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[topfiverecords]

Originally Posted by blankall

Not sure how someone could look at the absurd system of zoning, fees, permitting, taxes and building restrictions that Canada has and conclude that easing those amounts to subsidizing.

I'll be curious how the Federal gov impacts things like those that are municipal level elements of the home building process. They can't step in and mandate zoning changes. Fees are income that the municipalities need to operate. Permitting is not the devil most pose it to be. Taxes, yes you pay taxes. Do they want to step in and lower building code to make things cheaper to build? That would be a regrettable action.

If they want to tackle trade shortages, material costs, and other ways to bring costs down, by all means. Maybe GST on new home construction could be an area the Feds could control.

[opendoor]

Originally Posted by Ashasx

I thought the issue with builders was above all, with a lack of labour.

That, and they're not going to cut into their own profits by creating a glut of supply, particularly if we're potentially entering a recession which would lower selling prices.

But yeah, Canada is already building at a rate that's faster than almost any industrialized nation. I'm not sure where people get the idea that we can just snap our fingers and add a ton of home building capacity. And the one way that could possibly happen (through robust immigration) is basically what everyone's complaining about.

[calgarygeologist]

Originally Posted by blankall

Not sure how someone could look at the absurd system of zoning, fees, permitting, taxes and building restrictions that Canada has and conclude that easing those amounts to subsidizing.

I don't see what role or action the federal government is taking or can take to change the municipal zoning and permitting systems across Canada.

Also, apparently the announcement was nothing new in terms of programs or additional new funding and was just an announcement that the city of London is getting $74M from an existing housing program.

[The Fonz]

Would be very unpopular, but the logical solution in my eyes is, incentivize/promote relocation to rural communities in Saskatchewan & Alberta. There is no shortage of homes there, could take your pick of any 1970s built bungalow for $125-200k, and it'd be massively beneficial to those communities. This idea is realistic today with so many people employed in WFH positions.

Canada is an enormous country, and is fighting a battle of trying to squeeze 75% of it's population into 5% of it's land-mass. The solution seems obvious.

[Bill Bumface]

Originally Posted by Ashasx

I thought the issue with builders was above all, with a lack of labour.

I think permitting is a huge hurdle too. Countless resources go into projects only to be bogged down in permits and killed by NIMBYs. Things like the national blanket zoning they have in Japan would be a drastic step. Meet the zoning requirements? Ok, go ahead and build.

Instead we have this:


(Can't find higher quality, sorry!)

Same problem is happening in all places with housing affordability issues:

[blankall]

Originally Posted by The Fonz

Would be very unpopular, but the logical solution in my eyes is, incentivize/promote relocation to rural communities in Saskatchewan & Alberta. There is no shortage of homes there, could take your pick of any 1970s built bungalow for $125-200k, and it'd be massively beneficial to those communities. This idea is realistic today with so many people employed in WFH positions.

Canada is an enormous country, and is fighting a battle of trying to squeeze 75% of it's population into 5% of it's land-mass. The solution seems obvious.

That only works so much. Look at BC. People did start looking to live in other places, which just resulted in the all the prices in the secondary markets, like Nanaimo, Victoria, and Kelowna going through the roof too. Small town can also only handle so much growth. You can't just move 20k people into a small town and expect the town to handle that. Then you need to rezone the land around the town. You also price out the locals, who are earning local dollars and don't have the benefit of bringing in a big wad of cash from another market.

There's a million people coming into the country every year. The government neeeds to come up with a plan for housing.

[The Fonz]

Originally Posted by blankall

That only works so much. Look at BC. People did start looking to live in other places, which just resulted in the all the prices in the secondary markets, like Nanaimo, Victoria, and Kelowna going through the roof too. Small town can also only handle so much growth. You can't just move 20k people into a small town and expect the town to handle that. Then you need to rezone the land around the town. You also price out the locals, who are earning local dollars and don't have the benefit of bringing in a big wad of cash from another market.

There's a million people coming into the country every year. The government neeeds to come up with a plan for housing.

I guess I shouldn’t have said “solution” - it’s not as simple as I implied there.

What I was meaning though, is that this could be a big tool in terms of solving a problem which will require the entire toolbox.

[Leondros]

I was having an interesting discussion with some friends (lawyer, CPA, CFA, and a realtor) and one point brought up was how people are really leveraging their principal residence exemptions as investment tools. Staying in the house on paper for the 6 months required, and then flipping. Family members of large families were doing this with 5 - 6 houses at a time.

We then got to talking about if the government removed the PRE, would that reduce the amount of house speculators in the market? If you remove that portion of buyers of which you could argue is material, would that help remove the speculative aspect. Funny enough, the PRE was implemented in 1971, it was a way to implement capital gains taxes on property and in order to get it through politically the government added the exemption as to not hurt the vast majority of the population.

It was a great discussion with us concluding it would be political suicide to remove today however fast forward 10 years when the voting base has drastically swung and the boomers die out, and it may be possible.

[opendoor]

Originally Posted by Bill Bumface

I think permitting is a huge hurdle too. Countless resources go into projects only to be bogged down in permits and killed by NIMBYs. Things like the national blanket zoning they have in Japan would be a drastic step. Meet the zoning requirements? Ok, go ahead and build.

Instead we have this:


(Can't find higher quality, sorry!)

That's only one metric though. A lot of the countries with the shortest turnaround times have more extensive (and expensive) processes you have to go through before submitting and/or more extensive compliance processes once you've received your permit, so the net result ends up being not all that different. So Korea for instance, has the fastest permit turnaround in the OECD (not sure why they're not on that chart) at 27.5 days. So it's fast, but the permit process also costs 2.5x what it does in Canada in terms of % of building value.

