Cost of housing in Canada

[mariomike]

As to the radio host - Johnny Lombardi comes to mind.

Fondly remembered as, "Mr. Toronto". WW2 vet. Very friendly man.

Walk past Johnny's grave when visiting my father's, only a few feet away.

He is likely to rethink the value of that purchase on the 401 in January.

Haven't driven the 401 in years. I take 407. Better yet, the GO train.

 

[Brad Sallows]

Anything climate related is very politically charged but despite what anyone thinks about GHGs and "climate change" I would think that efficiency - and in particular energy efficiency given the rising costs of energy - would be a goal all parties could get behind. Efficiency and productivity are what make you competitive, and being competitive is how you prosper.

The summary provided says the goals of the program are:

The report then goes on to say:

Now I haven't had time to read the full report attached and as with every policy the devil is in the details so I have no idea if the goal of a 65% reduction in energy consumption is by less energy inputs in creating the building materials, in installation costs, in annual heating/cooling expenses once the building is occupied or a combination of all of the above.

To my mind reducing the energy consumption in a building by 65% whether that's 65% less wind energy, solar, nuclear, natural gas, coal or unobtainium is an efficiency plus regardless of whether it impacts the GHG emissions or not.

The question of whether the juice is worth the squeeze to achieve that 65% energy consumption reduction is whether those savings are offset by increased other costs incurred in achieving that reduction. If the savings are greater than any increased expenses then it's a good policy but if they are not then you're just putting lipstick on a pig.

Perhaps the full report contains that level of analysis but the summary seems to just compare the increased initial purchase price of a new home (apples) to the expected reduction in GHG's achieved (oranges). Nothing about savings over time realized from the upfront investment (good) or the increased other costs required to achieve the energy consumption targets (bad).

If scope is limited to measures to reduce emissions, then the "juice/squeeze" calculation doesn't have to produce a surplus; it just has to produce a deficit less than any other reasonable (practical) path which might be taken. If there are more cost-effective ways to gain the same benefits, those options ought rationally be implemented first.

Obviously we can't have everything we want all at the same time. I could wish people who want aggressive emissions reductions, more immigration, more policies to push money out to voters, more general safety, larger and more lavishly finished housing, etc, etc, would stop complaining about the knock-on effects on housing costs.

 

[Kirkhill]

If scope is limited to measures to reduce emissions, then the "juice/squeeze" calculation doesn't have to produce a surplus; it just has to produce a deficit less than any other reasonable (practical) path which might be taken. If there are more cost-effective ways to gain the same benefits, those options ought rationally be implemented first.

Obviously we can't have everything we want all at the same time. I could wish people who want aggressive emissions reductions, more immigration, more policies to push money out to voters, more general safety, larger and more lavishly finished housing, etc, etc, would stop complaining about the knock-on effects on housing costs.

You mean there is only so much credit to go around?

 

[suffolkowner]

Wrong Move at the Wrong Time: Economic Impacts of the New Federal Building Energy Efficiency Mandates

www.fraserinstitute.org

Wrong Move at the Wrong Time: Economic Impacts of the New Federal Building Energy Efficiency Mandates - 12 Sep 23​

As part of the 2030 emission reduction plan, the federal government is planning to decarbonize the building sector by enhancing the energy efficiency of new and existing buildings. In the Building Energy Efficiency (BEE) components of the 2030 Emissions Reduction Plan (ERP), the government has proposed new building codes with the goal of achieving a 65% reduction in energy consumption for new residential buildings and a 59% reduction for new commercial buildings by 2030, compared to 2019 levels. This report provides a quantitative economic evaluation of the economic consequences of these changes from 2020 to 2050 and makes use of a large, detailed macroeconomic model of the Canadian economy specially adapted to track the effects of the policy.

While the BEE requirements are initially minor, they quickly ramp up in the middle of this decade and will increase home construction costs by an average of about 8.3% by 2030, potentially adding an estimated $55,000 to the average cost of new homes in Canada. The costs vary by province, ranging from a low of $22,144 in New Brunswick up to $78,093 in British Columbia. These requirements are expected to impose annual direct and indirect economic costs that sum to over $1,700 per worker beginning in the post-2026 period.

National GDP will initially decline to about 2% below the base case and maintain much of that gap through 2050. The GDP loss against the base case as of 2030 ranges from a low of 0.9% in Prince Edward Island to highs of 2.6% in British Columbia and 2.5% in Ontario. Nevertheless, the effects on GHG emissions are small (a reduction of about 1% below the base case) and on a per-unit basis cost about 50 times the carbon-tax value as of 2030. As a result of the large loss of GDP relative to reductions in GHG emissions, emissions intensity of the Canadian economy actually rises slightly due to the regulation.

