What's the reason for Toronto housing crisis?

[The_Foxer]

Actually the third reason matters most. Globally, investment groups are holding onto trillions of dollars worth of housing with some of it being left intentionally empty. They own so much residential property that it's worth more than the US GDP in a good year. The fact is that housing costs have skyrocketed by design and govts are complicit in it. The IGs buy up homes and then rent them out for rather more than what the mortgage payment would be if an individual had been allowed to buy it.
The govt announcing that it will build thousands of new homes is pointless unless they change the fucking laws to prevent IGs from buying them up.
I say it's by design for good reason. For the middle class home ownership was a way to build equity and wealth. For many it's the only way. But your govt doesn't want that as evidenced by their reticence to do anything about the problem. Did I say reticence? I meant payola. Trudeau bloviating that "housing is a right" is just more of his blowhard bullshit that he doesn't actually mean. It's just sweeet talk for the proles to get their votes.

These IGs have also been instrumental in the removal of rent controls. Nor do they want anyone (but themselves) owning their own homes. You and I and anyone else in the "working class" owning their own homes are in the way of their ability to make even more astronomical profits and they're not going to stand for it.

Building a bunch of housing without changing anything in the laws will simply result in investment groups ultimately getting their hands on it.

Tbere's little evidence to support that. Surveys have been done to determine the number of vacant homes in several markets and it always turns out to be a pretty low number. And that includes reasons other than investment groups choosing to do so.

Consider vancouver, one of the most expensive areas in the country. As you can see, vacant homes are a pretty small hunk of the supply:

Empty Homes Tax reduced Vancouver's number of vacant homes by 36% | Urbanized

Five years after the City of Vancouver rolled out the Empty Homes Tax, the number of vacant homes has fallen by 36%.

dailyhive.com

Further, if we built enough houses they can leave ones empty if they like and it really won't matter. Jack up the taxes on empty homes like bc did and voila - they're helping fund the provincial services while losing money on a slowly appreciating asset. If there are enough homes then there is little incentive for investment groups to buy them up because they won't appreciate in value fast enough to make it worthwhile.

In the end it all comes down to having enough homes. And we don't.

 

[The_Foxer]

Municipal regulations are the main reason there is a housing crisis. You've heard of NIMBY is one reason; permits are difficult to acquire for developers and are often delay for absolutely no reason - (power trip??).

They're definitely a factor. But It's far more complex. How units being built are taxed is a big issue, there's issues with how they're financed, there's provincial regulation and other factors, and now of course there's an unstable interest rate which discourages development in a big way, so we're already seeing housing starts slowing down instead of speeding up.

It's complex, and the feds and provinces need to sit down and figure a few things out and then force the municipalities to get their acts together. At this point we really need close to a 50 percent increase in new home development sustained over many years just to get back to 'barely' enough.

 

[Jinentonix]

Tbere's little evidence to support that. Surveys have been done to determine the number of vacant homes in several markets and it always turns out to be a pretty low number. And that includes reasons other than investment groups choosing to do so.

Consider vancouver, one of the most expensive areas in the country. As you can see, vacant homes are a pretty small hunk of the supply:

Empty Homes Tax reduced Vancouver's number of vacant homes by 36% | Urbanized

Five years after the City of Vancouver rolled out the Empty Homes Tax, the number of vacant homes has fallen by 36%.

dailyhive.com

Further, if we built enough houses they can leave ones empty if they like and it really won't matter. Jack up the taxes on empty homes like bc did and voila - they're helping fund the provincial services while losing money on a slowly appreciating asset. If there are enough homes then there is little incentive for investment groups to buy them up because they won't appreciate in value fast enough to make it worthwhile.

In the end it all comes down to having enough homes. And we don't.

It's NOT just vacant buildings they are responsible for, but most of those are apartment buildings.
I don't have numbers for Canada but in the US IGs own 20% of all the single family dwellings in the country. And that number is growing.

