It’s the end of another work-week and that means it’s time or another Friday Free-for-all!
This is our regular end of the week news round up and open topic discussion thread for the weekend.
Here are a few recent links to kick off the chat, let’s play the blame game!:
–Blame the ALR
–Blame empty homes
–Blame early retirement
–Blame tax dodgers
So what are you blaming out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!
David Eby is definitely one of the most vocal politicians in Vancouver when it comes to issues around housing.
Have you ever wanted to ask him a question?
Now’s your chance. Eby will be hosting an ‘ask me anything’ thread on reddit today at noon (June 22nd)
His first comment on that thread:
I’m looking forward to it. A bit nervous, I’m expecting challenging questions on this important issue. I’ll do my best to answer, or to find the answers for you. I’m also interested to hear suggestions for policy opportunities and what you think needs to be done to respond to the housing crisis. See you then!
Let us know in the comments below if you spot anything note-worthy.
David Eby AMA June 22nd 12pm on Reddit.
There’s a lot of angry young people in Vancouver, people who think they deserve to be able to afford a home in this specific city. A few of the angrier ones would like to make the issue all about race, but I guess if you’re of a certain kind of mindset EVERYTHING can be about race.
It wasn’t always like this. Vancouver used to be a nice small town where the average income would be able to to stretch and afford a local detached home. Wouldn’t it be great to have gotten in at that time?
Maybe not. After all, It’s not these owners fault that property prices have gone up and up and property taxes have nudged up a bit as well.
Fortunately if you’re in this group the mayor of North Vancouver has got your back.
Mr. Mussatto said this week that he would like the province to look into separating single-family houses from condominiums and multiple-unit dwellings so owners of single-family houses could be charged a lower tax rate.
The mayor argues that while the value of single-family houses has skyrocketed in recent years, the value of condos has remained relatively stable. “If you’re a condo owner, your taxes may indeed be going down this year, because condos didn’t go up much or they didn’t go up at all compared to single-family homes,” he told me in an interview. “The bottom line is that there are some people who are getting hurt pretty significantly and I want to make sure that we’re fair with the tax system so everybody pays their fair share.”
Read the full article over at the Globe and Mail, and then if you’re so inclined go back to your racist rantings. That’s sure to be an effective way to change the way things are and get everybody on your side.
Bubble tea pointed out that back in March a study claimed that 10,800 homes were empty for more than a year in 2014.
They reached this conclusion by studying electricity usage, if it remained flat for 25 days the home was deemed to be vacant.
Of course many of these homes could have been occupied by paleo-humans who eschew electricity in favor of a simpler lifestyle. How many condos in Kerrisdale are filled with families huddled under blanket, burning their own waste to keep warm?
The majority of the empty homes in 2014 were apartments — 9,747 — and vacancy rates were highest on the West Side of the city, with 9.4 per cent in the area that stretches from Kitsilano to Point Grey and 8.6 per cent in neighbourhoods that include Kerrisdale, Dunbar and Southlands.
Suggested reasons for the vacancies included a home was bought for investment, was under renovation, the owners were on vacation, the home was caught up in an estate sell-off, or it was being flipped. A home was deemed empty in a given month if the hydro data showed a flat consistent use of electricity for 25 or more days in that month for a year. The findings were not specific to neighbourhoods but separated into five large geographic areas. Basement suites were not included in the study.
Are 10,800 empty homes a negative thing for a city, and If you had unlimited power what would you do to change this situation? Would you opt for incentives for owners to rent out empty homes or a some sort of system to try to prevent them from remaining empty?
CCEC Credit Union is a vancouver-based lender.
Their CEO has the delightful name of “Ross Gentleman” and is interviewed over at BNN where he says that the Vancouver housing market is in a bubble and it’s not if, but when it bursts:
He says they are seeing a number of people ‘trolling’ lenders looking for financing on speculative purchases.
He calls the upper end of the market potentially more volatile and says that CCEC is committed to more conservative lending and tends to focus mainly on primary residences.
