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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

#511

Post by throwaway_xx9 »

ap3 wrote: post #357
GFischer wrote: post #73

Earlier quoted context omitted.

I think that's one of the causes, the other is the excessive money supply: https://positivemoney.org/issues/house-prices/ The issue described is not unique to Vancouver, it's a worldwide phenomenon, lots of desirable locations across the globe are facing the same (from Auckland to London to Sydney to Zurich), even in my hometown in Montevideo, Uruguay, houses are going for ridiculous prices. A good measure on whether…

>As someone who doesn't own any property, I really hope the housing bubble explodes. Where were you 5-7 years ago?

I was sitting on large bank and calling real estate agents in the Bay Area ... who either committed suicide or left the industry. So no house for me.

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

#512

Post by dghughes »

rdlecler1 wrote: post #442
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…

Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be…

It's probably not as much as you think it is, what is the constant dollar difference?

If a single-family home in Vancouver cost $150,000 in 1980 and now it's $1.8 million it looks like a difference of $1,650,000.

But that $150,000 is equivalent to $411,000 in 2015 dollars so the real difference is $1,389,000 still a lot but it's nothing to scoff at.

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

#513

Post by elgenie »

nosuchthing wrote: post #478
JoshTriplett wrote: post #443

Earlier quoted context omitted.

This sounds like an excellent argument for getting rid of property taxes altogether. Property taxes have some major fundamental problems, not least of which that using them to pay for local services tends to make such services better in more affluent areas and worse in less affluent areas. They produce potentially unbounded and unexpected expenses long after paying off the house itself (which impacts retirees and oth…

High property tax assumes an area is in high demand for land, presumably incentivizing more efficient use of land per square foot.

It's the land value tax that incentivizes more efficient use of land. A property tax is levied on both the land and the improvements built on top of it. By only taxing land, the land use tax incentivizes maximizing the improvements-to-land ratio.

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

#514

Post by seanmcdirmid »

CountSessine wrote: post #493
seanmcdirmid wrote: post #475

Earlier quoted context omitted.

The way things are going right now, it seems to be playing out exactly the same, just the scale is much larger given the increase in population (million of new millionaires were created in Japan also, of course, with a much smaller population base than China!).

I think the point is that if housing prices in Vancouver peak around $2M, the dust settles, and housing prices fall and equilibriate down to $1M, living in Vancouver doesn't really get any more realistic. I too am skeptical of the Japan comparison. China is both a very densely populated but also an extremely populous country and I think its just natural that a lot of Chinese will want to leave for less-densely popula…

It depends on how much is speculation vs. how much it is Chinese from the mainland actually moving to Vancouver. How many Chinese can actually emigrate to Vancouver, or why would they go there when they can go elsewhere? I'm old enough to have seen Vancouver real estate go through boom and bust before, and I'm just a Seattleite.

Anyways, we've all heard "its different this time" before, and it never is.

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

#515

Post by seanmcdirmid »

elgenie wrote: post #513
nosuchthing wrote: post #478

Earlier quoted context omitted.

High property tax assumes an area is in high demand for land, presumably incentivizing more efficient use of land per square foot.

It's the land value tax that incentivizes more efficient use of land. A property tax is levied on both the land and the improvements built on top of it. By only taxing land, the land use tax incentivizes maximizing the improvements-to-land ratio.

Improved land tends to draw more from community resources. If we just tax the land, someone builds a huge apartment building, then it really sucks for the local schools.

Additionally, much speculation is in post improved land...e.g. apartments; they have to do something with their property also, not just build it up. Otherwise its a drain on the economy and distorts the real estate market.

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

#516

Post by [deleted] »

dghughes wrote: post #512
rdlecler1 wrote: post #442

Earlier quoted context omitted.

Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be…

It's probably not as much as you think it is, what is the constant dollar difference? If a single-family home in Vancouver cost $150,000 in 1980 and now it's $1.8 million it looks like a difference of $1,650,000. But that $150,000 is equivalent to $411,000 in 2015 dollars so the real difference is $1,389,000 still a lot but it's nothing to scoff at.

[deleted]

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

#517

Post by drfuchs »

DrScump wrote: post #476
rdlecler1 wrote: post #442

Earlier quoted context omitted.

Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be…

I can't imagine a single unimproved residence being anywhere in that neighborhood (even going all the way to 1978); examples are welcome.

Parts of Palo Alto were very blue collar post WWII. I knew one nonagenarian who bought his house new in 1949 for $10k, and it sold, unimproved, for $2.2m on his death over a year ago. Also a centenarian still living in her original 1950 $10k house that Zillow now estimates at $2.3m. So, there's 220x gains. Clearly, all the value is in the land. Property tax in 2013 was about $1k in both cases; both have new neighbors in newly-built $4m houses on same-size lots paying $40k tax.

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

#518

Post by CountSessine »

msie wrote: post #468
CountSessine wrote: post #380

Earlier quoted context omitted.

seriously flawed is an overstatement; there have been two studies done so far and while the researchers acknowledge the limitations of the method, in aggregate it is considered mostly sound by their peers. But I agree - we should have something a bit more conclusive than 'Chinese names'. But the whole point is that the current provincial government is actively hostile to requiring real estate agents to collect this i…

One of the studies looked at the names of people purchasing in a pricy small neighbourhood. That hardly generalizes to all of vancouver.

Just looking at that neighbourhood on MLS, it really doesn't look any different than the rest of Vancouver-proper.

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

#519

Post by cdransf »

This is becoming increasingly true of LA too. Unless you're rent controlled and have been there for a while the price for an apartment is further and further out of reach.

There's construction everywhere but the price of living in those new buildings is even more than the increasingly expensive older areas and a lot of new construction has begun with what seems like little to no consideration for its impact on traffic.

Perhaps developers and the city expect people to use the limited metro system and other public transit but few people, in practice do.

I can't be that upset though, my wife and I are leaving for the suburbs soon with no plans to come back.

There's a lot happening in LA in terms of the tech scene, but it's not enough to outweigh the overwhelming cost of attempting to put down roots there (home ownership is a largely unobtainable goal, insurance of all kinds is expensive, every neighborhood suffers from traffic congestion and on and on).

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

#520

Post by vehementi »

refurb wrote: post #368
thebokehwokeh2 wrote: post #218

Earlier quoted context omitted.

In the west end, it really is "yellow peril". I am asian myself, but I contribute to the economy as a job provider. Speculators are the reason for the impending ghost town that is Vancouver. http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpo...

That is the worst "research" I think I've ever seen.... Chinese name? Foreigner!!! Despite Vancouver being almost 50% Asian. Canada does not collect data on foreign ownership, and the citizenship of buyers in Yan’s study is not clear. But Yan established that 66 per cent of all buyers had “non-anglicized” Mainland China names.

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