High interest rates are slowing homebuilding, but the worst is yet to come - " The rapid surge in interest rates over the last year is starting to throttle the pace of homebuilding, the Canada Mortgage and Housing Corp. (CMHC) warned... while the slowdown represents a normalizing of building pace compared with the pandemic highs, it’s coming as governments at all levels of the country are attempting to ramp up homebuilding in an effort to accommodate rising immigration levels and keep homes affordable for those struggling to enter the housing market. The federal government, for instance, pitched a plan to double the current pace of homebuilding over the next 10 years in its 2022 budget. But Kavcic called this goal a “bit of a fantasy” in his note on Wednesday, arguing that Canada’s homebuilders are already running at “full capacity."
Posthaste: Canada among countries most at risk of housing crash spiralling into a bigger crisis, say these economists - "Using a banking sector risk tool that measures 35 macroeconomic and financial indicators, Oxford suggests that up to 16 per cent of major economies have an 18 to 20 per cent chance of suffering a housing crisis within the next three to five years, compared to a historic average of just 2 per cent. Canada, along with Iceland, the Netherlands, Sweden and Denmark, is among the five most vulnerable with a 7 per cent probability of this leading to a banking crises within the next year and 18 to 20 per cent chance in the three to five years... Oxford says real housing prices rose by 36 per cent between 2013 and 2021, an increase equal to that seen in the run-up to the great financial crisis. Nearly half of that increase was in 2020-21 during the pandemic, when prices rose at their fastest pace in 50 years."
Canada's Housing Crisis: A Consequence of Aggressive Immigration Policy - "The Trudeau government has taken a perplexing approach to tackling the ongoing housing affordability crisis in Canada. By implementing the most aggressive pro-immigration policy in history, they have intensified the demand-supply imbalance within the country. Consequently, population growth continues to soar, with Canada experiencing its highest ever annual growth rate at 2.7 per cent – an increase of more than a million people – last year. As per David Rosenberg of Rosenberg Research, this strategy is nothing short of bewildering. Rosenberg notes that the crux of the issue lies in Canada's inadequate supply, particularly for residential real estate, which cannot accommodate such immigration-driven population growth without further straining an already-overburdened housing market. The ratio of population to housing stock now stands at 40 per cent above historical norms, as does homeowner affordability ratio. He adds that the Bank of Canada’s (BoC) rate hikes over the past year would have succeeded in lowering real estate prices to more reasonable levels; however, this was thwarted by federal government’s unyielding immigration stance that maintained housing inflation intact. As a result, aspiring Canadian homeowners continue grappling with elevated prices and central bank-induced rates shock... A nation where individuals in their 30s face exclusion from the housing market due to prolonged periods of excessive home price inflation – a direct result of government policy – is far from content. This discontent may manifest itself in the upcoming elections, providing ammunition for opposition parties... homeowner affordability would need to witness an almost 30 per cent drop in home prices merely to revert back to its long-term average. However, such natural correction remains unattainable due to governmental immigration policies that maintain absurdly high price levels. Interest rates would have to plummet nearly two percentage points or incomes surge by 40 per cent instead. The bottom line? Rosenberg notes that this precarious scenario cannot persist indefinitely; with little likelihood that income will increase by 40 per cent anytime soon, what's needed is for the BoC to facilitate lower rates while implementing fiscal and regulatory policies fostering reasonable home prices (regrettably at existing homeowners' expense) and sustainable low inflation (currently hindered by Ottawa’s spending and immigration strategies)."
