Cheaper housing on the horizon?

Mad Mike

Mad Mike

Well-known member
Forum Sponsor
Looks like GTA house prices are getting some attention prior to the upcoming election. The Housing Affordability Task Force made a lot of recommendations that would ease prices in the GTA, mostly cutting red tape and eliminating roadblocks used by municipalities and special interest groups. Recommends 1.5M mew homes in the next 10 years, that's about double 2020s new housing starts.
  • More housing density across the province. Eliminate exclusive zoning that limits buildings to single-family homes
  • End exclusionary municipal rules that block or delay new housing, things like 'preserving character' and restricting building second suites
  • Prevent abuse of the housing appeals system by weeding out appeals aimed purely at delaying projects
  • Set uniform standards for building heights, shadows, and setbacks etc.
  • Depoliticize the process where possible. Eliminating municipal designations of 'heritage' to obstruct development, weed out ON land Tribunal appeals files simply to delay the process.
  • Set reasonable but firm time limits on public consultation (NIMBY stuff) and timelines for municipal plan approvals.
I think these on the face appear to be positive moves. NIMBY bylaws and municipal slow-rolling have long been tools used to oppose redevelopment in the GTA.

I don't see it dropping prices overnight, but 1.5 million units in the existing GTA footprint ought to make some difference.
 
I haven't read much about it but as you expand on housing, you also need to build the infrastructure to support the commute to the job center.

NIMBY is the worst offender here because people don't want to allow any change in their neighbourhood. Remove a few single family homes and replace them with 4-6 family unit low rise buildings and you can really start adding properties fast.

Problem is if you're not adding housing fast enough, the new units get gobbled up by investors for rental / flip and you're no better off...actually probably worse as they're brand new and are flipping fast.

Tough call.

I'm of the personal OPINION that the only way to get housing under control is remove the incentive/profit from flipping and running away from the capital gains tax by playing within the rules. 367 days and all of a sudden your gains of 100s of thousands are tax free. I'm against capital gains on primary properties (held over 5 years), and I've made that point a few times here, and I think the CRA should crack down hard on flippers.

Knew enough agents, contractors, and normal people who buy houses in the parents', kids', and anyone else's names just to let them live rent free while the property appreciates astronomically.
 
And still no progress on the *real* culprit behind high real estate prices:

- Rampant foreign investment and speculation, money-laundering etc.
- Unjustified low interest rates. The only reason it's still so low is because raising interest rates will crater this RE-based economy.

1.5M new units just means more RE for speculators and investors to play with. You need to douse a raging fire, not throw more kindling on it.

They're aiming for a soft landing, but this just isn't possible given how far up we've climbed.
 
Last edited:
Lightcycle said:
And still no progress on the *real* culprit behind high real estate prices:

- Rampant foreign investment and speculation, money-laundering etc.
- Unjustified low interest rates. The only reason it's still so low is because raising interest rates will crater this RE-based economy.

They're aiming for a soft landing, but this just isn't possible given how far up we've climbed.
Click to expand...
This is what surprised me the most in the last year or so. There are a LOT of people (contractors, workers, etc.) working for straight cash (on top of their official income) and they need to put that money somewhere. RE is literally the easiest way to do this.

Buy house with existing income as it's typically large enough, or you can get a fake mortgage application for $2,000. Close on house, use cash to renovate it top to bottom, sell for a profit...money clean!

I know one guy personally that spent 100k in cash on flipping his house. He makes a good income on paper, and even better in cash. That money's got to go somewhere to protect it from taxes...so they do their renovations all cash. Then the subs get lots of cash, and need to wash it, same thing, and so on, and so on, and so on...
 
mimico_polak said:
This is what surprised me the most in the last year or so. There are a LOT of people (contractors, workers, etc.) working for straight cash (on top of their official income) and they need to put that money somewhere. RE is literally the easiest way to do this.

Buy house with existing income as it's typically large enough, or you can get a fake mortgage application for $2,000. Close on house, use cash to renovate it top to bottom, sell for a profit...money clean!

I know one guy personally that spent 100k in cash on flipping his house. He makes a good income on paper, and even better in cash. That money's got to go somewhere to protect it from taxes...so they do their renovations all cash. Then the subs get lots of cash, and need to wash it, same thing, and so on, and so on, and so on...
Click to expand...

Canadian workers taking money under the table is a teeny tiny drop in the bucket of money laundering.

