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Without affordable housing, Vancouver risks becoming an economic ghost town

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

#431

Post by klipt »

Agustus wrote: post #305
svachalek wrote: post #245

Earlier quoted context omitted.

A 4-bedroom house bought in the 70s is far more affordable than a 1-bedroom condo bought today, which creates a situation where no one can afford to move out of their homes. It's a massive tax benefit for themselves, their children, and grandchildren, that instantly and irrevocably goes away when they sell the house. No matter how high the market drives prices there is little incentive to sell. I don't know how much…

That is not a fair assessment of the situation. There are a number of factors that have been put in place by the populace and government agencies to force this situation in the bay area: 1. Rent Control: This forces an incentive not to move. If you are in the 4-bedroom house at $1,500 a month for the past 15 years, a comparable 4-bedroom house is now $6,000. There is no incentive to move and owner's have little incen…

If you think of the government as the "ultimate landlord", then property tax is just another form of rent and Prop 13 is just another form of rent control. It has most of the same positives and negatives as rent control:

> forces an incentive not to move

Check, if you move your property tax will go up

> and owner's have little incentive to bring up to standard something they are not going to get an ROI on

Check, the "landlord" (government) spending on residential infrastructure won't result in increased property tax income. This is partly why the peninsula cities invest so much in office space but refuse to build housing.

You're right that Prop 13 makes rent control possible, but overall I'm not sure that's a good thing.

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

#432

Post by ficklepickle »

I live in Vancouver. I rent half an old house built in 1941 on a big lot.

It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out.

First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish primary residence exemption on capital gains when the house is sold. They make it look like that person is living there, when it's actually being rented. Two untaxed sources of income: undeclared cash rental income and the inevitable capital gains on the sale.

As far as investments go, its a sure win. And I have reason to believe I'm renting one of these properties. It happens to work out well for me though cause rents pretty reasonable.

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

#433

Post by ficklepickle »

I live in Vancouver. I rent half an old house built in 1941 on a big lot.

It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out.

First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish primary residence exemption on capital gains when the house is sold. They make it look like that person is living there, when it's actually being rented. Two untaxed sources of income: undeclared cash rental income and the inevitable capital gains on the sale.

As far as investments go, its a sure win. And I have reason to believe I'm renting one of these properties. It happens to work out well for me though cause rents pretty reasonable.

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

#434

Post by gozur88 »

stanmancan wrote: post #164
jessewmc wrote: post #152

Earlier quoted context omitted.

The problem in Vancouver is the house prices are not driven by economic activity in the city itself. Bay area and Manhattan prices are a product of the local economies. Vancouver prices are a product of speculation and wealthy people who live/have property there but don't work there.

Exactly this. A significant portion of the housing is being bought by foreign investors who don't even live here. Not only is it raising the pricing of the housing, but you don't get the economic benefit of said wealthy individuals living in the city. I recall reading an article about a local coffee shop. A number of new buildings were built around it, all residential condo's. The condo's in the buildings were comple…

When the market tips all those foreign investors are going to try to unload their investment property at the same time. If I lived in a market like that I probably wouldn't buy anything even assuming I had the money. There's a big hangover at the end of this party.

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

#435

Post by mcshicks »

thaumasiotes wrote: post #363
Retric wrote: post #338

Earlier quoted context omitted.

The problem is staying becomes increasing attractive over time. Retired people save money by staying put, young workers can't afford to move in. This breaks the housing market. SF is not a housing market it's effectively a planned communist community with a few bribes on the open market.

> Retired people save money by staying put, young workers can't afford to move in. This is a problem of housing stock. If you build more housing, it's not going to be occupied by people who've been sitting on it for the last 50 years. That's impossible, because it's new.

Well sort of. Consider a couple in a 4 bedroom house who's kids have moved out, but don't move into a smaller place (say 2 bedroom condo) because they would have to pay a bigger tax bill. So there are two bedrooms not being used because of taxes.

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

#436

Post by CountSessine »

edwinnathaniel wrote: post #378
infinite8s wrote: post #267

Earlier quoted context omitted.

That's in CAD, correct? The Canadian dollar isn't doing too well, and is expected to drop to around $.50 USD by year end.

But we're talking about local issue so currency matters less for this topic.

Unfortunately, Vancouver housing is being driven by international currencies. A low Canadian dollar makes houses in Vancouver a bargain for outsiders and even more unaffordable for anyone earning Canadian dollars.

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

#437

Post by jeremyt »

ficklepickle wrote: post #432

I live in Vancouver. I rent half an old house built in 1941 on a big lot. It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out. First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish prim…

Sounds to me the rent could be a lot more reasonable with a 5 min conversation.

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

#438

Post by brewdad »

louprado wrote: post #274
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…

A Canadian who invests in single-family homes recently told me that the U.S. state of Indiana charges double real-estate taxes if the home is not owner-occupied. As a Californian who owns rental property in Arizona, I am all in favor of this, provided that means my primary residence would be taxed less. Real-estate taxes on your primary residence is the equivalent of paying rent. It has become so high in some states…

Oregon's real estate taxes are modeled after California's. They are capped at 3% increase per year (in taxable value, increases in individual levies can lead to more than a 3% increase year over year).

My house is about 10 years old and I pay ~1.5% of it's resale value in taxes annually. Granted, that's much higher than my neighbor who occupies his childhood home built in the 1960s but it's hardly outrageous compared to other parts of the country.

One difference in OR, in addition to selling a home, a significant improvement (ie adding an additional bedroom) can lead to a resetting of the taxable value at current market value.

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

#439

Post by gedy »

kilroy123 wrote: post #393
CountSessine wrote: post #371

Earlier quoted context omitted.

As an established middle-aged software developer with a family living in Burnaby who cannot move now because of custody issues, I'm going to give you the same advice I give to all of the engineering co-ops I work with. You should move out of the Vancouver area as soon as you get your degree. I don't think that you're ever going to have a problem finding 1 bedroom accommodations in Vancouver because that's what develo…

Why does / did the Canadian government let so many Chinese come in and buy property like that?

Money

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

#440

Post by riquito »

ficklepickle wrote: post #432

I live in Vancouver. I rent half an old house built in 1941 on a big lot. It sold twice recently, within a couple months, by the same realtor. They always collect the rent in cash, never issue a receipt. I know a racket when I see one, so I had to figure it out. First, somebody buys a house in cash but puts it in somebody else's name, like a child or spouse. They get lots of mail sent there. This is to establish prim…

> They always collect the rent in cash, never issue a receipt. I know a racket when I see one

Do you see that by not requiring a receipt you're helping that racket?

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