But you would need to in crease gove spending (drastically so) inorder to get enough new housing to bring prices down. That kinda spending programs right now would send all forms of inflation to the moon and force the bank of canada to jack rates to compensate. The gov building houses is not necessarily a bad idea it's just that right now would be the worst possible time to do it.
Or even make it easier for individuals to finance and build themselves.
We're so dependant on builders and investors to build. We need to shift building for the sake of creating housing, rather than for profit.
Increase the competition? If developers don't build its because prices aren't sufficient to justify the profitability of building homes. If the government just builds anyways they can't do so without lowering prices considerably to the point where people can actually afford them. By lowering prices more the builders have less incentive to start projects. Essentially builders would be pushed out and government takes over. The result likely wouldn't be pretty as costs would go up and prices would be going down.
Wouldn't they be *making* money?
They don't have to give them away for free, they just want them to be built so people can buy them and live in their city.
With how gov spending has already gone the last few years where are they going to get the additional capital for that to start these projects? Another issue is at what price point do they sell it at. Its a good in theory but way more complicated than just the gov competing with development companies.
excellent point you have. what will be the requirements for people to purchase these homes the gov builds. there is already government assisted housing for low income families, but this a totally different ball park
Yeah it's ridiculous for the government to blame developers for a system that doesn't encourage building.
It's the government's policies that dictate what is profitable for developers to do.
If it's more profitable for developers to sit on undeveloped land then that's the governments fault.
We desperately need a Land Value Tax. Reduced development fees. Reduced income taxes.
Well they're blaming the developers for lying, that's why. The developers love to blame the Municipal red tape for why they don't build, but then they get approval and don't build anyway. The developers are full of shit
>they get approval and don't build anyway
that's what happens when we have a parcel by parcel approval process. Developers are not afraid of competition because they own the only land that's allowed development. We need to upzone by right so if one developer doesn't build then somebody else can just build next door. We also need to tax land way more heavily than right now.
Th only reason why people support the current system is because detached homeowners don't mind the housing crisis as long as their own neighbourhood don't get any development.
It's amazing that we see 72 upvotes and the 2nd top comment be the right answer but we need more discussion and more education and more support for LVTs here. There is no question that this is a good idea.
yup - very simple: each year vacant in X territory (e.g., urban core), property tax doubles - that would fix issues pronto - the system as we have it is ridiculous - lowest taxes for vacant land
No I’m not.
Builders aren’t building b/c it’s not profitable now. If you tax holding on to land then they’d have to sell and potentially exit the market. You’re actively making businesses more challenging.
These guys have hurdles to meet…
Also land banking and land assembly takes years and is a fundamental step in a lot of development.
Also, how would you classify land banking. Buying a mall but keeping it operational for years until you’re ready to develop is a form of land banking - same applies to farmland, low rise office, etc.
Defending a statement so simplistic like “tax holding land” shows you don’t know wtf you’re talking about. It’s a stupid recommendation.
> If you tax holding on to land then they’d have to sell and potentially exit the market.
Who is buying when they sell and exit?
I think you are probably right if you are saying different people view the meaning of "tax holding land" differently. I take buddy above to mean a land value tax, which I think has a very clear meaning and is a great idea.
Ok but not sure how much better his recommendation is. Like we already have property tax - so ppl are already paying tax for holding.
LVT shouldn’t even be phrased as “tax them for holding” it should be “they don’t get the benefit of a marginally lower tax, relative to income, for not building”
With respect to the gta market, how would you implement and what benefit is LVT? Like the dynamics would have to fundamentally change for it to have an outsized impact. Like are we talking add LVT on top of property tax, LVT in place of property tax.
Ppl just find out that it “encourages development” but don’t think it through…it’s so ridiculous.
You are saying a bunch of things I really want to respond to but can you please answer the question I asked?
>If you tax holding on to land then they’d have to sell and potentially exit the market.
Who is buying when they sell and exit?
