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No Surprise. Housing costs hurt low income the most.

No Surprise. Housing costs hurt low income the most.

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Old Apr 22nd 2016, 4:29 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Something has to be done. This housing situation is just out of control.

People paying 50/60/70% of income towards rent does not lead to stability or allow people to save for a rainy day and even just meet their basic needs.

If using the 30% of income financial folks say housing should not exceed, our max rent should be 650 or so. That is just not realistic in a lot of areas. (just using us as an example.)

No simple solution, but some kind of solution is needed.

The US does rentals differently so doubt most politicians would care if Americans had more difficulty buying in Canada.

The US has a lot more dedicated rental housing. Less dependent on individual landlords renting out a condo.

At least in the states I have lived in.
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Old Apr 22nd 2016, 6:41 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Jsmth321
Something has to be done. This housing situation is just out of control.

People paying 50/60/70% of income towards rent does not lead to stability or allow people to save for a rainy day and even just meet their basic needs.

If using the 30% of income financial folks say housing should not exceed, our max rent should be 650 or so. That is just not realistic in a lot of areas. (just using us as an example.)

No simple solution, but some kind of solution is needed.

The US does rentals differently so doubt most politicians would care if Americans had more difficulty buying in Canada.

The US has a lot more dedicated rental housing. Less dependent on individual landlords renting out a condo.

At least in the states I have lived in.
It doesn't really matter who your landlord is, they are basically running a business and are ultimately trying to earn a living. It is all about supply and demand. Reduce the rental stock as it looked like you were suggesting by limiting access which is ultimately what the result would be and rents would shoot up even more.
What difference do you feel it makes if you have twenty landlords in a block of condos versus one- I doubt whether the former will charge you a lower rent, why should they? How is it so different in the U.S.?
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Old Apr 23rd 2016, 4:16 am
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Stinkypup
It doesn't really matter who your landlord is, they are basically running a business and are ultimately trying to earn a living. It is all about supply and demand. Reduce the rental stock as it looked like you were suggesting by limiting access which is ultimately what the result would be and rents would shoot up even more.
What difference do you feel it makes if you have twenty landlords in a block of condos versus one- I doubt whether the former will charge you a lower rent, why should they? How is it so different in the U.S.?
Yes it's still all about supply and demand balance or lack of. With supply being artificially suppressed by planning restrictions and demand being high due to low interest rates, high immigration and overseas investment demand. No solution to the affordability crisis can occur unless supply and demand is brought into balance. Personally I believe a combination of supply and demand solutions are probably required.

However what happens if supply and demand isn't bought into balance and affordability remains at crisis levels?

If workers can't afford to live in an area because of high house prices how does that affect companies? Especially companies that have to compete against overseas competitors? Higher wages might drive a company out of business but you might not be able to recruit enough workers without higher wages. Will the disappearance of manufacturing from high cost inner cities spread to larger and larger areas? Higher wages to pay for increased accommodation costs aren't increasing living standards.

We will see more and more intergenerational conflict with rising house prices helping older home owners whilst hurting the young looking to buy and start a family?

At the moment the only way many can afford to buy a house is with help from the bank of mom and dad. What happens if the happy guaranteed (LOL) scenario of rising wages and rising house prices doesn't pan out?
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Old Apr 23rd 2016, 4:51 am
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by paw339
Yes it's still all about supply and demand balance or lack of. With supply being artificially suppressed by planning restrictions and demand being high due to low interest rates, high immigration and overseas investment demand. No solution to the affordability crisis can occur unless supply and demand is brought into balance. Personally I believe a combination of supply and demand solutions are probably required.

However what happens if supply and demand isn't bought into balance and affordability remains at crisis levels?

If workers can't afford to live in an area because of high house prices how does that affect companies? Especially companies that have to compete against overseas competitors? Higher wages might drive a company out of business but you might not be able to recruit enough workers without higher wages. Will the disappearance of manufacturing from high cost inner cities spread to larger and larger areas? Higher wages to pay for increased accommodation costs aren't increasing living standards.

