The only developed country that doesn’t seem to have a housing crisis right now is Japan. After their real estate market collapsed in the 90s, they instituted a number of reforms to make housing less attractive as an investment vehicle. Now housing there tends to depreciate over time, not appreciate. Consequently, it’s viewed not as an investment but as a consumer product, much like buying a car, and there is competition that brings costs down.
I think this is the sensible approach we need to follow in the rest of the developed world, but I don’t think it’s not going to be politically feasible until a lot of homeowners feel a lot of pain and give up on the idea of housing as an investment
Japan also has a shrinking population which would contribute to declining housing values though unlike the rest of the world that relies on immigration to counter their plummeting birth rates
it’s not going to be politically feasible until a lot of homeowners feel a lot of pain and give up on the idea of housing as an investment
This is the biggest issue. It’s fine to say we need to stop treating houses as investments, but most people own houses and it is their largest investment. Yes, billionaires and megacorps are profiting off it too, but if the government passed legislation tanking the prices of houses, the billionaires would be fine. Everyone 50+ who was getting ready to retire will loose most of their life savings. It needs to be a slow process, unless we’re all ok going through a market collapse like 1990s Japan
but most people own houses and it is their largest investment…
While this is currently true, it’s going down each year.
Between 2011 and 2021, homeownership declined across Canada and overall, there were 2.5% fewer Canadians living in owner-occupied homes in 2021 compared to a decade earlier.
So over the course of ten years home ownership went down 2.5%, but population went up from 34 million to 38 million. This quite literally isn’t sustainable.
Everyone 50+ who was getting ready to retire will loose most of their life savings
So at a certain point we have to ask, what’s worse, two generations who don’t own homes, or one generation loses it’s life savings.
I’m a member of a generation whose wealth is tied up in home ownership. I say let 'er rip!
We can’t keep putting off a fix forever, so the earlier we tackle it, the better. No matter what we do, someone has to suffer, at least a little bit, so get it over with.
There is also plenty of money available to help ease the suffering if only we had the courage to tax properly.
It also might not hurt to let the institutional lenders and the investment class just eat some losses.
With 38% of our federal politicians having real-estate investments or being landlords, and the rate of ownership amongst canadian politicians being twice as high as the general population… They literally have skin in the game.
I’m surprised it’s only 38%, that seems too low honestly.
Yup, no spine and maybe no ethics. Sometimes you have to do what is right, regardless of the consequences to yourself. Every ethical person knows that and every ethical person with a spine sucks it up and makes it happen.
This is one of the issues with democracy: people vote in their own interests. Perhaps I should be more specific: this is the problem with democracy in a culturally fragmented nation. Without shared values and a sense of camaraderie, people don’t vote altruistically, but self-interestedly. They don’t care about their neighbours because their neighbours don’t care about them. I live in Denmark now which is very culturally homogenous and people do vote altruistically. They vote for higher taxes because they know their neighbours share their values. They identify with each other like a loose family. This is one of the drawbacks of multiculturalism which is rarely discussed.
I am absolutely with you on the fact that Canada has a very individualistic culture (another drawback of our southern neighbours?), but I tend to diverge when you blame multiculturalism. I would think that other, more macro pressures (history, economic model, popular culture, political stability and wealth inequality) might be more influence on wether or not a population has social values or individualistic ones.
Source? I’m just spitballing here…
This is one of the issues with democracy: people vote in their own interests.
I vote for pro 2SLGBTQ+ issues, and am none of those things, so how does that square exactly? I vote for help for the unhoused, but am housed, how does that square?
this is the problem with democracy in a culturally fragmented nation. Without shared values and a sense of camaraderie, people don’t vote altruistically, but self-interestedly.
You seriously need to back this up with something, you can’t just say ‘we’re culturally fragmented, have no shared values’ as some sort of ‘known’.
It will never happen here. It doesn’t benefit the rich.
Housing as an investment shouldn’t have ever been a fucking thing. I’d like to find some of these investors and sell them my used car the way way they try to sell a used house.
Used cars are already being flipped in the same way. Take a look at the price of a 2000-2015 pickup.
Who the fuck is buying this shit?! Too bad we can’t force wages like they force prices lol
We can, but the capitalist class gets, well, intense about labour working collectively.
Join a union!
The abandonment of public housing by the federal government in the 1990s went hand-in-hand with a wider push to financialize the entire sector: rent controls were deregulated, rules were rewritten to make it easier for landlords to purchase buildings then forcibly hike rents.
Once the Liberal and Conservatives governments pushed us into this era of investor led housing development it was obvious there was going to be a growing group of people that would be very happy that general housing prices were sky rocketing. Imagine how society would have viewed any type a significant bump in housing otherwise, how would anyone view it as anything as a bad thing.
List of random thoughts for what investor led housing has brought us aside for the prices:
- Worse quality housing - They’re not living in it so they don’t care how poorly built or designed it is as long as it can be flipped for profit.
