This weeks new column for 24Hrs Vancouver: Mayors can’t afford to ignore housing

Recently, I  shared with you the news of my move from the Duel and why I made that decision-I’m thrilled at the overwhelming support from all of you in this new venture.

Today, I’m happy to bring you my first column as the new civic affairs columnist for 24Hrs Vancouver! Every week, the column will be up online by Wednesday evening and in the paper Thursday morning. I’ll continue to post the links here as well for those who don’t get the paper or follow on social media. And as I promised, I will continue blogging provincial and federal stories here, along with my usual thoughts and photos.

A heaping dose of irony filled me as I contemplated my first civic affairs column because well-known real estate marketer Bob Rennie was on the radio telling young Vancouverites to forget ever owning a single-family home in the city.

True enough, but then Rennie — who’s earned the moniker Condo King for a good reason — went on to say the only solution to affordable home ownership in Vancouver was high-density projects. Lots of them. And fast enough to drive down prices.

Did I mention he markets condos?

It’s not just Vancouver feeling the crunch — last week I read a story of an elderly couple in Burnaby whose apartment building is slated for demolition to make way for more condos. It’s a story being repeated all over Metro Vancouver as investors look to snap up current stock, or demolish and rebuild with little regard to what kind of housing is actually needed…

Read the rest of this weeks column, comment and vote at: http://vancouver.24hrs.ca/2015/05/20/mayors-cant-afford-to-ignore-housing

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12 thoughts on “This weeks new column for 24Hrs Vancouver: Mayors can’t afford to ignore housing

  1. I agree that the system is rotten and all that but that is NOT the problem this time. Not the WHOLE problem, anyway. The problem this time is that 1.3 billion rabid Chinese capitalists generate a helluvalot of money and not much of their excess private income is legal. Even if it was legal, it is subject to confiscation by the government of China on a whim. The money coming to Vancouver is simply the ‘slush’ and ‘hush’ money of the rich and crooked trying to bury it in a safe haven. Vancouver is safe. So long as we sell, they’ll buy. A real solution for the locals might be to let Vancouver go the Sparkle Pony’s (CC) vision of ‘high-end’ and ‘world-class’ and re-establish a more normal market in Surrey/Abbotsford. Major density there will be less attractive to those requiring ‘world-class’. Make another Metrotown in Surrey only so much bigger it is almost another Vancouver. And then again, if needed, another one in Mission. Or something. Face it, Vancouver has ‘sold out’. If you are going to stay there, get used to being 2nd class.

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  2. e.a.f.

    Unfortunately the mayors will ignore the “issue/problem” just like they have ignored child poverty in this province. There is nothing to motivate the mayors and other politicians to “mend their ways”. They keep getting re-elected.

    Canada offers Communist China’s investors a safe haven for their money. There are approx. 35 Million, millionaires in China. that is a lot of people and a lot of money. people living in Communist china want some of their money to be in a “safe” place. that means Canada. We have no laws to restrict them, so they will come. the politicians aren’t going to do anything about it, they benefit, one way or another or their corporate donators do. They won’t even do anything to ensure these investors pay their fair share for having property here. They ought to be paying a higher property transfer tax; have restrictions on what they can buy; pay higher taxes when they sell the property; and pay higher property taxes each yr. they aren’t in the country spending money. They’re back in Communist China, making even more money. Its not that I begrudge them that, its just if you want to buy land in Canada, like here and become a citizen.

    We have seen the premier and prime minister’s representative say they aren’t going to do anything about it. So if people are concerned they ought to remember that when they go to vote. If they don’t, they will find out in the not so distance a future, Canada is being owned by a whole lot of non Canadians.

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  3. It’s an old and familiar refrain, but no one takes the time to connect the pieces of the puzzle, and no one who has connected the dots has the courage to tackle the entire issue.

    Who are the stakeholders in the big picture?

    Let’s face it, we are not building homes for families; we are building homes for everyone but families! Construction provides jobs for workers. Every step in the process of bringing construction materials to the builders generates employment, provides taxes for government, and profits for business owners. Realtors get a piece of the pie, too, When viewed from this perspective, more construction is good for the economy – until we have a recession!

