According to a new report from Rentals, In July, the Canadian rental market hit a record high with an average asking rent of $2,078, marking an 8.9 per cent annual increase.
According to a new report from Rentals, In July, the Canadian rental market hit a record high with an average asking rent of $2,078, marking an 8.9 per cent annual increase.
What we need to do is de-incentivize the commodification of housing entirely. Really make it unprofitable to deal in homes while passing the risk for your “investment” on to the people you’re exploiting.
I’m talking about an outright ban on all corporations, foreign and domestic, from owning single family homes — corporations need offices, not homes, and shell corporations and LLCs don’t even need those. Give a one year grace period, then tax all rental income collected from single-family homes at 100%. Maybe fine them each year too until they shape up.
I’m talking about regulating rental prices on short-term rentals, and capping the annual income allowed from short-term rental units to a value indexed against minimum wage (or preferably the area’s living wage, determined not by any level of government itself but by valid third party organizations).
I’m talking an annual federal tax on properties not occupied full time by the owner or their immediate blood relative. Parent, sibling, or child. Something insane, maybe 400-800% of the home’s property tax. Multiply it exponentially for each hoarded home. Throw in an exception for a second home if it’s far enough from the first (people who own cottages aren’t the problem, and shouldn’t be penalised). But only for the second home — nobody needs two or three or four “vacation homes”.
That’s how we force land-rich boomers out of the housing “market” and get homes into the hands of people who need them, who should have a right to stable housing, who are currently being blocked from the market by vampiric land leeches.
Rental income is taxed at 100%, FYI.
I think carrot works better than stick. Instead of punishing everyone who made an investment, and spending god knows how much money to enforce it, just offer a one time capital gains exemption on any investment single family dwelling that has rental income for more than a year. But make that exemption dependent on the sale going to someone who doesn’t already own a home. (No landlords scooping up extra properties) this puts sellers in connection with buyers and since the seller is getting a big payout they can do the extra leg work. I bet many of the properties get sold to existing tenants.
The government gets an easy cost effective way to free up supply, and it doesn’t actually take money out of their pocket. (Just removes future tax income). Limit the program to no more than 3 years. Anyone who is a casual landlord will jump to get out. Boomers in retirement will jump at it as they will have owned these properties for years. This will free up supply in months, not years. Everyone I know who owns rentals that I discussed this with said they would sell if they could avoid capital gains.
That’s my $0.02. FWIW
You’ve already lost me. They’re the ones trying to treat homes as a commodity fit for investing. Investments carry risk. Passing the cost of that risk to tenants, or giving them a free pass because they’re being forced to play by real rules instead of the rigged game they’ve been taking advantage of, doesn’t sit well with me.
They made an investment that by its very nature exploits people. They should shoulder the consequences of that decision.
That’s because you aren’t interested in solving the problem. You just want to punish people that you think are evil. You would rather throw everyone you don’t like under a bus than actually help the people that need help now. Which is the vibe I get from many people on this site. The problem with what your want to do is it will never happen. There is no support. My solution plays into the hands of those in control but still gets the job done.
At this point I think I’m with Singapore on land and housing being a publicly controlled good
As it stands now our housing market is just an inflation resistant bank for the wealthy
They just named the price they’re willing to rent it at its entirely secondary to their goals and so it doesn’t serve the housing market
This is simply not true. Most of the single family dwellings rentals are owned by regular people. If you think the average person can throw down on a $800,000 mortgage at 6% and pay $8000 a year in property tax plus other expenses just to hedge inflation, you are as delusional as most of the people I’ve run into on this site. Just do the simple math on how much rent you would have to charge to break even on a rental if you wanted to be a land lord tomorrow, then see if you could just sit on a $50,000 loss per year. Jesus. I’m about done with Lemmy. People here are dumb as shit
You think I’m under the impression that people buying homes today as rental investments are the problem? The problem isn’t people trying to buy into the scam today, it’s the people who bought into it 10, 15, 20 or more years ago, have owned multiple homes for years, make their living off the work and money of others, and go about their lives thinking they’re good people as if they’re anything more than parasites in need of excision.
But if you’re going to start name-calling and denigrating anyone who disagrees with you as “dumb as shit”, I question whether you’re approaching the topic in good faith. I’m not going to engage with you further.
None of this was a personal attack and to take it as such might mean you need to reevaluate your feelings on the matter.
Pointing back to my original argument I stated that it was often a inflation resistant investment I’m not speaking of single family homes renting out their bottom half or whatever the case may be.
I’m speaking of those you buy up commercial property with no intent to ever do anything with it because the value of the land will vastly outpace the value of inflation.
I’m also speaking about landlords that own hundreds of properties. While someone in your position is becoming increasingly common it is not the majority in housing scarce areas. There are still a few individuals that own large swaths of land.
There are a lot of policy decisions that got us here. But more mixed zoning, more housing, less landlords has been proven time and time again to fix it and while I’m not sold entirely on the Singapore idea I will say that everyone in my generation is fucking sick and tired of people making excuses about what can’t work while people are on the street dying
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Housing is already controlled by a government body, both implicitly and explicitly. The only thing that holds up the housing situation as we know it is that government body – our collective willingness to recognize and abide by it. If we don’t like it, we can change it on a whim. We are the government.
That’s the question. Why not pick a house you like and move in, its owner be damned? The answer, I’m sure, is because you know the government will soon come and kick you out. By brutal force, if need be.
It takes people like you and me to bring that force. We are the government. If we don’t like housing being a market, why are we bringing the force? It’s certainly easier to do nothing.
Why not complain to them now, then?
This is actually a great idea.
But then how would we generate GDP?
This is fake GDP. Investing in land value is unproductive. Unlike a business, nothing of value is added.
