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[Leondros]

Originally Posted by blankall

Maybe I'm missing something.

This incentivises building rental vs ownership properties. Don't we want more Canadians owning the property they live in?

Is the goal for Canadians to own the homes that they live in or for housing to be affordable?

If the issue is to tackle affordability, the cost to rent is likely the first domino to fall. If you are an investor rent is what will drive the value of your asset. As rent falls, the value of the asset will fall as a result of its cash generating potential decreasing. At least in theory...

As someone not looking to invest, but looking to buy a house they would need to look at renting vs. mortgage payments. If renting becomes cheaper first, a lot of people will lean towards renting until the price of those homes come down.

[blankall]

Originally Posted by Leondros

Is the goal for Canadians to own the homes that they live in or for housing to be affordable?

If the issue is to tackle affordability, the cost to rent is likely the first domino to fall. If you are an investor rent is what will drive the value of your asset. As rent falls, the value of the asset will fall as a result of its cash generating potential decreasing. At least in theory...

As someone not looking to invest, but looking to buy a house they would need to look at renting vs. mortgage payments. If renting becomes cheaper first, a lot of people will lean towards renting until the price of those homes come down.

The goal is to have more housing period. Diverting housing from places Canadians could own vs rent off large corporations doesn't create more housing.

[bizaro86]

Originally Posted by opendoor

For instance, the biggest housing building boom in Canadian history was in the 1970s, where they added 35% to the housing stock in a decade where the population only increased by 14%.

Probably not a coincidence those were the years with the MURB tax credits for building new rental housing...

[Fuzzy14]

Probably not a coincidence those were the years with the MURB tax credits for building new rental housing...

IMO a MURB-like program should be part of the Conservative platform, albeit dependent on significant buy in from large municipalities to ensure sufficient adequately zoned land exists for the program to reach its potential. Give tax breaks, GST breaks, and have the land available to build on and developers will be foaming at the mouth.

[Leondros]

Originally Posted by blankall

The goal is to have more housing period. Diverting housing from places Canadians could own vs rent off large corporations doesn't create more housing.

And did my previous posts not explain how a reduction of GST makes the economics better for companies to incentivize the building of rental units?

[opendoor]

Originally Posted by bizaro86

Probably not a coincidence those were the years with the MURB tax credits for building new rental housing...

I don't know if that specific program necessarily drove that (I think that was the latter half of the '70s?). The growth in owned units was actually even faster than rented ones in that decade (38% vs 31% for rented) and the rental stock increases slowed in the 2nd half of the '70s, increasing only about 12% from 1975 to 1980.

The '50s and '60s were when rental stock increased tremendously. Particularly in the late '60s; the total number of rental units increased by almost 25% in just 4 years from 1966 to 1970.

[blankall]

Originally Posted by Leondros

And did my previous posts not explain how a reduction of GST makes the economics better for companies to incentivize the building of rental units?

I don't see how that works unless there are also other fundamental changes to supply, labor, etc... if the major markets have already hit their production capacities, how does giving breaks to rental properties increase supply?

[Tiger]

Originally Posted by blankall

I don't see how that works unless there are also other fundamental changes to supply, labor, etc... if the major markets have already hit their production capacities, how does giving breaks to rental properties increase supply?

I don't get it, when you drop the GST, it isn't just going to make pricing drop 5%, it'll like only drop 3% and 2% is made in increase profits, and the 3% drop increases demand, then that 3% saving is gone, and then you are right where you started with no revenue for the government.

[opendoor]

Originally Posted by blankall

I don't see how that works unless there are also other fundamental changes to supply, labor, etc... if the major markets have already hit their production capacities, how does giving breaks to rental properties increase supply?

I imagine the thinking is that in the current environment, nowhere has hit maximum production capacity. Housing starts in Q1 + Q2 2023 were about 15% lower than they were in that same period in 2021 and 2022. That's a consequence of interest rates and macroeconomic conditions, rather than labor supply, zoning, or permitting. So the government likely thinks if they can tip the scales to make some non-viable projects become viable all of the sudden, then they can get housing starts back up closer to maximum capacity.

[Tiger]

Originally Posted by opendoor

I imagine the thinking is that in the current environment, nowhere has hit maximum production capacity. Housing starts in Q1 + Q2 2023 were about 15% lower than they were in that same period in 2021 and 2022. That's a consequence of interest rates and macroeconomic conditions, rather than labor supply, zoning, or permitting. So the government likely thinks if they can tip the scales to make some non-viable projects become viable all of the sudden, then they can get housing starts back up closer to maximum capacity.

I still kind of believe the permitting is a problem Moreso than others. Maybe not in new communities, but when rebuilding in inner city there is lots of delays here with the city and nimby community associations etc

[Leondros]

Originally Posted by blankall

I don't see how that works unless there are also other fundamental changes to supply, labor, etc... if the major markets have already hit their production capacities, how does giving breaks to rental properties increase supply?

