Economists almost unanimously agree that rent control is a short term reprieve that causes long term problems.
Don’t control rents, control land values with land value taxes (not the same as property taxes)
If you take away the profit motive for owning a home, the whole current system collapses and housing returns to the price it should be based on it’s usefulness as a house not an investment.
The full context of this is economists don’t think it’s a long term solution but their other proposed solutions is even less accepted by politicians and the masses.
As such like many of the larger problems we have we’re left with a temporary solution that’s implemented long term.
When people criticize rent control at best what they’re saying is if we bottom out on a problem the only way we could go is up. Ala electing Trump.
Their other proposed solutions aren’t accepted by politicians and the masses, because there’s too many people benefitting from the system fucking the next generation to want to change it. We’re literally living in the largest pyramid scheme ever constructed.
Since I can’t seem to read this, what are their other solutions?
Yeah, without reading this I’m hella skeptical.
No amount of tenant rights will solve not enough houses, which is the problem we have here.
Not enough houses isn’t really the problem, or rather there’s no such thing as “enough houses” ever. If more housing were to become available, people would just inflate their expectations for what their housing should be (larger, more land, fancier, etc.)
There’s enough bedrooms in this country for every single person to sleep in. They just aren’t distributed properly (desirable locations, who owns them, etc.)
There will never be enough housing to meet people’s desires.
The question then becomes, how can we get the right people in the right amount and location of house, and what does right mean for these things?
The current allocation system we are using simply doesn’t achieve the optimal social outcome.
One big issue, is there are far too many older people that are over-housed. My parents live in a 4 bedroom home, by themselves. It was a great home for me and my brother to grow up in, but it hasn’t been optimal in the 20 years since we moved out. They should have downsized and freed that home up for another family. Instead you have couples in their 20s who are either underhoused for their family size or who won’t even have children because they don’t have enough space.
The only solution I’ve seen that would work is significantly taxing land based on the desirability of the location and size of land, to incentivize people to leave too much housing for their needs and free it up to house more people (either more people in the same home, or through density development). Those taxes should be really high, like income tax level of high, and income taxes should be dropped. It would overnight reset home prices to affordable levels. Unfortunately it’s never going to get voted in because it would also destroy the equity for every single current homeowner, and there’s no way they would accept that.
To match other advanced countries for citizens per house, we’d need a few million more houses. I’d call that a shortage, even if in the very long term, you’re right, we culturally adjust to whatever we have to. In a way we are already; multi-generational living is noticeably trendy.
The current allocation system we are using simply doesn’t achieve the optimal social outcome.
What you’re talking about here is basically just inequality, with a little bit of gerontocracy. Yeah, it sucks, haha. What needs to happen to fix that is more redistribution, one way or another.
Those taxes should be really high, like income tax level of high, and income taxes should be dropped. It would overnight reset home prices to affordable levels.
I don’t think so. The amount of privately held land is fixed, so somebody’s going to pay the same amount no matter what. It’s actually going to increase housing prices relative to other things, because the Zoomer family that buys your parent’s place will have that tax to bear as well (meanwhile everything else just benefits from the income tax break).
You could make it 65+ only, I guess, but there’s a high chance of unintended side effects on seniors not in that situation.
To match other advanced countries on square feet of land and house per person on average, we’d have to build a lot more smaller houses on a lot smaller lots. The unit counts only tell half the story, and everyone is somehow ignoring that.
For comparison, the UK average house size is only 41% the size of Canada, and the largest European size is Denmark and it’s still only 75% as big as Canada.
Globally, The countries having the worst time housing cost wise, are the ones with the largest average house size.
Yes I’m talking about inequality, but it’s systematic, people who’ve been around longer bought up everything in the major cities and now aren’t sharing.
The amount of privately held land is fixed, but that doesn’t mean someone’s going to pay the same amount. Not at all.
