Zoning Reform Ideas

[smably]

even if you could import the workers needed (which you can't)

Honest question, why not?

 

[Northern Light]

Honest question, why not?

There are a host of issues.

The first is of course any local certifications required to do certain work.

Beyond any union/regulatory nonsense, the reality is that building codes are different in different jurisdictions and products vary too, along with weather etc etc.

So there is the obstacle of whether someone's skill set is directly transferable.

Second, relatively few countries have large amounts of surplus, high-skill labour.in the trades.

There really is nowhere with a vast surplus of high-mast crane operators where we can raid that country's workforce.

Third, language is a barrier. As it stands now, there are many people working in the trades in Toronto for whom English is a challenge. The difficulty is that those people need
to communicate w/other people who don't speak the same first language; especially on large sites.

I can tell you of someone doing electrical work who almost had a very serious mishap because of miscommunication.

Fourth, a lot of people in the skilled trades have no incentive to move, sure we pay well; probably better than many other places; but our cost of living is stratospheric compared with all but a few.

There's also a lot of paperwork bringing in non-domestic labour; and a commitment that generally comes with it.

No one is coming for just one job, on one site, once; and that wouldn't make economic sense for a developer either, generally.

But now, if that person whose going to move is going to do so predicated on long term employment you have to guarantee them pay beyond 'x' project.

Its just not an easy thing to do, and harder to do well.

Its happening now by the way (bringing in TFWs); but its not an easy to do thing, and its not really resolving anything at-scale.

 

[evandyk]

From my point of view, it's a moral and ethical imperative to let people come to Canada, so if you have to balance letting more people in vs building more housing, we should always choose building more housing. There are obviously constraints on how much housing we can build, but let's let the economic/practical constraints limit us rather than stupid rules about neighbourhoods/heights/shadows/etc.

 

[MrGoose]

Its funny, we can look at the same set of facts and draw entirely different conclusions.

Your conclusion is that the problem is housing starts; I would argue the exact same charts above show that the problem is population growth. If Canada reduced its population growth to G7 norms (at or below 0.5% per annum); our housing starts would be just fine.

I don’t know how you can come to this conclusion looking at the data.

Natural population growth i.e. no more immigration period, is 0.2% per annum. Even New Zealand which is growing at 0.2% per year is producing 25% more housing per capita than Canada, and even that rate is only getting them to 2020 levels.

Ideally we'd have enough housing starts to drop housing prices down to the real growth of wages and keep them pegged to the real increases in wages or even lower. Housing speculation should never be considered a viable investment in this country again and the only way to do that is to continually have new housing being constructed, private or public sector.

The labour shortage would then drive wages up; and also investment in productivity which in turn supports greater wage growth.

The surge in population, has served to drive down wages, by goosing labour supply, and in turn reduced investment in productivity because labour is cheap.

Of course, all that cheap labour still needs to be housing.

So you can solve the problem by creating ten of thousands of new workers in the trades out of thin air; making capital mysteriously appear, and at cheaper rates, and by delivering vast public subsidies to lower the cost of housing.............

Or you can cut foreign students back to the level they were at in 2005; (600,000 fewer people); and you instantly create the equivalent of 400,000 units of housing out of thin air, and drive the price of rent and ownership down by ~20% or more.

I prefer my solution.



Except that its not possible, there is no labour supply to do this work; there are willing to loan out that kind of capital at a price that makes any sense, and as long we keep artificially inflating demand, we won't see any reduction in price, even if we could double construction rates. Which again, for the record, we cannot. And even if you could import the workers needed (which you can't) they would then need to be housed, making the problem even worse.

 

[Northern Light]

I don’t know how you can come to this conclusion looking at the data.

I'm at least equally perplexed that you do not.

Natural population growth i.e. no more immigration period, is 0.2% per annum. Even New Zealand which is growing at 0.2% per year is producing 25% more housing per capita than Canada, and even that rate is only getting them to 2020 levels.

Yes, there is a small amount of residual population growth before the boomers begin to depart en masse, but for clarity, the replacement rate of the population to hold steady is 2.1 children per woman.

We are currently closer to 1.4.

I would like to see the entire world down at those levels for a couple of generations so we can bring the number of humans down to ~3B or so, which should leave a vast surplus of housing stock, and radically reduce our environmental footprint as a species.