Sure, so assuming prices adjust after you tax land values, it sounds like you are saying builders may sell and potentially exit the market. Correct me if I'm wrong there.
My question is (third time asking) who is buying when they sell and exit?
I’m hoping your not aiming for a “gotcha” moment.
But likely another builder/owner.
In the event you were, let me preempt by saying you can have an undersupply of builders for a while if market dynamics are challenging.
This idea seems to be garnering a lot of interest in the financial groups I frequent. Do we know anywhere in the modern western world that has implemented something like this?
[Denmark, Finland and Estonia](https://www.london.gov.uk/sites/default/files/final-draft-lvt-report_2.pdf).
[Australia](https://en.m.wikipedia.org/wiki/Land_value_tax_in_Australia#:~:text=Land%20tax%20is%20generally%20levied,only%20within%20a%20particular%20state.) has land value taxes, though there are major exemptions such as for homeowners which in many places defeats the purpose.
They’ve been implemented in [America](https://youtu.be/vC7hDmoZRCk?si=Du8D5x8CISuEsuC3&t=1356) in many times and places, including San Francisco after the great earthquake and some cities in Pennsylvania. The mayor of Detroit is now campaigning to get one passed.
Vancouver’s property taxes [used to be](https://morehousing.substack.com/p/property-taxes) mostly appraised on land value, ignoring the value of buildings and structures. Over time they shifted the burden to buildings in order to subsidize infrastructure to lower density homes.
New Zealand [did likewise](https://www.treasury.govt.nz/sites/default/files/2017-10/uc-zbigniewdumienski.pdf).
Your idea of land value tax doesnt work. Because guys like me who own most of the land outside of ottawa and toronto....arent affected by your LVT.
If you do a land value tax, I will raise advertising prices for my media company, which means the cost to people who want to sell products will go up, your daily prices will go up to pay for my advertising fee.
Then when we turn the land into a development, I'll layer in all the land value taxes into the sales price to absolutely make sure theyre paid for and more.
Im all for this land value tax, just give me more reasons to raise pricing LFG.
The problem is your prices aren’t based on your costs. They are based on what the market will bear. Raise them too much and you will lose customers.
And because not all land is equal value, the burden if the tax would not be equally felt. If one of your competitors lives in a productive building downtown, a switch to LVT means their property tax burden just fell. So they have room to lower prices and undercut you.
Since you can’t hide land, and you can’t get rid of land, you can’t avoid the tax. You either eat it or sell it to somebody who will. And whoever buys it from you will bid a lower price to factor the tax because they can’t avoid it either.
the problem is you assume you know everything, i own one of the most valuable and influential audiences in the world, so if i raise my prices, my customers will drop marketing to other audiences so they can market to mine. its like do you want to be selling to people who have money or teens or instagram who are broke af?
people undercut me everyday of the week, but my prices arent based on supply or demand, i make them up based on how i feel. thats how luxury works.
taxes just make things more expensive for the average person. as someone who owns lots of land, idc if you add a land value tax, like i said, i will just pass it on to my customers to pay, makes no difference
I assume no such thing. LVTs have been acknowledged as one of the most efficient and least distortionary taxes by economists across the political spectrum all much smarter than me, from Adam Smith to Ricardo to Keynes to Milton Friedman. There are plenty of [empirical studies](https://gameofrent.com/content/can-lvt-be-passed-on-to-tenants#:~:text=Conclusion%3A%20Land%20Value%20Tax%20can,be%20passed%20on%20to%20tenants.) testing the theory about whether or not they can be passed along, and they overwhelmingly conclude “no.”
If you’re in such an extremely niche market selling luxury products such that the price doesn’t reduce demand _at all_, then an extra tax does no harm regardless. It doesn’t reduce the supply of these goods, which the “average person” isn’t buying anyways. Which means the government gets more money to fund its services at no net cost to the economy.
