What would be the ideal housing economy?

What’s ‘fair’ when it comes to housing?

Should you be able to purchase a home in the town where you were born using only income from an average local job? Or would efforts to bring a level of equality to the buying side unfairly take gains from those wise or lucky enough to have bought at the right time in the right place?

A recent report from San Francisco says that the average millennial can only afford 135 square feet of housing, the lowest buying power in the country.

We’re assuming numbers for Vancouver wouldn’t be a whole lot more hopeful for millennials wanting to buy a home.

But these are numbers for San Francisco and Vancouver – there are a huge number of cities in the world that have better options for most any subjective criteria you could name: culture, food, climate, etc.

If you’re priced out, what’s so horrible about moving and exploring new options?

In the first world, we’ve had the right conditions for a rising housing market for more than a decade now – prices have gone up all over, in some place more than others.

Is this ‘fair’ to those left out, who didn’t have the ability at the right time to buy?

On the flip side is it fair to those who stretched and saved every dime to purchase a home to have people wishing for it’s value to drop?

If you were king of the universe and could control the market what would be the best case scenario not just for you, but for society and the economy as a whole?

 

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patriotz
Member

Simple. The ideal housing economy is one where there are no government policies that encourage malinvestment (i.e. speculation, underutilization) in RE:

– No government support for mortgage lending.
– No property tax deferral.
– No homeowners grant.
– Deeemed income taxation for any person or entity owning RE and not declaring appropriate income.
– Better protection for renters so nobody feels they “have to” buy.

With regard to San Francisco, those figures are not really relevant anyway. San Francisco City has only 1/10 of the metro population, and has about the lowest % of kids of any city in the US. Of course it’s not going to be affordable to the ordinary person. But do note that ownership costs are not way out of line with rents. It’s just expensive, and for good reason.

patriotz
Member

High debt loads hurt Albertans amid increasing joblessness

No problem, they can just sell their houses to pay off their debts… right?

would-be buyer
Guest
would-be buyer

@patrioz – I would add, abolish the capital gains exception on primary residences. Why should your shelter be tax-free? Let’s face it, if the government doesn’t want people to lose equity in their homes because it’s their biggest “investment” and “retirement savings plan”, then tax it accordingly so it’s not traded like a commodity.

Royce McCutcheon
Member
Royce McCutcheon

@3: You also have to allow write-offs on losses then, no? I could maybe see a cap on the exception amount but not a total end.

bullwhip29
Guest
bullwhip29
a not-so-happy new year for investors as asian mkts collapse, trigger circuit breakers, follow thru selling continues in europe and n. america http://www.theglobeandmail.com/globe-investor/inside-the-market/market-updates/at-the-open/article27990798 more and more it looks like the bankster crooks were doing anything and everything in their power to fend the selling off until the book was officially closed on 2015. glue, duct tape, whatever it took. those that didnt make a mental note of where things are really at back in august and take advantage of short term strength in the mkt are probably going to be in for a very rough year. it is long overdue. i have said time and time again, in times of global financial mkt turmoil liquidity vanishes in a puff of smoke, markets seize up and/or close altogether and the average consumer hunkers down and stops spending esp on big ticket… Read more »
bullwhip29
Guest
bullwhip29

http://evaluebc.bcassessment.ca/ working about as well as the cda line this morning…lol…

space889
Member
space889

Hmmm….a lot of Canadians seem to like the biggest shithole in the world. But what do they know? They are probably all a bunch of commie loving locusts, and tax dodgers, unlike a true patriot red blooded BPOM here.

https://en.wikipedia.org/wiki/Canadians_in_China

Bizznitch
Guest
Bizznitch

Went to one place in Victoria on the weekend. Pretty solid looking house, other than the roof, and the fact that the kitchen ceiling was sitting on the floor of the kitchen. Oh, never mind the mould throughout the house, and the water pooling in the basement, which had flowed down from the roof. Oh yeah, they wanted just over $400k for this place. Just insane.

space889
Member
space889

@patriotz – Deemed income based on RE owned. That’s excellent. Love to see some of the old geezer boomers pay their fair share, living in $3M Dunbar houses.

space889
Member
space889
If you believe in free market then there should be no gov’t support for housing loans, city bylaws favoring particular type of zoning, housing style, etc, etc, etc. Basically let free market determine its course and all bubbles will burst eventually anyways. Once you start believing intervention is necessary and the “experts” knows what best, then it’s a slippery downhill slide towards communism that’s going to be very hard to climb out of. Off course, pure free market would also result in monopoly as well. And the bears on here would still be complaining about foreign hot money and bad bad corrupt foreign rich people. Btw, renters already have a lot of rights. When it takes months to kick out a non-paying renter, it’s the renters who got more protection than landlords. Heck, a bad renter can totally wreck the… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