Let me ask you a question, how much would you pay for a car, if you knew that car would sell for more money in 10 years than you paid for it today. No matter how much you spend on the car, it has a 99% chance to go up in value over 10 years. The logical choice is to spend as much money as you can possibly afford, because the more you spend, the more you get back. This is what’s been happening with houses for the last 40 years.
Now tell me how much you’d spend on a car if you knew is was going to lose half of it’s value over the next 10 years, like cars normally do, and you’re going to give me a much lower number.
The tax has to be high enough to make sure you and everyone else always lose money on the house. Then, you’ll only pay for what you need, or maybe splurge a little bit more for some extras, but you wouldn’t go crazy unless you were rich.
Under this plan that Zoomer family can afford my parent’s house, because they’re working and now don’t have to pay income tax. Meanwhile it’s going to be cheaper because there’s more supply of larger houses and less demand for them. My Boomer parents wouldn’t get that tax break because they retired and all that tax is now is a significant drain on their finances unless they downsize. Further into town where those taxes would be even higher because of desirability, those houses will be bought up by developers, and turned into condos, which because the tax is on land only and not the value of the building will have even cheaper per month taxes for the occupants. Good for both my downsizing Boomer parents, and for childless folks who don’t need a full sized house.
That’s interesting about housing sizes - good to know, thank you. It kind of confirms my general sense about those places, but it’s hard to sort stereotypes from reality sometimes.
Australia and the US are the other big-houses places. I suspect it’s down to available lumber and low land values. Maybe car culture too, but the history of that is intertwined with low land values. (Russia and China score lower because they’re just generally poorer)
I’m not really sure what point you’re making with it, though. We could start renting out oversize closets and spare rooms as separate housing, and people do, but that’s not generally regarded as a good solution to the housing crisis, and in fact is fairly illegal. We could start building more smaller houses, and as far as I can anecdotally see are, but that’s still building houses.
The tax has to be high enough to make sure you and everyone else always lose money on the house. Then, you’ll only pay for what you need, or maybe splurge a little bit more for some extras, but you wouldn’t go crazy unless you were rich.
Ah, but you’re not accounting for rental income, or equivalently the rent you won’t pay if you’re buying. People need to live somewhere, legally speaking, and legally speaking will keep paying more until it’s a profitable asset for the owners again.
Illegally speaking we absolutely would have a spike in homelessness, to the point where there might be more permanent Hoovervilles/favillas being built on land that’s not technically set aside for the residents. The appreciation you’re talking about isn’t an economic fluke, it’s driven by fundamentals. Land literally just does become more sought after as the population grows (and the buildings themselves slowly depreciate as they become old, musty and awful).
My Boomer parents wouldn’t get that tax break because they retired
Presumably they get some kind of income, right? They still eat. You mean a tax break just working individuals, then. That’s kind of the same as making the house tax 65+ only, except disabled people and similar will also get swept up.
This is a nitpick since it has nothing to do with our topic, but I would also like to point out that you don’t buy something just because it appreciates, like you implied. Lots of assets do, and they do it in varying percentages that always end up matching the volatility (or actual existential risk if it’s that kind of investment) they experience on the way. The rational move is to buy whichever ones make sense given when you want to actually have your earnings available to spend (investment horizon).
I’m not really sure what point you’re making with it, though. We could start renting out oversize closets and spare rooms as separate housing, and people do, but that’s not generally regarded as a good solution to the housing crisis, and in fact is fairly illegal. We could start building more smaller houses, and as far as I can anecdotally see are, but that’s still building houses.
I’m getting at the point that we need to heavily incentivize people to move out of too much home, into appropriate sized housing for their current situation. Families need more rooms than couples. Just because you USED to have a family doesn’t mean you should be allowed to keep that same amount of space after they move out.
There is enough housing right now for everyone to have a reasonable amount, we just need to give people who have an unreasonably large amount a reason to get the fuck out.
Ah, but you’re not accounting for rental income, or equivalently the rent you won’t pay if you’re buying. People need to live somewhere, legally speaking, and legally speaking will keep paying more until it’s a profitable asset for the owners again.