Ideally we'd have enough housing starts to drop housing prices down to the real growth of wages and keep them pegged to the real increases in wages or even lower.

We differ in our ideals. You want to adjust housing, rather than wages; I would entirely flip that.

Housing speculation should never be considered a viable investment in this country again and the only way to do that is to continually have new housing being constructed, private or public sector.

Finally we agree on a goal; but again we disagree on methodology.

I would legislate a prohibition on investor-owned housing; ban foreign ownership of real estate, eliminate the primary residence exemption for capital gains; lift the capital gains inclusion rate to 100%; prohibit short-term rentals (excluding purpose-built hotels) and finish by banning the sale of any real estate without 25% cash down minimum

That would squash the financialization of housing.

 

[Northern Light]

From my point of view, it's a moral and ethical imperative to let people come to Canada, so if you have to balance letting more people in vs building more housing, we should always choose building more housing. There are obviously constraints on how much housing we can build, but let's let the economic/practical constraints limit us rather than stupid rules about neighbourhoods/heights/shadows/etc.

Its a moral imperative to have slave-labour?

That's a novel argument.

That's what the majority of TFWs and foreign students are to us.

They are lured here under false pretenses and/or the idea of citizenship, generally w/o being told the cost of living here, so they can work at your local Tims, as an office cleaner or a security guard, to keep the cost of living for the upper middle class low, and fatten the bottom lines of large corporations.

By and large we are not bringing in prospective dentists, engineers and coders; and if we were, by the way, we would be taking away a precious commodity from a developing country that can hardly afford to lose such a citizen.

I take no issue with taking a reasonable number of economic-class immigrants; but they represented fewer than 450,000 of the over 1.1M people we added to this country last year.

If you're talking about refugees, Canada took in 75,000 of those, out of 1.1M last year.

The rest were TFWs and Foreign Students for the most part.

*****

I remain confused about the moral imperative argument. If someone is fleeing a war, is peace not preferable? If someone is feeling famine, would be not better off providing food aid and expertise and assistance in agriculture?

 

[Undead]

From my point of view, it's a moral and ethical imperative to let people come to Canada

Yeah that's a crazy take given this:

BoC Deputy Governor Gravelle says high immigration adding to housing inflation

Senior Bank of Canada official urges all levels of government to work together to reduce barriers to home construction

www.theglobeandmail.com

 

[afransen]

Its a moral imperative to have slave-labour?

One could say it is paternalistic to tell would-be migrants that we are refusing to let them come here for their own good.

 

[Northern Light]

One could say it is paternalistic to tell would-be migrants that we are refusing to let them come here for their own good.

I don't think we have any reason to be patronizing.

We should simply set good policy.

 

[Northern Light]

I'm now going to say, this is the Zoning Reform thread, not the immigration thread. We can discuss the latter in the Federal politics thread if so desired.

However, I have found many of arguments made above to be in bad faith, and poorly thought out. As such I may not find further engagement fruitful.

 

[MrGoose]

We differ in our ideals. You want to adjust housing, rather than wages; I would entirely flip that.

I would personally want to increase Canadian wages while at the same time adjusting housing down in absolute terms but I think that adjusting housing down is a blocker for the second.

In my view, the financialization of housing actively takes away from Canadian wages because it sucks up capital that would otherwise be invested into Canadian businesses, which would have increased the productivity of Canadian businesses. As we can see, business investment has been lagging in Canada since 2015, which way predates the current immigration surge. It does much more closely align to the surge in Canadian housing prices that we saw continue unabated since the early 2000s and really pick up in growth around 2015.

This would indicate far more to me that the housing price bubble started to suck up business investment and thus reducing wage and productivity growth first before hyper-immigration began.

This makes perfect sense from the point of view of the individual investor. If you had cash laying around in Canada why would you invest it into a business / buy stocks where your investment might make 5-10% per year, when you could buy up a bunch of houses with that money and be guaranteed to make a profit off of the capital gains and have that investment pay dividends in the form of renters. Thus business investment lags and residential investment surges.

We treated housing as a protected asset class, so of course investors were going to pick up on that and move their investments there.