Not compared to Chinese nationals not declaring millions of dollars of income:

biv.com

Man making $40k/year bought $32m in Vancouver real estate via CCP-linked offshore accounts

Commission of Inquiry into Money Laundering in B.C examined one instance in which a low-income man and his family bought $32 million worth of housing in Vancouver after transferring $114 million from largely obscure offshore accounts
biv.com biv.com

This shiite needs to end immediately.
 
Lightcycle said:
Canadian workers taking money under the table is a teeny tiny drop in the bucket of money laundering.

Not compared to Chinese nationals not declaring millions of dollars of income:

biv.com

Man making $40k/year bought $32m in Vancouver real estate via CCP-linked offshore accounts

Commission of Inquiry into Money Laundering in B.C examined one instance in which a low-income man and his family bought $32 million worth of housing in Vancouver after transferring $114 million from largely obscure offshore accounts
biv.com biv.com

This shiite needs to end immediately.
Click to expand...
Oh that's a WHOLE different story.

But I like to stick to topics / experiences that I'm more aware of instead of the big fish.

Regardless...I wish I had 100-200k in cash for renovations on my house!
 
Mad Mike said:
Looks like GTA house prices are getting some attention prior to the upcoming election. The Housing Affordability Task Force made a lot of recommendations that would ease prices in the GTA, mostly cutting red tape and eliminating roadblocks used by municipalities and special interest groups. Recommends 1.5M mew homes in the next 10 years, that's about double 2020s new housing starts.
  • More housing density across the province. Eliminate exclusive zoning that limits buildings to single-family homes
  • End exclusionary municipal rules that block or delay new housing, things like 'preserving character' and restricting building second suites
  • Prevent abuse of the housing appeals system by weeding out appeals aimed purely at delaying projects
  • Set uniform standards for building heights, shadows, and setbacks etc.
  • Depoliticize the process where possible. Eliminating municipal designations of 'heritage' to obstruct development, weed out ON land Tribunal appeals files simply to delay the process.
  • Set reasonable but firm time limits on public consultation (NIMBY stuff) and timelines for municipal plan approvals.
I think these on the face appear to be positive moves. NIMBY bylaws and municipal slow-rolling have long been tools used to oppose redevelopment in the GTA.

I don't see it dropping prices overnight, but 1.5 million units in the existing GTA footprint ought to make some difference.
Click to expand...
They pretty much all prove that developers have Doug in their pockets. Spin doctored to sound like they are looking out for the little guy.
 
timtune said:
Nice timing Dougie! You were elected over 3 1/5 years ago but decide to propose this just before the election season.
Click to expand...
Let's not forget this little bit to get that election season hopping...

www.thestar.com

Doug Ford may scrap renewal fees for Ontario licence plates

Premier Doug Ford is test-driving a plan to eliminate licence plate renewal stickers to save motorists up to $120 annually, the Star has learned.
www.thestar.com www.thestar.com

And I think it'll help his chances a lot. But where we going to come up with the $1B in revenue from those renewals...oh wait...new housing land transfer taxes?
 
backmarkerducati said:
They pretty much all prove that developers have Doug in their pockets. Spin doctored to sound like they are looking out for the little guy.
Click to expand...
The developers dont need to have Doug's ear. More dwellings equals more DC's, more land transfer tax and more property tax. Good for developers is directly good for douggie. No graft required.
 
I believe it's too little to late. All the players have rigged the system for their benefit, leaving typical Canadians holding the bag. This should have been dealt with years ago (like 10+). Instead our Gov did nothing, this feels like a speed bump to a run away burning vehicle.

BTW from my junk mail today a house around the corner from me, like 1 street over, sold for 1.3 million, it's a bunglo, little larger then mine. Chit I could sell and become a millionaire and relocate to El Salvador and live like a king.... oh wait maybe not there.
 
mimico_polak said:
I haven't read much about it but as you expand on housing, you also need to build the infrastructure to support the commute to the job center.

NIMBY is the worst offender here because people don't want to allow any change in their neighbourhood. Remove a few single family homes and replace them with 4-6 family unit low rise buildings and you can really start adding properties fast.

Problem is if you're not adding housing fast enough, the new units get gobbled up by investors for rental / flip and you're no better off...actually probably worse as they're brand new and are flipping fast.

Tough call.

I'm of the personal OPINION that the only way to get housing under control is remove the incentive/profit from flipping and running away from the capital gains tax by playing within the rules. 367 days and all of a sudden your gains of 100s of thousands are tax free. I'm against capital gains on primary properties (held over 5 years), and I've made that point a few times here, and I think the CRA should crack down hard on flippers.