    All this ‘good for the economy’ building creates a glut of housing on the market because the product exceeds the ability of the market – local residents – to purchase the production. As soon as the market begins to slow, prices cease to increase (which is ofter referred to growth, but which is really the devaluing of currency) and the economy is affected. There is less construction, thus fewer jobs in a basic industry, less purchasing power, fewer sales, more layoffs, etc. Is the solution to this problem really more construction?

    What keeps the price of properties relatively stable?

    In spite of repeated recesssions arising from a glut on the market, the price of house does not suffer the full impact of over production. Virtually all real estate is protected from drastic drops by finance. Developers and builders require the support of the financial community to fund projects, whether they are huge complexes and condos or single family housing. Rarely is a home built on a cash basis. It even sounds ridiculous to suggest such a thing should be considered. “Use other people’s money!” Financing is an insurance policy to protect the value of property from falling below the debt held against it.

    What drives up the price of real estate?

    Regardless of what is happening in the economy, real estate prices increase across time. People of influence can create a demand for housing in all kinds of ways including speculation of some new opportunity, immigration, reduction of services in small communities which drives people to the city, and the list goes on. Real estate fees, sales taxes, and legal fees all contribute to the cost of real estate but not to its value. These costs are notoriously detrimental because they reoccur every time a property is sold, and every time these costs are added to the mortgage which means years of interest is added to the total cost of the property.

    Financing is more pernicious than most people are aware. Aside from the fact that interest rates on a mortgage can and do change regularly, financial institutions are permitted to charge fees for giving the mortgage in the first place. Also, financial institutions charge interest even when the initial mortgage no longer exists. They deem to have the right to collect all the interest they would have received even if a mortgage is paid in full by another institution. A borrower must pay a penalty for paying higher payments on anniversary dates to ensure the lending financial institution gets ‘all’ its profit.

    Financial institutions do not risk anything when giving a purchaser a mortgage on a property. They do not give their own money (from profits), they do not use money that people have deposited with them (it’s against the law). Financial institutions create the money for the mortgage out of nothing by having the purchaser sign an agreement to make payments on a regular bases until the total of the mortgage and its compounding interest is paid in full and an offer to turn over to the institution their property if they default on payments. Financial institutions repeat the process every time a property is sold and the purchaser finances the purchase.

    It is the function of ‘financing’ property that causes the price of properties to increase exponentially. Each property sells at the highest price the market can bear. The market will bear an over-valued property when the purchaser is willing to take on the escalated debt. But the market will only bear a near-value price if financial institutions cannot inflate their own profits through over-financing the property. If financial institutions were controlled by governments, as they should be, they would be limited to lending only the amount of the original price plus the cost of improvements. 

    The benefit to the purchaser would be that the price of the property would be tied to its true value. Older properties would be affordable based upon their original price. Young families could start with an older home with reasonable down payments and low monthly payments. Live like the dream promises: Live within your means, save for a rainy day or the future, and if finances allow, move to a bigger, newer, more modern home when it is reasonable to do so and based upon the personal resources available.

    Privately owned homes are better for families, particularly for the children. People will not be constantly uprooted as they move from one rental unit to another. Families are better for the community. They care about what happens to their neighbourhoods.

    The preceding comments are submitted by Liz Galenzoski, Financial Agent for BC Refederation Party.

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    1. e.a.f.

      A little to late. Working people can’t afford homes in Greater Vancouver at their current price point, whether there is a tax or not. Just to afford a family sized apartment or townhouse, you need a six figure income.

      It might help to keep the current prices from rising, and its better than nothing, but really, the time to do something which would help working people, is gone. Now there needs to be a real plan to collect as many taxes from foreign owners as possible. They aren’t contributing to Canada, B.C. or Greater Vancouver.

      When houses drop in price $300K but the list price was over a million, how is it going to help solve the housing problem?

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    2. G. Barry Stewart

      An interesting idea — and I’m surprised to hear that Bob Rennie is also in favour of it. No % was mentioned, though I’d like to see it in the 75% range.

      Would it be province-wide? It might as well be, to take the fire out a hot market wherever it occurs. It’s not likely that a 3-month flip in Lytton, for example, is going to incur much of a profit spike… so a province-wide implementation would be harmless where little growth is seen.

      I’m thinking too far in advance, though. This proposal hasn’t grown legs yet.

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