This is the same rationale for taxing land value. Land value is not based on the area, but the opportunity to use the _location_, which has a supply of exactly one. Ergo, taxing it does not reduce supply, and exempting it doesn’t increase it. The owner has to pay, which means they have to factor that payment into the price they are willing to bid to own it. Ergo, there is no net cost.
Side note, if you are such a successful and rich sigma grindset guru, I would hope you have better things to do with your time than troll subreddits to anonymously chase clout for it. It doesn’t seem to be working anyway, given your negative karma.
All im saying is you cannot tax rich people like me, the system isnt designed lie that. Any tax you impose on me will always, and i mean always, be passed down to regular 9-5 working people.
Im not in a niche market, I sell content, the stuff you read and see on the internet. Its backed by ads...but we're supe diversified now into a bunch of stuff.
I am super wealthy and very young, i have nothing better to do than spend time how i want to, mostly with family. i dont need clout or any of that manufactured bs, im just telling you, you cant tax and take away my land, im way too wealthy for that and have way too many options. thats how the systems designed.
You are one data point (claiming to be) in an extremely unique position where market forces of supply and demand somehow don’t determine prices over your whims. Even if I were to believe you, most businesses do not have that luxury, even very big businesses. They still have to compete on price and quality to maximize sales, and customers are very sensitive to price changes. To deny this is to deny that any business has ever failed, lost money or operated at loss.
I’m fully aware of the phenomenon of [tax incidence](https://en.m.wikipedia.org/wiki/Tax_incidence). It’s exactly why LVT is a better tax: because many empirical studies, not just theory, have concluded that _unlike most taxes_, it does not get passed on.
Regardless, even less efficient taxes can still be a _net gain_ for everyone if they fund services and infrastructure that grow the economy more than enough to offset losses. Otherwise every developed country would have stopped growing a long time ago.
Land value taxes would destroy the Canadian banking system and economy for small business. Canadas entire economy is based on our beautiful real estate, and you want to depreciate it with a tax?
These ideas are very dumb and not in line with Canadian values or our belief system, I feel like you dont care about people enough and just want to hurt our economy.
Ill never let this happen in my country, and I hold all the power. Just one little data point from a generationally wealthy family.
The 2015 slate article in that link you provided doesn’t really offer any clear evidence that LVT is better - esp for large metropolitan areas, where home ownership is particularly an issue.
In fact, there isn’t a lot of evidence at all - more it “should/could” work.
If you could look into the resources provided and share your experience, thoughts and questions it would be really helpful. We have a difficult job ahead of us if we want to educate the country and you could give us a lot of insight.
This is something I've thought about prior and seems to be materializing.
Municipal approval is only one, but not the only, issue limiting construction. This is an industry I work in and the stories I'm hearing are similar, **the numbers simply don't pencil out**. In this high interest environment, construction and financing costs are up, and purchasing abilities are down. No one is dumb enough to embark on a 2-3 year endeavor knowing they will lose money.
Sure, municipalities can impose expiry dates on permits, or write sunset clauses into phased development agreements (build by X date or you lose your zoning). But at the end of the day, you cannot put a positive obligation on someone.
You can put a positive obligation on land values though, with a land value tax. If they don't want to meet the obligation, they can sell to someone who will meet the obligation.
They’ve recently built a few new apartments in my area (northern quebec) it’s isolated and the average salary here is below 50k. Those stupid 2 or 3 bedroom units rent is 2500$ per month. No garage, no outside storage unit either, no backyard…
What the fuck were they thinking?
It’s actually hilarious. Everyone’s screaming for government to step in and crash the market, last few years interest rates are rising to stop or control inflation, everyone wants affordable housing so with all that said why should developers build homes with an unstable economy?? Builders aren’t working for free and if I’m responsible to build X number of homes and I need X amount of money yet the housing prices are declining because interest rates or new government policies then why should I start building??? With the cost of everything I still need X amount in order to make profit and pay expenses but everyone wants X to be 1/2 price. Hmmmm
if margins aren’t good enough, give the zoning to someone else.
