We built this city on real estate

From a Vancouver Sun article about shifting tax burdens for the province posted by New Junky:

The convention comes on the heels of a business taxation report that suggests provincial and federal government decisions have had negative financial implications for local government.

The report by an expert panel also suggests the province doesn’t have any more money to dole out, Moore said. But he takes heart in a recommendation that the province work with municipalities to find alternate forms of funding to provide services.

“We really feel there hasn’t been a lot of cooperation,” he said.

Delegates’ resolutions include using development cost charges to fund projects such as recreation centres, fire halls and flood mitigation. Moore said other suggestions will focus on grants and shifting existing taxes — such as income, corporate and sales taxes — from the province to the municipalities, where they originate.

Moore noted changes in everything from improved workplace standards in fire halls to cameras in jail cells and rifles for RCMP vehicles have a financial effect on local government.

“We have to pay the price with no revenue coming with it,” he said.

It seems that local governments are becoming increasingly dependent on Development Cost Charges.

It seems like a bad way to pay for essential services like fire halls. How are we going to pay for these things after all the real estate development stops/slows because of a real estate crash???

Are city councils going to approve real estate development projects that are bad for the community simply because city finances are addicted to Development Cost Charges just to keep the fire halls functioning???

Read the full article here.

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Ralph Cramdown
Guest
Ralph Cramdown

“If someone only cycles (most cyclists also drive) they are actually subsidizing motorists.”

Yeesh. Public roads are a common good. Even if you don’t drive OR cycle, you still benefit from an efficient public road network that allows efficient deliveries of foodstuffs, household goods, emergency services, the mail &c. This goes back to the Romans (and what did they ever do for us, anyway?). Now back to our regularly scheduled real estate discussions.

Ed
Guest
Ed

The answer is simple. Triple property taxes for Non Canadian, Non Vancouver Residents.

If they don’t like it then they can vote against it.

Wait a minute, they can’t vote.

There are so many tax loopholes for foreigners, they don’t have to pay taxes on their gains, this one is one they can’t escape.

http://news.sympatico.ctvnews.ca/local/bc/vancouverites_house_rich_cash_poor_as_market_takes_on_chill/54225ccd

b5baxter
Member

@TNT: Motor vehicles (and roads) are highly subsidized by all taxpayers – about 2 – 6 billion per year (see: http://bc.transport-action.ca/learning/background/transport_2021/cost_report.html). If someone only cycles (most cyclists also drive) they are actually subsidizing motorists.

registered
Member
registered

@74 TNT Says: “Insurance for the cyclists, they drive on the road why do they not pay for the service?”

The old “cyclists don’t own cars” argument, a classic. Right up there with “those who don’t cause as much wear and tear on roads as my car and should pay too”. Good times.

patriotz
Member

@Anonymous:
“Does not The City of Vancouver practice of requiring many condo developers to pay for new public amenities …This practice pushes up the cost to the buyers”

No it doesn’t. The sale price of condos (or any other RE) is determined by what the buyer is willing and able to pay, period.

Is that you Dave?

Contrarian Lemming
Guest
Contrarian Lemming

How much does the city lose by using the outside lanes for traffic during rush hours instead of keeping meter parking available all day?

How much does the city lose by using the center lanes of arterial streets for traffic instead of having parking in the center as well (4 parking lanes total instead of 2)?

How much does the city lose by using outside lanes in shopping districts for parking and/or traffic instead of leasing them out for market stalls and vendor carts?

Streets are intended for the movement of people and goods. Vehicle parking can be better accommodated in off-street lots. When traffic volume is low enough then a lane can be temporarily used for parking, but parking does not take precedence over movement.

HappyRenter
Guest
HappyRenter

@ Turkey “it cost about $3.2 million to install the Hornby bike lane.”

Plus, around $2 million each year due to lost revenue from removed parking meters.

gokou3
Guest
gokou3

@Groundhog: Oops. Turned out the ROI on RE is much more negative due to the high leverage vs. a typical stock investment.

Groundhog
Guest
Groundhog
Good article I like to read every now and then from a “respected economist” in the US from 2005: http://www.cato.org/publications/commentary/no-housing-bubble-trouble Some excerpts: “Although the overworked analogy between housing and tech stocks sounds dramatic, it is quite preposterous. “The downside of this [housing] bubble,” said Mr. Roach last month, is “potentially far worse than that of the equity bubble. Really? After March 2000, the Nasdaq stock index plummeted from about 5,000 to 1,000. Does Mr. Roach mean to imply $500,000 houses might likewise drop to $100,000? Not likely.” “Talk of any national housing bubble is meaningless. Talk of any national drop in home prices exceeding what happened to tech stocks is madness.” “Matching that at the national level would require an unemployment rate of 8 percent 10 percent. If any housing bust zealot predicts the unemployment rate may double, we would… Read more »
John
Member
John

For a comparison of the rest of this year to 2008 – Lehman Brothers failed a week ago today in 2008. In 2012 we just got QE3 (basically a promise of low interest rates for more months to come). If we repeat October 2008, we are in serious poop.

