Cost of housing in Canada

[Kirkhill]

Zoning, NYMBYism, political issues etc. I suspect every city also has its peculiar issues compounding it (Ottawa has the never ending issue with the NCC as an example)

Calgary is no surprise, they’ve been have issues for some time.

https://www.cbc.ca/news/canada/calgary/calgary-council-affordable-housing-density-nimby-poilievre-1.6869177

This article outlines some issues Calgary has been having and why.

That was enlightening. In Lethbridge Calgary is a foreign land these days.

One of the advantages of Canadian construction practices is that wooden houses are not built to last. They seldom outlast the generation for which they are built. The tendency has been for new homes to be built on the outskirts and for the value of the interior homes (as opposed to the value of the land on which they sit) to fall. That alone presents opportunities for new developments. In Calgary the area around CFB Currie is a great example.

Conservatives can progress. We just prefer to progress conservatively.

 

[Remius]

To be honest, Remius, I was surprised Ottawa wasn’t higher towards Calgary. Then again, maybe things in Bytown aren’t as bad in the big picture, as we think locally. Except for the O-Train….that’s still a hot mess!

Ottawa is such a weird market due to it being a government town. But…

Recent initiatives to deal with housing.

• Building near transit. (As you said transit is a hot mess but still…)
• changes to rules to allow more secondary dwellings on private property
• office space conversion
• re zoning surplus land and giving non profit or affordable housing discounts on that land
• re directing or hiring more staff to the process side to cut back on delays and processing times
• various incentives and or cost reductions if builders meet a bunch of criteria (like building affordable intensifies housing on transit routes etc)

All good things but not the full solution to be sure. But reducing barriers is a good step.

I’ve noticed some price drops and a few friends have recently bought and paid under asking and sold under asking. With conditions and such. Unheard during the craze.

 

[mariomike]

And all of it in either urban areas or the so-called 'whitebelt' (the part of the Oak Ridge Moraine and surrounding land not defined as the Greenbelt).

Toronto has the "yellow-belt" .

Aka the "Residential Detatched" ( RD ) zone.

10.20 Residential Detached Zone (RD) - In the RD zone, a dwelling unit is permitted in the following residential building types: (A) Detached House.

City of Toronto Zoning By-law 569-2013, as amended (Office Consolidation)

 

[Good2Golf]

I’ve noticed some price drops and a few friends have recently bought and paid under asking and sold under asking. With conditions and such. Unheard during the craze.

Also depends on how they were priced, I’ve seen some locally go for both below and above asking recently, but the asking was well set for the comps in the area, so that made sense.

 

[IKnowNothing]

That's unpossible, it's just greedy developers that are to blame... or so it's been said by others in this thread when zoning, and NIMBYism comes up.

Assuming this was directed at me.Zoning and NIMBYism are definitely issues, I'm in full favour densification and speak out against NIMBYism locally.

but if you read the full Howe report a couple of different things jump out

1. the work behind identifying the non "Barriers to Supply" element of that graphic is exceptional
2. the attribution of the Barriers to Supply section as "Policy based "Barriers to Supply is based on a completely theoretical stance that IF the housing market was a true competitive market (in the economic theory sense) and IF there were no barriers to entry that any surplus in price over marginal cost MUST be caused by barriers to supply, because otherwise supply would expand, prices would fall, and the surplus would disappear. Assuming both to be true is not a defensible stance when it comes to the development of singe detached housing in Urban areas.
3. There's great work getting into the granular amounts that can be directly attributed to actual policy based barriers to supply But:
   1. they don't account for near the full surplus amount
   2. the bulk of the barrier to supply cost isn't red tape, it's development charges for water/waste water infrastructure (which the author thinks should be downloaded to the population (sure that lowers housing cost, but not living cost), and land use restrictions for the green belt and agricultural land.

I might be wrong, butI don't think the reports findings support what you think they do. They aren't saying that housing is expensive because municipalities are causing a problem by blocking stacked townhomes and apartments in single-detached neighbourhoods, they're saying that single detached homes cost so much in urban areas because we're not letting them sprawl even more into farmland and greenspace, and are forcing infrastructure into the build cost.

 

[Remius]

Also depends on how they were priced, I’ve seen some locally go for both below and above asking recently, but the asking was well set for the comps in the area, so that made sense.

True and a lot of houses have been priced a bit higher than they can actually get them for. But a. Lot would have gone for over a million a few years ago are now in the 750 to 950 thousand

Not sure how familiar you are with Ottawa but here is an example of the removal of barriers plan.



The plan is 2 high rise buildings with commercial at ground level and varying 1 to 3 bedroom apartments. So re zoning that area for mixed use. Builders are getting a bunch of incentives and permit speed ups etc because it’s intensified building, next to transit and enough local infrastructure nearby (walking distance to 3 grocery stores and various medical clinics etc etc).

 

[Good2Golf]

Not sure how familiar you are with Ottawa but here is an example of the removal of barriers plan.