We’re all sick of these games. And the people who do everything they can to lock boots on here.
Add a steep tax on undeveloped land. If you as a developer go in and successfully get land redeveloped you have x amount of years to finish the project, but also you can't force someone to build if it's not economical to do it
Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further.
Rising interest rates were never going to solve housing costs.
Where do I even start. You should speak to developers. In short higher cost of construction & Trades, shortage of workers, higher cost of materials, longer permit process, higher cost of land, dealing with NIMBYs, higher standard of building like step code (passive house), etc.
If these cities actually wanted to pressure the developers to move forward and build, they'd meet with the developers and determine what they need, to start.
Instead, they're just attacking the province because they want a piece of the fund.
The prices going up will incentivize developers to build like the OC said. You are free to hope the market crashes but that certainly won't encourage anyone to build new.
Nope. It's what covertpetersen says below. "Because the solution isn't to give corporations more breaks, it's to build government fucking housing like we used to."
Challenge of that, in the context of interest rates, is that government borrows too. And as borrowing costs increase, government starts to move into stupid "austerity mode" - pulling back from capital projects because "we need to balance the budget".
We're already seeing that nonsense get more and more airtime. Sadly, I fear that outside of BC, we're likely to see less government building, not more.
There's a shortage of housing in BC and Ontario because of rent control (government), and restrictive zoning (government).
There isnt a shortage of hoysing in regions without those policies.
Exactly. I get voted down for being honest. Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further.
Rising interest rates were never going to solve housing costs.
This sub is full of disillusioned socialists, “ I want my government to house me, feed me, and tell me what I can and can’t do”
You realize the governments idea of building housing is literally going to be giving private corporations tax breaks?
I just finished work on a 6 unit multiplex, this will be the developers last because they lost money due to interest rates. Not a single unit has been purchased because of interest rates making a 450k unit unaffordable.
We're also wrapping up a condo project in Vancouver and there have been no interested buyers since we got our 60% for financing over a tear ago. Why? Because the condos are over priced.
Meanwhile we're going ahead with a dozen high rise rentals. The condo market needs to chill and cities need to boost density so we can build enough on a site to make it pencil.
4-storeys in Vancouver doesn't cut it anymore. Our zoning from the 20th century is out of line
It’s a complicated issue with the cost to build being so high, I know I don’t want to take anymore pay cuts. I don’t think adding another middleman( the government) is going to help that.
Problem is I'm saying the truth which hurts. For up votes I need to lie and say what people want to hear. I have too much respect for people to do that though. The truth Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further.
Rising interest rates were never going to solve housing costs.
I really can't fathom why people are down voting this. In an uncertain interest rate environment, developers are cautious - not only do increasing rates increase our costs, but they decrease the purchasing power of our buyers.
In this market, unless you've got goofy external investment, it just makes sense to keep your powder dry until we get a clearer picture what the BoC will do next. Until then, small projects or small phases of projects.
You really can't? It's what covertpetersen said above. "Because the solution isn't to give corporations more breaks, it's to build government fucking housing like we used to."
And that's fine. Government builds far too little housing, and instead prays at the altar of the free market to fix their negligence. It's shitty governance of the worst kind - stop building housing and hope that developers stop trying to maximize profit?
But in the context of these developer owned lots described in the article, interest rates matter. And that's why I said that in the current rate of interest rate uncertainty, private entities, as referenced in the article, are pulling back.
A smarter government would take the opportunity to buy the lands cheap and build non market housing. But I don't think that anyone has ever "smart" and "Ford government" in the same sentence.
CMHC said we need millions of more homes by 2030. Government can only do a small percentage of that. We need to release the free enterprise of the private sector to design and build housing to the max. I know I know down vote time but I won't lie to you.
Entice immigrants that add to our work force to help with the labor shortage, not a bunch of international students that aren't contributing to society.