We will see more and more intergenerational conflict with rising house prices helping older home owners whilst hurting the young looking to buy and start a family?

At the moment the only way many can afford to buy a house is with help from the bank of mom and dad. What happens if the happy guaranteed (LOL) scenario of rising wages and rising house prices doesn't pan out?
I think you're being a bit doomsday here. The market will sort it out (with its invisible hand, ne c'est pas?). Companies will move to lower cost locations where they don't need to pay such high living costs to employees, individuals will decide the cost premium of the attractive city is not worthwhile and move elsewhere, demand will reduce. There is a natural limit to affordability, it gets stretched in global centres with over crowding / small accommodation, long commutes, but there is always a natural limit on what individuals will bear.
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Old Apr 23rd 2016, 5:03 am
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Shard
I think you're being a bit doomsday here. The market will sort it out (with its invisible hand, ne c'est pas?). Companies will move to lower cost locations where they don't need to pay such high living costs to employees, individuals will decide the cost premium of the attractive city is not worthwhile and move elsewhere, demand will reduce. There is a natural limit to affordability, it gets stretched in global centres with over crowding / small accommodation, long commutes, but there is always a natural limit on what individuals will bear.
I'm not really doomsday its just a huge problem :-)

Companies moving to lower cost locations might not mean within Canada. How many Ontario car parts manufactures would move to cheaper (but still high cost) areas in Ontario when Mexico is calling? Something worth taking into account.
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Old Apr 23rd 2016, 9:20 am
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by paw339
I'm not really doomsday its just a huge problem :-)

Companies moving to lower cost locations might not mean within Canada. How many Ontario car parts manufactures would move to cheaper (but still high cost) areas in Ontario when Mexico is calling? Something worth taking into account.
and how would one compete with the Mexican labour market and overhead. A reduction in local rent ain't going to do it. Can you see Canadian labour accepting the same wages as Mexican or Chinese labour, even if housing costs dropped?
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Old Apr 23rd 2016, 9:32 am
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Aviator
and how would one compete with the Mexican labour market and overhead. A reduction in local rent ain't going to do it. Can you see Canadian labour accepting the same wages as Mexican or Chinese labour, even if housing costs dropped?
Where a company sets up has many individual parts, wages are just one factor and for every company their priority is different. However doubling (or greater as has happened) the cost of housing might easily long term require a 30% rise in wages to offset those costs. Adding 30% to a companies wage bill might be the difference between being able to operate profitably in Canada and having to move to cheaper location. Obviously provinces and governments can try and help companies by offering a safe non corrupt environment, low electricity costs etc to offset higher wages. The point is high housing costs don't help.

Last edited by paw339; Apr 23rd 2016 at 9:38 am.
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Old Apr 23rd 2016, 2:09 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Well it makes a huge difference when developers build and operate dedicated rental buildings as this also generally increases supply and keeps things more even. Plus many US citys wont approve new developments without adequate rental stock built as well.

I was only suggesting making it less attractive to invest here and then leave the housing empty and thus of no benefit to anyone but the owner.

Those who invest to rent dont need those restrictions as well they are renting out the unit.

Housing is becomong a dire situation in maby regions and without something being done, more folks will end up in bad housing, no housing, livong in cars as they cant afford rent anymore.

It is what it is and nobody who can change things is willing to do so.

It just gets sickening at times when it takes 2 full weeks of woking just rent a very basic 1 bedroom.



