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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

#621

Post by logfromblammo »

wavefunction wrote: post #286
logfromblammo wrote: post #112

Earlier quoted context omitted.

It became vital back when economies first started to specialize. If you take the net the fisherman wants to use and string it up as a hammock, you're going to eat fewer fish later. If you take the blacksmith's tongs and use them to crack walnuts, you're not going to get that handful of nails that you wanted to build your house. Property rights alleviate the tragedy of the commons, by taking resources with multiple po…

In all your examples, you're talking about tools that would be finding direct use. How do you reconcile your allegories with empty houses purchased solely as stable investment vehicles instead of actually housing people?

That's just like the fishing net used as a hammock instead of catching fish. A house used for housing is a productive purpose. It is generating value to the economy every minute that it is being used as shelter for humans. That value diffuses out to more people through trade. When used for speculation, it is not producing value, but simply storing it for later use. Meanwhile, those who would otherwise produce value from it are producing less value in aggregate because they are denied access to at least one house.

If you put gold in a vault, it retains its value. But it cannot be used productively. If you instead loan the same gold out, you can charge interest, and some of the value generated by the gold performing its productive function as money will diffuse back to you via trade.

As a whole, the entire economy would prefer that all tools be put to productive use 24 hours a day. But the individual Nash equilibrium strategy is to selectively employ or withhold the use of those tools for greater personal benefit to the tool owner.

In the government's role as cartel enforcer, it would be in the interest of the whole cartel for the enforcer to levy a vacancy tax on investment properties. That reduces the personal benefit of idling the productive tool, but the enforcer then also has the burden of returning that value to the economy in a productive way.

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

#622

Post by nibs »

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…

In Toronto it is based on assessed value. You get a letter each year with a fairly conservative estimate of the value of your home, and your tax is a flat percentage based on the line item in the budget (city, education and transit). Calculator: http://wx.toronto.ca/inter/fin/tax.nsf/tax?openform

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

#623

Post by surement »

john_fushi wrote: post #266
surement wrote: post #158

Earlier quoted context omitted.

Indeed. I love Montreal but the health care system in Quebec is absolutely ridiculous. It's not unusual to wait 12-15 hours at the ER. In Vancouver, without an appointment, you have to wait about 10 minutes to see a competent doctor.

Actually it is. Unless you are the kind of person to go to the ER for having sneezed once in the last 24 hours...

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

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

#624

Post by frandroid »

infinite8s wrote: post #272
zanny wrote: post #219

Earlier quoted context omitted.

Except I'm not - there already exist squatters rights to occupy someones elses property and eventually claim it their own if they can avoid detection long enough. All that takes is the minimum effort to police the property you own to insure nobody is squatting. What I'm saying is that unconditionally whether or not someone is illegally occupying your property you only have a fixed amount of time to make use of it bef…

No developed country supports anything remotely like squatter's rights.

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

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

#625

Post by Grishnakh »

Arnt wrote: post #620
Grishnakh wrote: post #586

Earlier quoted context omitted.

No, it doesn't, actually. The police can get their money from the property tax for any new residents who have built new houses. If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.

Needs change and buildings age. The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents. (Not just police, of course. All public services.)

So why do they need more money for this?

When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it."

Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise.

So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary.

As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?

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

#626

Post by elgenie »

seanmcdirmid wrote: post #515
elgenie wrote: post #513

Earlier quoted context omitted.

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.

An appropriate land value tax is proportionate to what improvements the community expects to be present on the land on average -- that is, how desirable the area is as a whole. That should scale pretty well on a school district level.

As for discouraging speculation, property and land tax schemes can both be used. However, in an environment in which other landowners are improving, the tax burden of a speculator just sitting on their property goes up under a land value tax.

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

#627

Post by maxsilver »

krakensden wrote: post #575
maxsilver wrote: post #195

Earlier quoted context omitted.

Would that actually solve the problem? Is there anywhere in America where steel frame construction + concrete walls + elevators is affordable to regular people? Is there even one example of this happening in the real world? I haven't found any examples, except in already hyper-wealthy neighborhoods, or in 40+ yr old buildings in cities that became significantly less desirable, due to very high crime/poverty/etc. (Det…

Seattle is currently enjoying falling rents, and is the kind of hip coastal city that people care about: http://www.bizjournals.com/seattle/blog/2015/11/bad-timingas... For more dramatic numbers, including low prices and a booming population for many years, you should look at Houston, Texas, Hero Of Housing Capitalism.

> Seattle is currently enjoying falling rents.

But that's not true, according to your own article.

From your link: "in the core of Seattle, rents went up 3.9 percent year-over-year in September."

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

#628

Post by Arnt »

Grishnakh wrote: post #625
Arnt wrote: post #620

Earlier quoted context omitted.

Needs change and buildings age. The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents. (Not just police, of course. All public services.)

So why do they need more money for this? When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it." Instead, I save money over time so that when I need that new car, I have the mo…

You started by asserting that the police budget need not increase when there's a property boom.

Perhaps the town of Starnberg is an instructive example. It's a small town in Germany which hasn't grown much in terms of population, but its property market has boomed, BOOMED, enough that the city's employees had problems. Rents increase, their salaries don't.

Last time I was there the local newspaper reported that for several years, the only police officer who worked there voluntarily was the chief. The force hadn't had a single application to any of its job postings for years, and all the old police officers had gotten better-paying work or moved to lower-rent towns. German police can be ordered to serve for a while, and the Starnberg city police force was composed of newly educated police officers who had been ordered there by the state, lived on 10m² while they had to, and who left Starnberg as soon as they were legally able to.

I understand the city council was trying to find some way to solve this. To pay the employees a sizable extra to compensate for the high cost of living. (Haven't followed the news there.) Anyway what employees said wasn't "I need another new car, so I need a new raise", they said instead "I need another new car, so I got a better-paying job, goodbye" or "I need another new car, so I'm moving, goodbye".

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

#629

Post by krakensden »

maxsilver wrote: post #627
krakensden wrote: post #575

Earlier quoted context omitted.

Seattle is currently enjoying falling rents, and is the kind of hip coastal city that people care about: http://www.bizjournals.com/seattle/blog/2015/11/bad-timingas... For more dramatic numbers, including low prices and a booming population for many years, you should look at Houston, Texas, Hero Of Housing Capitalism.

> Seattle is currently enjoying falling rents. But that's not true, according to your own article. From your link: "in the core of Seattle, rents went up 3.9 percent year-over-year in September."

The next sentence, about how growth was 8 percent the year before, is also meaningful. This is a better/more clear article on the same thing: http://www.bizjournals.com/seattle/morning_call/2015/12/repo...

> rents dropped this quarter in all but South Lake Union, with the average decline hitting $59 a month. Further, when all of these submarkets are considered, the average vacancy rate increase was nearly a full percentage point.

2015 new construction was huge, the biggest since the late eighties/early nineties, and construction for the next couple years, based on filings, looks like it's going to continue that way. So it's likely that apartment prices will continue fall or hold still.

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