I guess you and I see bottlenecks on the supply side differently. You don't seem to see it as an issue of capital. I believe if you see more projects starting up it will support more work force. I don't believe the main bottleneck here is the lack of labor, there are always more trades and businesses willing to gobble up work and push overtime.

[Slava]

Originally Posted by Tiger

I still kind of believe the permitting is a problem Moreso than others. Maybe not in new communities, but when rebuilding in inner city there is lots of delays here with the city and nimby community associations etc

The NIMBY aspect is interesting to me. I don't live in the inner city, but I do like having certain aspects of our community (larger lots, few cars on the street, etc). To get that, it was a higher cost than other options. So, perhaps unsurprisingly, if someone wanted to buy the place next door and put up a 4-plex, I wouldn't be super pumped. I don't think that's a crazy viewpoint, and I feel like most people would have that same opinion.

[Wormius]

Originally Posted by Slava

The NIMBY aspect is interesting to me. I don't live in the inner city, but I do like having certain aspects of our community (larger lots, few cars on the street, etc). To get that, it was a higher cost than other options. So, perhaps unsurprisingly, if someone wanted to buy the place next door and put up a 4-plex, I wouldn't be super pumped. I don't think that's a crazy viewpoint, and I feel like most people would have that same opinion.

I think a person would only have themselves to blame for not having the foresight to buy the neighbouring properties to create a buffer zone for themselves.

But anyway, how super pumped would you be if you wanted to cash in on your large lot and let a developer build a fourplex and your neighbour vetoed you?

[Slava]

Originally Posted by Wormius

I think a person would only have themselves to blame for not having the foresight to buy the neighbouring properties to create a buffer zone for themselves.

But anyway, how super pumped would you be if you wanted to cash in on your large lot and let a developer build a fourplex and your neighbour vetoed you?

Well that's a known barrier for me. My community isn't zoned for that, so why should I expect that it will be?

[Wormius]

Originally Posted by Slava

Well that's a known barrier for me. My community isn't zoned for that, so why should I expect that it will be?

I thought we were talking about a situation that you wouldn’t be enthused about?

[blankall]

Originally Posted by Leondros

I guess you and I see bottlenecks on the supply side differently. You don't seem to see it as an issue of capital. I believe if you see more projects starting up it will support more work force. I don't believe the main bottleneck here is the lack of labor, there are always more trades and businesses willing to gobble up work and push overtime.

Permitting is the major bottleneck. Then it takes a lot of time to adjust other factors line labor.

[blankall]

Originally Posted by Slava

Well that's a known barrier for me. My community isn't zoned for that, so why should I expect that it will be?

Depending on where your property is, you should know that zoning can change. If you bought in the inner city or won't a major road, you shouldn't be able to stop the progress of the city in other to maintain the integrity of a property that isn't yours.

And yes, what's considered inner city changes over time.

[flamesfever]

Originally Posted by opendoor

I imagine the thinking is that in the current environment, nowhere has hit maximum production capacity. Housing starts in Q1 + Q2 2023 were about 15% lower than they were in that same period in 2021 and 2022. That's a consequence of interest rates and macroeconomic conditions, rather than labor supply, zoning, or permitting. So the government likely thinks if they can tip the scales to make some non-viable projects become viable all of the sudden, then they can get housing starts back up closer to maximum capacity.

I have seen large periods of time where building projects stopped and laid idle for many years, and I can see this repeated. The fact that people can be taxed out of their homes, tells me that the value of houses will eventually return to earth, without undertaking any of these disturbing emergency measures like blanket upzoning.

just what my gut tells me.

[blankall]

Originally Posted by flamesfever

I have seen large periods of time where building projects stopped and laid idle for many years, and I can see this repeated. The fact that people can be taxed out of their homes, tells me that the value of houses will eventually return to earth, without undertaking any of these disturbing emergency measures like blanket upzoning.

just what my gut tells me.

How does that theory account for accommodation of over one million new residents every year?

[PepsiFree]

Isn't the prevalent opinion of those in the know basically the opposite of things returning to earth? I would listen to that over a gut.

Maybe I misread it somewhere, but it sounds like Canada is going to struggle to even maintain the current situation for the next decade. Things getting better without any significant and drastic action is pretty much off the table entirely. This isn't exactly new, it's a problem that has been getting worse for... ever?

Either way, I don't think people have to like upzoning, or having their neighbourhoods change, or whatever. I don't think you have to see a few houses getting knocked down across the street and think, "Wow! They're replacing those few houses with an apartment complex? YES!!!!" But... you should also remember that your neighbourhood isn't yours alone, and to not be a dick about it, and learn to accept change.

The current situation is unsustainable. You cannot live in an unsustainable situation and expect the world not to adapt just to make you happy. Unsustainable situations are either solved before they reach a breaking point or they reach it and break. You're looking at change either way, and for those who don't want change, the kind of change that comes from hitting a breaking point is always far, far worse. So you either have to adapt to change, or leave the unsustainable situation yourself.