Liberals make housing a 'right'

[Argus]

You can tell it's an election year when this kind of crap finds its way into budget bills.

The federal Liberals are using their omnibus budget bill to legislate a “right to housing” in Canada, a pledge advocates worry could fall short of being the historic step the government wants without a few parliamentary tweaks before summer.

The budget bill would set into law rules for the Liberals’ 10-year national housing strategy, now valued at more than $55 billion, impose those rules on future governments and create two new oversight bodies meant to make sure the spending reduces homelessness.

The reason that housing has become affordable is, of course, because of government regulation. So now government, rather than lifting the regulation (and massive fees) is to spend tens of billions to build (at higher than market prices) housing and then rent it out (at lower than market prices). 

In case anyone has forgotten, CD Howe found, last year, that government fees and regulation add an average of $229,000 to the cost of a new house in Canada. You don't have to look very bloody far to find out why so few people can afford to buy these days. 

https://www.theglobeandmail.com/canada/article-liberals-put-right-to-housing-anti-poverty-laws-into-omnibus-budget-2/

[Argus]

In case it wasn't clear, the Liberals housing strategy has nothing to do with homeless street people. It's designed to create public housing for poorer families. The reason those poorer families can't find a place to stay is because the upward mobility of people abandoning cheap rented places for more expensive rental accommodation, and then for home ownership has been frustrated by government. This is not a uniquely Canadian situation, as all over the west Millennials are finding the dream of owning their own home unaffordable due to government.

So why has home ownership fallen? Largely due to regulations that have placed new affordable housing beyond the reach of younger Australians, something we also see in major cities in Great Britain, the United States, and Canada. In all these places, the main culprit has been “smart growth,” a notion that encourages the reluctant to move closer to dense urban cores and give up the dream of owning a home.

As a result, Australia’s once affordable cities are now among the world’s most expensive. According to demographer Wendell Cox, prices for homes in Sydney—even in the current downturn—are higher than Los Angeles, London, New York, Singapore, and Washington. These all are cities that by any estimate are more critical in the world economy and far more land constrained. Even Adelaide, an isolated and declining industrial hub, has higher prices based on income than Seattle, one of the world’s most dynamic tech hubs.

The impact on prices has been severe. In Sydney, planning regulations, according to a recent Reserve Bank study, now add 55 percent to the price of a home. 

https://quillette.com/2019/04/10/the-end-of-aspiration/

[Michael Hardner]

Facile answer to a complicated question.  They removed rent control to a huge degree in Ontario because legislation was supposed to be causing higher rents in the 1999s.  It didn't help.

[Argus]

2 hours ago, Michael Hardner said:

Facile answer to a complicated question.  They removed rent control to a huge degree in Ontario because legislation was supposed to be causing higher rents in the 1999s.  It didn't help.

Rent control is only one of the problems. All the regulations as well as the rent control on landlords does prevent rental companies from expanding. But there's a lot more in terms of development fees and the massive, time-consuming bureaucracy that prevents housing developments from going forward for YEARS. All this doubles the cost of new homes in some cases, which prevents masses of people from being able to vacate their rental homes to buy their own home. That, in turn, keeps rentals from opening up to others, and keeps them expensive.

And the 'facile' answer is to have government go ahead and build and operate units itself.

Edited April 14, 2019 by Argus

[Michael Hardner]

1 hour ago, Argus said:

1.  All the regulations as well as the rent control on landlords does prevent rental companies from expanding.

2.  But there's a lot more in terms of development fees and the massive, time-consuming bureaucracy that prevents housing developments from going forward for YEARS. All this doubles the cost of new homes in some cases, which prevents masses of people from being able to vacate their rental homes to buy their own home. That, in turn, keeps rentals from opening up to others, and keeps them expensive.