It's also not about appreciation value of the properties. They RENT them out for far higher rents than the mortgage would be if an individual had purchased the home for themselves.

But this isn't just a Canadian problem, it's happening globally despite what the OP states.
There are other causes. People selling their homes in an auction process that drives the price up higher than it should be.
House flippers also don't help.
There's obviously no single cause but it's like death by a thousand cuts. Just some cuts are bigger than others.

 

[harrylee]

 

[The_Foxer]

It's NOT just vacant buildings they are responsible for, but most of those are apartment buildings.
I don't have numbers for Canada but in the US IGs own 20% of all the single family dwellings in the country. And that number is growing.

THey're talking about all home units which includes apartments, and as you can clearly see the number is shrinking. The number was growing for a little while there leading up to about 2019, but now its beginning to go down. It only works when theres a long term radical increase in property values, which we've seen for a few decades. It does NOT work when housing is going up at a more sedate rate like 5 percent a year or the like, like it's supposed to.

And as vancouver shows it's easily crushed with a tax if necessary. If you have enough homes the small percent that are vacant for whatever reason (there are many reasons, not just investment groups) is a null issue.

It's also not about appreciation value of the properties. They RENT them out for far higher rents than the mortgage would be if an individual had purchased the home for themselves.

Umm.... .if they rent them out, they're not vacant.

And the reason they can rent them out for so much is that there are TOO FEW HOMES. If there were enough, the rental pool would be large enough that competition would keep prices reasonable. But - there's not enough, which means the price of what homes there are goes up, and it means there are fewer rentals, which means that people can't afford to buy and therefore must pay whatever they have to to get a rental place. OR stay in their mommie's basement, which is happening more and more.

But this isn't just a Canadian problem, it's happening globally despite what the OP states.

There is no where that's experiencing what Canada is. And we have the lowest number of homes AND home starts per capita out of any of the g20 and we have had so for decades.

Since 2016 at least (and probably before) we've been building about 100 thousand LESS homes than we needed to just to keep the problem from getting worse based on our population growth. And the fact is i know we haven't been building enough since the 2000's started but i don't have actual studies to prove it. So even from 2016 we'll be over 700 thousand homes LESS THAN THE BARE MINIMJUM, and that's still not enough to really solve the problem.

And to put that into perspective Canada builds about 260 thousand new homes per year. And some existing homes are demolished to make that happen so thats' not even "net" homes.

If we had enough homes, the vacancy rate would not be an issue, rents would be reasonable, and people could afford to buy a home with a reasonable amount of effort and savings and the rental pool wouldn't be so strained. There have ALWAYS been vacant properties (ask the insurance companies about that) and that doesn't make any real difference... IF there's enough homes to start with.

There are other causes. People selling their homes in an auction process that drives the price up higher than it should be.
House flippers also don't help.
There's obviously no single cause but it's like death by a thousand cuts. Just some cuts are bigger than others.

 

[Dixie Cup]

It's NOT just vacant buildings they are responsible for, but most of those are apartment buildings.
I don't have numbers for Canada but in the US IGs own 20% of all the single family dwellings in the country. And that number is growing.

It's also not about appreciation value of the properties. They RENT them out for far higher rents than the mortgage would be if an individual had purchased the home for themselves.

But this isn't just a Canadian problem, it's happening globally despite what the OP states.
There are other causes. People selling their homes in an auction process that drives the price up higher than it should be.
House flippers also don't help.
There's obviously no single cause but it's like death by a thousand cuts. Just some cuts are bigger than others.

In the U.S. Blackrock Investments apparently is buying up blocks of housing, just as Jinentonix stated, to rent out at higher rents thus removing additional housing that would otherwise go on the market. They are also paying the sellers over market value for these homes which, of course, only increases the cost of anyone who wants to purchase a home.