Rents are tied directly to housing prices. If the price of housing goes down, so do rents. There can only be so much of a gap before renters just tell landlords to fuck off and buy their own place because it’s significantly cheaper.
The current rent prices are a reflection of the house prices being high, current house prices are not a reflection of rent prices being high. That distinction matters. House prices are high because they are profitable investments (even when sitting empty in many cases). Take away that profit, and house values with take a swan dive off a cliff.
You say it’s because there’s limited land, but the limit isn’t actually what you think it is. Vancouver has a lot of land, enough for millions of more people at density levels similar to cities like Paris or Tokyo. The problem is that it’s not available because people currently live there in detached homes that they refuse to sell because there’s no incentive to do so. The longer they hold it, the more money they make for retirement, and it doesn’t cost them anything more than they already paid to just stay.
Presumably they get some kind of income, right? They still eat. You mean a tax break just working individuals, then. That’s kind of the same as making the house tax 65+ only, except disabled people and similar will also get swept up.
I mean, some of their pensions are technically counted as income, but you’re right, I’m talking about income from jobs not pensions or other investments. It shouldn’t be age based at all, since there would be plenty of younger people who don’t work in the traditional sense either. Lots of people live off investments, family money, etc. and they shouldn’t get the break on taxes.
This is a nitpick since it has nothing to do with our topic, but I would also like to point out that you don’t buy something just because it appreciates, like you implied. Lots of assets do, and they do it in varying percentages that always end up matching the volatility (or actual existential risk if it’s that kind of investment) they experience on the way. The rational move is to buy whichever ones make sense given when you want to actually have your earnings available to spend (investment horizon).
What are you talking about, buying appreciating assets is literally what investment is. Given that you also need somewhere to live, a house is WAY too lucrative an investment for most people to avoid. If they can afford it, they buy it, that’s why home ownership is still at like 65% in Canada, a historically high percentage. I have purchased 3 houses with my wife over the years (consecutively, not at the same time) and each time we’ve bought as much as we were allowed to by the bank. We’ve made over $750k in the last 14 years in appreciation alone, in addition to the couple hundred grand in paid equity we’ve got, and that’s exactly why housing is unaffordable for everyone. That should never have happened.
The houses should have been cheaper because appreciation should have been either staved off by taxes in the first place, or taxed away.
The other thing is that wages shouldn’t have gone up as much either, because it wasn’t needed to pay for housing. Making everything else cheaper too.
Right now all the money that home owners make is coming from somewhere, and that somewhere is workers who are the only ones who actually produce value to be taxed.
Rents are tied directly to housing prices. If the price of housing goes down, so do rents.
Plus expenses of running the property. Those are relatively small right now, but wouldn’t be in this scenario.
You say it’s because there’s limited land, but the limit isn’t actually what you think it is. Vancouver has a lot of land, enough for millions of more people at density levels similar to cities like Paris or Tokyo. The problem is that it’s not available because people currently live there in detached homes that they refuse to sell because there’s no incentive to do so. The longer they hold it, the more money they make for retirement, and it doesn’t cost them anything more than they already paid to just stay.
Yeah, if we could make it denser overnight that would be a great option. Actually, even gradually it’s where we need to go. I’m not sure if I mentioned that Calgary abolished single-family zoning in the last year. Buying lots hasn’t been the problem so much as labour, and just everyone trying to time interest rates, but I dunno, maybe it will be.
Lots of people live off investments, family money, etc. and they shouldn’t get the break on taxes.
Sure, but a lot of them already are in the lowest tax bracket and owe nothing to start - especially the ones on government programs, which you skipped over. It’s worth considering that if there’s any inflation that happens as a result they’re in trouble, so maybe you want a negative tax as well.
What are you talking about, buying appreciating assets is literally what investment is.
It is. There’s a vast number of choices of investment, though, and housing is not the fastest growing.