The mayor has released a statement reiterating his support for a house-flipping tax saying that without some sort of action the Vancouver economy is at risk:
Gregor Robertson says recent reports and recommendations from banks, organizations, real estate boards and economists has made it clear to him that it’s time to deal with Vancouver’s sky-rocketing real estate prices or the city’s economy could suffer.
On Sunday he released a statement amplifying his support for a house flipping tax as a measure to reduce speculation and a luxury sales tax to help, “rein in the excesses of Vancouver’s housing market.”
“First and foremost, housing needs to be for homes, not just treated as a commodity,” said the statement.
Read the full article over at the CBC.
Lots of young people like to complain about high housing costs here, but do you know why Vancouver is so expensive?
The Mayor explains:
“…Our cultural scene punches above its weight and routinely draws international attention to our theatre, music, comedy, and visual arts. In its first year, we had Canada’s largest public New Year’s Eve celebration. Hundreds of thousands of people year over year come out to watch one of the largest Pride parades in North America.
Patios stay open later, our craft breweries are exploding in popularity, and our food trucks are globally revered. Car-Free Day on Commercial Drive and Khatsahlano Fest on West 4th pack thousands of families on our streets every summer. The PuSh Festival, viff and the Folk Fest get capacity crowds and have lineups onto the street.”
We are pretty much just like London, New York and San Francisco. Read the full write up by the Gregor Robertson over at the Walrus.
Most people in Canada don’t care about the Vancouver housing market, but that doesn’t mean they would be unaffected by a bursting housing bubble here.
Canadian Business argues that what we need is a national regulator to deal with risks in the financial system:
In 2013, the International Monetary Fund called on Canada to create a federal entity with a clear mandate to monitor threats to the financial system. The IMF earlier this month scolded Ottawa for so far ignoring its advice.
The Vancouver house-price surge is exactly the sort of thing the independent agency should handle. It is a national issue: everyone knows who will be called on to clean up the mess if it bursts. The banks would feel it and likely would curb lending. CMHC would feel it because it has insured most of the mortgages Vancouverites have used to buy their inflated assets.
Unfortunately as a politician anything you could do about the housing market would most likely be political suicide. Owners are voters and nobody wants to see the value of their home drop. Read the full article here.
Polozi Scheme posted this link to a post at Ross McKay real estate consultants with the theory that the Vancouver real estate is a ‘currency exchange ponzi scheme’.
A investor seeking to remove Chinese Yuan from China and have it converted into a foreign currency purchases a home in Vancouver. The investor once having the currency exchange authorized and completed for the purchase to take place then offers the same opportunity to another investor who is willing to offset any costs the original investor incurred through paying a high enough price for the same home that then allows the previous investor to “break-even”. This pattern is continued over and over again causing the selling price to raise higher and higher at no risk to the investor, while at the same time offering higher and higher amounts of currency to be exchanged on the rising home price being paid.
At no time is the price paid reflective of fundamental value of the real estate being traded but is being established for ulterior purposes that are not related to normal house price growth.
At some point in time the scheme ends as the last investor is converting so much currency that the benefits exceed even the need to “break even” and the home can be sold at a net loss. When that moment is reached the appearance of sustained house price growth ends and the scheme ends moving the scheme somewhere else.
Read the full posting here.
A recent report out of SFUs school of public policy is generating headlines that are rather extreme:
Foreign buyers crushing Vancouver home dreams as governments do little.
“People recognize what’s going on, and they’re willing to call a spade a spade,” he said, stressing that such views are based on reality, not racism.
His report compiles a number of other studies, including data on home-buying trends, population density, the cancelled immigrant investor program, and American research on the same issue.
Gordon said his report blames Vancouver’s housing crisis on foreign buyers, particularly from China, because “this is where the evidence points, not because of some anti-Chinese animus.”
Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said.
Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn’t happened in Canada.
Read the full article over at the CBC.