Dosanjh: The silencing of the white men of the West

BY UJJAL DOSANJH, SPECIAL TO THE PROVINCE

http://www.theprovince.com/life/dosanjh+silencing+white+west/11628454/story.html

pricedoutfornow
Guest
pricedoutfornow
I don’t disagree that housing should form part of a solid lifetime financial plan. The whole purpose of housing is (or should be) that you are able to pay off your housing during your working years, so that you can live rent-free after retirement, when there is less income to live off of. But we seem to have lost sight of this fact, and many people are overpaying for housing in hopes of becoming “rich” (but how can one be wealthy from housing if they never sell, I wonder?). A buddy called me yesterday to tell me he’s bought a new house, but keeping the old one as a rental-crazy to me considering the new one is likely over $1 million, and the old one could be sold for about the same, so why not sell and live rent-free? Equally… Read more »
space889
Member
space889

@Bizznitch – What’s the land value?

crabman
Guest
crabman

If I were in charge, I would adjust policy to keep housing reasonably priced based on fundamental metrics like price-to-rent ratios. When prices get too high, I would put restrictions on foreign buying, tighten lending standards and increase supply. When prices fell too far, I would do the opposite.

Central banks have a target for inflation, and take action when the rate deviates from 2%. We could do the same for housing when P/R gets out of the 15-20 range.

Bizznitch
Guest
Bizznitch

$387k

Tim
Guest
Tim

Sooo…China, eh?

bullwhip29
Guest
bullwhip29
@ #8 probably not worth that unless location is prime. tons of liveable, if not nearly new homes (ie. <5yrs) in the mid 400's all over victoria and surrounding area. assessments in many areas of the island actually dropped this year and have literally gone nowhere for many, many years. life on the island totally different than the mainland. only thing that fixes this is if another 10 lane bridge and/or tunnel is constructed from mainland to island at a cost of $10B+ or $25B+ if you include bullet train. unless govt really goes off the deep end and/or some friendly SWF with the audacity to change the rules to fit their needs (at everyone else expense) and more money to burn than they know what to do with (and not a care in the world about the consequences) steps… Read more »
pricedoutfornow
Guest
pricedoutfornow
Has anyone ever looked into a system like Whistler’s housing agency? From what I understand, you can buy a place there in certain properties, but they are very strict about who can buy-you actually have to live in Whistler and show proof of a job there. The properties seem pretty reasonable, when I looked there were townhouses for sale for about $360k. The key is there won’t be any speculation in these properties, because you can sell, but only to someone else who proves they live/work in Whistler, and when you sell, the price won’t be more than the CPI per year, plus 1% or something like that. This seems like a pretty good idea, it would encourage regular people to move there, they can own their own house, and they have a chance of paying it off during their… Read more »
Bizznitch
Guest
Bizznitch

Bullwhip29: Try find something liveable (SFH) for $400k in Victoria. Lots of delusional people here trying to flog overpriced, potentially asbestos filled dives which were build in ~1950.

Royce McCutcheon
Member
Royce McCutcheon

“Why isn’t Vancouver progressive enough to do something like this?”

You didn’t see it then, because things weren’t out of hand and people didn’t feel the need to install this. You won’t see it now because:

Record % of people participating in market.
Record high employment in real estate and related industry.
Record high prices indicating either massive windfalls for long-time market participants or life-changing debt levels for newer participants.

There is VERY little will to make changes. Any corrections to the market will come in spite of general public will, not because of it.

If we’re going for completely inappropriate paraphrasing of an album title that dealt with a far more serious issue: It Takes a Region of Hundreds of Thousands to Hold Us Back.

space889
Member
space889

@pricedoutfornow & @crabman – so basically you are advocating for gov’t controls on housing prices. Price control have a dismal history of working properly as intended without unintended consequences.

By artificial restricting prices, I don’t see how it encourages builders to build more housing to meet increased demands. Unless you believe gov’t should get into the construction biz and build new housings as well?

And restriction on selling your properties? That doesn’t sound very free to me. In fact, it sounds downright dictatorial.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
Jimmy
Guest
Jimmy

@Bizznitch

“$400k insane”?? You must be joking. If it’s this listing, that would be the deal of the decade.

http://www.remax.ca/bc/victoria-real-estate/na-1286-filmer-rd-na-wp_id133106573-lst/

7300 sq ft lot, 1960 house (solid), end of cul-de-sac in one of the best areas of Victoria. If someone gets that for less than 500, they stole it. The land value is well over 400. New shingles are cheap too.

squeak
Member
squeak

Headline:
What would be the ideal housing economy?
What’s ‘fair’ when it comes to housing?

Not being an economist but a mere “biology problem solver”, here is my take to these loaded questions.

I will say it is UNFAIR, when those who have saved, scrooged, sacrificed for 20 or 30 years, done everything by the book, duty fully paid their TAXES, done the “right thing” and find they not even remotely can afford to buy a home unless their mom/dad/childless aunts/uncles,grandma/-dad will make them winners of the “croak lottery”.

What kind of society is this??

What will be the “ideal” housing economy?

Again, no being an economist (but still of some value to society: economists get cancer/heart disease too..) I would say, I really don’t think this is a rocket science question, they know what to do.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
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