Given that you also need somewhere to live, a house is WAY too lucrative an investment for most people to avoid.
Less “lucrative” than “more convenient”; a mortgage kind of forces you to save. It’s also been pushed as a cultural ideal. I’m not that rich, but if I was I’d still rent rather than buying, because I’ve always been a borderline-problematic saver anyway. What little I’ve scraped together is in an index fund.
We’ve made over $750k in the last 14 years in appreciation alone, in addition to the couple hundred grand in paid equity we’ve got, and that’s exactly why housing is unaffordable for everyone. That should never have happened.
Congratulations on living in Vancouver or Toronto. Assuming that means it doubled, it comes out to almost exactly 5% per annum. Meanwhile, the stock market has gotten 10% over the last century.
I’d be curious to find out if these stats take into account the prevalence of secondary (or even tertiary) suites, especially the unofficial ones. Officially the place I live in is a single family home, originally designed for a family of 4. My family of 3 lives in about 700sqft and there’s another family of 4 living in about 1000sqft upstairs. Do the stats count us as 1 household? I’ve never been sent a census form to fill out, I don’t have a legally distinct address or seperate utilities. I know many people in similar living arrangements, how are we counted in the statistics?
It’s StatsCan, so a household is defined as all the people living in a single unit together. It usually comes down to, if you share a kitchen with the other people, you’re considered 1 household. If you have separate kitchens, you get a separate census to fill out. Five roommates in a house next to a university would be 1 household for the purposes of the census which is completed every 5 years.
Right, but I guess my point is how would statscan know if a house has 1, 2, 3, or 4 units if they all share the same official address? Tax data? Driver’s licence/service cards? And as for the census, how is it accurate if only one of the households in a multi unit house gets one?
Either way it’s irrelevant to this discussion, because the article you linked didn’t use statscan data:
Most data was curated from a select number of sources: Japan Statistical Yearbook, European Housing 2002, Australian Bureau of Statistics, Canadian Home Builders Association, Infometrics, US Census.
There’s enough bedrooms in this country for every single person to sleep in.
This would be a very useful stat for us all to have if you can back it up. I’d also be interested if it is still true of individual provinces.
So, I don’t think this exists as a discrete statistic, but here’s some math to back it up.
Housing units in Canada https://www150.statcan.gc.ca/n1/daily-quotidien/230116/dq230116d-eng.htm Approximately 16.4 million units in 2021
Bedrooms per dwelling https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?LANG=E&GENDERlist=1%2C2%2C3&STATISTIClist=4&HEADERlist=20&SearchText=Canada&DGUIDlist=2021A000011124
This one is a bit harder because the stat only collects 0 (studios) 1, 2, 3, and 4 or more. If we average it out assuming a studio also counts as 1 bedroom (which seems reasonable to me) and only assume 4 or more equals 4 exactly (just being conservative here) then we get an average number of bedrooms per dwelling of 2.7 bedrooms.
16.4 million homes x 2.7 bedrooms per home = 44.28 million bedrooms
Even the latest Canadian population in 2023 is 40.1 million.
That’s enough rooms for every single Canadian to have their own room, and doesn’t even need to account for couples sleeping in the same room. That means every couple could have a spare bedroom for an office or guest room and there would still be enough rooms for everyone.
Thanks for math, appreciate
Montreal had rent control for a long time and renting only became a problem when the bubblification of real estate got imported to Quebec from the rest of Canada.
Renting only became a problem when it became a problem elsewhere… oh… well then it looks like it didn’t work well did it.
The Canadian rental market, famously a victim of rent control.
Who said anything about the Canadian market having tried rent control?
Plenty of other places have tried and failed at it though.
Ah yes, the Anglos made you price up your own real estate. /s
And what, exactly, are the long-term problems? The most common one I’ve seen sited is that they don’t maintain properties, but there are solutions to that. Economists just don’t seem to be willing to discuss anything that isn’t some kind of private market solution.