Dog
Guest
Dog

Any examples or data for folks who don’t have $2M to spend?

an observer
Guest

I posted a couple of MOI numbers for higher end SFH’s earlier – here is a more complete list:

Burnaby 1.3M+ 6 sales on 216 inventory = 36 MOI
Richmond 1.7M+ 8 sales on 263 inventory = 33 MOI
Richmond 2.0M+ 3 sales on 153 inventory = 51 MOI
Vancouver West 2.2M+ 36 sales on 701 inventory = 20 MOI
Vancouver East 1.2M+ 7 sales on 195 inventory = 28 MOI
Vancouver East 1.4M+ 1 sale on 93 inventory = 93 MOI
West Vancouver 1.2M+ 19 sales on 498 inventory = 26 MOI

Nice healthy market

VMD
Member
Chem guy
Guest
Chem guy

@Groundhog: Never confuse a press release with a journalistic article. Any bear can put out a press release and I can almost guarantee it will get picked up by AP. The problem is we all like our anonymity.

Dog
Guest
Dog

Seems like the only price drops presented on here are for $2M properties.

jesse
Member

@G: What would Dooowntown Vaaaancouver be without The Business of Being Ian Watt?

Watt’s bravely foraging into bearish territory. Maybe he gets what he’s saying, maybe not, but let’s be absolutely clear about this: if prices are in a bubble of the magnitude bears are predicting — say prices due for at least 40% drops (Watt dabbles his toes into the icy water mentioning 10% lolz) — it is going to be years, not months, of day-old bread and water for die-hard Realtors.

jesse
Member

Twitter says,
“2 critical words explain the difference between Canadian and US markets: Supply & Demand.”

Three words explain the different between Canadian and US markets…

Groundhog
Guest
Groundhog

@G

Ian Watt, making the connection between RE prices and rents.. Well done!

vangrl
Member
vangrl

ya that was my favourite line as well:)

“Mr. Arkan added that these predictions have debunked the myth of inevitable bubble in Toronto.”

Groundhog
Guest
Groundhog

@vangrl

That is about the worst article I have ever read, I had to look at the source a couple of times, just to make sure it wasn’t a joke! Best line:

“Similarly, condo demands and prices will also rise in Toronto according to Genworth. Condo prices in GTA will increase 2.5% in 2013. Mr. Arkan added that these predictions have debunked the myth of inevitable bubble in Toronto.”

We predict condo prices to rise 2.5% next year, therefore the bubble theory is wrong! HAHAHA

vangrl
Member
vangrl
Anonymous
Guest
Anonymous

@skippa_azza: “The catch is that the developer was demanding 10% down now and another 10% next year…Perhaps the developer wants to lock in the buyers with higher down payment before he hits the ground. ”

It could be the developer or it could be the bank financing the project. My guess is the bank is dictating the 20% DP.

yvr2zrh
Member
@skippa_azza: Interesting – – Developer asks for higher deposit in exchange for lower price. Sounds like good risk management. With 20% on the table, the developer could handle more of a downturn. I guess right now you can quantify your losses up front and limit more downside. On a completely separate thought – – We will not have lower sales in October 2012 than October 2008. One other thought is that September sales are running really steady. We have had very constant daily sales volume throughout the month with very few variations in daily sales. We will however come under 2008 – which will make a good headline. Also saw a pretty good price drop today on Van West. Approx numbers were 1.5M sale on 1.9M assessed – larger lot and original ask over 2M. Richmond had a very good… Read more »
Many Franks
Guest
Active Member
Many Franks

Mish peeks over the border again.

Anonymous
Guest
Anonymous

Does not The City of Vancouver practice of requiring many condo developers to pay for new public amenities help keep residential property taxes lower than jurisdictions that pay for new public amenities out of the general public purse? This practice pushes up the cost to the buyers: A detriment to first time buyers (including immigrants/new arrivals to the city), but a benefit to current city property owners, who see the value of their properties also increase as a result (a rising tide lifts all boats). It also reduces affordability.