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Tapioca · 04-08-2016, 04:53 PM

I don't know if it's selling out as much as the fear of action. The problem is more complex than simply blaming government, the banks, or foreign money.

From the municipal perspective, city governments can only control property taxes and zoning. Most cities, other than the City of Vancouver, have pursued aggressive rezoning policies to create more housing. This has upset many people, but most notably, those in the City of Vancouver who fear towers, gentrification, the loss of commercial/industrial land, etc. However, even if you can get zoning for multi-family approved, the problem is that land anywhere in the Lower Mainland is expensive, so you can't expect developers to build product that is cheap out of the goodness of their hearts. Municipal governments cannot collect data on the nationality of buyers so they cannot charge higher taxes to non-residents.

The provincial government has a few more tools at its disposal, including the ability to collect data on real estate activity and infrastructure money for things like social housing. However, the provincial government is probably reluctant to make big changes because real estate is a big generator of economic activity. Corporate taxes are low and so are personal income taxes and people want the tax regime in this province to stay that way. Data collection doesn't cost a lot of money, but it may reveal some things which would be politically dangerous.

The federal government has other tools - immigration policy, regulation of the banking industry and financial transactions, tax policy, and agencies which are involved in housing such as CHMC. However, from the federal perspective, it's difficult to make decisions that are targeted at one or two parts of the country. Other real estate markets in Canada are not experiencing the same run-up in prices as Vancouver and to a lesser extent, Toronto. Other areas, such as immigration, are hugely political. The federal government could decide to invest in social housing again, but it must do so for the entire country. This will come at a huge cost to the taxpayer, given the other demands on taxpayer dollars for other social programs such as health care and education.

There are huge political risks if one or more levels of government collude and use any number of their tools at their disposal to slow down or facilitate a decline in the housing market. There's lots of foreign money floating around in the local market, but what about those who have over-leveraged to get in? Should these people be punished, particularly when a market decline is the result of government/political action? It's easy to say as a disenfranchised millennial, "Screw those who over-leveraged and made poor decisions" but politicians don't react until the stakes are high enough. The reality is is that people who have assets tend to vote and tend to have the money to lobby governments. The people who have assets and have the most to lose are not upset... yet.

04-08-2016, 04:53 PM	#5629
Tapioca OMGWTFBBQ is a common word I say everyday Join Date: Apr 2001 Posts: 5,198 Thanked 2,787 Times in 1,244 Posts Failed 81 Times in 54 Posts	I don't know if it's selling out as much as the fear of action. The problem is more complex than simply blaming government, the banks, or foreign money. From the municipal perspective, city governments can only control property taxes and zoning. Most cities, other than the City of Vancouver, have pursued aggressive rezoning policies to create more housing. This has upset many people, but most notably, those in the City of Vancouver who fear towers, gentrification, the loss of commercial/industrial land, etc. However, even if you can get zoning for multi-family approved, the problem is that land anywhere in the Lower Mainland is expensive, so you can't expect developers to build product that is cheap out of the goodness of their hearts. Municipal governments cannot collect data on the nationality of buyers so they cannot charge higher taxes to non-residents. The provincial government has a few more tools at its disposal, including the ability to collect data on real estate activity and infrastructure money for things like social housing. However, the provincial government is probably reluctant to make big changes because real estate is a big generator of economic activity. Corporate taxes are low and so are personal income taxes and people want the tax regime in this province to stay that way. Data collection doesn't cost a lot of money, but it may reveal some things which would be politically dangerous. The federal government has other tools - immigration policy, regulation of the banking industry and financial transactions, tax policy, and agencies which are involved in housing such as CHMC. However, from the federal perspective, it's difficult to make decisions that are targeted at one or two parts of the country. Other real estate markets in Canada are not experiencing the same run-up in prices as Vancouver and to a lesser extent, Toronto. Other areas, such as immigration, are hugely political. The federal government could decide to invest in social housing again, but it must do so for the entire country. This will come at a huge cost to the taxpayer, given the other demands on taxpayer dollars for other social programs such as health care and education. There are huge political risks if one or more levels of government collude and use any number of their tools at their disposal to slow down or facilitate a decline in the housing market. There's lots of foreign money floating around in the local market, but what about those who have over-leveraged to get in? Should these people be punished, particularly when a market decline is the result of government/political action? It's easy to say as a disenfranchised millennial, "Screw those who over-leveraged and made poor decisions" but politicians don't react until the stakes are high enough. The reality is is that people who have assets tend to vote and tend to have the money to lobby governments. The people who have assets and have the most to lose are not upset... yet.