“We can’t do anything that reduces landlord or developer profits” is trying to solve the problem with both hands tied behind your back and a ball gag firmly in place.
Nobody builds new rental properties that aren’t profitable. I dunno, would you, if you had that kind of money?
If I were a government? Yes. Because housing people will have far reaching benefits that go beyond short term profits.
No, if you were a potential landlord.
Rent control implies private landlords, so you can’t just say you wouldn’t become a landlord.
First, it’s Cited, not Sited.
Second, I think you misunderstood me. I’m advocating for removing their profits almost entirely, or at least the portion of profits attributed to the increase in land value that they had no part in improving.
I just think that rent controls are a stupid way to attempt to do it because they don’t apply to new units and they often have loopholes. Rent controls can also exacerbate the problem where new units get rented for much higher prices, to try to compensate for the fact that they won’t be able to increase them over time. There definitely isn’t enough supply to stop that issue happening.
We need:
-limit 1 house per family
-serious rent control
-4-storey apartments built owned by the public and cooperatives
-Stronger renter protections
-Aggressive tax on empty properties/units
Vacant House Taxes have been tried throughout Canada and are generally ineffective. They are just a distraction.
The main reason why they don’t work is fairly obvious: Why would someone own property to keep it vacant?
Sure, there are some people with vacation homes, or second homes where they frequently visit (heck, I might have to get an apartment where my office is located now we’re being forced to return to the office). Oh the Urbanity has a great video where they point out the vast majority of “Vacant Homes” are either students who don’t permanently live there, in the process of a move, under renovation, etc.
Thankfully, off of Lemmy people seem to get this, and we’re all talking construction and rezoning now.
I think people who think about housing critically get it, but unfortunately I don’t think most Canadians get this, either on or off Lemmy. It’s too easy to see “1.3 Million Vacant Houses” and think that’s a solution for the Housing Crisis.
I’m not used to having less political bullshit here, but I guess it could be regional.
At the federal level they’re mostly doing tax breaks for potential owners, and subsidies for builders.
Aggressive and escalating.
The longer you leave a residential property vacant, the higher the tax rate becomes.
Speculating on residential housing needs to become costly - more expensive than making it livable and available for people to live there.
I think we also need to discount and ease new construction - NIMBY bullshit shouldn’t be allowed to prevent densification and we either need direct subsidies or material subsidies of construction materials.
When new builds are all mcmansions from developers with deep, unethical, ties to politicians it doesn’t really help much either.
Looking at you Doug Ford.
Can you explain what you mean by
-limit 1 house per family
Many of the times I’ve heard this sentiment, it’s been to either ban Mom&Pop landlords, or ban rental houses completely. These options seem to benefit potential homeowners by screwing over renters. I’m not sure if you mean something different?
“apartments built by thr public or coops” is right there. Don’t look at a package proposal and treat each part of it as unrelated or judge it in a vacuum.
I am fully supportive of public housing and coops, but that doesn’t explain how a “limit 1 house per family” rule would work or what it’s intending to achieve. If you or @Sunshine@lemmy.ca want to expand on that you can even explain it in the context of a whole system, I’m happy to hear it. I am a policy wonk and just want to understand this proposal.
You’re probably just going to get flamed here. Most political people (and activists for that matter) are not policy wonks.
They’re probably thinking a ban on landlords, as currently legally defined, basically.
That’s a lot of 4-story apartments, since that’s the main thing that will actually get built under this scheme. I guess it worked okay in the USSR, but Soviet citizens definitely did complain about the lack of other options for living arrangement.
as much as your typical canadian city subreddit complains about homeless encampments?
Probably not - social criticism had to be subtle or the KGB would have words with you. The theme makes it’s way into various works of art, though, like Enjoy Your Bath.
I think we need a rental tax credit. Whether it’s partial or fully tax exempt, doesn’t really matter. If every renter was reporting their rent payments on their taxes it would be impossible for landlords to dodge their own taxes, thereby shifting the tax burden where it belongs.
