Landlords unhappy with housing boom

You know all those grouchy bears complaining about the Canadian housing boom?

They might be your landlord..

John Dickie, president of the Canadian Federation of Apartment Associations, said at least part of the housing boom over the past decade can be attributed to the government favouring housing over rental accommodation by providing a much larger subsidy.

“There are a number of rules in the current tax system that amount to massive favoritism towards homeowners as opposed to renters,” said Mr. Dickie Tuesday, adding it’s true for all three levels of government.

In Ontario, the group estimates, municipal, provincial and federal governments provide a subsidy of $2,629 per owner-occupied house, compared to $395 per renter.

“There is a perception among politicians that homeowners vote more frequently than tenants,” said Mr. Dickie. “There is perception in society that homeownership is good and should be encouraged.”

Homeownership rates in Canada have climbed steadily over the past decade and are now closing in on about 70% of households, something Mr. Dickie said “pushes it further than it should.”

86 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
squidgy
squidgy
9 years ago

"All I know is that the financial situation of many friends and acquaintances is more precarious than I’d have ever imagined." Would that be b/c of buying homes they could not afford?? If so, oh f boo hoo, how can I feel bad for those that cannot differentiate between needs and wants? For those that want to play "im better than thou", for those that are so unrealistic to believe that money grow on trees, those that ars sume that housing will always go up in their favour of course, etc etc. Well, it turned. Risk is called risk b/c it is a risk. Being greedy usually includes some kind of risk, and one caan lose. Really, nothing new under the sun, not at all. A learning curve is in order for those that live in bling bling brains. It… Read more »

patriotz
9 years ago

@Anonymous: I thought “Vancouverism” required mixed developments of affordable and luxury housing? No it doesn't. Developers can build anything the zoning allows. You think all those condo developments you get flyers for have "affordable" units? "Affordable" units are designated only in developments where the city is the property owner or otherwise directly involved. Anyway all housing is affordable to someone. If the owner is not willing to sell or rent for what someone is willing to pay it will sit empty. The market does not care that the developer built a luxury condo for some rich person who hasn't showed up. The property is going to have to sell or rent for what someone else is willing to pay. As I said at the outset there is no general rental affordability problem at all, just a problem with individuals and… Read more »

VancouverGuy(a)
9 years ago

2. Migrant labour (to the extent illegal) living in bunk houses is what happens when people try to circumvent the rules. At some point, if your business is not profitable with local labour you either go under or you bring in external labour. Nothing wrong with the former, as it is part of the creative destruction that occurs in capitalism. The problem with the latter is where it is breaking the law. Do not take that as a sign that wages do not correct; it is merely a sign that people try to bend the rules to get around it. 3. Granted it carries with it risks. You can always join the air force. Regardless, an individual who is asking for a public handout should first consider the option of what other good employment is available. 4. The military is… Read more »

service people? what
service people? what
9 years ago

"1. I was not talking about necessarily homeownership, but rather whether or not people could afford shelter. Whether or not people can afford a home is less relevant than whether or not people can afford rent." Point taken. "2. As I noted, to the extent there is no affordable housing in a region for poorer workers the market will correct for that by increasing wages." That is simply not true. An economics textbook will tell you this happens, but the more likely scenario of migrant labour living in bunk houses in Abbotsford and working in chicken barns is what really happens. Or if we look at Whistler, rather than increased wages, we just see people living ten to a room. Or we see 3-4 immigrant families sharing a home in East Van. Real wages (not nominal wages) have not increased… Read more »

VancouverGuy(a)
9 years ago

Devore, Do you have stats demonstrating the affordable housing problem? First, note that when I talk about this issue I am always referring to MIN(Rental Cost, Ownership Cost), because I do not think people need to own, and so out of reach ownership costs are not a social problem. Yeah, they are a problem, in that they are a symptom of a bubble or some form of useless government intervention, but unaffordable ownership does not mean people can't find somewhere to live. The problem I have with the argument that there is a problem with affordable housing in Canada is that people often say things like, "It costs too much to live in Vancouver." As I previously stated, people do not have to live in Vancouver, and no one has the right to live in any location. Local issues with… Read more »

NO - LYMPICS
NO - LYMPICS
9 years ago

77 Sour Grapes Says:

October 25th, 2010 at 10:46 pm

@NO – LYMPICS:

What’s her e-mail….we’ll prank call her.

