Let's Talk About Minimum Wage, Class Warfare, Wage Gaps, etc.

[Fuzz]

Originally Posted by GGG

Why does housing cost what it does?

It seems like more supply should be able to eliminate any housing affordability problem. But a long with excess supply another thing that needs to be realized is that near city centres SFHs should eventually not exist.

How many new homes would it take to tank the housing market?

The other thing is with housing in Calgary is the median family income supports the purchase of the median SFH so that seems pretty balanced. If you wanted to reduce the market further you would have to increase qualifying standards for loans and down payments to make the affordability of housing drop. This might be offset by increased investment into rentals though.

Part of the problem is that so much money has been printed and instead of causing inflation it’s being hidden in stocks and houses and other assets. The only solution is to decrease money supply and there is a lot of resistance to that.

I presume it has to do with land costs, labour costs, and building materials. I don't really think it's just arbitrarily valued based purely on demand.

[bizaro86]

Originally Posted by combustiblefuel

In bc your lucky to get a condo for $350,000 we are talking like basic 1 bedroom . 500,000 dosen't even get you in the most basic of houses in 85% of the province.. That's like entry point now.

Yeah, the way to fix Vancouver housing affordability isn't to give everyone who lives there a bunch of money. They need to upzone Vancouver for higher density, and convert some agricultural reserve to housing on the fringe of the metro area.

[GGG]

Originally Posted by Fuzz

I presume it has to do with land costs, labour costs, and building materials. I don't really think it's just arbitrarily valued based purely on demand.

Land cost I think is a function of forecast future demand.

[bizaro86]

Originally Posted by GGG

Land cost I think is a function of forecast future demand.

And supply. The expensive Canadian cities (Vancouver and Toronto) have both artificially restricted supply through ag zone/green policies, and a lack of land supply for multi family.

In both cases a huge percentage of the cost of housing is just the land value. Adding land supply for more units would reduce the land value per unit.

[blankall]

Originally Posted by bizaro86

Yeah, the way to fix Vancouver housing affordability isn't to give everyone who lives there a bunch of money. They need to upzone Vancouver for higher density, and convert some agricultural reserve to housing on the fringe of the metro area.

Zoning and limited permitting is definitely playing a massive role in Vancouver. I find the debate on the issue mind numbing, with most people taking a position on either the "supply" or the "demand" side. In reality, it's clearly both supply and demand that dictate a market.

The other issue with Vancouver is that most people who are already established there want to preserve the suburban nature of the city. They love their detached homes and don't want to see densification. They've also become multi-millionaires from the current status quo. They don't want to give up their future "earnings".

[Winsor_Pilates]

Originally Posted by blankall

Zoning and limited permitting is definitely playing a massive role in Vancouver. I find the debate on the issue mind numbing, with most people taking a position on either the "supply" or the "demand" side. In reality, it's clearly both supply and demand that dictate a market.

The other issue with Vancouver is that most people who are already established there want to preserve the suburban nature of the city. They love their detached homes and don't want to see densification. They've also become multi-millionaires from the current status quo. They don't want to give up their future "earnings".

This is true.
But it's also the massive tax earnings BC makes from property transfer tax each year and the cities make from property taxes.
The entire economy functions on high real estate prices at this point.
In a hypothetical world where BC property values dropped... say 60%; we'd be in an economic depression.

[PepsiFree]

Originally Posted by RichieRich

I think you called me old? I'm not 50 yet but older than 40 but true enough I do have some older ideas, many of which were inherited from the parents. I was brought up without much (ie: yes I was that kid that had hand-me-down underwear), have travelled a lot and seen true true destitution where people might be "lucky" to live another day. So, to me, I see excess examples of consumerism, wastage, expectations and demands exceed potential to support them. I see far far too many failures where "the man" is to blame instead of personal accountability and self-awareness of immediate and long term decisions. For example, I have "poor" friends whose T4's are near $200k/annual who whine and moan about how they're only freedom-75 plan... yet they travel a lot, regular new cars, kids in many expensive sports that require travel, all kinds of toys, etc... and they actually feel they're hard done by. It's wrong, IMO, to expect the government to be your saviour. It's also wrong to expect any society to tax their way to prosperity, or to take from the richer and give to the poorer like we are headed towards. F that.



That said.. I support your concept of certain tax-exempt items, but lets also throw in consumption-based taxes. Even though I pay a fair bit of tax I do see some value in a graduated taxation too, however enough is enough at some point. Those that pay the least tax may be victims of their situation (earned or inherited or just crap luck) indeed, and that sucks, however it's not reasonable to expect those that scrimped and saved and worked their @$$e$ off to now be penalized.