Liberal housing plan an astounding, yet unsurprising, failure - "If the federal government seems entirely out of touch with aspiring homeowners, it’s likely because most MPs have no personal stake in the matter. Quite the opposite, in fact. Many of them have a vested financial interest in housing being astronomically unaffordable for Canadians younger than themselves. One in three Liberal cabinet ministers supplement their taxpayer-funded salaries with rental or investment income. About 40 per cent of all MPs do the same, according to one analysis of public disclosures. While many have owned these properties for years and not purposefully bought into a national crisis, the same can’t be said for Housing Minister Ahmed Hussen, who by most recent public disclosure count now owns three rental properties. Hussen, who has led the Liberals’ housing file since 2019, purchased an investment property in the middle of the 2021 federal election campaign — an act that would be an obvious conflict of interest if we were talking about any other industry than housing... It’s no surprise so many young Canadians report being not just frustrated, but “furious” when it comes to housing. The dearth of reasonably-priced homes is bad enough on its own, but the feeling that elected leaders are, if not actively working against our interests, perfectly content to reap not just the political, but financial benefits of our pain, is nothing short of enraging. The continued utter failure of the First-Time Home Buyer Incentive (FTHBI) is a perfect example of a program that exposes the federal Liberals’ either incompetence, lack of commitment or two-faced approach to the issue. The Liberals want us to believe the program is a crown jewel of their affordability agenda when it’s clear to just about everyone it’s a complete dud. The FTHBI was proudly announced as part of the 2019 federal budget as a shared-equity mortgage program between first-time buyers and the government, with qualification limits on household income and mortgage size. The government will loan up to 10 per cent of a home’s purchase price, interest-free, in exchange for a capped stake in any appreciation. Since it was implemented a little more than three years ago, Globe and Mail analysis finds a grand total of 385 households have used it in the nation’s most unaffordable markets of Toronto, Vancouver and Victoria. The numbers outside of those hubs aren’t much better. The stated goal was to help around 100,000 purchasers secure their first home. The total uptake: around 17,500 nationwide. Faced with evidence their program isn’t working, the Liberals decided to doubledown and extend it until May, 2025, as though buyers not taking advantage of a totally awesome incentive is the problem rather than the incentive being totally at odds with reality... Barely any first-time buyer within these income brackets can afford to enter the market without parental help or an inheritance. If they happen to luck into one of those scenarios, it’s still highly unlikely they’ll find a property that falls within the FTHBI’s rigid rules. This is all before we even get to the lunacy of trying to solve housing affordability by subsidizing exorbitant values. Every time the government does this with one of their programs, it simply sets a new floor for prices."
Toronto condo residents trying to stop a different condo from being built nearby - "Residents of a mid-rise condo building in Toronto are trying to stop a different mid-rise condo from being erected nearby, ironically claiming that the building is out of character with the existing neighbourhood. A condo board member at 90 Broadview is part of a group rallying against a proposed condo development just down the street, and they're trying to drum up support to fight the development — despite it only being planned to rise marginally taller than a building members of their own group live in. Along with residents of an adjacent loft building at 68 Broadview, a working group initiated and organized by the area councillor, Paula Fletcher, is fighting against the proposed condo plan and claiming that such developments — like the very ones they reside in — are damaging to the city."
Garden suites now legal in Toronto after appeal fails. But opponents still speaking out - "When Toronto city council passed a bylaw in February that would allow garden suites, that sounded like the perfect solution. A garden suite is "usually located in the backyard of an existing house, but separate and detached from the main house," according to a definition released by the city. "The garden suite offered an affordable alternative to add more space to the house where we can accommodate family members who want to move closer to us," Liu said, noting both he and his partner are immigrants and reuniting with family is important to them. Their excitement quickly dimmed when the bylaw was appealed to the Ontario Land Tribunal (OLT) by a group of Toronto residents' associations. This week, the OLT dismissed the appeal, saying it did not have the jurisdiction to hear the application. The group that launched the appeal says it's disappointed. It cites environmental concerns and says developers could take advantage of the bylaw, making housing even less affordable. But the City of Toronto says allowing greater variety in the type and form of housing in its neighbourhoods is one solution to the housing crisis."
Damn investors keeping housing expensive! Clearly anything that gives developers more business makes housing more expensive, because more supply makes housing more expensive because you just bring in more investors
Meme - "SAVE THE ROSELAWN APTS.
131 Lyon Court and 836-838 Roselawn Avenue
TORONTO (YORK), ON
DEAR NEIGHBOURS, FRIENDS,
As I'm sure you are all aware, our homes have been proposed to be demolished. We are essentially being rennovicted so that a condo may be built in place of where we live, eat and share memories with our family for the sole reason that the corporations who own this property can pocket even more money than they already do. At a time where we are witnessing soaring inflation, no rent control and record profits by grocery stores, many of us are barely getting by on what little we have. To be forced out of our homes so that a condo can be built, that the community did not ask for seems almost cruel. This Condo is being built in a location that they must amend zoning by-laws to squeeze this monstrosity in. It is too high the tallest building in the area by a wide margin. It has too many units, takes up too much area as it is. Concerns have been raised over the amount of traffic it will generate, how it will block the sun - creating shadow and increasing winds, how it will eliminate most of the feel to the area and how construction will impact local businesses like the childcare center literally next door, or the neighboring apartment buildings. Yet there sits an abandoned lot at 927 Roselawn Avenue just down the street. While zoning laws and concerns are one thing, it is another to lose your home. In the immediate area, there are not 53 rental units available to the price and standard that we currently have. There is not even a quarter of that available on the market right now. Many of us will be forced to compete for local rental opportunities, and those that can't will simply be priced or forced out of the area. Increasing commute times - if we are even able to keep our current jobs and continue to provide for our families. As someone who has a home and family here, I beg and implore you to attend the tenant meeting May 234, 2023, to let your voice be heard. Our voices be heard. If you cannot attend online or by telephone please at least message the City of Toronto Staff contact for this meeting: Cate Flanagan, housing planner. Her public contact information is: 416-392-4529
Please, help us save the Roselawn and Lyon Court apartments. Help us save our livelihoods, our homes."