3.  And the 'facile' answer is to have government go ahead and build and operate units itself.

1.  Copy that.  It's not true.

2.  The government has enabled a wild building spree and it has not helped average wage renters.

3.  That's a crazy and untried solution IMO.

[Argus]

28 minutes ago, Michael Hardner said:

1.  Copy that.  It's not true.

Ah, I see. It's not? So the elementary, fundamental laws of economics do not apply to this type of business. Is that your position? Making less profits, and having higher expenses does nothing to discourage the development of new rental properties?

28 minutes ago, Michael Hardner said:

2.  The government has enabled a wild building spree and it has not helped average wage renters.

It has enabled a 'wild building spree' by doubling the price of houses?

28 minutes ago, Michael Hardner said:

3.  That's a crazy and untried solution IMO.

Really? Every city in this country operates thousands if not tens of thousands of public housing units.

[Michael Hardner]

14 minutes ago, Argus said:

1. So the elementary, fundamental laws of economics do not apply to this type of business.  

2. It has enabled a 'wild building spree' by doubling the price of houses?

3. Really? Every city in this country operates thousands if not tens of thousands of public housing units.

1. I didn't say that.  Your assertion that socialistic legislation is at the root of this, though has been disproven.

2. Those things have both happened.

3. Having government "build and operate units" will not solve the housing situation and I don't think anyone really thinks that.

[Argus]

1 minute ago, Michael Hardner said:

1. I didn't say that.  Your assertion that socialistic legislation is at the root of this, though has been disproven.

You're saying the CD Howe report is wrong? Or are you saying Canadians don't care how much things cost? As to rentals. How was it disproved?  It seems elementary to me that if you limit the profits in renting, and increase the bureaucracy and red tape, then there will be fewer rental units.

1 minute ago, Michael Hardner said:

2. Those things have both happened.

That makes zero sense.

1 minute ago, Michael Hardner said:

3. Having government "build and operate units" will not solve the housing situation and I don't think anyone really thinks that.

The federal government seems to think that. All the cities seem to think that. The NDP seems to think that. If you want private industry to solve it you need to make it profitable for them to do so, and you need to lower the prices by taking away the massive cost of red tape and fees so they could build homes for less. A quarter million bucks a house going to government fees and red tape is ludicrous.

[Michael Hardner]

11 hours ago, Argus said:

1. You're saying the CD Howe report is wrong? Or are you saying Canadians don't care how much things cost? As to rentals. How was it disproved?  It seems elementary to me that if you limit the profits in renting, and increase the bureaucracy and red tape, then there will be fewer rental units.

2. That makes zero sense.

3. The federal government seems to think that. All the cities seem to think that. The NDP seems to think that. If you want private industry to solve it you need to make it profitable for them to do so, and you need to lower the prices by taking away the massive cost of red tape and fees so they could build homes for less. A quarter million bucks a house going to government fees and red tape is ludicrous.

1. The report talks about regulation adding costs from 2007 to 2016.  The current rental situation was nowhere near as bad in 2007.  Rent controls have been scaled back to a great degree over the past 20 years behind the very arguments you are using around regulation and things have got much worse.  It doesn't matter if there are fewer units if the ones available are 3X the price of what you are currently paying.

2. If the prices are higher then there is more incentive to build, right ?

3. How is the 'government' going to house 1/2 of the city then ?  The press is only starting to realize that "affordable housing" is not something that only poor people need right now.

[Argus]

6 hours ago, Michael Hardner said:

1. The report talks about regulation adding costs from 2007 to 2016.  The current rental situation was nowhere near as bad in 2007.  Rent controls have been scaled back to a great degree over the past 20 years behind the very arguments you are using around regulation and things have got much worse.  It doesn't matter if there are fewer units if the ones available are 3X the price of what you are currently paying.

On what planet have rent controls been scaled back? Certainly not in the land you profess to be living in. In fact, Kathleen Wynne expanded them. And as I've pointed out, this is just one aspect of the way government discourages investment in rental housing. And building of rental housing is only one aspect of why there's a shortage.

