I'm from Ontario, Canada. I find that it's average people getting into the real estate game as a way of protecting their wealth against inflation and not wanting to play the stock market.

People blame internation investors, but that is only a small problem.

People say we should build more homes, but Ontario already has 10s of thousands of approved homes to build, that have not yet been started. Lack of skilled trades. Developers that are just sitting on the permits as they finish other projects.

I think the simple solution is an extra tax on people that own more than 2 homes. An even higher tax if you own more than 3 homes, and so on. Keep increasing the tax rate, on each home a person owns.

I'm also from Ontario.. I dont think this is the issue at all.

These stories are not referring to "growth in Ontario" but unoccupied multi-million dollar homes in Vancouver with questionable ownership, and paid in cash.

Ontario grows by more than 100k people per year. 10s of thousands of homes/year is losing ground, not even treading water.

Yeah, there is a pretty well circulated blog post [1] explaining this population growth. Ontario just wasn’t ready to see this many people show up.

If anybody doesn’t make SV money and wants a good tip: Consider an early inheritance of your parent’s home if you can build them an addition. That’s what we are doing. Took out a small mortgage to buy out my sister and we are now raising a family with grandma nice and close. We’ll assist her through old age and the entire thing feels very, I don’t know, European I guess?

[1] https://mikepmoffatt.medium.com/ontarians-on-the-move-2021-e...

I used to blame the FLQ and the 1980 referendum. But Ontario has had 40 years to understand the new reality and Montreal _still_ has more subway than we do.

Good advice on co-housing - intergenerational sharing makes a ton of sense for so many reasons.

It's always funny how people come up with increasingly convoluted solutions to a simple problem because they don't want the simple solution. I honestly don't see how this is going to solve the problem. You're just making it harder to express the problem but it is still there.

I’ll bite: what’s the simple solution?

Make housing abundant by building more of it, like we used to.

It’ll be snapped up by all the landlords who have had years of profit taking to build up cash reserves to buy additional stock at a premium. That’s what is happening now.

Let them. This would increase competition and drive down the rent. Making it less lucrative to own property.

Is there a reason increasing supply wouldn't be an easier solution?

Supply is increasing, but if that increased supply gets snatched up by investors then you haven't really increased supply for people who need a place to live.

These investors want tenants. The more supply, the more (ceteris paribus) rents drop. The more rents drop, the lower the rates of return on the home, meaning the asset is worth less and prices drop for those buying homes, too. Supply leads to lower rents and prices.

There's no magic way around these economic laws.

Of course if demand grows faster, then prices still go up. But in absence of supply increases it'd be even worse. Supply definitely helps.

> These investors want tenants

Not necessarily. By the UK Government's own estimate [1], 1-in-20 homes in West and Central London (the more expensive parts) are empty. The story I've heard is owners who use them as a store of wealth safe from their own government's hands (usually Russia, China, or places in the Middle East). They prefer not to have tenants because it adds risk and complexity. I'm not saying this is the true story, but it's what I've heard, and there are definitely lots of expensive, empty apartments.

[1] https://theconversation.com/londons-extraordinary-surplus-of...

It's a fair point that there's some buying for store of wealth, but if that's the problem, address it, not something else. Amsterdam (my city) for example fines for homes left empty, either you live there, rent it out, or get fined. It should be quite easy to set penalties such that the incentive flips. There's plenty of property management + insurance products, to make the task of renting out carefree and riskfree compared to leaving it empty and paying fines.

But beyond that I find it's a minor problem that gets broad attention in the media. There've been lots of studies around vacancies, but they usually don't amount to anything close to the media narrative.

For example, most real estate investors discount their expected rental income by 10% for expected vacancy, because they know tenants come and go, it takes time to find/review/place new tenants, some tenants fall through, and sometimes there's a no alignment between a tenant leaving and a tenant being available on short-term. 8 or 10% is a very standard industry figure people often use for quick calculations. In the US I think the average is about 7% for example.

Now if you find that 1 in 20 homes, in a particular high-class area known for vacancy, of a particular city known for this problem discussed intensively in media/politics, are vacant... that's entirely within normal parameters. That's 5%, and supposedly it's the most incendiary piece of data they could find.

In other words, quite normal figures that have a straightforward solution (>3 or >6 month vacancy leads to hefty pentalties/fines/taxes). I'm not saying the problem is completely non-existent, but it's not that big a deal as people often think and repeat.

