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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#941

Post by digisign »

heavyset_go wrote: post #818
xapata wrote: post #659

Earlier quoted context omitted.

> incentivizing developers to build affordable housing But that's unnecessary. If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

There are housing insecure people who need housing now and not some nebulous time in the future when the market could, theoretically, correct itself. Markets are notorious for remaining irrational in the face of obvious market forces that should, theoretically, influence them. While we wait for housing to trickle down, people will go without homes, possibly for decades. It's a classic market failure, and doubling dow…

Unhindered housing markets haven't been allowed to exist for fifty years. Homes for people of limited means, outlawed for almost a century.

https://en.wikipedia.org/wiki/Single_room_occupancy

Re: Canada bans foreign home buyers for two years

#942

Post by seoaeu »

seanmcdirmid wrote: post #612
weeksie wrote: post #588

Earlier quoted context omitted.

Manhattan (where I live) is extremely underbuilt. Lots of people want to live here! But yes, the implication of a housing abundance agenda is that places will change. I think it's generally underrated exactly how much the cities we know today changed during the 20th century as they grew in population. That said, you don't really need a lot of high rises to drastically increase density. Even row houses and low rise ap…

Don't get me wrong, I'm pro density. However, it seems like they are kind of like building new freeways, which rather than reduce traffic, simply induce more demand. By say taking Seattle and making it 4X dense...I doubt it would become much cheaper...instead it would just become more popular (still, I would love to live in a more dense Seattle, but I don't think I would save money by it).

Seattle is actually a good counter example showing that more supply does bring down rents: https://www.oregonlive.com/business/2019/01/apartment-rents-...

Re: Canada bans foreign home buyers for two years

#943

Post by tomrod »

Drew_ wrote: post #863
tomrod wrote: post #410

Earlier quoted context omitted.

Would you mind walking through your analysis?

They think these taxes will simply be passed onto renters just like the nominal taxes landlords already pay now. The reality is that there is no market for renters that could actually afford these supposed monumental price hikes. So instead landlords would simply be forced to sell their houses, increasing the market supply and decreasing the cost of houses.

That's the general equilibrium effect I am shooting for -- make it unprofitable for landlords beyond a certain size in an area.

Re: Canada bans foreign home buyers for two years

#944

Post by digisign »

seoaeu wrote: post #939
tick_tock_tick wrote: post #694

Earlier quoted context omitted.

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

> Affordable housing is and will always be a horrible idea. This is like saying food banks are a horrible idea, and we should just focus on job growth so everyone can afford to buy their own food. It comes across as really tone deaf to ignore that some people need help now and that even though it isn’t a complete solution, feeding one person today or getting one person off the street into newly constructed affordable…

"Affordable housing" is one of the most expensive, bureaucratic forms of construction, not a way to build faster.

Re: Canada bans foreign home buyers for two years

#945

Post by danans »

majormajor wrote: post #906
danans wrote: post #873

Earlier quoted context omitted.

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable. If the last few decades have taught us anything, it'd that location (and every social category that location encodes) matters to people more than luxury, or rather a desirable location is the biggest luxury. This is why a 3 BD fixer-upper in Palo Alto will cost more than a luxury 5 bedroom house i…

Even if you had no zoning or "organized" NIMBY restrictions, it would be extremely slow to build denser in the most popular "full" residential places: any new construction there requires someone else to sell and leave for that construction to take place. You aren't going to be able to build a hundred-unit tower like you could if the land was empty or was just a vacant old structure. Targeting stuff that isn't current…

> Others due more to development factors: NYC is more in-demand than if it was an empty bunch of land because we've already done a bunch of development there.

Agreed, and human development is a major part of that. NYC is a cultural center of the world, which is a result of its human development, and that has a tremendous currency and gravity over and above Manhattan's physical grid.

Re: Canada bans foreign home buyers for two years

#946

Post by harambae »

3qz wrote: post #352
symlinkk wrote: post #319

Earlier quoted context omitted.

This is well written and is something I noticed too during my own house hunt: houses owned by teachers, plumbers, and car mechanics were getting fought over by engineers, doctors, and lawyers.