Totally agree. I think people who are well off more often than not don't understand just how well off they actually are. Especially compared to others in their area. If you can't live well, not just comfortably, but well off 200k then that is your fault and your fault alone and I agree that under no circumstances is it the government or society's job to give one #### about helping you. But for those who actually are struggling, like families of four making 80k household or less, something needs to be done because that becomes a vicious cycle.

And I think we agree on tax, I may have worded it poorly. I think higher consumption taxes are needed (with essentials exempt for everyone regardless of income) and a flat tax that applies to everyone equally (so whether you're making 30k or 1M, you're paying 20%, or whatever). You could set an exempt amount, so, no tax on the first 30k and 20% on everything above, but in general I think there are ways to ensure everyone pays their fair share without progressive taxation.

I do wonder what effect extreme regulation around debt would make. Debt is so high and I know a lot of people who got into debt early and got in bad, and will struggle for a long time just to service that debt and pay it off, which has a huge impact on quality of life.

[flamesfever]

Originally Posted by GGG

Why does housing cost what it does?

It seems like more supply should be able to eliminate any housing affordability problem. But a long with excess supply another thing that needs to be realized is that near city centres SFHs should eventually not exist.

How many new homes would it take to tank the housing market?

The other thing is with housing in Calgary is the median family income supports the purchase of the median SFH so that seems pretty balanced. If you wanted to reduce the market further you would have to increase qualifying standards for loans and down payments to make the affordability of housing drop. This might be offset by increased investment into rentals though.

Part of the problem is that so much money has been printed and instead of causing inflation it’s being hidden in stocks and houses and other assets. The only solution is to decrease money supply and there is a lot of resistance to that.

I believe it's a whole bunch of factors that have come together at one time.

1. low interest rates

2. the debasement of our currency by printing money

3. the rise in commodity costs

4. the shortage of labor

5. the demand by immigrants or people from other countries

6. the difficulty to invest in the low risk fixed income market in such a way as to overcome inflation and taxes

7. the belief that the house prices will inflate continuously without periods of deflation

8. the changes in lifestyle because of the pandemic e.g. being able to work remotely using technology

9. etc.

I don't think the banks should make it easier to get loans, as we may end up with a crash in the market similar to what happened in the US.

IMO it will take an increase in interest rates to cool the market.

As for trying to flood the market with new homes, I believe this country is far to burdened by red tape and taxes to make that happen in any reasonable time period.

I understand that much of the house purchasing is happening with the help of "the bank of Mom and Dad".

[you&me]

Originally Posted by PepsiFree

...
And I think we agree on tax, I may have worded it poorly. I think higher consumption taxes are needed (with essentials exempt for everyone regardless of income) and a flat tax that applies to everyone equally (so whether you're making 30k or 1M, you're paying 20%, or whatever). You could set an exempt amount, so, no tax on the first 30k and 20% on everything above, but in general I think there are ways to ensure everyone pays their fair share without progressive taxation...

Completely agree on these points about taxation. It may be naive of me, but I think before we go down the UBI road or any other similar, new initiatives, we should really try to simplify taxes. The fairest and simplest way to do that is modest flat income tax across the board and a higher consumption tax (with exemptions for essentials)... At that point tax exemption rates (like you said, say $30k per individual) can be adjusted and we can have a more straightforward talk about a UBI and how that can help top-up the lowest income earners. Dare to dream...

[GirlySports]

I think if the NDP win the next election they bring in a 5% sales tax.

[bizaro86]

Originally Posted by blankall

Zoning and limited permitting is definitely playing a massive role in Vancouver. I find the debate on the issue mind numbing, with most people taking a position on either the "supply" or the "demand" side. In reality, it's clearly both supply and demand that dictate a market.

The other issue with Vancouver is that most people who are already established there want to preserve the suburban nature of the city. They love their detached homes and don't want to see densification. They've also become multi-millionaires from the current status quo. They don't want to give up their future "earnings".

The only way demand changes is probably changes in interest rates, or maybe tightening qualifying again. But qualifying changes haven't worked so far... the big problem with those is that they're nationwide solutions to a Toronto/Vancouver problem. Calgary doesn't need higher interest rates

Supply the government has more control over, but the city, the province and existing homeowners are all very much FYGM.

[flamesfever]

Originally Posted by GirlySports

I think if the NDP win the next election they bring in a 5% sales tax.

I agree, but you can be sure they won't say that before the election.

