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Without affordable housing, Vancouver risks becoming an economic ghost town

business.financialpost.com

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Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#231

Post by mjmahone17 »

yelnatz wrote: post #206
eigenvector wrote: post #160

Earlier quoted context omitted.

The article's gist is that Vancouver lacks the "otherwise desirable economic climate" that makes the SFBA, Manhattan and London housing markets at least tolerable. Rather than being a side-effect of explosive economic growth as in SF, the housing prices are totally out-of-step with the local economy.

It's really painful. Having average home price of $1.8m while the median salary is at $60k. Something really needs to be done to help out Vancouverites.

Would it be as big a problem if people had a strong incentive to rent their property? I know most people like owning property, but renting often makes more economic sense. Especially when the cost to rent is significantly below a monthly mortgage.

As a city, Vancouver has the ability to vote for significant property tax increases. Which would encourage investors and speculators to rent out more of their (currently empty) property in order to offset the yearly cost of ownership. Right now, it probably is more expensive to sell property that currently has renters living in it, because evicting people is a messy, expensive and difficult process. But higher property taxes make it more expensive to own: a tax of 3% per year completely eats up a 3% yearly increase in property value. Unless you offset the tax through other income.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#232

Post by rconti »

empressplay wrote: post #37
kentt wrote: post #31

Earlier quoted context omitted.

I'm an hour outside of Vancouver in Abbotsford. Housing is still high, 300k for a single detached unit, but it's very liveable.

A modest house in the suburbs of Victoria is 400K now so that's not too bad, really.

Price is reasonable, but an hour outside Vancouver is damn far.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#233

Post by curveship »

fiatmoney wrote: post #217
gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Prop 13 has nothing to do with real estate price inflation. If anything, shifting of property tax burdens from long-time homeowners to new homeowners would tend to suppress prices. Shifting that burden evenly across the population would tend to cause more churn as long-time homeowners get pushed out, but would do nothing to increase aggregate housing or lower aggregate prices. Although, you can get pretty far into th…

Wouldn't it discourage long-time owners from selling, thereby limiting supply and raising prices?

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#234

Post by badloginagain »

refurb wrote: post #199
badloginagain wrote: post #116

Earlier quoted context omitted.

That requires the government to acknowledge there is a problem and come up with a clear strategy to solve the problem. The BC Provincial Government is working very hard to ignore it as a problem, where they won't even commission studies to generate data on how bad the problem is (or isn't). The federal government has also signaled their distancing from the Vancouver housing issue. Also, the real problem is foreign ow…

Also, the real problem is foreign ownership. What evidence is there that foreign ownership is a major problem? I've heard plenty of anecdotes, but no actual data. I do know that Vancouver real estate agents are milking the "yellow peril" for all it's worth. "Buy now before China owns all of Vancouver!". Suffice to say, Canadians are doing what American's did in the early 2000's. They are going into a crazy amount of…

Unfortunately, the provincial/foreign governments refuse to even study the problem. So all we get is anecdotes and investigatory journalism[1], which do not make for good data points.

http://www.theglobeandmail.com/news/investigations/the-real-...

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#235

Post by sandworm101 »

rconti wrote: post #223
sandworm101 wrote: post #197

Earlier quoted context omitted.

The US, even Seattle, can be a culture shock for many Canadians. It is a very different country. I know of several people who have fled the US after only a couple years. It generally boils down to race, religion and guns, all of which are radically different on either side of the boarder. It's not that one is better than the other, but that a person raised in one environment can be taken aback by the immediacy of the…

There's virtually no religion or guns in Seattle. And I'm not sure what race you're talking about, but I can only guess Asian (since Canadian isn't a race!) and even growing up in the 80s half my friends were Asian. We're not talking about Oklahoma here.

>>> but I can only guess Asian (since Canadian isn't a race!)

That's a perfect example. You've assumed that I meant "race" as meaning there where different races in either country. I mean to speak about the concept of race generally. American's are obsessed with race. It is part of nearly every discussion and aspect of life. In Canada it isn't such a big deal. You don't hear Canadian politicians ever speak of wining "the black vote" or caring that someone is "the first jewish person to win a primary." As a canadian I find such phrases impolite, almost difficult to type.

Look at the new defense minister. If he was named to head the US DOD FoxNews would scream 24/7. In Canada, barely anyone noticed. Those that did did so only because the guy looks like the toughest defense minister on the planet atm.

http://www.readoo.in/2015/11/meet-canadas-new-badass-defence...

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#236

Post by mahyarm »

msvan wrote: post #82

It seems like many major cities of the world are experiencing this problem, and no city has been able to come up with a good solution. It always leads to displacement and newspaper articles about displacement, but no real solutions. Here are a couple of solutions: 1. Build really tall. Hasn't worked out all that great in Hong Kong, though. 2. Rent control. This is often unfair and inflates price of non-rent controlle…

Whenever I look at hong kong on google earth, I see a lot of empty green space that tall buildings could be built on. I also see an area in the north that isn't really dense, large open sports areas and green areas on the south island. HK the territory seems to be much larger than HK the city and it smells suspicious that prices are high but land is not being used.

And don't say, we need parks! I'm fairly certain that large amounts of that parkland is unused because you need to hike in pretty deep to enjoy it. And highrises can be built on mountains.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#237

Post by rconti »

hvmonk wrote: post #74

Yeah, investors are all around in Bay area too. They are making the real estate market crazy. I have witnessed more than 15 offers on ordinary properties in South Bay, and well, they are selling far more than the listed price. All these investors pay all-cash, money gifted from other side of the globe. It doesn't matter where you work, how much is your salary - you can't beat these investors.

For very real reasons, it's different in Vancouver than in the Bay Area, which some of the comments touch on.

Not that you're wrong -- we bought in the bay area. Our offer was the best of 13, and narrowly beat out an all-cash offer. Of course, you have to have the right seller to be willing to "risk" selling it to normal people who have to borrow to buy, vs the sure thing of an all cash offer.

Guy across the street bid on tons of properties before buying. I think they had the best of 34 (!) offers. RWC.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#238

Post by rb808 »

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Most countries dont have such high property taxes that the USA does. In London I paid $2500 a year in council tax and thought that was a lot of money, even though that was about 0.25%. Meanwhile NYC suburbs I'm now paying that every two months.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#239

Post by sterl »

curveship wrote: post #233
fiatmoney wrote: post #217

Earlier quoted context omitted.

Prop 13 has nothing to do with real estate price inflation. If anything, shifting of property tax burdens from long-time homeowners to new homeowners would tend to suppress prices. Shifting that burden evenly across the population would tend to cause more churn as long-time homeowners get pushed out, but would do nothing to increase aggregate housing or lower aggregate prices. Although, you can get pretty far into th…

Wouldn't it discourage long-time owners from selling, thereby limiting supply and raising prices?

It would, and it does.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#240

Post by gorkemyurt »

rb808 wrote: post #238
gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Most countries dont have such high property taxes that the USA does. In London I paid $2500 a year in council tax and thought that was a lot of money, even though that was about 0.25%. Meanwhile NYC suburbs I'm now paying that every two months.

But I am sure you paid more in income taxes in London. Which policy do you prefer? In my opinion taxing wealth is always a better idea than taxing income..
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