Knew enough agents, contractors, and normal people who buy houses in the parents', kids', and anyone else's names just to let them live rent free while the property appreciates astronomically.
Click to expand...

NIMBY is a real challenge in my neighborhood, I've seen Councilor outright lie about what can be done and cannot.

Here's one from Andrew Keyes Markham Ward 5 Councilor. From his website: "In May 2018, Markham City Council amended a series of Zoning By-Laws to define and effectively prohibit short-term rental accommodations within the City, therefore property owners are not permitted to use their residential property as a short-term rental." Not true, they debated STAs and second suites. They found no legal way to prohibit either.

I'm not sure whether investors are a problem, increasing supply to meet demand will cool prices whether in investor or homeowner's hands.

I agree that we should remove speculation and tax gaming. Increase the hold time to 1 year, make it mandatory the homeowner reside in the home to claim the tax break (keeps real estate agents and their flipper friends from living in a $5m house but flipping multiple $1M homes tax free. ) Make the tax free exemption ONLY AVAILABLE TO CANADIAN CITIZENS - keeps students and foreign interests utilizing PRs to speculate in Canada tax free.

I also think that tax evasion is rampant. I know a couple of realtors who have flipped a dozen homes tax-free in the last 10 years for huge profits. They buy off distressed owners, refresh and flip -- each spouse owns a primary property they are flipping, they also live in a small mansion kept in their elderly parent's name -- which they rent from them for tax purposes.
 
BB722 said:
Some good ideas in here, but it all feels too late
Click to expand...
If you separate land value from housing, you may be able to come up with affordable housing. Absolutely terrible investment so it's not a good hop for people trying to climb the ladder but that also keeps investors out. Basically have some level of government maintain ownership of their land, allow properly affordable housing to be constructed (say 250K for a condo?). Maybe province/feds own the land and municipality cuts DC's by an order of magnitude (as they alone push the limits of an affordable dwelling). Build enough of them and that drives down the market rate of rent as you can pay off a mortgage for <$1500/month. Government may have to hold the mortgages as banks won't be interested without land ownership. It will appreciate slowly (maybe inline with inflation?) but more importantly it allows people a sense of stability and community as turnover will likely be low (where else are you going to go for similar money?).
 
GreyGhost said:
If you separate land value from housing, you may be able to come up with affordable housing. Absolutely terrible investment so it's not a good hop for people trying to climb the ladder but that also keeps investors out. Basically have some level of government maintain ownership of their land, allow properly affordable housing to be constructed (say 250K for a condo?). Maybe province/feds own the land and municipality cuts DC's by an order of magnitude (as they alone push the limits of an affordable dwelling). Build enough of them and that drives down the market rate of rent as you can pay off a mortgage for <$1500/month. Government may have to hold the mortgages as banks won't be interested without land ownership. It will appreciate slowly (maybe inline with inflation?) but more importantly it allows people a sense of stability and community as turnover will likely be low (where else are you going to go for similar money?).
Click to expand...
Land availability is certainly a problem however even free land doesn't make a house cheap. A small townhouse is running $220-250/sq to build + another $30K in soft costs. If I got an acre of land for $60K on small-town Ontario and built 6 budget townhouses, I'd have to sell them for $400K.

If you bought a house in Markham, knocked it down, and put up 3x2 stacked budget condos of 1000sq', you would need to get $800K each.
 
Mad Mike said:
Land availability is certainly a problem however even free land doesn't make a house cheap. A small townhouse is running $220-250/sq to build + another $30K in soft costs. If I got an acre of land for $60K on small-town Ontario and built 6 budget townhouses, I'd have to sell them for $400K.

If you bought a house in Markham, knocked it down, and put up 3x2 stacked budget condos of 1000sq', you would need to get $800K each.
Click to expand...
That's in the ballpark. In my example, 700 sq ft condo sold for ~250 and land cost was zero. It doesn't work for every situation but there are definitely places those towers could be dropped to improve access to affordable housing.
 
Meh...won't matter to me. My retirement plans are blown to smithereens now and there's no way back. If house prices way down in SW Ontario magically went back to where they should be (inline with trajectories from 5-7 years ago) I would have been OK. I will be renting for the rest of my life.
 
Sad, considering I have owned 3 houses in my life. Odd circumstances and bad decisions on female partners sent me back to renting about 8 years ago when I moved back to the city. (that plus I lucked out and found a great house to rent for cheap, with a great landlord....some could say I'd be foolish to leave).
Forum Sponsor
 
You must log in or register to reply here.

Back
Top Bottom