on the backs of amateur landlords and troglodytes. I don’t know if they’re using any Scandinavian cities as a gauge but they should go during their summer festivals and count the number of children.
But maybe they prefer Manhattan, where there is no affordability problem for families with children: there are few families with children to begin with.
The problem with it playing out are the severe side effects of the bubble.
A hard landing from this nonsense is bad news for the Canadian middle-class. A soft landing still has the potential to stall out GDP growth in Vancouver.
“A hard landing from this nonsense is bad news for the Canadian middle-class.”
I guess I’m more sanguine than you — if the middle class feels hard done by they can redistribute wealth with all sorts of zany laws. I heard they make up the majority of voters.
The bubble “playing itself out” (and imploding, as all bubbles do) will ‘solve’ some housing challenges (housing will drop closer to fundamental value; will cease to be a speculative financial vehicles; will start looking attractive to sensible investors on the basis of income; etc).
But the economic consequences of the burst will be very ugly. This, of course, is not the ‘fault’ of the burst, but of the economic distortions that occur during the bubble itself, and that simply cannot continue (debt expanding at unsustainable rate; over-reliance on one asset class; etc).
All that aside, yes, there will still remain challenges regarding all sorts of finer points of the ‘shape’ of our housing and housing policy: types of housing, density restrictions, suites (legal? not?), building codes;…
I think there something more fundamental that needs to be discussed:
Should an inhabitant of Vancouver have some say over the availability of housing types even if they are not currently property owners?
Sure, why not?
All ‘inhabitants’ use housing, right?
“Should an inhabitant of Vancouver have some say over the availability of housing types even if they are not currently property owners?”
Well you could start a landed nobility and take away people’s citizenship rights, I suppose.
But as for now, both national and local law govern housing policy.
“Should an inhabitant of Vancouver have some say over the availability of housing types even if they are not currently property owners?”
The laws governing how we elect our representatives have improved suffrage to the point where, yes, even the unwashed can have a say in their futures.
Ain’t democracy grand.
“Ain’t democracy grand.”
Yep. One of the best Democracies Money Can Buy.
PS – Greg Palast owes me one for that title. Swell guy, too.
PPS – Yank! Landed aristocracy?!… psst – ever look at that ‘funny money’ they’re paying you with?… Albeit, I would postulate that you Yanquis simply replaced one LandedAristocracy with another. “Say Hi! to the ‘new boss’. Same as the old boss.”
Whatever.
Yank, did you know what Johnny Canuck returned to you as our BFF AmericanRevolutionaryBicentennial anniversary prezzie in ’76? Hint: In the War ‘o 1812… we snatched it from the House ‘o Congress after burning Washington to the ground. Oh, and we gave you a nice ‘coffee table’ picture book, too… “Between Friends”.
Your turn.
Caveat emptor, but looking at this simplistically, there is a 70% home ownership rate in the country. That ratio has got to go down in order to enable any political changes to the existing system. A bubble bursting may accomplish that, but then perhaps home ownership may not be so desirable then (you lose the veblen effect).
Heh, you could flip that… Those who have already bought obviously were served by the current available housing stock, so maybe only those who have not bought should have a say. *smirk*
LOL maybe current owners should have a say on future rental stock…
Hi Mike,
The option is not homelessness but following the rules. Let me give you an example. Lets take pets for example and I’ll tell you the rules here in Ontario.
No pet clauses in leases are void.
The only deposit allowed is last month’s rent deposit and it must go towards last month’s rent.
Now I love pets, I have 2 dogs of my own that are part of the family. As a landlord though pets are to be feared in many cases because it increases the risks of damage and tenants often just stick the landlord with the damage bill.
Our aforementioned bad tenant who is so dysfunctional that they cannot pay to keep a roof over their head is often problematic in other ways. Recently I evicted a couple with two children and two dogs, on social assistance. They crated their dogs on the balcony, never cleaned the cages and the crap and stuff was leaking off their balcony onto the other tenant’s balconies and the patio. In fact one day the tenant on the ground floor (who is a really nice guy) was sitting out on their patio when a viscous and disgusting liquid splashed onto him from the cleaning activities of our delightful upstairs tenants. The howling that occured 24-7 from the crated dogs was also great for the other residents.