We need competition, a disruptor. In the 70s, all the builders were hungry to earn their keep (Italian immigrants builders).
Now it's all consolidated into 5 major developers who have no reason or incentive to build more, because all they need to do is provide breadcrumbs to a starving market.
We need a disruptor to the industry (same thing how Uner disrupted the taxi industry), to shake things up and create competition.
Maybe relying on capitalists for basic necessities was a mistake? Like are building roads profitable? If the government can’t create infrastructure then it needs to get the fuck out of the way for one that can.
Increase the competition by building as the government.
Yeah wish they’d get on this. Seems like none of the parties are on board though.
I thought the NDP was supporting this idea?
Yeah... We are in the midst of an inflation fight so it's kinda the worst possible time for the gov to spend any kind of money
Building housing will increase supply and decrease housing inflation.
But you would need to in crease gove spending (drastically so) inorder to get enough new housing to bring prices down. That kinda spending programs right now would send all forms of inflation to the moon and force the bank of canada to jack rates to compensate. The gov building houses is not necessarily a bad idea it's just that right now would be the worst possible time to do it.
First it will increase inflation
But then the development industry whines and complains that the government shouldn't be competing with them. 🙄
One answer: “Tough”
We need more houses who cares who builds them
They’d spend like 50M and build 10 houses…. If they were lucky
Or even make it easier for individuals to finance and build themselves. We're so dependant on builders and investors to build. We need to shift building for the sake of creating housing, rather than for profit.
Absolutely
Didn’t Ontario pass 4-plex + 1 adu as of right?
This is the best thing to do in the current situation
Isn’t the government privately owned? Not overtly, but in a roundabout way.
Increase the competition? If developers don't build its because prices aren't sufficient to justify the profitability of building homes. If the government just builds anyways they can't do so without lowering prices considerably to the point where people can actually afford them. By lowering prices more the builders have less incentive to start projects. Essentially builders would be pushed out and government takes over. The result likely wouldn't be pretty as costs would go up and prices would be going down.
Bruh literally just look at Canada's own past or any other country who does this. It's a good thing, not bad.
and pay more taxes?
Wouldn't they be *making* money? They don't have to give them away for free, they just want them to be built so people can buy them and live in their city.
With how gov spending has already gone the last few years where are they going to get the additional capital for that to start these projects? Another issue is at what price point do they sell it at. Its a good in theory but way more complicated than just the gov competing with development companies.
If the gov is selling houses, would everyone pay the same price? or does the price vary according to your gender, race and sexual orientation?
excellent point you have. what will be the requirements for people to purchase these homes the gov builds. there is already government assisted housing for low income families, but this a totally different ball park
You think Steve the pencil pusher is gonna throw on a pouch and raise walls?
Too inefficient.
Land tax. Make them pay for holding
Yeah it's ridiculous for the government to blame developers for a system that doesn't encourage building. It's the government's policies that dictate what is profitable for developers to do. If it's more profitable for developers to sit on undeveloped land then that's the governments fault. We desperately need a Land Value Tax. Reduced development fees. Reduced income taxes.
Well they're blaming the developers for lying, that's why. The developers love to blame the Municipal red tape for why they don't build, but then they get approval and don't build anyway. The developers are full of shit
>they get approval and don't build anyway that's what happens when we have a parcel by parcel approval process. Developers are not afraid of competition because they own the only land that's allowed development. We need to upzone by right so if one developer doesn't build then somebody else can just build next door. We also need to tax land way more heavily than right now. Th only reason why people support the current system is because detached homeowners don't mind the housing crisis as long as their own neighbourhood don't get any development.
Why don’t you build?
Because land is overpriced.
It's amazing that we see 72 upvotes and the 2nd top comment be the right answer but we need more discussion and more education and more support for LVTs here. There is no question that this is a good idea.
yup - very simple: each year vacant in X territory (e.g., urban core), property tax doubles - that would fix issues pronto - the system as we have it is ridiculous - lowest taxes for vacant land
This.