While you’re at it, could you fax me a pizza?

==========

Sure

Thin or extra crispy

VHB
VHB
9 years ago

Days elapsed so far 16

Days remaining 4

Average Sales this month 119

Average Listings this month 198

Projected sell/list 60.0%

SALES

Projected month end total 2371 +/- 57

95% Conf Interval lower bound 2315

95% Conf Interval upper bound 2428

NEW LISTINGS

Projected month end total 3953 +/- 73

95% Conf Interval lower bound 3880

95% Conf Interval upper bound 4025

MONTHS OF INVENTORY

Inventory as of September 30th 15401

MoI at this sales pace 6.49

Note: This is a simple linear projection of month end totals.

This provides the answer to the question

"What will month end totals be, if things continue

on the same pace we've seen so far this month?"

realpaul
realpaul
9 years ago

US Fed is officially 'giving it away'. Negative yields on treasuries………..where can we all sign up? Getting paid to buy dollars…sweet deal. Ya..dream the good dream …the 'investors' mentioned who are 'buying' the paper is the government itself.. buying its own paper.. obstensively to loan out to a generous retail institution or two……gotta have some available if any one comes through the door…..it must be nice to own a money machine eh Bernake?

http://www.bloomberg.com/news/2010-10-25/treasury

VancouverGuy(a)
9 years ago

Dear servicepeople, 1. I was not talking about necessarily homeownership, but rather whether or not people could afford shelter. Whether or not people can afford a home is less relevant than whether or not people can afford rent. 2. As I noted, to the extent there is no affordable housing in a region for poorer workers the market will correct for that by increasing wages. My point was that the market will provide a solution, either by people moving away or by wages going up, and in reality a combination of both. People often tell me that in the US there would be no food supply without illegal immigrants. I disagree, and note that instead there would be a combination of: higher wages and higher employment of legal workers, an increase in food prices for domestically produced goods that currently… Read more »

Sour Grapes
Sour Grapes
9 years ago

@NO – LYMPICS:

What’s her e-mail….we’ll prank call her.

While you're at it, could you fax me a pizza?

NO - LYMPICS
NO - LYMPICS
9 years ago

62 junius Says:

October 25th, 2010 at 7:07 pm

maybe hate is too strong a word.

strong dislike.

she’s been bullish on RE for a decade and rubbing it in my nose.

I am tired of her calling me the ultimate loser.

+++++++++++

What's her e-mail….we'll prank call her.

service people? what
service people? what
9 years ago

@vancouverguy(a) Well, congratulations on writing one of the dumbest posts I have ever read on this blog. I am a military veteran, and I am going to take a guess and say you have never served in the military. Your suggestion to just "join up" as the only means of home ownership was certainly helpful, and should go a long way to alleviating this bubble. I am shocked you bother to post at all, clearly your genius would be better served at a think tank developing public policy. Why, you must be some kind of modern art masterpiece, just for that, I am going to let you bang my sister! Suppose you live in a town with a car lot of a hundred cars, and a hundred people. Just for you, we will pretend it is a military base, so… Read more »

Renting
Renting
9 years ago

@jesse:

I assume you understand the two are not independent of each other

Yes, from the same post I wrote: "a strong housing sector is good for the economy. Lots of spin off jobs…"

The jobs don't just go to home owners which was my point. The government is trying to create jobs and economic activity not appeasing home owners by inflating home prices so home owners will vote for them.

In the case of the US they produced lots of extra jobs while the boom was going, but now it is bust not only did the boom jobs vanish so did normal housing related jobs that have been around for decades. They borrowed from the future. The same as we have done. We just have not started to pay our loan back yet.

jesse
9 years ago

@Anonymous: "It doesn’t matter what the stats say."

