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Demonizer
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Backward plan to make housing cheaper is about to backfire

Wed Jul 13, 2016 7:04 am

http://business.financialpost.com/fp-co ... o-backfire

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We take you now to Vancouver where Mayor Gregor Robertson is engaged in constant battle against the dynamic economic windmills of markets and progress. At city council on Tuesday, members began debating a Zero Emissions Building Plan to eliminate all carbon emissions from new buildings erected in the city by 2030. In a separate initiative, on Monday the city received permission from the province to impose a tax on empty homes, including condos.

Both initiatives are designed to achieve two largely pointless objectives: reduced carbon emissions and lower housing prices. Operating in tandem, and under the laws of unintended consequences, the two city initiatives are also likely to exacerbate the problems they are allegedly intended to solve.

The tax on empty dwellings is designed to force the owners of about 10,000 currently uninhabited residences (mostly condos) to sell or rent their properties. The official objective of the vacancy tax is to help relieve Vancouver of its media-fostered housing crisis and its headline-grabbing prices, foreign buyers, and severe rental shortages. B.C. Finance Minister Mike de Jong said the new tax is “ultimately … about trying to increase the supply of rental accommodation” while the province awaits housing from new construction.


Mayor Robertson said the tax would trigger a release of rental properties and provide the city with revenues to fund new housing. Not much of either will happen under the tax, unless the owners of this statistical stock of unused real estate are investment imbeciles. High taxes do not as a rule increase supply. Nor do gross interferences with investors’ rights to use property as they see fit encourage confidence and promote future investment in needed housing development.


Which brings us to item two on the Robertson agenda at city hall. The city’s zero-emissions initiative is a vast interventionist scheme to micro-regulate each and every new building envelope, ventilation, heating and cooling system — from high-rise condos to single-family dwellings — to achieve a zero-emission target by 2030. Ultimately, the plan aims to run all of Vancouver on renewable energy by 2050.

In addition to the massive regulatory proposals, the plan’s key carbon-reduction proposal is to eliminate natural gas. “The focus of this plan is on reducing the demand for fossil fuel based natural gas used primarily for space heating and hot water and transitioning these functions to renewable sources such as electricity (including heat pumps), bio-gas, and neighbourhood renewable energy systems.”


Eliminating natural gas would be seen as a green coup by activists at the Pembina Institute, but it would also be an economic and financial blunder. FortisBC, the provincial gas distributor, says that a family of four living in a home in Vancouver could expect to pay about $1,500 more a year in energy costs if forced to use electricity instead of natural gas for space and water heating.

Timothy Egan, head of the Canadian Gas Association, told Robertson in a letter Monday that the effect of the plan would be to eliminate natural gas, the most cost-effective energy choice, from the list of energy options for Vancouver buildings. This, added Egan politely, “would be shortsighted.”

Natural gas is the most affordable energy option by far for Vancouver, said Egan. It is the global standard among low-emissions energy sources, and it would be foolish (Egan uses the word “shortsighted” when I believe he really means totally crazy) for Vancouver to ban natural gas just as the rest of the world — including China — is scrambling to adopt it.

Not mentioned by Egan is another likely undesirable result of the Zero Emissions Building Plan. The massive regulatory intrusions into the housing and construction market will inevitably increase costs and prices, and — judging by the language of the plan — diminish the attractiveness of the new housing relative to existing stock. The plan, in other words, will simultaneously drive up the costs of new housing and promote higher prices and demand for existing residential housing.

Two Vancouver initiatives will likely worsen the problems they intend to solve
At Tuesday’s council meeting, the zero plan was sent to a sub-committee where it will receive more detailed review. Maybe somebody will come up with an economic analysis of the cost of the zero targets, especially ones that come with nail-by-nail instructions on how to install a ventilation system in zero-emission buildings.

Meanwhile, the Vancouver housing crisis may be coming to an end before the governments get around to imposing their plans to tax and regulate the industry, investors and home buyers. Data released by the province destroyed the claims that foreign buyers were driving up prices. In Metro Vancouver during the month of June, out of 5,118 transactions, 4,858 properties were bought by Canadians while 234 were bought by Chinese nationals. On average, the 234 Chinese buyers paid $1.4 million per property while the 4,848 Canadians paid about $1 million.

The data also showed how below-average provincial housing starts produced a shortage that likely helped drive up prices. As well, a recent Fraser Institute study found that municipal regulation tends to reduce housing-market development and the stock of housing. Land-use regulation, zoning rules, density controls, excess taxes — they all tend to curb development, even in cities where overall economic and population growth is strong.

