There is only one mechanism that both reduces rent, and increases housing supply that I’ve heard of. Taxing the shit out of the land value (not the property value) a.k.a. Georgism.
The problem with this is that it WILL reduce the cost of housing which isn’t what our leaders actually want. They won’t say that part out loud though. This is because people want both affordable housing for our youth and people starting out, and they want retirees to be able to cash in on the value of their home.
You CAN’T have both things. If the market was flooded with $300k houses then the value of everyone’s house would plummet because why wouldn’t you just buy a $300K house instead of a $1M house?
I don’t know much about georgism, only that people who advocate for it online tend to present it as a silver bullet for too many things and that makes me suspicious that it’s snake oil. Like I don’t know the band, but the fans are kinda sketchy.
Totally fair. I think it’s just terribly unlikely to ever happen, and the ramifications aren’t really understood.
It amounts to wealth redistribution at the end of the day. Tax the land at a really high rate and redistribute the tax to everyone equally. This is precisely why it won’t take hold. Too many people have invested in land speculation (which is where most real estate investment profits come from) and it would tank a lot of peoples savings and retirement plans - but so would anything that delivers on affordable housing at scale.
So I at least don’t think it is a silver bullet. The obvious downside is that a lot of retirees who were counting on using the proceeds of selling their house to fund their retirement or end of life care would be absolutely fucked by it. Retirement homes are really expensive. It’s a choice though. We either decide to hurt the retirees who can’t work anymore, or put the pressure onto the youth and others starting out who have the ability to dig out of this mess.
When I bought my house I paid $330k for everything. Now the land alone is worth more than that. We’ll never see affordable houses again until the cost of land goes down, and Georgism is the only path to that I’ve heard of. I am not sure if this is something we should do or not.
Why are things like housing coops and other kinds of off-market housing (eg council housing) not a solution to affordable housing? Georgism to me sounds like too many hoops jumped to protect private ownership, when social/municipal/public ownership is a more straightforward solution.
And on the other end, Canada is big. There is still a lot of space to go off into the boonies and construct new transit oriented towns.
If done at massive scale then yes that would also work, but I don’t believe the Canadian government is willing to go there either. It would truly need to be a huge scale to be able to bring housing back to affordable levels.
I think that is a second best solution, but would take a huge investment from our government.
It would still tank a lot of people’s retirements, because at its core more affordable housing means people can sell their houses for a lot less.
At its root I think Georgism is actually quite socialist. You are effectively saying nobody really owns land anymore, but instead have to rent it from the state for the value that you would get if you rented out just the land.
So this government will know this, see the youth giving up on them in favour of the same cancer going terminal in the USA, and ignore it.
Sounds good.
Let’s be very clear here: HOUSING IS THE RESPONSIBILITY OF THE PROVINCES.
As well, PROPERTY TAX (TAX ON LAND) IS THE RESPONSIBILITY OF PROVINCES.
So if by “this government” you mean the Carney Liberals you’re right in the sense they won’t do anything about this — but the reason for that is they can’t. That’s not their Constitutional role, and the levers they can pull in this regard are minimal (and mostly revolve around either mortgage insurance, regulating the financial sector, and dolling money out to Provinces).
If you’re upset about housing, you should be upset at your Provincial Government, not the Feds.
The federal government loosened LMIA requirements, increased immigration, created a surf class the UN described as modern slavery. That all directly affects housing for Canadians who fight for finite land and jobs, as we fail to invest in modern infrastructure like high speed rail to make it sustainable.
One year we brought in 1.4 million people, the US brings in 1/4 that per year and has 10x the density , so 2.5% on a per capita basis.
Agreed on all counts. Additionally, living wages need to be paid with “casual” no hours jobs disincentivized (I.e. full benefits for all workers). Rent is more and more of people’s income, and it’s not solely because rent is rising although that is a giant part of the problem.
Still, I’d ultimately want decommidification, but literally anything that will actually ease the problem is good in the meantime.
Pretty sure they did say that out loud though.
I’ve heard them say it, but then quickly walk it back with phrases like how of course they are for affordable housing.
Note that this isn’t a liberal, conservative or even NDP or PPC thing. I haven’t heard ANY of them propose anything that would actually make housing affordable at scale.
If you’re heard any different please point me to it.
Isn’t that period exactly when developers stopped building new dedicated rental housing and put us into this hole we’re currently in?
The article states that CMHC saw no difference between rent controlled and non-rent controlled markets in rental starts, but ignores the fact that overall rental starts dropped.
Short term gains, for long term pain.
What we need is Land Value Taxes, short term pain for long term gain. Unfortunately there just aren’t enough people willing to vote away the current system.