I could definitely believe this. Renting something is a hassle and risky. Tenants can easily trash the place requiring expensive repairs. Especially if you don't live close by to have an eye on things.

Also I've heard about apartments and commercial rental space staying empty because people can borrow money against the 'value'. If rents drop that value shrinks. If it sits empty, no such problem. You still borrow against that commercial property that rents for $5000 a month. You were just unlucky finding a tenant the past 5 years.

Yes increasing supply will help, and my suggestions encourage increasing supply over turning existing stock into rentals, but if the new supply is all rentals that doesn’t help owner occupiers much.

What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers.

So for example a property selling for $1m, what would happen if it actually cost a landlord say $1.5m after taxes, higher interest etc, but an owner occupier would still just have to pay $1m. That gives an advantage to someone who actually needs the home.

Edit: Also new supply takes a long time to ramp up, with planning permission, land acquisition, infrastructure, and there are materials shortages (wood especially) and cost overruns rampant at the moment. There is also a potential issue in the quality of supply (see the leaky building crisis in NZ in the 90s, or how small the apartments of the last decade are).

> What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers.

A vibrant rental market is a great thing for many reasons (e.g. look up any study on labour mobility). Not sure why we should have tax advantages for home owners and tax disadvantages for the rental market. It's certainly not equitable to the renter class. And there's tons of evidence that home owner tax advantages flow mostly to incumbent home owners who gain the proceeds from any tax advantages spent to help new home owners get into the market.

I agree with you on this. Though to continue being a socratic a-hole on this thread, I might ask won't subsidizing renters always trickle up? The trickle down seems like a lie.

I'm personally supportive of housing as a human right and think it's worth it and actually stimulating all around, turns out removing stresses of life is good for the economy and people.

I think we did this backwards with stimi. Should have written checks to renters directly. The programs we do have for relief are woefully behind with hundreds of millions outstanding huge red tape.

Giving all renters point blank could maybe help start balancing the scales just a tiny bit.

Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing?

Yes I agree some rentals are necessary given the practical nature of the housing system. But once they become the cause of people being unable to afford to buy their own home it is an issue that needs addressing.

> Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing?

What I'm trying to say is that if the government is manipulating the market by giving tax advantages to the homeowner market, and tax disadvantages to the rental market, that it's not a good way to spend public funds.

Home ownership is exactly cheaper because it's so subsidised through various ta breaks. That makes renting more expensive vis-a-vis owning, which hurts the class of people who can't rent or has a different preference around life (e.g. more transient, more mobile, less fixed, travel for work, seasonal work etc). Then concluding 'oh owning is cheaper, but it's less accessible, let's give even more tax breaks and stimulus and make renting even more expensive' only exacerbates the problem, it doesn't solve it.

I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here.

I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing.

Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups.

I’ve got nothing to back this up, but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property. Yes there are some that want to rent but i seriously doubt it’s anywhere near 1/3rd of the population. I also suspect a significant number of people who prefer to rent would not have this opinion anymore if house prices were not so inflated. Maybe 20-25% but no way the 1/3 of all Kiwis that we are seeing now.

Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand

I’m not calling for elimination of rental properties, just a fair limit on them. In my opinion it’s more important every person is able to buy a single home than every landlord be able to buy as many homes as they want.

1. https://www.stats.govt.nz/assets/Uploads/Reports/Housing-in-...

2. https://www.newstalkzb.co.nz/news/business/mum-and-dad-landl...

> I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here.

It's not, but giving tax breaks to home owners is. Giving tax cuts to home owners and not home renters is by definition not equitable, you'd be favouring one group of people over the other. And if you look at who has it economically better, you'd statistically favour to give tax cuts to the economically better-off group most of the time in almost all countries. If you then, on top of that, tax landlords, it leads to even higher rents and even larger disadvantages for the renter class. That's something you haven't acknowledged, except by saying 'perhaps some of these renters can become owners, too!' -- and that's a fair point, but also wholly insufficient. We know not everyone can, needs or wants to be an owner. We know a rental market is important. Yet the tax manipulation you suggest very much disadvantages the usually poorer-than-average income rental group and favours the richer-than-average owner group.

> I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing.

What policies are you talking about that would deprive people of the ability to own a home?

> Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups.

Just like in the US. Just like in my country in Western-Europe. I'm not sure how large you think it should be, more, less? Should we strive towards anything at all?