The Vancouver housing experience demonstrates that a combination of market factors, geography and regulation helped create a housing situation marked by soaring prices, political conflict and dramatic headlines. Under Mayor Robertson, Vancouver can expect more of the same.
 
jimtan
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 7:52 am

IMHO, Mayor Robertson has got it right. Targeting vacancy instead of foreign buyers. In addition, the vacancy tax would discourage developers from holding back units that have been completed. This is important. Similarly, anti-Airbnb policies will discourage shady businesses.

Of course, it should also be possible to tax foreign residents extra for vacant homes. However, this is likely to require Federal legislature. Similarly, Ottawa can intensify its program to catch permanent resident cheats who don't live here.

The important thing is to create fear and doubt in the minds of speculators and flippers. :mrgreen:

Good? After all, you don't want to be stuck in a starter home all your life. :?:
 
Demonizer
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 8:03 am

probably hard to enforce and also costly bureaucracy required to manage it.

it just create more work for political departments resulting in more cost to everyone.

imagine all the lawsuits and battles from disgruntled property owners who have been wrongly accused.

the intended consequences will result in unintended consequences.

and what about vacant houses to be torn down, or awaiting development?

there are homes too rundown to be livable, should owners be forced to renovate?

this is not freedom, this is more micromanaging peoples lives.

i think a better step would be for example to limit the number of homes one can buy but i don't think they would ever allow that. there are similar challenges and loopholes that will emerge obviously.

another solution is to speed up development. this creates more projects faster, creates jobs and increases supply. that would be better i think. it costs less than micromanaging everything if you just let people move at the speed they wish instead of holding back development progress.
Last edited by Demonizer on Wed Jul 13, 2016 8:28 am, edited 1 time in total.
 
rofina
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 8:27 am

ASHRAE is already a nightmare to work with, and costing thousands more to adopt to existing builds, and even more to new.

This further increase in energy requirements will continue to drive construction costs into the stratosphere.

Forget land prices, the cost to build is whats running up faster than land.
 
Demonizer
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 8:33 am

yep.

and another result of Vancouver's political meddling will just skyrocket surrounding burbs to even higher prices ie. Richmond, Burnaby, Surrey, Delta, Coquitlam, Port Moody, Abbotsford etc
 
jimtan
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 9:06 am

Seems to me that many of the objectors have shady deals in the making.

Anyway, detecting vacancy will be easy. Same process as the detection of marijuana grow-op. Analyze BC Hydro records. That's why Victoria has to pass enabling legislature.

The controversial part comes from the definition of 'vacant'. 365 days a year or 300 days?

For genuine long term residents, it should not be a problem. Those who are away, can simply ask family or friend to move in for a couple of months.

What we like to see is the departure of foreign investors. In particular, those who were on the 65k waiting list in the last investor program. They have no personal stake in Vancouver. Adios, Leave Vancouver to those with a long term stake. Good?
 
tdma800
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 9:49 am

yep.

and another result of Vancouver's political meddling will just skyrocket surrounding burbs to even higher prices ie. Richmond, Burnaby, Surrey, Delta, Coquitlam, Port Moody, Abbotsford etc
To top it off, finding houses with or without people is complicated and hard as hell,. without deploying an army of civil servants to go door knocking
 
Demonizer
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 12:40 pm

Anyway, detecting vacancy will be easy. Same process as the detection of marijuana grow-op. Analyze BC Hydro records. That's why Victoria has to pass enabling legislature.

The controversial part comes from the definition of 'vacant'. 365 days a year or 300 days?

For genuine long term residents, it should not be a problem. Those who are away, can simply ask family or friend to move in for a couple of months.


What we like to see is the departure of foreign investors. In particular, those who were on the 65k waiting list in the last investor program. They have no personal stake in Vancouver. Adios, Leave Vancouver to those with a long term stake. Good?
how's the marijuana detection working? it's pretty much legal now isn't it? alot of illegal growops bypass consumption meters to steal power, also there are other ways to make power such as natural gas or diesel. Besides, it's so prevalent and it is also moving towards light industrial and agricultural buildings so breaching privacy by accessing bc hydro records likely would not work and cause what i mentioned earlier which is increased cost to analyze data, enforce, manage the bureaucracy and investigate. Also add lawsuits and such battling wrongful accusations it will open a huge can of worms into a conundrum therefore costing more tax dollars.

and for long term residents are we all just able to find a friend or family member to stay in our home to care for it when we are away for a couple of months!?!? just that simple eh? i know i don't like people in my home when i'm not there. i've done it but not something for a long length of time.

all these proposals are not reality.
Last edited by Demonizer on Wed Jul 13, 2016 12:45 pm, edited 1 time in total.
 