I’ll tell you a secret no landlord in his or her right minds wants to kick out “tenants who break the rules” as a group we don’t care as long long as our building is not damaged and the rent is paid and the other residents can live with the behavior of the “rule breaker” But when people start sweeping dog shit and piss off their balconies onto other residents you can see why we might want to get them the hell out of the building before all the decent people move out.
I can say with 100% certainty that there are a very small minority of people that are not at all cut out for communal living. The facts are that they don’t bother the property manager half as much as the good people who live in the building. The property manager gets to go home away from these people at the end of the day, unlike their poor neighbors. It’s not my problem to make sure every person has a home, it is my job to make sure a majority of people have a decent and safe place to live.
I imagine dealing with the some of elements of the underclass is difficult.
However, some people choose to go into the business of renting housing the lowest level of society. They know the risks of owning certain types of housing in certain areas. If they don’t like the risks than they can get out of the business.
If they stay in the business, than they must be making money off the poor, so I don’t know why they’re complaining.
“Yank, did you know what Johnny Canuck returned to you as our BFF AmericanRevolutionaryBicentennial anniversary prezzie in ’76? Hint: In the War ‘o 1812… we snatched it from the House ‘o Congress after burning Washington to the ground. Oh, and we gave you a nice ‘coffee table’ picture book, too… “Between Friends”.
Your turn.”
The Battle of New Orleans?
http://en.wikipedia.org/wiki/Battle_of_New_Orleans
History Throwdown!
http://www.youtube.com/watch?v=UbVWd_dc6Tc&feature=related
Until I came to Canada I always thought of that war between the US and Britian. Weren’t a lot of the soldiers from Britian? Don’t know much about military history – more interested in the cultural turn.
“Landed aristocracy?!… psst – ever look at that ‘funny money’ they’re paying you with?…”
I hope you’re not thinking I’m for a landed artistocracy. I’m all EP Thompson moral economy of an English crowd myself. Must be tired as I’m missing something here. Or perhaps your sarcasm meter was turned off when you read my comment. In any case, I ain’t getting paid in USD. My money has a picture of the Queen on it.
C’mon jesse/vraa you know City of Vancouver planning dept. will never implement blanket rezoning and density bonuses. If they do that, they lose their piece of the action (in this case they get 75% of the benefit of a rezoning). Brent Toderian is on record as stating this. Plus other municipalities across the province are now copying Vancouver approach.
Here’s a Geller article on it:
http://gellersworldtravel.blogspot.com/2011/02/financing-growth-in-vancouver-why.html
Our fair city is addicted to real estate appreciation – from boomers planning for retirement to offshore investors to sub-prime owners to city hall.
Letters will fall on knowing deaf ears. Focus on the media. Start by having Queen Rachelle administer a public flogging to Global TV reporters – all of them.
Hey Vesta/Yank, you may want to volunteer for the Maclean’s upcoming article mentioned in Garth’s blog this evening. Provide a perspective of Americans moved north to dodge the melt-down only to have traveled in a hot tub time machine back to Nevada 2006.
http://www.greaterfool.ca/2011/09/15/the-news-4/#comments
I’ve been in Vancouver for 20 years. I wasn’t escaping anything when I moved here — my husband got a job at UBC.
Putting my bitterness aside for a second on this housing ownership party I’ve missed, I see no reason to implement radical changes in policy right now.
1. So far, Canada has avoided a massive economic meltdown due to CMHC strategy of encouraging sub-prime borrowing and spending on new homes. Construction employment has boomed, the wealth effect impact on 70% of households has rocked, jobs galore.
2. Plus lots of dumb foreigners are paying a fortune for stickframe shacks across the city – returning wealth accumulated in China etc. to Canada in the process. It sucks now, but after the bubble bursts we’ll all have the last laugh.
The bubble is temporary and this all can’t continue, but for now it is creating lots of construction-related jobs and returning tons of capital to Canada. Flaherty and Carney may be victims of their own success. The policy is working too well – prices are out of control and a soft landing seems laughable at this point. Old Skool irrational exuberance has taken hold and people are going to be angry when this thing pops.
Policies aside, I still want people at Global TV flogged though. Queen Rachelle, can you help?
smart post 604x
The fed is in a bind. The only industries working now are those related to housing. In fact, this is the only industry that’s done anything in 2.5 years. Kill that and kill any economic growth.