I believe it's part of the WEF which states that you will own nothing and be happy - and they're right. The rich will purchase these homes leaving everyone else out in the cold because they can't afford the new rents that are being charged. It's a major issue as is the fact that Bill Gates now owns more farm land than anyone else in the country. What is he going to do with all this land? Likely for solar panels and/or windmills - the hell with growing food & crap like that eh? LOL

 

[petros]

In the U.S. Blackrock Investments apparently is buying up blocks of housing, just as Jinentonix stated, to rent out at higher rents thus removing additional housing that would otherwise go on the market. They are also paying the sellers over market value for these homes which, of course, only increases the cost of anyone who wants to purchase a home.

I believe it's part of the WEF which states that you will own nothing and be happy - and they're right. The rich will purchase these homes leaving everyone else out in the cold because they can't afford the new rents that are being charged. It's a major issue as is the fact that Bill Gates now owns more farm land than anyone else in the country. What is he going to do with all this land? Likely for solar panels and/or windmills - the hell with growing food & crap like that eh? LOL

Just like Boardwalk did in Canada 20 years ago?

 

[Dixie Cup]

Just like Boardwalk did in Canada 20 years ago?

Boardwalk definitely purchased a lot of apartment rental properties. I don't think they purchased individual homes like Blackrock does and that's the issue in the U.S. The following was an article in "Slate" with their perspective:

"Might the fact that corporate investors snapped up 15 percent of U.S. homes for sale in the first quarter of this year have something to do with it? The Wall Street Journal reported in April that an investment firm won a bidding war to purchase an entire neighborhood worth of single-family homes in Conroe, Texas—part of a cycle of stories drumming up panic over Wall Street’s increasing stake in residential real estate. Then came the backlash, as cool-headed analysts reassured us that big investors like BlackRock remain insignificant players in the housing market compared with regular old American families."

Another article states that Invitation Homes owns approximately 80,000 homes for lease and American Homes for Rent own over 57,000 homes It also states that Bill Gates is NOT the biggest owner of farm land and quotes the USDA stating as such.

So, there is mixed information and I suspect the latter is more accurate than the former but with the government the way it is, I don't know how the USDA is any more reliable for information than any other government department under the Biden Administration. Just sayin....

Lets face it, homelessness is a major issue in both of our countries and needs a solution. As it is we're throwing money away because nothing we're currently doing is providing the much needed shelters people require.

 

[Taxslave2]

Development costs cities and utilities big bucks in capital. A piece land might be ready to see a 100 unit condo block but if there isnt water, sewage, electricity, telecommunications, arterial road acess, transit, schools its just a pipedream.

Here is a large part of the problem that most people don't see, because they have no clue and less interest in infrastructure. As long as there is heat, water and light and the garbage disappears most of the time they are happy.
Infrastructure designed 50 years ago for a large area of single family homes is not going to suddenly support multiple highrise residential units.

 

[Taxslave2]

Tbere's little evidence to support that. Surveys have been done to determine the number of vacant homes in several markets and it always turns out to be a pretty low number. And that includes reasons other than investment groups choosing to do so.

Consider vancouver, one of the most expensive areas in the country. As you can see, vacant homes are a pretty small hunk of the supply:

Empty Homes Tax reduced Vancouver's number of vacant homes by 36% | Urbanized

Five years after the City of Vancouver rolled out the Empty Homes Tax, the number of vacant homes has fallen by 36%.

dailyhive.com

Further, if we built enough houses they can leave ones empty if they like and it really won't matter. Jack up the taxes on empty homes like bc did and voila - they're helping fund the provincial services while losing money on a slowly appreciating asset. If there are enough homes then there is little incentive for investment groups to buy them up because they won't appreciate in value fast enough to make it worthwhile.

In the end it all comes down to having enough homes. And we don't.

Investment groups are mostly buying up single family homes to turn multiple lots into giant residential towers of condos. This even happens on the island. The few that are owned by rich foreigners looking for a rabbit hole do not account for a significant number of empty homes, and are mostly upper end houses that the vast majority could never afford to rent.