A fun thought experiment is trying to imagine what career an 18 year old today should work towards if they want to own one of those homes. VC or Onlyfans? How can anyone plan for the future when prices might double between the start and end of a degree? They did for me… I think the only option left is moving away. Everyone in tech is already doing it

> VC or Onlyfans?

Well for men that's usually an easier decision

Re: Canada bans foreign home buyers for two years

#947

Post by freeone3000 »

MAGZine wrote: post #717
freeone3000 wrote: post #674

Earlier quoted context omitted.

Temporary Foreign Workers is everyone with a work permit for their first three years (or longer!) regardless of qualifications -- NAFTA means doctors, engineers, and software developers are TFWs for a few years at least until/unless they apply for permanent residency. The idea that they are somehow less wealthy than the average immigrant is incorrect. So to answer "with what salary?": The one from their jobs.

This is factually incorrect. NAFTA workers--TN visas--are not part of the the TFW program, which is something entirely different and requires market assessment impacts. https://www.canada.ca/en/employment-social-development/progr...

My residence status for three years under NAFTA was Temporary Foreign Worker. I still have the paper permit. I was exempt from a labor market opinion but all other requirements, such as a single employer sponsor, applied until permanent residency.

Re: Canada bans foreign home buyers for two years

#948

Post by freeone3000 »

alar44 wrote: post #934
freeone3000 wrote: post #666

Earlier quoted context omitted.

Yes, for the minority of people who live outside of a major city, they likely aren't seeing huge increases. But for most people, affordable housing is an issue.

No, most people do not live within a market that has these problems. Yes, something like 80% live in a metro area, but this isn't applicable to all metro areas. In the US, maybe the top 5ish cities. Even Chicago, for example, has tons of undeveloped, or underdeveloped land. It's not even close to Toronto or NYC. For most people, moving a little farther from work is what they need. A Chicago suburb commute isn't even…

Moving farther from work and increasing sprawl and traffic is its own problem.

Re: Canada bans foreign home buyers for two years

#949

Post by seanmcdirmid »

kelnos wrote: post #764
seanmcdirmid wrote: post #697

Earlier quoted context omitted.

> Is there any evidence that induced demand applies to housing as well? Yes, plenty of people are discouraged from moving to a hot city due to the lack of supply. Increasing supply then moves discouraged demand into actual demand. Otherwise why do dense cities (like Shanghai, NYC, Manila) still experience housing shortages? If the place is desirable, demand increases to catch up to the new supply, bringing us to the…

I was asking for evidence, not a hypothetical rationale. It's possible (and likely) that housing in Shanghai, NYC, and Manila just have not reached a supply-demand equilibrium yet, because housing policy still constrains supply. There's nothing requires that demand is effectively infinite in these cities, or that demand will keep growing as more housing is built. Let's say unfilled demand for housing in San Francisco…

> I was asking for evidence, not a hypothetical rationale.

Equilibriums are not hypothetical. The fact that increasing supply can induce more demand is well known in many areas (expressways being just one). Cities take off, and building booms don't reduce prices like a recession or bust will.

> the city would never implement unrestricted housing development with no hurdles.

Not many people would like to live in such a city (who wants to live in Houston?), so that on its own would limit demand.

> But maybe the "equilibrium" price can be something significantly less ridiculous than it is today.

Sure. Perhaps a lot more WFH will eventually eliminate or reduce critical mass feedback loops that lead to these problems in the first place (e.g. why live in Seattle when you can live in Toledo?).

Re: Canada bans foreign home buyers for two years

#950

Post by thawaya3113 »

clpm4j wrote: post #582
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and deal…

This is also, obviously, not intended to be a long term solution as evidenced by the fact that it’s limited to 2 years.

I do think it would have been better if they hadn’t announced it was limited to 2 years but that’s not practical.

I’m a huge proponent of the “build more supply” side. But that takes time. And in addition, there is a huge 2 year gap of supply creation that didn’t happen because of the pandemic.

This may help ease some of that pandemic related imbalance.

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