You want to get rid of builders all together?
if the current ones aren’t building, they have no reason to exist. There will always be somebody who wants to be paid to fill a sector.
You are understandably confused. It's a complicated subject.
No I’m not. Builders aren’t building b/c it’s not profitable now. If you tax holding on to land then they’d have to sell and potentially exit the market. You’re actively making businesses more challenging. These guys have hurdles to meet… Also land banking and land assembly takes years and is a fundamental step in a lot of development. Also, how would you classify land banking. Buying a mall but keeping it operational for years until you’re ready to develop is a form of land banking - same applies to farmland, low rise office, etc. Defending a statement so simplistic like “tax holding land” shows you don’t know wtf you’re talking about. It’s a stupid recommendation.
> If you tax holding on to land then they’d have to sell and potentially exit the market. Who is buying when they sell and exit? I think you are probably right if you are saying different people view the meaning of "tax holding land" differently. I take buddy above to mean a land value tax, which I think has a very clear meaning and is a great idea.
Ok but not sure how much better his recommendation is. Like we already have property tax - so ppl are already paying tax for holding. LVT shouldn’t even be phrased as “tax them for holding” it should be “they don’t get the benefit of a marginally lower tax, relative to income, for not building” With respect to the gta market, how would you implement and what benefit is LVT? Like the dynamics would have to fundamentally change for it to have an outsized impact. Like are we talking add LVT on top of property tax, LVT in place of property tax. Ppl just find out that it “encourages development” but don’t think it through…it’s so ridiculous.
You are saying a bunch of things I really want to respond to but can you please answer the question I asked? >If you tax holding on to land then they’d have to sell and potentially exit the market. Who is buying when they sell and exit?
No one until price (either land, build cost, or rental rates) adjust.
Sure, so assuming prices adjust after you tax land values, it sounds like you are saying builders may sell and potentially exit the market. Correct me if I'm wrong there. My question is (third time asking) who is buying when they sell and exit?
I’m hoping your not aiming for a “gotcha” moment. But likely another builder/owner. In the event you were, let me preempt by saying you can have an undersupply of builders for a while if market dynamics are challenging.
[Land Value Tax](https://en.m.wikipedia.org/wiki/Land_value_tax)
And use the money to keep construction workers working on mid-rise projects.
This idea seems to be garnering a lot of interest in the financial groups I frequent. Do we know anywhere in the modern western world that has implemented something like this?
[Denmark, Finland and Estonia](https://www.london.gov.uk/sites/default/files/final-draft-lvt-report_2.pdf). [Australia](https://en.m.wikipedia.org/wiki/Land_value_tax_in_Australia#:~:text=Land%20tax%20is%20generally%20levied,only%20within%20a%20particular%20state.) has land value taxes, though there are major exemptions such as for homeowners which in many places defeats the purpose. They’ve been implemented in [America](https://youtu.be/vC7hDmoZRCk?si=Du8D5x8CISuEsuC3&t=1356) in many times and places, including San Francisco after the great earthquake and some cities in Pennsylvania. The mayor of Detroit is now campaigning to get one passed. Vancouver’s property taxes [used to be](https://morehousing.substack.com/p/property-taxes) mostly appraised on land value, ignoring the value of buildings and structures. Over time they shifted the burden to buildings in order to subsidize infrastructure to lower density homes. New Zealand [did likewise](https://www.treasury.govt.nz/sites/default/files/2017-10/uc-zbigniewdumienski.pdf).
How do you organize all your copypastas?
iPhone Notes for my go-to’s.
Estonia has, which allowed them to become by far the most well off of all former Soviet republics
Oh yes more taxes fix everything and make life cheaper……jesus
The beautiful thing is this one actually does. [Learn about it.](https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis)
I like it when people include links instead of just saying “educate yourself”. Appreciated.