Anecdotes are a far more satisfying gauge of the market. All's I know is only so many homeowners can sell, with sales running at the second lowest rate in more than a decade. The rest — including the tens of thousands of BCers who have already pulled their props off the market in the past few months — have no choice but to wait unless they drop their asking prices.

jesse
9 years ago

@Renting: "The one that will cost the democrats is the lack of jobs not the falling housing prices"

I assume you understand the two are not independent of each other.

Renting
Renting
9 years ago

The reason government favors home owners is because a strong housing sector is good for the economy. Lots of spin off jobs and taxation opportunities when things are booming. Obviously when a credit bubble is created they borrow from the future which will have to be paid back.

The average home owner does not vote for the government in power because their house went up in value. Having a job is more important which was the part the government was trying to address when it pumped the bubble further in 2008.

Look at the states. There is high unemployment and housing is in the tank. The one that will cost the democrats is the lack of jobs not the falling housing prices.

Renting
Renting
9 years ago

I guess I have to ask what is affordable housing? First off owning a place is not a necessity and is it merely a want not a need. Renting is affordable. I quick search on craigs list shows 915 listings in the $500 to $600 range. You can get a brand new basement suite is Surrey with utilities, cable and internet included for a $575 per month (asking price – you may get it cheaper). A person making minimum wage can afford that. It is in a brand new house! A couple both making minimum wage can afford that and live better than the average Vancouver home owner. Many of the listed units that came up are 2 bedrooms. Get a room mate and your rent is $300 each. The ONLY people who housing is unaffordable for are those who… Read more »

Boombust
Boombust
9 years ago

"I am tired of her calling me the ultimate loser.

She sounds like a nasty ditchpig.

Boombust
Boombust
9 years ago

"It doesn’t matter what the stats say. They area I am looking at is falling. That is what matters to me. Period. Its dropped by 10% over the last three months."

Agreed.

I watch the Tri-Cities area very carefully, and the same is true for that area.

Anonymous
Anonymous
9 years ago

@Anonymous:

It doesn't matter what the stats say. They area I am looking at is falling. That is what matters to me. Period. Its dropped by 10% over the last three months.

jesse
9 years ago

The comment in the article about home ownership rates being pushed "further than it should" is a key statement. This is one of the big problems in the US market. Too many people who either are not capable of ownership, or have jobs that will eventually require them to relocate, will not do well by owning. Many will be forced to sell in the coming years.

The long term home pwnership rate is in the mid 60 % range. Reverting to that average means a lot of properties being sold for rental. With around 1 million households in Vancouver area, that's about 50,000 owned dwellings that would need to change hands over the next few years to investors. And guess what class of buyer doesn't buy in flat to falling markets.

Anonymous
Anonymous
9 years ago

@Devore:

"Why are developers choosing to build luxury and high end housing, instead of sufficient quantities of affordable housing for all market segments?"

I thought "Vancouverism" required mixed developments of affordable and luxury housing? Isn't there some requirement for the %age of each development which must be affordable?

Anonymous
Anonymous
9 years ago

@McLovin:

"Prices are dropping in all areas regardless of what the “official” stats say. "

"Thoughts?"

Yes – you're cherry-picking evidence. You think your anecdotal data is more accurate than the "official" stats? Trust me – it's not.

oneangryslav2
oneangryslav2
9 years ago

@junius: Wow! Mom sounds like a real peach. Like BPoM, I'm staying away from short-term prognosticating. I thought that the peak in 2008 was going to be a generational maximum. I sure felt good about myself the next year or so, but this double top has really shaken my faith in myself.

All I know is that the financial situation of many friends and acquaintances is more precarious than I'd have ever imagined.

junius
junius
9 years ago

maybe hate is too strong a word.

strong dislike.

she's been bullish on RE for a decade and rubbing it in my nose.

I am tired of her calling me the ultimate loser.