Demonizer
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 12:43 pm

yep.

and another result of Vancouver's political meddling will just skyrocket surrounding burbs to even higher prices ie. Richmond, Burnaby, Surrey, Delta, Coquitlam, Port Moody, Abbotsford etc
To top it off, finding houses with or without people is complicated and hard as hell,. without deploying an army of civil servants to go door knocking
you got it. any extra cost of anything added will just give money to political waste and at the same time increase home prices further because it becomes more difficult and costly to acquire homes for many people due to another layer of bureaucracy.
 
westcoastfella
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 3:53 pm

Seems to me that many of the objectors have shady deals in the making.

Anyway, detecting vacancy will be easy. Same process as the detection of marijuana grow-op. Analyze BC Hydro records. That's why Victoria has to pass enabling legislature.

The controversial part comes from the definition of 'vacant'. 365 days a year or 300 days?

For genuine long term residents, it should not be a problem. Those who are away, can simply ask family or friend to move in for a couple of months.

What we like to see is the departure of foreign investors. In particular, those who were on the 65k waiting list in the last investor program. They have no personal stake in Vancouver. Adios, Leave Vancouver to those with a long term stake. Good?
Detecting the use of too much power is easy.

Trying to detect the use of too little power is not, and its much easier to get around. A few electronic timers hooked up to lamps, set to turn on during the day, plus regular use of heating and always-plugged-in appliances... $50 bucks seed money and ability to pay a ~$50 power bill every month electronically from a Canadian bank, how would the city know? If you want to get elaborate, a smart home system could be installed, you can turn on lights and the stove with your phone from anywhere in the world.
 
jimtan
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 8:23 pm

Seems to me that many of the objectors have shady deals in the making.

Anyway, detecting vacancy will be easy. Same process as the detection of marijuana grow-op. Analyze BC Hydro records. That's why Victoria has to pass enabling legislature.

The controversial part comes from the definition of 'vacant'. 365 days a year or 300 days?

For genuine long term residents, it should not be a problem. Those who are away, can simply ask family or friend to move in for a couple of months.

What we like to see is the departure of foreign investors. In particular, those who were on the 65k waiting list in the last investor program. They have no personal stake in Vancouver. Adios, Leave Vancouver to those with a long term stake. Good?
Detecting the use of too much power is easy.

Trying to detect the use of too little power is not, and its much easier to get around. A few electronic timers hooked up to lamps, set to turn on during the day, plus regular use of heating and always-plugged-in appliances... $50 bucks seed money and ability to pay a ~$50 power bill every month electronically from a Canadian bank, how would the city know? If you want to get elaborate, a smart home system could be installed, you can turn on lights and the stove with your phone from anywhere in the world.
Can you turn on the water in a random manner? Might be suspicious if the amount of water and power usage is the same every month?
 
tdma800
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Re: Backward plan to make housing cheaper is about to backfi

Wed Jul 13, 2016 8:29 pm

yep.

and another result of Vancouver's political meddling will just skyrocket surrounding burbs to even higher prices ie. Richmond, Burnaby, Surrey, Delta, Coquitlam, Port Moody, Abbotsford etc
To top it off, finding houses with or without people is complicated and hard as hell,. without deploying an army of civil servants to go door knocking
you got it. any extra cost of anything added will just give money to political waste and at the same time increase home prices further because it
becomes more difficult and costly to acquire homes for many people due to another layer of bureaucracy.
Well of course, also its legal to use any amount of water you like and unless your home is very new, educated individuals know that in vancouver there's no water meters anyway
 
westcoastfella
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Re: Backward plan to make housing cheaper is about to backfi

Thu Jul 14, 2016 7:05 am

Can you turn on the water in a random manner? Might be suspicious if the amount of water and power usage is the same every month?
Timers come with full "vacation mode" randomizers in them, its easy to set several of them so things come on at different times and for different durations.

As for water usage - you can use home automation systems to control dishwashers, washing machines, water spigots or in-ground watering systems for your garden, etc - lots of things in your house use water. You could probably rig something up to try and control taps as well, to just run water at different times.
 
Demonizer
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Re: Backward plan to make housing cheaper is about to backfi

Thu Jul 14, 2016 7:30 am

easy loophole to get around this, buy home for 5 million, put it up for sale for 50 million and just say it's vacant because it's for sale.

is there any way the government law can tax you for being vacant when the home is for sale?
 
InvestorRelations
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Re: Backward plan to make housing cheaper is about to backfi

Thu Jul 14, 2016 12:51 pm

probably hard to enforce and also costly bureaucracy required to manage it.

it just create more work for political departments resulting in more cost to everyone.

imagine all the lawsuits and battles from disgruntled property owners who have been wrongly accused.

the intended consequences will result in unintended consequences.

and what about vacant houses to be torn down, or awaiting development?

there are homes too rundown to be livable, should owners be forced to renovate?

this is not freedom, this is more micromanaging peoples lives.

Wait until you see our solutions!

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