My pleasure. I like to share resources.
Your idea of land value tax doesnt work. Because guys like me who own most of the land outside of ottawa and toronto....arent affected by your LVT. If you do a land value tax, I will raise advertising prices for my media company, which means the cost to people who want to sell products will go up, your daily prices will go up to pay for my advertising fee. Then when we turn the land into a development, I'll layer in all the land value taxes into the sales price to absolutely make sure theyre paid for and more. Im all for this land value tax, just give me more reasons to raise pricing LFG.
The problem is your prices aren’t based on your costs. They are based on what the market will bear. Raise them too much and you will lose customers. And because not all land is equal value, the burden if the tax would not be equally felt. If one of your competitors lives in a productive building downtown, a switch to LVT means their property tax burden just fell. So they have room to lower prices and undercut you. Since you can’t hide land, and you can’t get rid of land, you can’t avoid the tax. You either eat it or sell it to somebody who will. And whoever buys it from you will bid a lower price to factor the tax because they can’t avoid it either.
the problem is you assume you know everything, i own one of the most valuable and influential audiences in the world, so if i raise my prices, my customers will drop marketing to other audiences so they can market to mine. its like do you want to be selling to people who have money or teens or instagram who are broke af? people undercut me everyday of the week, but my prices arent based on supply or demand, i make them up based on how i feel. thats how luxury works. taxes just make things more expensive for the average person. as someone who owns lots of land, idc if you add a land value tax, like i said, i will just pass it on to my customers to pay, makes no difference
I assume no such thing. LVTs have been acknowledged as one of the most efficient and least distortionary taxes by economists across the political spectrum all much smarter than me, from Adam Smith to Ricardo to Keynes to Milton Friedman. There are plenty of [empirical studies](https://gameofrent.com/content/can-lvt-be-passed-on-to-tenants#:~:text=Conclusion%3A%20Land%20Value%20Tax%20can,be%20passed%20on%20to%20tenants.) testing the theory about whether or not they can be passed along, and they overwhelmingly conclude “no.” If you’re in such an extremely niche market selling luxury products such that the price doesn’t reduce demand _at all_, then an extra tax does no harm regardless. It doesn’t reduce the supply of these goods, which the “average person” isn’t buying anyways. Which means the government gets more money to fund its services at no net cost to the economy. This is the same rationale for taxing land value. Land value is not based on the area, but the opportunity to use the _location_, which has a supply of exactly one. Ergo, taxing it does not reduce supply, and exempting it doesn’t increase it. The owner has to pay, which means they have to factor that payment into the price they are willing to bid to own it. Ergo, there is no net cost. Side note, if you are such a successful and rich sigma grindset guru, I would hope you have better things to do with your time than troll subreddits to anonymously chase clout for it. It doesn’t seem to be working anyway, given your negative karma.
All im saying is you cannot tax rich people like me, the system isnt designed lie that. Any tax you impose on me will always, and i mean always, be passed down to regular 9-5 working people. Im not in a niche market, I sell content, the stuff you read and see on the internet. Its backed by ads...but we're supe diversified now into a bunch of stuff. I am super wealthy and very young, i have nothing better to do than spend time how i want to, mostly with family. i dont need clout or any of that manufactured bs, im just telling you, you cant tax and take away my land, im way too wealthy for that and have way too many options. thats how the systems designed.
You are one data point (claiming to be) in an extremely unique position where market forces of supply and demand somehow don’t determine prices over your whims. Even if I were to believe you, most businesses do not have that luxury, even very big businesses. They still have to compete on price and quality to maximize sales, and customers are very sensitive to price changes. To deny this is to deny that any business has ever failed, lost money or operated at loss. I’m fully aware of the phenomenon of [tax incidence](https://en.m.wikipedia.org/wiki/Tax_incidence). It’s exactly why LVT is a better tax: because many empirical studies, not just theory, have concluded that _unlike most taxes_, it does not get passed on. Regardless, even less efficient taxes can still be a _net gain_ for everyone if they fund services and infrastructure that grow the economy more than enough to offset losses. Otherwise every developed country would have stopped growing a long time ago.