Canada still isn't great. But there's a more comprehensive measure that accounts for time, costs, and # of procedures for building permits, and by that measure Canada is 24th among 38 OECD nations.

[opendoor]

Originally Posted by Leondros

I was having an interesting discussion with some friends (lawyer, CPA, CFA, and a realtor) and one point brought up was how people are really leveraging their principal residence exemptions as investment tools. Staying in the house on paper for the 6 months required, and then flipping. Family members of large families were doing this with 5 - 6 houses at a time.

We then got to talking about if the government removed the PRE, would that reduce the amount of house speculators in the market? If you remove that portion of buyers of which you could argue is material, would that help remove the speculative aspect. Funny enough, the PRE was implemented in 1971, it was a way to implement capital gains taxes on property and in order to get it through politically the government added the exemption as to not hurt the vast majority of the population.

It was a great discussion with us concluding it would be political suicide to remove today however fast forward 10 years when the voting base has drastically swung and the boomers die out, and it may be possible.

I could see them implementing a sort of partial removal of the exemption. Either through a sliding scale based on the length of time you lived there (say 100% exemption for over 5 years and then lower amounts if you sell it more quickly), or a maximum exemption (either lifetime maximum, or some sort of rolling period). The latter is what they do in the US.

[flamesfever]

Originally Posted by The Fonz

Would be very unpopular, but the logical solution in my eyes is, incentivize/promote relocation to rural communities in Saskatchewan & Alberta. There is no shortage of homes there, could take your pick of any 1970s built bungalow for $125-200k, and it'd be massively beneficial to those communities. This idea is realistic today with so many people employed in WFH positions.

Canada is an enormous country, and is fighting a battle of trying to squeeze 75% of it's population into 5% of it's land-mass. The solution seems obvious.

Make it mandatory that certain immigrants have to work on farms, etc. in rural areas for the first 2 years. I think that's what the German POWs had to do after WWII.

[iggy_oi]

Originally Posted by flamesfever

Make it mandatory that certain immigrants have to work on farms, etc. in rural areas for the first 2 years. I think that's what the German POWs had to do after WWII.

So you’re suggesting that we start treating immigrants the same way POWs we’re treated?

[bizaro86]

Originally Posted by opendoor

Canada still isn't great. But there's a more comprehensive measure that accounts for time, costs, and # of procedures for building permits, and by that measure Canada is 24th among 38 OECD nations.

I mean, even if that's the correct measure that's still more delay than the average OECD nation on something that's a big issue.

Surely we could aspire to be the equal of the OECD - housing is a bigger problem here than the OECD average...

[flamesfever]

Originally Posted by iggy_oi

So you’re suggesting that we start treating immigrants the same way POWs we’re treated?

I don't believe they were treated badly. What's wrong with working on a farm? The one I knew became very successful and was well off in 10 years.

[Table 5]

Originally Posted by flamesfever

Make it mandatory that certain immigrants have to work on farms, etc. in rural areas for the first 2 years. I think that's what the German POWs had to do after WWII.

Not the same, but Saskatchewan is starting a pilot program where 10% of their immigration spots will be reserved for a select group of countries (Czechia, Germany, India, Ireland, Lithuania, Poland, Slovakia and Ukraine). The thinking is that people from these countries are more likely to stick around for the long term, and be a better fit for the jobs available.

[blankall]

Originally Posted by calgarygeologist

I don't see what role or action the federal government is taking or can take to change the municipal zoning and permitting systems across Canada.

Also, apparently the announcement was nothing new in terms of programs or additional new funding and was just an announcement that the city of London is getting $74M from an existing housing program.

So basically Canada's federal government prevents any level of government from taking action, as there's a lower level of government that's in charge, and the lowest level of government is going to be controlled by a bunch of NIMBYs in a townhall. Great.

I understand how the division of powers works. There are many things the federal government can do, even if it's just grants for the municipal infrastructure required for higher density. For example, the federal government could provide funding for transit, as long as high density is rezoned along those transit lines.

[topfiverecords]

Originally Posted by topfiverecords

I'll be curious how the Federal gov impacts things like those that are municipal level elements of the home building process. They can't step in and mandate zoning changes. Fees are income that the municipalities need to operate. Permitting is not the devil most pose it to be. Taxes, yes you pay taxes. Do they want to step in and lower building code to make things cheaper to build? That would be a regrettable action.

If they want to tackle trade shortages, material costs, and other ways to bring costs down, by all means. Maybe GST on new home construction could be an area the Feds could control.

Federal government will remove GST on new rental housing builds
https://financialpost.com/real-estat...-builds-source

[Fuzz]

Originally Posted by topfiverecords

Federal government will remove GST on new rental housing builds
https://financialpost.com/real-estat...-builds-source

I wonder if builders will fill that vacated space with profit?

[topfiverecords]

Originally Posted by Fuzz

I wonder if builders will fill that vacated space with profit?

Of course. Builders are ecstatic right now as they instantly get a 5% bonus.

The proper way to do this would be a credit back to the actual ownership of the rental building upon completion, but that would require some type of administered operation to oversee that. What it will likely be is the hired prime contractor gets to remit for GST credits.

The other issue is a lot of these buildings are first built by a development arm and then sold off at market rates after.

[opendoor]

Originally Posted by topfiverecords

The other issue is a lot of these buildings are first built by a development arm and then sold off at market rates after.

Yeah, unless there's more to it than it sounds, the idea that this is going to result in anything but the properties still being sold for the highest the market will pay is laughable. Which just means developers get a huge increase in their margins courtesy of taxpayers.

I'm sure they've convinced themselves that that it'll incentivize a ton of construction, thus driving down market prices. But that assumes that there's a significant latent capacity in terms of labor and investment dollars for real estate, which is pretty specious IMO.