I believe whether the increased revenue is used responsibly by the socialist leaning NDP government is open to question. However, as far as NDP leaders are concerned, I do admire Notley.

I do think a Sales tax has merit, as the rest of the provinces would be less inclined to be jealous of us. Also we would have a better case to get rid of, or change, equalization so we are not continuing to subsidize Quebec.

[blankall]

Originally Posted by bizaro86

The only way demand changes is probably changes in interest rates, or maybe tightening qualifying again. But qualifying changes haven't worked so far... the big problem with those is that they're nationwide solutions to a Toronto/Vancouver problem. Calgary doesn't need higher interest rates

Supply the government has more control over, but the city, the province and existing homeowners are all very much FYGM.

Another major issue with interest rates and tightening control is that it doesn't affect demand equally. If you have lots of funds already, these effects may actually help you by driving competition out of the marketplace. If you are a lower (relative word here) income person attempting to buy a home, these restrictions only make it more difficult for you.

So if the goal is to help Canadians afford homes, restrictions on mortgages don't help unless there's also a massive decrease in prices. Without that massive decrease in prices, mortgages controls do the exact opposite of what they are supposed to accomplish.

[rubecube]

Originally Posted by you&me

The fairest and simplest way to do that is modest flat income tax across the board and a higher consumption tax (with exemptions for essentials)... At that point tax exemption rates (like you said, say $30k per individual)

Yeah, the problem with that is it's a regressive tax that hurts the poor.

[delayedreflex]

Originally Posted by _Q_

Not much older than me "bud".

Maybe if you focused a bit on reading comprehension in high-school, you would be able to make that average salary. Then you would be able to purchase that average home and average vehicle.... wait Scratch that. You still wouldn't be able to afford ####, because that's not how our economy works anymore.

Being able to buy the average vehicle and average home on an average salary seems like it would make sense on the face of it - but I don't think it's actually a reasonable assumption.

The lowest earners would not be buying homes or new vehicles, so while they are factored in to the group of people for calculating average salaries, they are NOT factored in to the group of people calculating average new vehicle or home prices. If you were to calculate the average household incomes of people who DO buy new vehicles and homes, I think you'd find that the average is substantially higher.

Originally Posted by Mr.Coffee

I think your overall point would resonate more if you took it from like a 10 to a 5. I didn’t bother to go back and re-read but your initial reply to Q seemed hilariously over the top aggressive.

I don’t even necessarily disagree with your point. Canadian expectations of standard of living is something that is 110% going to decrease in the future, that’s something you can bank on without doubt. And it’ll be good for society I think, weirdly.

I agree with this - I certainly don't think you need to own a single family home or a new car to live a comfortable life. There's honestly nothing wrong with renting, living in a condo or townhouse, driving an older car, etc. No doubt, the security of owning your own house is a valuable thing, but I don't see why so many people see it as a pre-requisite to living well when owning your own house is not the norm in most other places around the world.

[PepsiFree]

Originally Posted by rubecube

Yeah, the problem with that is it's a regressive tax that hurts the poor.

I don't think it has to be.

If an individual making 30k doesn't have to pay take on their income, or sales tax on groceries, rent, gas(? maybe), utilities, things we deem as essentials, etc. How are they being hurt by this tax system vs the alternative?

[rubecube]

Originally Posted by PepsiFree

I don't think it has to be.

If an individual making 30k doesn't have to pay take on their income, or sales tax on groceries, rent, gas(? maybe), utilities, things we deem as essentials, etc. How are they being hurt by this tax system vs the alternative?

Don't most payrolls take the tax off anyways and leave it up to the employee to claim their refund at tax time? I'll admit to not being super familiar with how payrolls work.

[iggy_oi]

Originally Posted by PepsiFree

I don't think it has to be.

If an individual making 30k doesn't have to pay take on their income, or sales tax on groceries, rent, gas(? maybe), utilities, things we deem as essentials, etc. How are they being hurt by this tax system vs the alternative?

Because poor people usually have to spend all of their money and rich people usually can’t spend all of their money.

Also anyone advocating for a flat sales should really look into how much tax revenue GST accounts for. It shouldn’t take too long to figure out how pie in the sky the concept of expecting new sales taxes to make up for all income and corporate tax revenue really is.

[you&me]

Originally Posted by rubecube

Yeah, the problem with that is it's a regressive tax that hurts the poor.

Edit - misread.

[iggy_oi]

Originally Posted by SebC

But a person's income would be more than their wages.

Yes, however since UBI would move the starting line up for everyone people would still need to rely on their wages to give them economic mobility.