Overall the proposed Building Energy Efficiency package is a very costly addition to the federal carbon tax. It will impose substantial costs while contributing relatively little to Canada’s greenhouse gas reduction targets. Additionally the rules will affect mainly purchasers of new homes. Since older, higher-income households tend already to own their homes, the costs discussed in this study are likely to fall disproportionately on younger and lower-income people trying to enter the housing market.

The problem is that buildings dont actually meet their nominal insulation values. Field measurements will shop that an R2000 house effectively modern building code will only generate a total house R value of around 4. We know how to fix this, use better different insulation than fibreglass or roxul and we have known this for generations. Instead R values get bumped up to compensate. You can in most cases build your house to be tested but no one does this as there is no easy remedy to fix the house after build if it fails. Remember that building code just establishes the minimum standard

Efficiency and cleanliness are two really simple concepts that should sell across the board.

The only thing I find bothersome about housing efficiency is that too many people seem to think that the goal is a 100% tight building isolated from its environment. My experience is that those structures tend to be unhealthy, in part because they rely on mechanical systems being properly maintained. All structures need some free flow exchange with the environment which inevitably degrades efficiency. And on the electrical side of things there isn't really a lot of room for growth when the typical electrical motor in use currently is 95% efficient.

Your house should be 100% tight and ventilation should be controlled. The problem with "tight" homes is the insulation system not the tightness itself. The unhealthiness comes from the mold build up on the fiberglass and roxul as the continual cycle of convection in the wall cavities causes condensation. Avoiding this situation by ventilating defeats the purpose of insulating. It is also why our vapour barrier goes on the inside of the building envelop whereas in lower latitudes it is on the outside

 

[Brad Sallows]

You mean there is only so much credit to go around?

Credit basically enables people to spend their future income, which also enables government to spend the corresponding future taxes. It should be worrisome that governments are in deficit even when they realize future tax revenues today.

[moved to slightly more relevant hijacked thread]

 

[mariomike]

I've got to think the buyer of the Jeep is very new to the country or else has enough spare cash to pay his rent.

Looking through the ads, it's a pretty tough rental market.

In Toronto, the average rent of a one-bedroom unit is now $2,600 .

Countless strange makeshift spaces and multiple beds in a single room now a common trend.

Saw one near Bloor and Ossington. $1,350 for 250 square feet. With a toilet and bathroom sink in its "kitchen" space.

Another where you share a bed with a stranger for $550 per month.

 

[Kirkhill]

Looking through the ads, it's a pretty tough rental market.

In Toronto, the average rent of a one-bedroom unit is now $2,600 .

Countless strange makeshift spaces and multiple beds in a single room now a common trend.

Saw one near Bloor and Ossington. $1,350 for 250 square feet. With a toilet and bathroom sink in its "kitchen" space.

Another where you share a bed with a stranger for $550 per month.

Was it here that I saw a closet in a 2 bedroom apartment being sublet as a separate room? $960 for 4 weeks bought you a camp cot and an Ikea bookshelf.

 

[mariomike]

Was it here that I saw a closet in a 2 bedroom apartment being sublet as a separate room? $960 for 4 weeks bought you a camp cot and an Ikea bookshelf.

Maybe this one. A cot inside the front door closet of a condo in Toronto , for over a grand a month.

The front door closet.

TikTok - Make Your Day

 

[IKnowNothing]

Where I would start with a housing plan-

1- Either by working with the Provinces to create a coast to coast common framework or via Federal Criminalization- ban blind bidding and bring transparency into the house transaction process. It doesn't need to be as seamless and revolutionary as an open live portal, just get rid of "holding" offers, and make it a requirement to disclose offers currently under consideration to the realtor of any interested party

Desired Impact(s) -firstly, lower the cost of housing in competitive scenarios by reducing information asymmetry and allowing the final buyer to purchase the house for the minimum needed (theoretically $1 more than the second highest bidder), removing the exploitative "come back with your best offer" bs. By trimming this fat out of competitive transactions (whether it's 1%, 2%,5%, 10%) we would take just a little off the top of the market without collapsing it, and put the reins on runaway price increases by destressing the process, and preventing the cascade of anomalous high offers resetting local expectations.