We also need to fix our zoning laws. They prevent many different types of developments that could result in more units available and better revenue for our cities, so they stop getting bankrupted
See strongtowns.org and not just bikes comments on this issue like in this playlist:
https://www.youtube.com/playlist?list=PLJp5q-R0lZ0_FCUbeVWK6OGLN69ehUTVaThat won’t hurt, but it won’t fix the issue. There are places with little to no zoning that have gone up in value just as fast as everywhere else.
Japan has practically zero zoning, and yet Tokyo is still more expensive per square foot than any Canadian city in terms of the core area and that’s with a population that’s in decline. They built tiny to keep things barely affordable, but theres no reason why Canada should need to go anywhere near that level of density with the amount of land we have even in just the reasonable parts of Canada.
@[email protected] You’re on fire today!
Anyone who is evidence-based as opposed to ideology based needs only to look at every single jurisdiction where rent controls have been enacted, to become a vociferous opponent to rent controls.
Rent
Controls
Do
Not
Work.Not over the long term, and definitely not for new tenants.
[citation needed]
- San Francisco
- New York
- Literally any other city with rent control
New research examining how rent control affects tenants and housing markets offers insight into how rent control affects markets. While rent control appears to help current tenants in the short run, in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood.
Over the long term, rent control has never seen more positive benefits than negative ones, regardless of city.
Rent controlled properties create substantial negative externalities on the nearby housing market, lowering the amenity value of these neighborhoods and making them less desirable places to live.
https://iea.org.uk/media/rent-controls-do-far-more-harm-than-good-comprehensive-review-finds/
- However, 14 out of 17 studies found that rent control leads to higher rents in the uncontrolled sector.
- 12 out of 16 studies found negative effects on housing supply, while 11 out of 16 studies found negative impacts on new construction.
- 15 out of 20 studies found rent control leads to reduced housing quality and maintenance.
- 25 out of 26 studies found rent control reduces residential mobility.
- All 14 studies examining the issue found rent control leads to misallocation of housing.
https://financialpost.com/real-estate/rent-controls-hurt-rental-supply
We reviewed the studies cited by the author and found they all unequivocally demonstrated that rent controls contribute to a slowdown in rental supply, thus hurting the very people that rental advocates intend to help.
[…]
We were again surprised to discover that the IJHP paper painted a completely different picture. The authors said “more restrictive rental market legislation generally has a negative impact on both new housing construction and residential investment.” They concluded that the “received wisdom among economists of a negative construction and investment effect of rent controls seems to hold.”
https://capx.co/rent-controls-never-never-work
The issue with rent controls is not that they are novel or radical. The issue with them is just that every time they are tried, the results are exactly what the Economics 101 textbook would predict. They lead to a decline in the supply of rental properties, a decline in housebuilding rates, a slowdown in tenant mobility, a misallocation of existing properties, and a decline in the quality of rental housing.
https://www.economicsobservatory.com/does-rent-control-work
This study also sheds light on an important behavioural response to rent control by owners of rental properties: landlords substituted to other types of real estate (such as properties exempt from rent control). This lowered the housing supply and shifted it towards less affordable types of housing, leading to rents rising at an even higher rate.
This finding is largely consistent with the predictions of basic microeconomic models: rent controls lower the price of housing and at this lower price less housing is offered (Glaeser and Luttmer, 2003). Housing quality is also reduced as landlords can no longer make up losses from renovating properties by raising rents (Sims, 2007).
Reality doesn’t give two shits about ideology, it cares only about facts.
Okay, where’s the data that the tax cuts proposed do better than rent control?
That paper just takes 3 cities and makes no distinction between different types Of rent control
That paper isn’t really that good at saying what it wants to.
@Sunshine The problem with rent control is that it rewards incumbent renters at the expense of new renters. This is not a point that can be seriously debated. However, the housing market, especially over many decades, is influenced by more than one factor, and it’s difficult to separate out the effects. I am extremely skeptical of rent controls; however, there is certainly a case to be made for some regulation of the rental market, in the same way that we regularly regulate public utilities.
@Sunshine In my jurisdiction, there are effectively no real protections for tenants. Landlords can unilaterally raise rents by any amount without limit, with every lease renewal. My landlord has raised my rent every year for the past 3 years, now, and the housing market is so tight that there are no realistic alternatives for non-wealthy people. In a society where most people are living paycheck-to-paycheck, a 90 day notice is all it takes to evict for no cause.
Ahhh, that’s why NYC is a bastion of affordability…
and San Francisco
I also love that someone downvoted you for pointing put how this has worked out for others. “Boo this person and their flagrant use of facts! That’s not nice!”
What facts? Your pure speculation?
??? What part is speculation?
San Francisco and NYC both implemented rent control decadea ago and are famously some of the most expensive places in the US to live.