6 hours ago, Michael Hardner said:

2. If the prices are higher then there is more incentive to build, right ?

You clearly have never been involved in business.
High prices are irrelevant. It is the profits which matter. If government delays and fees double the cost of a house that in no way gives more profits to the builder. And you can often make much more selling a lot of something at a lower price than selling fewer at a  high price.

6 hours ago, Michael Hardner said:

3. How is the 'government' going to house 1/2 of the city then ?  The press is only starting to realize that "affordable housing" is not something that only poor people need right now.

The government does not need to house half the city. The government needs to get the hell out of the way and stop taxing housing to death. Lower the fees, don't require ten years to give permission for new housing developments. How many people do you think would be moving out of rentals if housing prices dropped in half anyway?

[egghead]

hmm, without the red china's $ and the calling for money laundering investigation, the housing bubble is bursting. May be that is why

[Michael Hardner]

4 hours ago, Argus said:

1. On what planet have rent controls been scaled back? Certainly not in the land you profess to be living in. In fact, Kathleen Wynne expanded them.

2. And as I've pointed out, this is just one aspect of the way government discourages investment in rental housing.

3. And building of rental housing is only one aspect of why there's a shortage.

4. You clearly have never been involved in business. High prices are irrelevant. It is the profits which matter.

5. If government delays and fees double the cost of a house that in no way gives more profits to the builder. And you can often make much more selling a lot of something at a lower price than selling fewer at a  high price.

6. The government does not need to house half the city. The government needs to get the hell out of the way and stop taxing housing to death.

7. Lower the fees, don't require ten years to give permission for new housing developments. How many people do you think would be moving out of rentals if housing prices dropped in half anyway?

1. Ontario ?  The governments play with 'cut-off years' but those are an artifact of rent controls already being scaled back.

2. It's a big one.

3. Yes but more than one aspect can be legislated.

4. It's real estate.  Buy low, sell high.  if prices go up, and you're holding pre-hike property there's nothing else that matters much.

5. You have a point in that the big condos have to content with city bureaucracy and graft.  Nobody seems to be selling much at a lower price though.

6. Yeah, again.  I don't think much of the current leap in prices has much to do with taxes.  Much the opposite, I would say government has been reluctant to legislate lest the boomers see their retirement nest eggs go down.

7. Suburban homes in Stoney Creek or Burlington is a different market than downtown but yes they are related.

 

 

 

[Argus]

1 hour ago, Michael Hardner said:

1. Ontario ?  The governments play with 'cut-off years' but those are an artifact of rent controls already being scaled back.

The government legislated all newer buildings under rent control. That's not 'scaling back'. The only scaling back is happening under the Tories and hasn't had any time yet to have an impact.

1 hour ago, Michael Hardner said:

2. It's a big one.

3. Yes but more than one aspect can be legislated.

And getting in the way of developers who want to build family housing by forcing them to undergo  years of hearings and studies while tacking on enormous fees certainly aren't the way to get more family housing.

1 hour ago, Michael Hardner said:

4. It's real estate.  Buy low, sell high.  if prices go up, and you're holding pre-hike property there's nothing else that matters much.

5. You have a point in that the big condos have to content with city bureaucracy and graft.  Nobody seems to be selling much at a lower price though.

All developers contend with that. If you read the cites I posted it pointed out that even millennial want to by a detached house, not be jammed into a box in a tower. Right now governments are trying to prevent that, wanting people to live in the tower boxes instead. 

1 hour ago, Michael Hardner said:

6. Yeah, again.  I don't think much of the current leap in prices has much to do with taxes.  Much the opposite, I would say government has been reluctant to legislate lest the boomers see their retirement nest eggs go down.

Did you or did you not read the CD Howe cite?

1 hour ago, Michael Hardner said:

7. Suburban homes in Stoney Creek or Burlington is a different market than downtown but yes they are related.

They are related in that no detached houses in the burbs, or ones too expensive to buy means people stay in their rentals rather than moving on up. Which is not a good indicator for their future as so much of people's savings wind up in their homes.

