We haven't designed or planned for the growth we're undergoing. It is a zoning and civic planning problem, first and foremost, and not a problem that can be solved by direct price manipulation.
If there's still not enough space after these policies are implemented, maybe then we can entertain the YIMBYs' sqwaking.
> YIMBYs' squawking
The huge advantage of the "squawking" which you are unfairly biased against is that it eliminates the profits that these speculators are depending upon.
The rise in prices is 100% dependent on a shortage of housing. If there wasn't a shortage, the market would correct. It may take a year or two of surplus housing to flush out those who are holding on for higher prices and teach them the new reality that they can't depend upon massive unearned gains every year, but it is the only way.
The other advantage of building surplus housing is that it gives people what they want. It stops the hoarding of a few wealthy people and opens up a desirable place to more people. This is nearly as big a benefit as lower prices.
Band aids on far downstream symptoms are not going to solve anything. And people are far too happy to only look at the symptoms rather than the underlying cause.
With a collapse in house prices, this problem is self solving.
- at 0% the price ceiling is infinite, so the price tends to climbs up to infinity, up to affordability, which due to close to zero interest rates is also almost unbounded
- at 2% many vacant houses start returning back to the market since it no longer pay off to wait indefinitely for a greater fool to buy it from you. Price starts to equalize, because suddenly the market starts to clear again
- at 50% of land tax, the only thing changes is that the land price is reduced, all else being equal. In such a market you pay 50% tax on the parcel to government and 50% to the land owner (current leassee).
- At 100% of land tax the price of land is further reduced to almost optimal market clearing price. It is now equivalent to renting the land directly from the government. There is no longer any "private tax" paid to the land owner. The land is now rented only if the acticity performed on it outweights the benefit of the tax. The price is now determined purely based on market terms and actually affordable to many.
The house crumbles down eventually and eg. in Japan the price of a house is 0 or negative (destruction cost) after only 30years. It's the same in the west, but people choose to pretends it's not, because all their net worth is stored in that crumbling ruin of theirs.
All of these attempts are imperfect but more politically accepted variations of land tax.
Won't this be extremely problematic for anyone who can't afford to buy a house?
By making landlording prohibitively expensive, you compel them to sell. They can't sell to other landlords, since the new buyer would incur the same penalty, so the most likely customers would be first time owners or the state itself. The government, free of the landlord's profit motive, could in turn offer these properties to the public at lower prices through long term mortgages with little to no down payment. The weekly repayments would be less than rent, and the occupants would eventually own the property instead of lining somebody else's pocket. I don't know what the precise term for this model is, but I don't think it's unprecedented.
Like I said, this is the polite route. It introduces complexity to avoid stepping on too many toes, and therein lie its flaws. I can certainly think of more direct methods.
Redistribution of the spoils of unearned income is probably one of the leading causes of violence (e.g. civil war, bay of pigs) and the threat of violence is what helps keep those systems in place.
In supply-constrained markets, asset appreciation far outpaces the revenue from rents. So if you charge taxes on vacant apartments, the asset owner may try harder to rent out the unit, but that just increases their profits even more.
When profits from asset appreciation eclipse rent revenues, establishing rent caps does little to eliminate rentier profits. Already, loans are predicated on rents not increasing above inflation, so rent caps do nothing to curb asset appreciation, especially as long as rental units can also be owned (for example single unit detached homes).
Limiting the number of properties that somebody can own does little to force "small landlordism," unless you also ban the ownership of property by LLCs or other organizations, which would also ban many better forms of ownership like co-ops.
The core problem is not the profits, even though that is problematic. Rentier profits just a symptom of the real problem: asset price appreciation due to exclusionary practices. That's what must be attacked head on, with socialization of land use so that when lots of people want to live in an area, they are allowed to, and anti democratic landowners are not allowed to exclude new people. Ironically, the pure landlords are less often against such proposals, it's the rentier homeowners that are often the ones who subvert society and in turn force profits to landlords. Though quite often, these exclusionary homeowners have become "small" landlords too, and doubly invested in keeping our new people to maximize their unearned profits.
If you want housing investments to be less valuable, just build more if it.
I really wonder, why are you so opposed to giving people what they want, which just so happens to also meet BC's climate goals? Multi unit housing is much much better for the environment.
That is basically what happened when I lived in Switzerland. Places were let at reasonable prices, but there was so much competition for supply that your best bet was to find something overpriced.
https://www.pionline.com/article/20180621/INTERACTIVE/180629...
Edit:
>The housing market would look very different if everybody had to live in their property instead of engaging in transparently parasitic activity like speculation/landlording.
Sarcasm on. Yes, I think we should ban renting out properties. Everyone should live in their own property. Sarcasm off.
No sarcasm: I think we should ban renting.
Toronto rents were getting quite high pre-pandemic, but once tourism dried up, and Airbnb unit owners needed to pay their bills they seem to have released a lot of stock. The overall average rent dropped 16% YoY:
* https://www.torontorentals.com/blog/toronto-gta-march-rent-r...
Toronto has/had a lot of international students as well, and there's a lot fewer of those as well.
Meanwhile, real estate prices are up for the whole country: https://www.cbc.ca/news/business/housing-bubble-small-towns-...
From the perspective of a politician this is very good for their career. It's the "fake it", mentality except you never intend to do the "until you make it" part.
[Little Bill viciously kicks English Bob]
It is a convenient issue to misdirect attention to for groups of diverse political leanings. Progressives and wealthy homeowners both can avoid any of the messy realities of needing to permit new housing while pretending as though there's this more politically palatable thing they can do instead.
Having been to Vancouver, the only thing that seems like a joke is the massive amount of land that is reserved only for multi-million dollar single unit homes, and the lack of space where apartment buildings are allowed. Vancouver is beautiful, has great transit, but needs a lot more apartment buildings.