 

[Taxslave2]

THey're talking about all home units which includes apartments, and as you can clearly see the number is shrinking. The number was growing for a little while there leading up to about 2019, but now its beginning to go down. It only works when theres a long term radical increase in property values, which we've seen for a few decades. It does NOT work when housing is going up at a more sedate rate like 5 percent a year or the like, like it's supposed to.

And as vancouver shows it's easily crushed with a tax if necessary. If you have enough homes the small percent that are vacant for whatever reason (there are many reasons, not just investment groups) is a null issue.

Umm.... .if they rent them out, they're not vacant.

And the reason they can rent them out for so much is that there are TOO FEW HOMES. If there were enough, the rental pool would be large enough that competition would keep prices reasonable. But - there's not enough, which means the price of what homes there are goes up, and it means there are fewer rentals, which means that people can't afford to buy and therefore must pay whatever they have to to get a rental place. OR stay in their mommie's basement, which is happening more and more.

There is no where that's experiencing what Canada is. And we have the lowest number of homes AND home starts per capita out of any of the g20 and we have had so for decades.

Since 2016 at least (and probably before) we've been building about 100 thousand LESS homes than we needed to just to keep the problem from getting worse based on our population growth. And the fact is i know we haven't been building enough since the 2000's started but i don't have actual studies to prove it. So even from 2016 we'll be over 700 thousand homes LESS THAN THE BARE MINIMJUM, and that's still not enough to really solve the problem.

And to put that into perspective Canada builds about 260 thousand new homes per year. And some existing homes are demolished to make that happen so thats' not even "net" homes.

If we had enough homes, the vacancy rate would not be an issue, rents would be reasonable, and people could afford to buy a home with a reasonable amount of effort and savings and the rental pool wouldn't be so strained. There have ALWAYS been vacant properties (ask the insurance companies about that) and that doesn't make any real difference... IF there's enough homes to start with.

The flip side is that if we stopped immigration for a few years, we would have more than enough houses to go around and the prices would not be in the stratosphere.

 

[petros]

Boardwalk definitely purchased a lot of apartment rental properties. I don't think they purchased individual homes like Blackrock does and that's the issue in the U.S. The following was an article in "Slate" with their perspective:

Housing is housing not necessarily houses.

 

[The_Foxer]

The flip side is that if we stopped immigration for a few years, we would have more than enough houses to go around and the prices would not be in the stratosphere.

That is true technically - just as it's true that we could afford more immigration if we built even more places (and schools etc).

Basically we can have as much or as little population growth as we want provided we make a commitment to have the homes and hospitals etc necessary for that population growth, and with homes especially we badly failed there.

 

[The_Foxer]

Investment groups are mostly buying up single family homes to turn multiple lots into giant residential towers of condos.

Sure, those are more development groups but that's semantics of course. But that results in a net gain of homes so that's obviously not the problem longer term.

 

[The_Foxer]

In the U.S. Blackrock Investments apparently is buying up blocks of housing,

Doesn't matter. First the price of a home in the states is on average a fraction of what it is in Canada for the same house, and there the market will adapt. If they keep doing that then the demand for housing will go up and people will build more houses. There are less practical barriers to developers doing that.

However in Canada there are major barriers that prevent the market from dealing with that. Our market is designed in such a way that they will NEVER build enough houses as long as we've got positive population growth. And if the population growth or demand were to shrink, it would not take long for the market to adapt to THAT, so we get the worst of both worlds. We slow down building when need reduces just fine but we don't pick up when demand does. So there's always a shortage.

So it doesn't matter here either. IF investors stopped buying homes developers would make less.

No matter how you slice it, it always comes back to the same thing. Our problems are all linked to not building enough homes - and if we did the rest of the problems would be very easy to manage and homes would be affordable.