Not only here at South Keys but in other areas too, Chapman Mills/Barrhaven (like the housing/apartments along Longfields Drive immediately south of Strandherd). We raised the issue of type-of-housing availability to our City Councilor (George Darouze) when we moved my mother-in-law to Ottawa and there was a clear lack of affordable and appropriate housing (both high-to-med density apartments and older-age facilities).

Good to see some clear efforts to address the barriers to supply issues.

 

[Remius]

Not only here at South Keys but in other areas too, Chapman Mills/Barrhaven (like the housing/apartments along Longfields Drive immediately south of Strandherd). We raised the issue of type-of-housing availability to our City Councilor (George Darouze) when we moved my mother-in-law to Ottawa and there was a clear lack of affordable and appropriate housing (both high-to-med density apartments and older-age facilities).

Good to see some clear efforts to address the barriers to supply issues.

Yeah, I was recently in that area and saw all those builds.

I’m not sure if it is planned but I’ve also noticed builds catering to older people. Retirement residences close to or near a lot of residential and marketing that so that older generations can live near their families.

We looked at a new development across from Findlay creek, low rise multi appartments. We thought of buying one and getting the mother in law to move a bit closer and out of her massive Orleans house, but the entry price was around 580k, not terrible but still out of reach for some people. Further down te road they have rezoned for retirement residence and they are catering to those that want to live near their families that live in FC.

No easy solutions to a problem with so many factors.

 

[Furniture]

Assuming this was directed at me.Zoning and NIMBYism are definitely issues, I'm in full favour densification and speak out against NIMBYism locally.

but if you read the full Howe report a couple of different things jump out

1. the work behind identifying the non "Barriers to Supply" element of that graphic is exceptional
2. the attribution of the Barriers to Supply section as "Policy based "Barriers to Supply is based on a completely theoretical stance that IF the housing market was a true competitive market (in the economic theory sense) and IF there were no barriers to entry that any surplus in price over marginal cost MUST be caused by barriers to supply, because otherwise supply would expand, prices would fall, and the surplus would disappear. Assuming both to be true is not a defensible stance when it comes to the development of singe detached housing in Urban areas.
3. There's great work getting into the granular amounts that can be directly attributed to actual policy based barriers to supply But:
   1. they don't account for near the full surplus amount
   2. the bulk of the barrier to supply cost isn't red tape, it's development charges for water/waste water infrastructure (which the author thinks should be downloaded to the population (sure that lowers housing cost, but not living cost), and land use restrictions for the green belt and agricultural land.

I might be wrong, butI don't think the reports findings support what you think they do. They aren't saying that housing is expensive because municipalities are causing a problem by blocking stacked townhomes and apartments in single-detached neighbourhoods, they're saying that single detached homes cost so much in urban areas because we're not letting them sprawl even more into farmland and greenspace, and are forcing infrastructure into the build cost.

I wasn't just referring to you.

The report deals with detached single family homes, I'm not particularly concerned with them specifically. The factors that make them expensive contribute to rising costs of rentals, but they aren't the only driving factor. Housing is more than just detached single family homes, but for decades that is what has been pushed by governments at all levels, at the expense of densification. There would be less demand for detached homes if there had been more emphasis on densification in walkable neighbourhoods with reliable and convenient transit 20-30 years ago.

 

[Good2Golf]

We looked at a new development across from Findlay creek, low rise multi appartments. We thought of buying one and getting the mother in law to move a bit closer and out of her massive Orleans house, but the entry price was around 580k, not terrible but still out of reach for some people. Further down te road they have rezoned for retirement residence and they are catering to those that want to live near their families that live in FC.

Yeah, we looked in there too, I know the ones you’re talking about 500-600K is nuts for those and even the 750-800K for semis in there was crazy. Manotick North (some still call it Riverside South, but anything south of Earl Armstrong between River Rd and Limebank is technically Manotick…just not said with the same clenched jaw as the Old Bones on Long Island… )

Edit to add incomplete post idea:

…[Manotick (North)] is similar money to that crazy cell of Findlay Creek (East).

 

[Kirkhill]

True and a lot of houses have been priced a bit higher than they can actually get them for. But a. Lot would have gone for over a million a few years ago are now in the 750 to 950 thousand

Not sure how familiar you are with Ottawa but here is an example of the removal of barriers plan.

View attachment 79508

The plan is 2 high rise buildings with commercial at ground level and varying 1 to 3 bedroom apartments. So re zoning that area for mixed use. Builders are getting a bunch of incentives and permit speed ups etc because it’s intensified building, next to transit and enough local infrastructure nearby (walking distance to 3 grocery stores and various medical clinics etc etc).

I note that the office vacancy rate in Calgary is 27%. How about converting some of those offices into living space above the shop?

If you want a denser community start by changing your commercial zoning regulations. Move more people into the attics on main street.

 

[Remius]

I note that the office vacancy rate in Calgary is 27%. How about converting some of those offices into living space above the shop?

If you want a denser community start by changing your commercial zoning regulations. Move more people into the attics on main street.