[Michael Hardner]

11 hours ago, Argus said:

1. The government legislated all newer buildings under rent control. That's not 'scaling back'.

2. And getting in the way of developers who want to build family housing by forcing them to undergo  years of hearings and studies while tacking on enormous fees certainly aren't the way to get more family housing.

3. Did you or did you not read the CD Howe cite?

4. They are related in that no detached houses in the burbs, or ones too expensive to buy means people stay in their rentals rather than moving on up. Which is not a good indicator for their future as so much of people's savings wind up in their homes.

1. You are cherry-picking your starting point.  ALL buildings were under rent control before the scaling back.

2. Like I said - housing is a different story, though related.  You have more of a leg 

3. Yes, I read the summary.

4. I am acknowledging that, but prices are going up due to lots of factors and rental housing is taking an onerous toll on people who can least afford it.  The landlords are making an absolute killing.  You can read all the studies you want but I am living this.

[GostHacked]

For what some are paying in rent, they can easily afford a mortgage.  So why can't they buy a home?

[Michael Hardner]

6 minutes ago, GostHacked said:

For what some are paying in rent, they can easily afford a mortgage.  So why can't they buy a home?

Average house prices downtown are headed towards $800K so you need a hefty downpayment, which is hard to muster up when you're making $500 a week and paying $1500 in rent.

[Argus]

12 hours ago, Michael Hardner said:

1. You are cherry-picking your starting point.  ALL buildings were under rent control before the scaling back.

Wynne extended rent control to new units in 2017. Was that what you meant by scaling back? The scaling back has occurred under the Tories, which means it clearly could not have had any impact as yet.

12 hours ago, Michael Hardner said:

2. Like I said - housing is a different story, though related.  You have more of a leg 

It's part of the same story.

12 hours ago, Michael Hardner said:

3. Yes, I read the summary.

4. I am acknowledging that, but prices are going up due to lots of factors and rental housing is taking an onerous toll on people who can least afford it.  The landlords are making an absolute killing.  You can read all the studies you want but I am living this.

The landlords are making an absolute killing? You got a cite on that? 
The simple fact is that you want to limit profits to landlords because you don't like landlords and think they're 'oppressing' renters. There is no question that will mean less rental accommodation. The government thus limits rental accommodation by making it unprofitable, or barely profitable to construct new units, while also slapping huge delays and fees on new home developments to double their prices and keep renters from moving into them. Then they decide there's a crisis and have to build housing themselves. Because of their own actions.

[Argus]

12 hours ago, Michael Hardner said:

Average house prices downtown are headed towards $800K so you need a hefty downpayment, which is hard to muster up when you're making $500 a week and paying $1500 in rent.

Prices are going up because the local government is doing its best to discourage construction of housing outside the core, because of Chinese money laundering moving from Vancouver to Toronto, and because of high government fees and red tape. as per the Quillette story:

So why has home ownership fallen? Largely due to regulations that have placed new affordable housing beyond the reach of younger Australians, something we also see in major cities in Great Britain, the United States, and Canada. In all these places, the main culprit has been “smart growth,” a notion that encourages the reluctant to move closer to dense urban cores and give up the dream of owning a home.

The goal is to cram people into as small an area as possible by making it very hard to build elsewhere. Naturally that makes the land in that area extremely valuable. Also, people want single family homes, again as per the quillette story, so since few new ones are going up the ones already there are skyrocketing in price.

 

Edited April 16, 2019 by Argus

[Michael Hardner]

11 hours ago, Argus said:

1. Wynne extended rent control to new units in 2017. Was that what you meant by scaling back? The scaling back has occurred under the Tories, which means it clearly could not have had any impact as yet.

2. The landlords are making an absolute killing? You got a cite on that? 

3. The simple fact is that you want to limit profits to landlords because you don't like landlords and think they're 'oppressing' renters.  

