One of the main problems people have with this is “housing costs “, what’s causing the housing problem there. Surely its not just the immigrants that are to blame . Canada has swaths of land, it definitely does not have a space issue. It has plenty of resources (major economic driver is natural resources) , no resource issues either . What exactly is causing the housing price to stay so high compared to income .
It's zoning which forbids the construction of any denser forms of housing than single-family detached houses in the vast majority (like, ~90%) of the land in most Canadian cities. And more broadly an insane amount of bureaucracy and friction that developers have to go through in order to get a building approved. In Vancouver, they are literally tearing down apartment buildings and replacing them with multi-million dollar mansions, within walking distance to downtown, because it's no longer permitted to build apartments in the neighbourhood and the buildings are end-of-life. Check this map here, all the yellow areas are zoned for houses (luxury mansions in this market) only https://maps.vancouver.ca/zoning/.
This (https://www.google.com/maps/@49.2632824,-123.0709435,3a,82.3...) is across the street from Commercial-Broadway station, the busiest skytrain station in Metro Vancouver at the intersection of the two major lines. The lines were constructed in 1986 and 2002 so they've had a good 37 years to densify the area. It's the same story in every city outside of Montreal and Quebec City.
Then there's the many ways that Canadian homeowners benefit at the expense of everyone else from subsidies. Unlike in the US, capital gains on primary residences in Canada are completely tax free with no limit. That incentivizes people to invest as much as possible into buying as much home as they can. Then, in some jurisdictions like Ontario and BC, owner-occupied homes are actually charged less property taxes. In other words, renters are subsidizing homeowners. Then, in some provinces like in BC, you can actually apply to defer paying property taxes entirely until you're dead at which point the estate pays the balance. Further, homeowners with a home worth less than about 2.125 million, and you are 65 or older, you are eligible for a grant of $1045 per month discount on your property taxes simply for being a poor downtrodden homeowner. Being a homeowner also gives you the right to vote in every municipality that you own property in. So we have a municipal politics in which property owners are given more of a voice than residents themselves. Absolutely fucking disgusting
> Then, in some jurisdictions like Ontario and BC, owner-occupied homes are actually charged less property taxes. In other words, renters are subsidizing homeowners.
I’ve owned in both and I am not sure what you are referring to. Residential mill rates don’t seem to distinguish between owner occupied and not. The only thing I can think of that resembles what you are talking about is the extra tax on vacant homes or extra tax in some municipalities on secondary homes?
> Then, in some provinces like in BC, you can actually apply to defer paying property taxes entirely until you're dead at which point the estate pays the balance.
There’s interest that applies too right? It is essentially a loan from the municipality and I think it also gets paid if you sell before death. I agree that it is totally bizarre that BC offers this.
> Further, homeowners with a home worth less than about 2.125 million, and you are 65 or older, you are eligible for a grant of $1045 per month discount on your property taxes simply for being a poor downtrodden homeowner.
Yup, this is ludicrous and a self-serving item by and for boomers. I think this is per year though - not per month.
In Hamilton, purpose built rental apartment buildings have a way higher mill rate than condo buildings (even when individual units are rented out) or single family houses. Tyranny of the single family homeowner majority.
Which part are you saying isn't true? It most certainly is. In Canada, the capital gains exemption on principal residences has no limit. In the states, you start paying capital gains after 250k or 500k, depending on whether you are single or married. I think you can roll your gains above that into a new mortgage to avoid or delay paying the taxes, but I don't know the details.
No, the land immediately surrounding the urban area of Toronto is some of the most fertile and productive farmland on Earth, the really cheap land is several hours drive north and almost entirely rock/muskeg/etc. and much colder.
Without having numbers, we'd just be armchair economists. But there are a number of things we could look for.
- Everyone wants to live in the same places. From what I understand, Toronto is the elephant in the room in Canada. It's the #1 and almost everyone wants to live there. Also, most of Canada's farmland is below the 49th parallel. Next up are Vancouver and Montreal. Vancouver is hemmed in by mountains and floodplains so you can't just build everywhere. There may be a local version of this as well.
- Plain old demand outstrips supply. Y'all are building housing like crazy in Vancouver, compared to the Bay Area, but folks who've lived there a while tell me that the place was discovered after the Olympics. Someone else mentioned zoning, which may work with this point and the previous point, but we don't know.
- The business / investor class is relatively static. In the naughts, there was this idea that software developers should not be paid more than X, and that the only way to move up was to become a manager. Despite that, salaries crept up because of competition from finance, until the collusion between Jobs and others was exposed. Is there some wider version of this in society? I don't know. In Oregon, non-competes only apply to people up to a certain level of income, so this sort of thing may be subtle.
- Property taxes are low but income taxes are high. This would favor investing in real estate rather than the labor market.
- Immigration for skilled labor is difficult. This would depress average incomes, especially if the immigrants you are losing are the sort who tend to use more services.
- Infrastructure / building costs are expensive, e.g. if the cost of infrastructure is subsidized through housing any way. Canada's topography is not as blessed as the U.S. It is not lacking for resources, but the only region of Canada where it's easy to transport said resources, without significant capital investment, is in the Toronto area. In the U.S., if you want to ship grain, you just float it down the river. That's super cheap. And then how do you get it to population centers? Most of Canada is big and spread out, and the rivers run north in many parts too. I imagine that in a lot of it, you have to build roads, and it's hard to build roads to all of the places. This restricts the actual amount of land that's available for settlement.
So yeah, someone with a LOT of time and experience doing econometrics could go and quantify these and other things, if the data is there. They may need to gather data themselves.