Actually I think Calgary has that idea and are pioneering that exact thing. I’m pretty sure I had posted something a while back that there are some lessons in their office conversion plans.

Deachman: Why Ottawa should look to Calgary when converting office space to housing

Facing 12 million square feet of empty office space — more than 30 per cent of its total — Calgary developed a plan to convert half of that space to residential within 10 years.

ottawacitizen.com

 

[Brad Sallows]

The interesting thing about "barriers to supply" is that it doesn't include (apparently) land cost, construction cost, or profit. Which leaves what, exactly, that is so different across the regions?

 

[Remius]

The interesting thing about "barriers to supply" is that it doesn't include (apparently) land cost, construction cost, or profit. Which leaves what, exactly, that is so different across the regions?

The article defines it as:

« These barriers to constructing new single-detached homes include government regulations but also other potential market dysfunctions. These barriers manifest in prices of land over-and-above the assumed 25 percent share of construction costs in markets without land supply constraints. »

So mostly regulations, permits and associated costs etc.

 

[IKnowNothing]

The article defines it as:

« These barriers to constructing new single-detached homes include government regulations but also other potential market dysfunctions. These barriers manifest in prices of land over-and-above the assumed 25 percent share of construction costs in markets without land supply constraints. »

So mostly regulations, permits and associated costs etc.

That line/assumption and the kind of pushing aside of "other potential market dysfunctions" in favor of focusing on regulations reveals a distinct ideological bias and undermines the report in my opinion. Especially given that the italicized constraints exist.

 

[Kirkhill]

Actually I think Calgary has that idea and are pioneering that exact thing. I’m pretty sure I had posted something a while back that there are some lessons in their office conversion plans.

Deachman: Why Ottawa should look to Calgary when converting office space to housing

Facing 12 million square feet of empty office space — more than 30 per cent of its total — Calgary developed a plan to convert half of that space to residential within 10 years.

ottawacitizen.com

I probably read your post and forgot the source. Unconscious plagiarism.

Cheers.

 

[Remius]

I probably read your post and forgot the source. Unconscious plagiarism.

Cheers.

Not at all. The conversation is worth repeating

 

[Brad Sallows]

The article defines it as:

« These barriers to constructing new single-detached homes include government regulations but also other potential market dysfunctions. These barriers manifest in prices of land over-and-above the assumed 25 percent share of construction costs in markets without land supply constraints. »

So mostly regulations, permits and associated costs etc.

Yes, but, what are the actual details I wonder, and why so different across regions? "All other costs" (or "barriers to supply") is not particularly enlightening. And "market dysfunctions" could mean actual market failure, or could simply mean "political interference in markets".

So much interest in the costs of housing; so much coyness instead of frank revelations of what the shares of all the different factors are. It's almost like everyone circling around the issue is reluctant to be specific.

 

[Kirkhill]

I wasn't just referring to you.

The report deals with detached single family homes, I'm not particularly concerned with them specifically. The factors that make them expensive contribute to rising costs of rentals, but they aren't the only driving factor. Housing is more than just detached single family homes, but for decades that is what has been pushed by governments at all levels, at the expense of densification. There would be less demand for detached homes if there had been more emphasis on densification in walkable neighbourhoods with reliable and convenient transit 20-30 years ago.

I was under the impression that the single detached family home was driven by demand not by government policy. My understanding was that when everyone could afford a car they aspired to the country life of the gentry who had a long time preference for working in town and living in the country. Townhouses were a seasonal thing.

When Henry Ford supplied the means for every one of his workers to live outside of Detroit and commute to work independently, not have to wait for trains, street cars or buses, or rely on shank's mare, people started spreading out.

In this case low density living was government following demand. The Covid Incident seems to have revived the interest in spreading out and claiming a little patch of private land.

 

[Furniture]

I was under the impression that the single detached family home was driven by demand not by government policy. My understanding was that when everyone could afford a car they aspired to the country life of the gentry who had a long time preference for working in town and living in the country. Townhouses were a seasonal thing.

When Henry Ford supplied the means for every one of his workers to live outside of Detroit and commute to work independently, not have to wait for trains, street cars or buses, or rely on shank's mare, people started spreading out.

In this case low density living was government following demand. The Covid Incident seems to have revived the interest in spreading out and claiming a little patch of private land.

There was and always will be a demand for that sort of living, I grew up in the country where the nearest store was in a hamlet 1 mile down the road. I get it, I enjoyed growing up that way and could easily go back to it. Having now lived in the "downtown" of a major city, and having travelled to cities around the world where people quite happily live in apartments/condos within easy walking distance of transit and all the things they need, I get that living as well.

If living the "15 minute city" life was made convenient, and plausible for people, I suspect most youth today would jump at it. Particularly since traffic has become a significant problem across NA as cities keep growing, and fuel prices have done nothing but go up ever since I have been driving (98).

Also, lets not forget that the government has incentivised home ownership for decades via first time homeowners incentives, and no capital gains tax on home value increases. So, it's not as if the government has had nothing to do with Canadian's preference for a detached home and a long commute.