1. I thought I had responded already - no, scaling back happened before that.  Wynne's government actually saw a loophole appear in the law, which made it worse for renters.

2. Really hard to get cites on Toronto housing, but I am living it.  Everyone I know who is a renter is facing renovictions and giant hikes, as I did.

3. No - you are basing your argument on your judgment of me personally - again.

 

 

[Michael Hardner]

11 hours ago, Argus said:

1. Prices are going up because the local government is doing its best to discourage construction of housing outside the core, because of Chinese money laundering moving from Vancouver to Toronto, and because of high government fees and red tape. as per the Quillette story:

2. The goal is to cram people into as small an area as possible by making it very hard to build elsewhere. Naturally that makes the land in that area extremely valuable. Also, people want single family homes, again as per the quillette story, so since few new ones are going up the ones already there are skyrocketing in price.

 

1. Those are all factors, but you left out major factors like the renoviction loophole, Air BnB

2. You start to get into a related area but new home construction in Toronto is a pretty complicated area.  Maybe these Australian academics understand it ?

[Argus]

6 hours ago, Michael Hardner said:

1. I thought I had responded already - no, scaling back happened before that.  Wynne's government actually saw a loophole appear in the law, which made it worse for renters.

2. Really hard to get cites on Toronto housing, but I am living it.  Everyone I know who is a renter is facing renovictions and giant hikes, as I did.

3. No - you are basing your argument on your judgment of me personally - again.

No, your argument is silly. I suppose in that last I'm simply trying to suggest why you're making a silly argument. That you and others are facing giant hikes and renovictions is irrelevant to whether landlords are 'making a killing'. You know what you pay but you don't know what their expenses are. 

[Michael Hardner]

18 hours ago, Argus said:

1. That you and others are facing giant hikes and renovictions is irrelevant to whether landlords are 'making a killing'.

2. You know what you pay but you don't know what their expenses are. 

1. I suppose so, but I would say that they could withstand more legislation and not lose their shirts.

2. I know my landlord likely paid $250,000K and is paying about $200/month taxes and nothing else on an income of about $3k per month.  And he's not satisfied - so he could evict us very easily if he wanted to get more.

[eyeball]

On 4/16/2019 at 4:49 AM, Michael Hardner said:

Average house prices downtown are headed towards $800K so you need a hefty downpayment, which is hard to muster up when you're making $500 a week and paying $1500 in rent.

Sounds like the minimum wage is also a lot less than it needs to be.

[Argus]

11 hours ago, Michael Hardner said:

1. I suppose so, but I would say that they could withstand more legislation and not lose their shirts.

2. I know my landlord likely paid $250,000K and is paying about $200/month taxes and nothing else on an income of about $3k per month.  And he's not satisfied - so he could evict us very easily if he wanted to get more.

Presumably he paid that quarter million a very long time ago and your house/apartment is now worth a lot more money. If he could sell it and have that money and then invest it in something which would pay him a higher rate of return than he's getting on your place then that would make sense. Although he might want to hang on a bit of all we hear about Chinese money flooding in because of Vancouver taxes increases the value even more.

Ultimately, he's not in any way responsible for ensuring you have a nice place at a reasonable price. He's in the landlord business to make money. Why shouldn't he make as much as he can?

 

 

[Michael Hardner]

13 hours ago, Argus said:

1. Presumably he paid that quarter million a very long time ago and your house/apartment is now worth a lot more money. If he could sell it and have that money and then invest it in something which would pay him a higher rate of return than he's getting on your place then that would make sense 

2. Ultimately, he's not in any way responsible for ensuring you have a nice place at a reasonable price. He's in the landlord business to make money. Why shouldn't he make as much as he can?

 

 

1. For argument's sake, what if it wasn't that long ago ?  What if the rate of return is really high right now ?  Let's work with that assumption.  

2. Exactly.

My point is that at some point the public good is not helped by a subset of the population making great gains on the bottom third.  Before rent control was scaled back we had a more equitable situation.