Damn corporations and investors buying up housing and driving prices up!
Council votes to permit multiplexes in all Toronto neighbourhoods - "Multiplexes will now be permitted to be built across Toronto after being approved by councillors on Wednesday in a bid to create more housing options. In a vote of 18-7, city council adopted a staff report recommending expanding multiplexes in all of Toronto’s neighbourhoods. “We are working non-stop to get more housing built across Toronto. Allowing multiplexes in our low-rise neighbourhoods brings more types of housing to our city and supports a more equitable approach to growth,” Deputy Mayor Jennifer McKelvie said in a statement. “By introducing multiplexes, we also create the flexibility of our residential buildings and ensure that we have a mix of housing types to meet the needs of our current and future residents.” Multiplexes are low-form housing with two, three or four units in a single building. Staff said while mid- and high-rise apartment buildings have seen growth in densely populated areas, low-rise housing has not kept up with demand... Multiplexes can also be delivered quickly, staff said, as owners will only be required to obtain a building permit rather than official plan or zoning-by-law approvals"
Amazing Facebook comments: "Let's make Toronto a slum instead of solving the core problems. Great idea.", "They have to rezone the neighborhood giving home owners a chance to object and make their case to their city council", "So basically turn neighborhoods into crowded ghettos.", "Wow, Toronto is going to become more of a dump than it already is.", "goodbye established family neighborhoods, hello over crowded transient neighborhoods (but never in the richer parts of the city, only in ours)"
"There goes the neighborhood."
Toronto council greenlights multiplexes citywide | The Star - "The decision is an upheaval of Toronto’s long-standing “yellowbelt” — the roughly 70 per cent of Toronto’s zoned residential land that has been restricted to single-family homes only. That rule system has led to concentrated growth — leaving the city skyline sharp and jagged, with neighbourhoods dominated by either low-slung houses or sky-high apartment towers. For several years, city planners had been mulling a rethink of Toronto’s planning regime to add more “gentle density” — housing options such as triplexes and fourplexes — where single homes dominate... The new framework, as approved on Wednesday, allows new multiplexes to be built up to 10 metres high, or three storeys, as long as the design keeps with an area’s existing “physical features.” In areas where taller buildings are already allowed, four-storey multiplexes may be possible, the new rules say — and where the lot is large enough, the rules allow a multiplex abutting a garden or laneway suite. That would total five residential units on larger lots. Those rules go a step further than the changes mandated by the province last year through Bill 23, which required cities to allow a minimum of three residential units on any property."
Pierre Poilievre | Facebook - "Finally, city hall is getting my message that we must remove gatekeepers to bring homes workers can afford.
My common sense plan:
-Give federal infrastructure bonuses to cities that allow the building of more new homes faster.
-Fine local governments that block new homes.
Bring it home."
Massive 9 tower development that would bring 4,690 units to Mississauga rejected - "Many residents came forward to speak against the proposal during past public meetings. Concerns ranged from traffic congestion, parking, and a lack of infrastructure to support the influx of new residents. This “massive” development would impact the community with increased density impacting schools and traffic, one resident told the committee on May 8. Lucas said a major concern is the shadow the tall buildings would cast on the neighbouring homes. And the proposal does not meet the city’s standards for sun shadow studies."