A rental tax credit would likely result in money laundering schemes. For example you’re a Mafia boss and you purchase a building with very expensive appartment rents and people that you pay to “pay” you the rent. Then that money is magically clean and tax free
I don’t see how this would make money laundering for organized crime any easier than it is today, the tax would just be shifted to the landlord side (likely at a higher rate since they’re probably in a higher tax bracket) and off the tenant.
Right now the tenant earns money, pays income tax on that money, pays rent, and the landlord pays taxes on that money (if they’re honest and report it all) but can claim their mortgage interest as a tax deduction.
I think the tenant should be able to claim some portion of their rent as a tax deduction. It would require an official record of rent paid, which would keep the landlord honest. I’d say the mortgage interest on a rental property probably shouldn’t be tax deductible either, but even still this would have the biggest impact on those large private landlords that are often what you’d call slumlords.
Edit: I’m obviously not an expert on taxation or housing policy so if I’m wildly out of touch I’ll accept that, I just think it’s kind of bullshit that the government subsidizes the mortgages we pay for our landlords with the money we paid the government when we worked for it.
Like how Donald Trump does it?
Fwiw, rent control is fully insufficient - what you need is a completely massive supply of affordable housing built, owned and operated by the public. Nothing short of this will make a dent
Also prohibit the use of houses for
scalpingspeculation and investmentThis is only really a thing in a paradigm of housing scarcity. Can’t speculate on houses if houses are not abnormally rising in prices year over year.
The housing scarcity is the root cause, and is most effectively addressed by the aforementioned method
De Beers enters the chat
Non purpose built for rental homes should be limited to one per person. Any more than that should be hit with cumulative tax rates for each home past the first until such time as it is no longer profitable to hoard them.
Not saying people can’t own multiple homes. It just shouldn’t be so disgustingly profitable. If it’s not profitable, prices adjust accordingly.
So problem will never be solved then. Far too much vested interest in the status quo from existing landowners.
Nobody is going to build “affordable housing” unless you like living 10 hours commute from major cities. And as soon as someone builds a bullet train to shorten the commute to an hour the prices will skyrocket.
I’d advise you to avoid defeatism. This is a policy that has historically been implemented in various countries, and it can be done again if pushed for enough from the voting population.
Step one is identifying the correct solution, which we’ve now established. Step two is to spread the word about it.
So I’m going to put it a different way that you absolutely won’t appreciate but is the truth.
I’m a homeowner (single detached) that has a significant mortgage. Anything that happens to lower prices is going to negatively impact me so I don’t want change to bring property prices down now, but to have them go up as high as possible so I can sell down the road and make money.
That’s what you’re dealing with. It’s not defeatism, it’s people actively voting against and impeding stuff that will go in the direction you seem to think people want. Many do not want change in that direction at all.
Preparing for downvotes from those who don’t like cold hard truth.
Right, so I think it’s important that you understand that I’m in the very same boat - I have a mortgage and declining property values affect me quite negatively as well.
We can’t let that be a reason to perpetuate this system that leaves so many homeless and so many more in what essentially amounts to indentured servitude in the face of ever-increasing housing costs.
We’ll probably have to do some form of soft landing for the average person with a mortgage in order to not make the transition a disaster for them, but it still has to happen.
I’m actually shocked that the Financial Post said something positive on rent control. This is some alternate universe stuff. It’s typically neolib drivel.
im just sick of ppl listing rooms on craigslist for $800-1000 :/ esp when they title it misleadingly as a whole suite
We have rent control in BC (I think, unless I misunderstand), but I’d be willing to ease the restrictions a bit in exchange for vacancy control. I’ve only been in my current place for 4 years, but if I had to move (renoviction or personal use) I’d be looking at almost a 150% increase for something comparable. I know I’m not alone in that. I could handle a 10% increase per year if it meant I had the flexibility to move if I needed an upgrade or my landlord was simply being an ass.
So it won’t be profitable to build housing? Good fucking luck with that.