2a Prepare an extensive library of pre-approved plans for all of single detached, duplex, triplex, row, stacked townhomes, and lowrise apartment buildings. I mean extensive, 2, 3 and 4 bedroom, many different floorplans and elevations/style at each size. Lots of choice. Common element- size constraints based on number of bedrooms, and overall architecture/design emphasis on lower cost/ efficient (not cheap) building practices (I'm talking reducing corners- not cutting them, simple rooflines, no mcmansion bs, no structural frills etc.)

2b- Create a fund to be managed by the BDC to provide low interest loans to projects building exclusively designs from the library, with caps on the proportion of the development that can be 4 bedroom.

2c- waive Federal portion of HST on sale of new homes on projects.... "" ""

d- I don't know how exactly, but come up with mechanism to make sure that at least some of the per unit cost reduction gets translated into lower new home purchase price.

Desired Impact (s) Increase in supply
a- increased annual throughput, both by rubber stamping at the permit level, and by reduced trade time and material required per unit built
b-increased financial incentive and access to capital to catalyze starts and get/allow builders to build

 

[YZT580]

Where I would start with a housing plan-

1- Either by working with the Provinces to create a coast to coast common framework or via Federal Criminalization- ban blind bidding and bring transparency into the house transaction process. It doesn't need to be as seamless and revolutionary as an open live portal, just get rid of "holding" offers, and make it a requirement to disclose offers currently under consideration to the realtor of any interested party

Desired Impact(s) -firstly, lower the cost of housing in competitive scenarios by reducing information asymmetry and allowing the final buyer to purchase the house for the minimum needed (theoretically $1 more than the second highest bidder), removing the exploitative "come back with your best offer" bs. By trimming this fat out of competitive transactions (whether it's 1%, 2%,5%, 10%) we would take just a little off the top of the market without collapsing it, and put the reins on runaway price increases by destressing the process, and preventing the cascade of anomalous high offers resetting local expectations.

2a Prepare an extensive library of pre-approved plans for all of single detached, duplex, triplex, row, stacked townhomes, and lowrise apartment buildings. I mean extensive, 2, 3 and 4 bedroom, many different floorplans and elevations/style at each size. Lots of choice. Common element- size constraints based on number of bedrooms, and overall architecture/design emphasis on lower cost/ efficient (not cheap) building practices (I'm talking reducing corners- not cutting them, simple rooflines, no mcmansion bs, no structural frills etc.)

2b- Create a fund to be managed by the BDC to provide low interest loans to projects building exclusively designs from the library, with caps on the proportion of the development that can be 4 bedroom.

2c- waive Federal portion of HST on sale of new homes on projects.... "" ""

d- I don't know how exactly, but come up with mechanism to make sure that at least some of the per unit cost reduction gets translated into lower new home purchase price.

Desired Impact (s) Increase in supply
a- increased annual throughput, both by rubber stamping at the permit level, and by reduced trade time and material required per unit built
b-increased financial incentive and access to capital to catalyze starts and get/allow builders to build

so more government control? I cry bull. Until the supply and the demand are more or less equalized, housing will remain an elusive goal for the majority of new entrants into the market.

 

[IKnowNothing]

so more government control? I cry bull. Until the supply and the demand are more or less equalized, housing will remain an elusive goal for the majority of new entrants into the market.

Where's the control?
Also, boosting supply is one pretty big side of equalizing supply and demand.

 

[Rifleman62]

Add, in BC get rid of the Land Transfer Tax.

The general property transfer tax rate is: 1% of the fair market value up to and including $200,000. 2% of the fair market value greater than $200,000 and up to and including $2,000,000. 3% of the fair market value greater than $2,000,000.

 

[YZT580]

everything on your list reeks of government intervention.

Where's the control?
Also, boosting supply is one pretty big side of equalizing supply and demand

 

[Brad Sallows]

Where I would start with a housing plan-

1- Either by working with the Provinces to create a coast to coast common framework or via Federal Criminalization- ban blind bidding and bring transparency into the house transaction process. It doesn't need to be as seamless and revolutionary as an open live portal, just get rid of "holding" offers, and make it a requirement to disclose offers currently under consideration to the realtor of any interested party

d- I don't know how exactly, but come up with mechanism to make sure that at least some of the per unit cost reduction gets translated into lower new home purchase price.

Incompatible. You want open bidding and lower prices in a market with a substantial mismatch between supply and demand.

Imagine dividing the residence-buying population into deciles according to what they could afford to pay. "One" is the top.

If the people in "One" can't find anything, they start bidding on the properties the people in "Two" are looking at.
If the people in "Two" can't find anything, they start bidding on the properties the people in "Three" are looking at.
Etc.