The answer is never "build more infrastructure", somehow
George Fallis: It's a housing bubble in Toronto, not a supply squeeze - "From 2014 to 2019 the population of the Toronto “census metropolitan area” grew by 7.7 per cent, which certainly increased demand. At the same time, median household income rose 20 per cent, boosting it further. On the other hand, mortgage interest rates, after a slight fall in 2015, moved up steadily up over the period, as did property taxes and insurance and heating costs. As a rough estimate, the carrying cost per dollar of house price rose about two per cent per year. Combining all these influences suggests demand was probably higher by about 18 per cent... If on balance we assume demand has risen by about a quarter since 2014, what would a market fundamentals analysis say should have happened to price? In the very short run, the supply of housing is quite unresponsive to demand. Over the long haul, it can be very responsive. For the six years we’re considering, it’s probably something in between. The costs of labour, building materials and land do rise as supply increases but they don’t rise infinitely. Using estimates of their responsiveness from the economics literature, the market fundamentals analysis predicts house prices should probably have risen about 12 per cent in Toronto since 2014. In fact, they rose 93 per cent. The 81 per cent that market fundamentals can’t explain is likely bubble. This analysis simply assumed a supply response. But what actually happened on the supply side in the Toronto housing market? A total of 230,210 “dwelling units” were completed over the six years. Population had increased by 556,470; assuming household size remained at 2.8 persons, the population increase required 198,740 new units. The supply of new units was more than enough to accommodate the growing population. Moreover, the housing stock was further augmented by renovation and by tearing down old houses to be replaced by larger new houses, both of which have been booming in Toronto. Residential real estate investment, which includes both new construction and renovation, has been a rising share of GDP. There is thus no problem on the supply side of the Toronto market. Of course, more supply will reduce prices slightly, but the Toronto price escalation is not caused by supply problems. Demand is growing steadily, supply is responding, but prices are soaring. What can explain that? If households are bidding more for houses because they believe prices will continue to go up in the future, that’s convincing evidence of a bubble. When prices go up next year, the very high carrying costs of this year will be more than offset by capital gains. Result? You will have enjoyed an increase in wealth"
Don’t buy that house! Your bank account and your country need you to wait | The Star - "A once-in-a-lifetime confluence of factors have conspired to create today’s unnatural housing market.
Interest rates are at near-record lows. Ottawa’s staggering, unprecedented pandemic relief payments have been pouring into the housing market, distorting prices. The first global pandemic in a century has fuelled demand for the kind of COVID-19-safe sanctuary that only a house is thought capable of providing. (Actually, there have been very few reported COVID-19 outbreaks in apartment buildings or condo towers, compared with the many outbreaks traced to house gatherings.) The model of the “ownership society” has always had a grip on Toronto, made more acute by the pandemic. Never mind that there is no scientific evidence that a community of homeowners is more civil than one of renters — or that, in contrast with Toronto, obsession with home ownership does not afflict the people of Montreal, New York, Paris and London, where there is no loss in social status from spending one’s life in rented flats.
The ownership-society model makes billions of dollars for mortgage lenders, homebuilders, contractors, real estate agents and property tax collectors... More than 60 per cent of Canadians polled in March believe house prices will rise in their neighbourhood in the next six months. That’s the highest level of expectations of higher house prices since Nanos Research Group began that survey 13 years ago. “This fear of missing out … is driving people to make decisions they’ll have to live with,” Royal Bank of Canada economist Robert Hogue told Bloomberg News"
The housing boom that never ends already wiped out all the short-sellers - "Today, the buying, selling and building of homes in Canada takes up a larger share of the economy than it does in any other developed country, according to the Bank of International Settlements. It also soaks up a larger share of investment capital than in any of Canada’s peers.Canadians’ mortgages have helped create one of the largest consumer debt piles in the world, and its financial system’s exposure to those loans is twice that of the U.S. With prices already at record levels, Canada’s housing market kicked off 2021 by going into overdrive, posting annual gains of 30 per cent in many communities across the country... What if the bubble doesn’t pop? What if prices just keep going up and up? Their concern is that this would only further cleave apart the haves and have-nots in Canada. In the past two decades, the country’s major cities have posted the worst deterioration in housing affordability among the world’s major metropolises, according to urban planning consultant Demographia. That’s putting what’s traditionally been Canadians’ surest path to middle-class stability — home ownership — out of reach for many people not already in the market and exacerbating the inequality gap.As an ever greater chunk of the economy is devoted to housing, concerns are mounting that there’ll be less room for more productive uses of capital... Toronto and Vancouver have long contended with some of the lowest rental vacancy rates in North America as slow re-zoning processes meant the addition of new apartment stock perennially lagged demand. And when it comes to ground-level homes, the constraints get even tighter. The cities are hemmed in by large bodies of water on one side, and regulations limit urban sprawl... In Woodstock, Ontario, a city of about 40,000 southwest of Toronto, the average increase in home values last year was greater than most residents’ annual income."