In my view, what the Trudeau government is doing with the surge in immigration is much more a reaction (and exasperating cause) to an asset bubble than the root cause itself, which is the hyperfinancialization of the Canadian housing market and the perverse incentives around zoning that causes and the subsequent hollowing out of other sectors of the Canadian economy.

This is most salient for me when I look at the Canadian technology scene. We have much much weaker investment into technology startups because their potential is weak relative to just using your venture capital money to buy houses. Thats not for a lack of trying on the governments part to lure IT workers from India and other countries into Canada. The wages are low relative to the US to try and entice businesses to do more technology development in Canada, but ultimately those businesses are capital starved, not that the wages are too high.

Finally we agree on a goal; but again we disagree on methodology.

I would legislate a prohibition on investor-owned housing; ban foreign ownership of real estate, eliminate the primary residence exemption for capital gains; lift the capital gains inclusion rate to 100%; prohibit short-term rentals (excluding purpose-built hotels) and finish by banning the sale of any real estate without 25% cash down minimum

That would squash the financialization of housing.

I think that you have the wrong idea here. I think that there is a need for investor-owned housing, after all there will always be people who would rather rent than purchase, Students, Young people, people who moved etc. And there will always be demand for short-term rentals for vacationers etc.

Instead we should more broadly segregate individual home owners and those investors/landlords and closely regulate landlords to maximize usage.

In my view if you chose to be an individual home owner, then you should have gradated property taxes based on how many homes you own and the order you buy them in. First & second property (for the first year of ownership and or a certain geographical distance away from the first home) would be the base rate or close to it, each subsequent property would be 50% greater than the previous.

So, 1st home pays 100% of the base rate, 2nd pays 150% if within 100km of the 1st home; 110% if further away, 3rd pays 200%, 4th pays 250% and so on.

To avoid escalating property taxes, those who own can register as "landlords/investors" but this subjects them to vacancy regulations where empty units (apartments or storefronts) are taxed if unit remain empty for 6 months or longer, land use taxes that penalize those who leave lots in prime locations empty, tenancy protections, rent controls etc.

I think that there is a balance that we need to strike because we will always have a need for a rental housing market, but we need to ensure that it remains a market where landlords have to continuously invest into their properties to keep them up to date and that it prevents rent-seeking of all forms and maximizes usage of available space.

 

[Northern Light]

We are way past tangential here. Lets leave this topic (within this thread) as it doesn't belong here.

We have a federal politics thread.

 

[Undead]

One could say it is paternalistic to tell would-be migrants that we are refusing to let them come here for their own good.

Many immigrants I know either regret or are ambivalent about coming here; this is especially the case for homeowners and those with good jobs in the professions back home. They sell everything to raise enough money to come here, but have to start from scratch with respect to jobs and property.

This is often the case for people from the second world like the Eastern bloc. Sure, people from much poorer countries might be better off here, but we're not the world's charity.

Moreover, as NL stated, they're seen as cheap labour. I would also add as a cash cow to create more demand for goods and services, including housing. There's no incentive to recognize their credentials and experience. So they end up languishing in menial jobs, becoming resentful and creating a lose-lose situation for both the immigrants and Canada.

As we can see, business investment has been lagging in Canada since 2015

That's almost exactly the year Trudeau began the surge.

 

[Mount Dennis Resident]

Many immigrants I know either regret or are ambivalent about coming here; this is especially the case for homeowners and those with good jobs in the professions back home. They sell everything to raise enough money to come here, but have to start from scratch with respect to jobs and property.

This is often the case for people from the second world like the Eastern bloc. Sure, people from much poorer countries might be better off here, but we're not the world's charity.

Moreover, as NL stated, they're seen as cheap labour. I would also add as a cash cow to create more demand for goods and services, including housing. There's no incentive to recognize their credentials and experience. So they end up languishing in menial jobs, becoming resentful and creating a lose-lose situation for both the immigrants and Canada.


That's almost exactly the year Trudeau began the surge.

Immigrants I know like it here in Canada. Especially the ones from Eastern Europe.

More likely the ones regretting are just home sick.

 

[Undead]

Immigrants I know like it here in Canada. Especially the ones from Eastern Europe.

More likely the ones regretting are just home sick.

And many don't. The point is that it's more nuanced than afransen's original claim of paternalism.