As long as demand in higher deciles can't be met, people who can afford more will be out-bidding people who can afford less (and effectively pushing up prices). Open bidding might reduce that pressure somewhat of course, but the underlying problem is lack of supply and we don't know how many extra buyers in a market (neighbourhood) it takes for a nickel-and-dime open bidding process to end up at the same prices as a closed bidding process.

"Mechanisms" have to be able to compete with the basic financial incentive to build maximum value housing on real estate in order to maximize profits. All the solutions I've seen boil down to either forcing developers to take haircuts (eg. include some fraction of "social housing" in each development), which motivates them to work even harder to find maximum value prospects elsewhere; or, to transferring public funds (including "socializing risk") into the pockets of developers (either directly, eg. low interest loans, or indirectly via buyers, eg. tax breaks).

Canadian Immigration Statistics (Wikipedia). Notice that the immigration rate has jumped in the past few years. The federal government has full control of that slider, and doesn't have to give any money to anyone or interfere in any province's management of its real estate.

 

[IKnowNothing]

everything on your list reeks of government intervention.

A. Any change to the status quo to rectify the situation is "government intervention"
B. Intervention is not the same as control

The 1st step amounts to shutting down an exploitative practice that is bad for society
The 2nd amounts to a qualified subsidy program to boost supply in a couple different ways.

 

[YZT580]

A. Any change to the status quo to rectify the situation is "government intervention"
B. Intervention is not the same as control

The 1st step amounts to shutting down an exploitative practice that is bad for society
The 2nd amounts to a qualified subsidy program to boost supply in a couple different ways.

may not be the same but it is a definite first cousin.

 

[IKnowNothing]

You want open bidding and lower prices in a market with a substantial mismatch between supply and demand.

As long as demand in higher deciles can't be met, people who can afford more will be out-bidding people who can afford less (and effectively pushing up prices). Open bidding might reduce that pressure somewhat of course, but the underlying problem is lack of supply and we don't know how many extra buyers in a market (neighbourhood) it takes for a nickel-and-dime open bidding process to end up at the same prices as a closed bidding process.

I have to throw in a caveat- I did speak misleadingly. When I say "ban blind bidding" I don't want to blow apart the system and make everything an auction, moreso "ban the fubar blind quasi-auctions we've come to know as bidding wars" It won't fix the problem, but every little bit helps. There is "fat" in the real estate process, an economically indefensible information asymmetry that exploits stress and frustration to extract surplus out of buyers , triggering a feedback loop of heightened valuations/expectations.

Imagine dividing the residence-buying population into deciles according to what they could afford to pay. "One" is the top.

If the people in "One" can't find anything, they start bidding on the properties the people in "Two" are looking at.
If the people in "Two" can't find anything, they start bidding on the properties the people in "Three" are looking at.
Etc.

The "ones" have homes. They will always have homes. There isn't enough for the 10's through 6's? 5's? 4's though.

Ontario -We need 1.5 million homes spread across the 10 deciles (theoretically). We don't have the resources to (in terms of building capacity) to get it done with the mix the market is putting out.

Not enough in aggregate- we're still in this mess
Enough in aggregate, but overweight towards higher $ deciles - we're still in this mess
Enough in aggregate, but overweight toward lower $ deciles- some people with money have a less prestigious house than they want/

Canadian Immigration Statistics (Wikipedia). Notice that the immigration rate has jumped in the past few years. The federal government has full control of that slider, and doesn't have to give any money to anyone or interfere in any province's management of its real estate.

The student visa's have become a problem that has been getting out of control. As has the, shall we say, untargeted, nature of immigration policy. There needs to be reform, but... that tap cannot be turned off entirely or we risk complete economic collapse. We need working age people to keep the lights on and the wheels turning while the boomers retire.

We don't have enough houses today. We need population growth to prevent a pop pyramid inversion/ handle a cylinder. We need some sort demand reduction to stop the bleeding, but the supply side cannot be ignored.

 

[mariomike]

Cheapest detached house in Toronto.

$599,000

1,000 square feet.

This might be the cheapest detached house in Toronto right now

Housing prices continue to climb across the country, and the only affordable, if you can even say that, homes in all of Ontario are in Niagara Falls …

www.blogto.com

 

[Quirky]

Cheapest detached house in Toronto.

$599,000

1,000 square feet.

 

[IKnowNothing]

Cheapest detached house in Toronto.

$599,000

1,000 square feet.

This might be the cheapest detached house in Toronto right now

Housing prices continue to climb across the country, and the only affordable, if you can even say that, homes in all of Ontario are in Niagara Falls …

www.blogto.com

500 sq feet, and a finished basement apartment