Questioning immigration impact on housing is a fair question | The Star
Amazing that this came out in this left wing paper. The laws of economics are racist, after all. Either that or the leftists keep insisting that economics is astrology for dudes
Mississauga residents, council blast 700-unit development - "Queenscorp’s proposal would see 703 new units split across five buildings and stacked townhouses at 4099 Erin Mills Pkwy. in Mississauga’s Erin Mills neighbourhood, where local residents say the project would snarl traffic, possibly endanger children at nearby schools and lower the quality of life in the area. At a May 29 meeting, Justin Colley spoke to council warning the proposed building heights would immediately impact the privacy of the existing neighbourhood and that new project would create “major issues” on surrounding residential roads... “The 703 proposed units will seriously compromise the safety of our children by significantly worsening an already dangerous situation in front of the schools”... Mississauga Mayor Bonnie Crombie, who is contemplating a run for the Ontario Liberals, said the city would exceed those housing targets but increased density would go where it’s appropriate in the city. “We know where density and intensification is appropriate and it’s not in that plaza,” she said. Building heights for the proposed development range from 11 to six storeys... Current zoning allows for commercial uses like retail and restaurants and buildings of up to four storeys for the site, which is adjacent to two-storey single family homes and served by three MiWay bus routes along Erin Mills Parkway. University of Toronto geography and planning professor Karen Chapple said there is often pushback on infill development, but said she was surprised to see such opposition to 11-storey heights. “There's been a good deal of highrise development in Mississauga in recent years and if any site is appropriate, it's an underutilized parking lot on a very wide roadway,” she said. “You would not be making smart choices for the future if you didn't build a considerable density on this site.”... Several residents at the meeting also raised concerns about potential loss of the existing 60,000-square-foot retail plaza on the site that includes a grocery store, pharmacy and ice cream parlour."
Federal government’s impulse to block housing out of sync with priorities of Canadians - "A new front has opened in the simmering jurisdictional conflict between the federal government and the provinces. This time, however, the fight is not over carbon taxes or pipelines, but over where homes can and cannot be built. Since earlier this year, Steven Guilbeault, federal minister of the environment and climate change, has made clear his intention to prevent Ontario from redesignating some land currently in the Greenbelt (a swath of protected rural land surrounding the Greater Toronto Area) to allow home construction. Specifically, the Trudeau government is considering the use of the Species at Risk Act and Impact Assessment Act to slow or even freeze the planned addition of homes in areas adjacent to, but outside of, the Rouge National Urban Park just east of Toronto. The federal government’s motivation appears to be the protection of species that might live near the park, and are protected under federal legislation. The provincial government, for its part, controls land-use legislation including that which created the Greenbelt in the first place. It’s also pledged to enable the construction of 1.5 million homes in a decade, with 50,000 homes slotted for the 7,400 acres of Greenbelt lands it intends to re-designate, on condition that builders show “significant progress” in obtaining approvals this year... Of course, such scenarios are nothing new in Canada and elsewhere. In a now-canonical essay written in 2014, journalist and venture capitalist Kim-Mai Cutler explored the roots of the San Francisco Bay area’s severe housing affordability crisis. Faced with a crippling shortage of homes in one of the world’s most opportunity-rich regions, governments—especially municipal—tend to focus on hyper-local considerations in specific areas, rather than considerations of general welfare, such as growing the housing supply to meet demand and tame prices. She cited Mountain View city council’s decision to block Google from building badly needed employee housing on its campus, arguing that doing so might imperil the city’s burrowing owl population."
Bad news for Toronto’s housing crisis: The Hub reacts to the Toronto mayoral byelection - "I was excited about John Tory’s third term as mayor of Toronto. For the first time in his tenure, he had 1) strong mayor powers, 2) no re-election ambition, so was relatively unconstrained politically, and 3) finally accepted and acknowledged that housing in Toronto is expensive because there’s not enough of it. Specifically, he publicly committed to helping achieve the provincially-set target of 285,000 homes built over the next ten years—approximately 90 percent more than had been built over the last ten years. That’s what you need to get more housing built in this city: an understanding that it needs to be built and the political cover and power to get it done. As we all know, he then swiftly resigned. Bummer. Olivia Chow is now the mayor of Toronto. She 1) promised to not make use of the new strong mayor powers, 2) as a first-term mayor, presumably does have re-election ambition, and 3) has said very little to signal that she understands that housing in Toronto is expensive because there’s not enough of it. Instead, she’s promised to strengthen renter protections, tax speculators, tax luxury homes, prevent renovictions, and build 25,000 rent-controlled homes over the next eight years. Only the last of those promises touches on the problem of scarcity and that in a very marginal way."
Yes, Justin Trudeau deserves blame for sky-high housing costs - "Government gatekeeping adds enormously to home-building costs, according to the C.D. Howe Institute: “Over the period (2011-2021), a single-detached home in Vancouver cost homebuyers nearly $1.3 million more than it would cost to build in a market without barriers to supply. The cost of barriers there is so much higher now because it began its steep rise only in 2015, near the end of the previous study period. The gap in price between construction costs and the market price for a new single-detached home is more now than 60 per cent of the total cost in Vancouver. Homes in the Toronto CMA now cost buyers $350,000 extra over the cost to build, or about one-third of the total cost.”"