- Worse quality local amenities - Why invest in things like local amenities, transit and anything else when it doesn’t make a difference for you
- Worse maintained strata housing - Anyone that has been on strata boards know that investors owned units don’t want to maintain the building since they’ll be gone by the time the shit hits the fan and be twice as expensive to fix.
https://www.bankofcanada.ca/rates/indicators/indicators-of-financial-vulnerabilities/
29% of housing sales are from investors:
The cause isn’t “investors”, they are a symptom, of capitalism, the actual cause.
Housing is a human right and should not be commodified, anything less than that should no longer be acceptable.
Can you help me understand what a non-commodified housing system looks like? Does everyone live in social housing or is there just a lot of social housing with a secondary open market? Are there restrictions on investing in housing, such as you may only own 1 home or maybe 2? I’m just trying to get my head around it.
(Back-of-the-napkin ideas from a nerd who has way to much time on their hands to read about stuff like this)
Does everyone live in social housing or is there just a lot of social housing with a secondary open market?
likely the second: it’s human nature to have preferences for things, and if you don’t accommodate for people wanting something outside the norm, it’ll just end up on a gray or black market. That’s not a defeatist “what’s the point in even trying” statement (“why ban xyz?? People will just get xyz anyways!” is not what I’m trying to say), just acknowledging the realities of people being an extremely diverse collection of individuals and how to work that fact into on-the-ground policy. If you’re in a position to be able to afford something else, you should be able to build it - so long as the external costs such as utility hookups and roads and so on are factored into “can afford” (property taxes should be replaced with a land value tax, or in lieu of that raised to cover the costs of infra to get to your home).
Are there restrictions on investing in housing, such as you may only own 1 home or maybe 2?
This would help slow the bleeding, but I don’t see it being a solution: numbered corps “suddenly” on the rise after that happens. The only real solution is for the government to build a ton of social housing themselves and not P3 it or leave it to the market, since we’re trying to leave it to the market and it’s obviously failing to deliver and P3s are a waste of money.
So this would be pretty close to what we have now, but with so much social housing people wouldn’t have to worry about being homeless. Like a basic income, but for houses.
More or less: the government would out-compete the investors and builders, leaving only those with sustainable business practices left to build the difference (I say this part because a healthy business can (ideally) compete on only the merits, as opposed to trying to cheat the market and hiding costs that way as quite a few do now).
There’s a whole ton of asterisks here, and we should probably steal a few ideas from Singapore (not everything, because there are things there that don’t apply to here, and vice versa), but it’s the general idea.
government to build a ton of social housing themselves
I can’t see that going well at all. Gov’ts do this very, very badly from anything I’ve seen.
Gov’ts do this very, very badly from anything I’ve seen.
Can you share some details?
I don’t personally believe government-run projects are inherently doomed to be bad simply because they’re government-run: private industry shits the bed on a fairly regular basis, yet we give it a pass here, so what makes government special here? Both can (and do!) fail in exactly the same ways, and just because it’s government or private doesn’t mean we shouldn’t give it a chance: we’ve tried the private way for a few decades and look where it got us.
I can see the argument for not having qualified experts available in every municipality and that leading to poor outcomes, but that’s a people problem and not a government problem, and also not something unique to government (and the idea that every private industry expert is qualified is absurd: plenty of idiots in private orgs too).
The problem space is the same actual space for both, not a similar space, the exact same. If anything, Canada needs an “Army Corps of Engineers” or something to build infra+housing for municipalities.
Just keep building housing until there’s enough available that nobody’s left without an affordable home. Enough that investors can’t buy it all (without simultaneously killing the value, because TOO MUCH empty housing kills the value of the area). If that requires municipalities investing in building then let’s have them do that.
Tax the fuck out of rental income, and increase the property taxes for investor-owned or foreign-owned homes to commercial rates, then hit them again with a pre-tax that increases at a rate 2x of inflation. We’ll stomp that shit out in under a decade.
Over the past several decades, Canadian housing has been transformed into a financialized wild west where the interests of the investor class are sacrosanct and social need is secondary.
Secondary? That implies it has any priority what so ever in the market. It has been shown clearly there is no consideration of the social aspect of housing as an investment. It’s how much you can get for your property, that now carries no mortgage (OK, boomer), and how you can fund the lifestyle you’ve been practising for all these years. Remember, there are no poor people, just temporarily inconvenienced millionaires.
Greed is good. So are the well cooked rich, I’ve heard.
It’s both, you can’t fix the problem by only attacking one of the two biggest causes.
Renting a space for people to live in should be a privilege and not a right. We should have a board that limits what your rented space and its amenities can be rented for. I would even go as far as a permit and if you violate it you must sell the property within 90 days or jail time. We shouldn’t fuck around with the basic human right to affordable housing.
Foreign investment got us started down this path. A ton of people moved here when UK handed HK sovereignty to China in the 90s.
Investment is probably a bigger problem now but that was established by the initial foreign investment booms.