In Canada, spending a million dollars to open a restaurant or found a tech start up is a worse bet than just buying a house. Not to mention these businesses are simply harder to keep open when real estate expenses are so high. This is terrible for our economy and one of the biggest reasons why our GDP-per-capita is falling behind peer countries.
I think their question was facetious.
Hard to tell. Lots of Canadians, including probably our prime minister, genuinely believe that high and rising real estate prices is good for our economy.
@SkepticalButOpenMinded @dubyakay
I wish more people understood this.
Your solution focusing on increasing the supply of single family homes is questionable. Single family homes are incapable of supporting affordable housing markets in high demand areas like Toronto, Quebec, Ontario, and Vancouver, which are where most Canadians live. North America needs more flexibility and capital to support upzoning the housing supply we already have from the overused SFH to missing middle multiplexes, or from those to low rise apartments, or from those to 5 over 1 style buildings, or from those to towers. The rigid Euclidean zoning policies of North America mean that even if all housing stock was privately owned by residents, there would still be a shortage in the high demand places where most people live, leading to continued high prices. Especially because we have so much trouble building quality public transit that would open up more land as desirable for development. High speed rail between Windsor and Quebec City could spread out the demand to existing supply in smaller low-cost cities while providing a boon to those cities’ economies, but Via Rail has pretty definitively shut that down in favor of HFR at this point for cost reasons
This is the only idea aggressive enough to work which is why they will never let it happen
Or at the very least, the focus could go into de-commodifying rentals so that everyone always has a fall-back option for safe, clean, affordable places to live even if they can’t buy a house/condo. Nobody should be seeking profit in a manner that endangers people’s safety.
So what happens to a rental highrise in your policy idea?
Rental highrises are not single-family homes. What we need there are more stringent rent control and to move the majority of such rentals from for-profit property developers to non-profit housing cooperatives.
We could also prohibit property developers from purchasing highrises from each other altogether. You want a new high-rise? Build one. You don’t want one of the ones you own? You get to sell it to a cooperative for a heavily regulated maximum price, and might get to break even.
So Bob sees your tax, looks at the Ahmed family renting his unit. Says “oh crap, uh, Ahmeds, you’re out, I need to put my brother Doug in there to dodge this tax!”
Result: Brother Doug moves from a tiny apartment to living in Bob’s house.
The Ahmeds cannot find another place, because half the Bobs are doing a similar scam, and the other half the Bobs are doubling their rents because they can see they now have a good that’s in even shorter supply and they don’t feel guilty at all for this because they’re now paying triple property tax.
The Ahmeds now live in their car and eat cat food.
You know when the number of rentable units goes down, rental prices go up, right? I’m all for going after people who leave units vacant, and for taxing the income people get from these investments, but taxing rental units means making the rent price worse.
But if Bob moves Doug into his second house, then he’s now either a) exploiting his brother instead of a stranger, which most landleeches are less likely to want to do, or (more likely) b) giving his brother a better rent to avoid exploiting his brother… and is thus making a much smaller profit than when he was exploiting the Ahmed family. And if not, then at least Bob only has so many brothers he can rent to, so the worst kinds of Bob will eventually have to sell off some number of properties.
But the goal of the immediate family exemption is to allow families to help each other own homes that aren’t beholden to some shit stain developer or daywalking asshat. Specifically to let boomer and gen-x parents provide struggling millenial or gen-z children with homes, but I’m sure I could come up with a handful of other semi-likely relevant situations as well.
Back to your example though, the lack of profit he’s now making pushes Bob to sell the place. And because all his landleech buddies are making less and less money per hoarded home, they’re also more likely to be unloading their surplus stock at the same time. And if these people all lose money on the sale of their extra homes as prices come crashing down, fucking good.
And as prices come down, more people who are currently renting because buying is prohibitively expensive are able to stop renting and move into a place they own, this freeing up rental spaces.
Of course I’d also support going much more simple and literally forcing landleeches to give their hoarded homes on pain of prison time, but I figured that’s a little more radical than the general population could ever come close to supporting.
I get your angry, but your comment about housing prices crashing is going to fuck over so many good hard working people that bought houses in the last 5 years. You would subject those people to holding hundreds of thousands of dollars in debt (say if they had to move for work); just to satisfy your need for revenge?
As mad as I am, it’s genuinely not about revenge. It’s about making the prospect of home ownership a realistic and attainable goal for entire generations of people for whom, right now, it’s literally a joke.
Fact is there’s not really any way to both return housing prices to realistic levels and keep prices steady for current owners. I don’t pretend this is a simple problem, or that solving it won’t cause other problems as a result. But in my opinion the problem you’re suggesting is of a much lesser scale than what we’re facing today, and has less drastic solutions. Using the taxes collected from serial landleeches to compensate normal people who need to move during and following the market crash to offset the debt caused by a now-underwater mortgage could be a solution, for example. And fuck knows the banks aren’t innocent in this whole mess themselves, and could probably be forced to shoulder their share of the burden as well.
I agree with you about the pricing. Interest rate hikes should have provided the cooling off period to slowly bring prices down. But we don’t have the supply to allow for a buyers market to take over. I watch coworkers who are late twenties and early thirties signing $900,000 mortgages. They are desperate. So the small number of people who can actually afford homes are taking the small supply even at these interest rates. I made a post up earlier about a way to free up supply, which of course was met with more anger. This whole situation sucks.
Prices are already down over 20% and it IS a buyers market at the moment. The problem is that people don’t have the funds so even though prices are down significantly there are now fewer buyers because people can’t borrow. The elephant in the room is that wages need to come up.
The other way to make things more affordable is to raise wages for the lower 90% of earners.