Originally Posted by Stinkypup
It doesn't really matter who your landlord is, they are basically running a business and are ultimately trying to earn a living. It is all about supply and demand. Reduce the rental stock as it looked like you were suggesting by limiting access which is ultimately what the result would be and rents would shoot up even more.
What difference do you feel it makes if you have twenty landlords in a block of condos versus one- I doubt whether the former will charge you a lower rent, why should they? How is it so different in the U.S.?
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Old Apr 23rd 2016, 2:11 pm
  #54  
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by paw339
If workers can't afford to live in an area because of high house prices how does that affect companies?
In the case of London, it doesn't. HSBC, for example, is still a profitable corporation even if the office cleaners commute from outside the M25. It hasn't been possible for ordinary company employees to live close to work in the City for a generation.
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Old Apr 23rd 2016, 2:21 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Now if you have a parent who has a house sitting on land worth 800k to 900k with the house being a tear down, why not offer to pay off the 250k mortgage and in the process encourage parent to title the house over to the child so parent is no longer listed as an owner.

Then get an equity loan or something based on parents house to pay for your wedding, buy 24 acres of water front property and build a house on.

All while parent struggles financially, had no idea the house changed ownership and the other parents child struggles to rent housing.



Guess thats how people buy houses these days?



Wouldnt be a good movie maybe, bases on a true story and it actually happened.

The other child of above parent isnt happy with sibling.


Real Estate seems to just make otherwise good people do shady things and screw over family.



Now question.

House sells 180,000 in 1990.

House is now considered labd only on 1.3 acres and appraised at 900k with real estate agent estimting closer to 950k as what it could sell for.

Is that sort of increase typical?
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Old Apr 23rd 2016, 2:26 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Jsmth321
Now question.

House sells 80,000 in 1990.

House is now considered labd only on 1.3 acres and appraised at 900k with real estate agent estimting closer to 950k as what it could sell for.

Is that sort of increase typical?
In Mississauga, yes. In Dalston or San Francisco, no, prices have risen much more steeply than that. In Belfast, no, prices have fallen. The trick is to buy in Belfast and then to move the land to Dalston or San Francisco.
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Old Apr 23rd 2016, 2:37 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

I did correct it. I missed the 1 in the price so original price was 180k not 80k.








Originally Posted by dbd33
In Mississauga, yes. In Dalston or San Francisco, no, prices have risen much more steeply than that. In Belfast, no, prices have fallen. The trick is to buy in Belfast and then to move the land to Dalston or San Francisco.
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Old Apr 23rd 2016, 2:38 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by dbd33
In the case of London, it doesn't. HSBC, for example, is still a profitable corporation even if the office cleaners commute from outside the M25. It hasn't been possible for ordinary company employees to live close to work in the City for a generation.
You bring up an important point. With carbon taxes having arrived or about to arrive will the commute to work become very much more expensive so everyone will have to live much closer to work?
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Old Apr 23rd 2016, 2:40 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Suppose it dependa on how high the tax is. The carbon tax in BC doesnt seem to have decreased commuters.





Originally Posted by paw339
You bring up an important point. With carbon taxes having arrived or about to arrive will the commute to work become very much more expensive so everyone will have to live much closer to work?
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Old Apr 23rd 2016, 7:51 pm
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Default Re: No Surprise. Housing costs hurt low income the most.

Originally Posted by Jsmth321
Well it makes a huge difference when developers build and operate dedicated rental buildings as this also generally increases supply and keeps things more even. Plus many US citys wont approve new developments without adequate rental stock built as well.

I was only suggesting making it less attractive to invest here and then leave the housing empty and thus of no benefit to anyone but the owner.

Those who invest to rent dont need those restrictions as well they are renting out the unit.

Housing is becomong a dire situation in maby regions and without something being done, more folks will end up in bad housing, no housing, livong in cars as they cant afford rent anymore.

It is what it is and nobody who can change things is willing to do so.

It just gets sickening at times when it takes 2 full weeks of woking just rent a very basic 1 bedroom.
A valid point about property rental companies rather than private landlord/investors. In Britain, the finance minister has just changed the tax code to make it much more expensive for private landlords to operate but exempted rental companies. The move is partly political, but in theory it is also aimed at increasing supply (owned and rental). Whether it works remains to be seen.
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