> but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property.

That doesn't seem reasonable at all. Would you say the same for example, in a world with a shrinking population, large amounts of vacant land and cheap technology to mass-construct homes? In such a world, property prices would (ceteris paribus) drop over-time. Most people would be entirely disinterested in owning a home in such a world. Why not simply cheaply rent, wherever you decide to live, move as often as you want, as often as your tastes or moods change. Of course this world is hypothetical, but I use it to show that the choice to own a home isn't natural, it's conditional.

Now I agree that in the current market, it's preferred to own a home, because prices and rents are going up, but a mortgage can be more or less locked in. Of course people prefer a 30y mortgage contract at 2k per month and see their home equity triple in 30y, than to rent at 2k and see their rents triple in 30 years, for example. But the point is that this ownership preference is thereby conditional on what the market does. At the same time, every academic study, every central bank etc in the world is saying that low interest rates and tax breaks are pushing prices up. That means you're doing two things. The very condition you have that says 'owning is preferred' is in fact exacerbated by your policy to subsidise owning (with public funds), which screws over the rental market and everyone unable to own (which has always been 20-30% of the population, typically the poorest one). And second, you're favouring this generation over a future generation. That subsidy isn't sustainable, but creates massive wealth for current owners (who bought into a market at $200k homes) at the expense of future owners who are born into a market where a home costs $1 million. That also is poor public policy.

> Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand

I don't really see the big issue with minor property concentration. They all must rent out at market rates. Someone with 20 properties (in a country with a few million properties) is not setting the price levels, but just following them, just like anyone with 1 property would. Would it help if the company or person who owned 20 properties, would instead be 5 companies or persons who owned and rented out 4 properties?

> Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand

I don't see what spending of public funds you're referring to, thereby also not sure how that prevents businesses to grow and expand.

cant build more land

The stupid thing is there is a lot of land still, just need to look at the space between Albany and Silverdale, all rural, and yet it’s only Silverdale north that is being developed. Likewise inner city suburbs have a NIMBY problem where it’s taken ages to finally change planning permission / zoning rules to build up. For example some areas on the shore only recently allowed 3-6 story multiple occupant dwellings. We need not just more housing, but denser (quality) housing in the inner areas. Doesn’t have to be all high rises either- look at Paris and their 6 story height limit. Can be done properly.

why should there be a building height limit? if there is demand, the market with sane regulation(protection from foreign government interference and hostile manipulation) will provide as much housing as needed with as low prices as possible, driven by investors maximizing their profits from land investments

possible solutions for the inaccessible housing issue:

- make it so the people profit from housing prices rising -> minimize building and housing regulation, forbid foreign ownership of the land(like at least 50% should be owned by a local) and by taxes and loans make it more likely that a lot of people will own some land then small percentage of the people own a lot of land, specify that all those rules are going to apply for 20 years(number of years calculated to the point when the land of the nation is owned by the nation and more or less even), and it will be a completely free market afterwards(so investors are not afraid to invest) — in a society with high income inequality will require either high taxes for landowners and/or long time to achive high level of land ownership

- government built, controlled and owned housing for the people(like singopore), ­— has a high potential for corruption, any country with weak institutions has a huge risk to end up without housing and with high corruption, income inequality etc

Agree govt controlled and owned housing is not a good idea in general, private home ownership is the way to go. Exceptions are people on benefits.

> and by taxes and loans make it more likely that a lot of people will own some land then small percentage of the people own a lot of land

This is what my original comment is all about. Except no 20yr limit, any investor who is banking on capital gains from house price increases will have no problem waiting 20 years to sell.

Edit: re height limits, they are important to preserve views and ambience of the local area (London has some rules for instance where St Paul’s cathedral must be visible from certain other major landmarks), avoid too dense housing if it will cause undue issues with infrastructure (insufficient sewage capacity in the area for example), transport on an already congested road etc, and preserve the general vibe of the area (to a degree, people accept gradual change a lot better than a Big Bang approach), also sunlight issues for neighbouring properties. Building a 30 story apartment block in a suburb of 2-3 story houses is just out of place. Building slightly up to 6 stories is not so bad.

Under certain conditions, it can be done. Hong Kong, Singapore, Dubai, and even older cities like Boston and New York prove that land reclamation works.

and more vertical space ;0 I love density we need WAY more in the US if we want to tackle climate catastrophe.