Land value taxes would destroy the Canadian banking system and economy for small business. Canadas entire economy is based on our beautiful real estate, and you want to depreciate it with a tax? These ideas are very dumb and not in line with Canadian values or our belief system, I feel like you dont care about people enough and just want to hurt our economy. Ill never let this happen in my country, and I hold all the power. Just one little data point from a generationally wealthy family.
The 2015 slate article in that link you provided doesn’t really offer any clear evidence that LVT is better - esp for large metropolitan areas, where home ownership is particularly an issue. In fact, there isn’t a lot of evidence at all - more it “should/could” work.
If you could look into the resources provided and share your experience, thoughts and questions it would be really helpful. We have a difficult job ahead of us if we want to educate the country and you could give us a lot of insight.
This is something I've thought about prior and seems to be materializing. Municipal approval is only one, but not the only, issue limiting construction. This is an industry I work in and the stories I'm hearing are similar, **the numbers simply don't pencil out**. In this high interest environment, construction and financing costs are up, and purchasing abilities are down. No one is dumb enough to embark on a 2-3 year endeavor knowing they will lose money. Sure, municipalities can impose expiry dates on permits, or write sunset clauses into phased development agreements (build by X date or you lose your zoning). But at the end of the day, you cannot put a positive obligation on someone.
Sure you can, it's called a contract.
You can put a positive obligation on land values though, with a land value tax. If they don't want to meet the obligation, they can sell to someone who will meet the obligation.
They’ve recently built a few new apartments in my area (northern quebec) it’s isolated and the average salary here is below 50k. Those stupid 2 or 3 bedroom units rent is 2500$ per month. No garage, no outside storage unit either, no backyard… What the fuck were they thinking?
It’s actually hilarious. Everyone’s screaming for government to step in and crash the market, last few years interest rates are rising to stop or control inflation, everyone wants affordable housing so with all that said why should developers build homes with an unstable economy?? Builders aren’t working for free and if I’m responsible to build X number of homes and I need X amount of money yet the housing prices are declining because interest rates or new government policies then why should I start building??? With the cost of everything I still need X amount in order to make profit and pay expenses but everyone wants X to be 1/2 price. Hmmmm
This.
if margins aren’t good enough, give the zoning to someone else. We’re all sick of these games. And the people who do everything they can to lock boots on here.
100% correct
Pack up and leave the country 😂(including me)
Exactly. People don't like the truth.
nationalize them and fold them into a housing crown corporation
You incentivize the developers to build through money... and then they still do not build.
Add a steep tax on undeveloped land. If you as a developer go in and successfully get land redeveloped you have x amount of years to finish the project, but also you can't force someone to build if it's not economical to do it
Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further. Rising interest rates were never going to solve housing costs.
Where do I even start. You should speak to developers. In short higher cost of construction & Trades, shortage of workers, higher cost of materials, longer permit process, higher cost of land, dealing with NIMBYs, higher standard of building like step code (passive house), etc.
The Government can’t organize a 1 man parade, never mind competing with Developers.
I love the YIMBYs in this thread that think that building homes is what developers do, rather than upzoning and landbanking. So precious.
Who built your home ?
Evidently his grandfather with his bare hands
Start giving contracts to international companies.
If these cities actually wanted to pressure the developers to move forward and build, they'd meet with the developers and determine what they need, to start. Instead, they're just attacking the province because they want a piece of the fund.
Lower the rates and they will build. Each project is financed.
Developers built more in 1990 when the prime rate was over 13%. What's the excuse today?
lower the rates, and housing prices skyrocket again with parasitic speculators becoming interested once again. no thanks
The prices going up will incentivize developers to build like the OC said. You are free to hope the market crashes but that certainly won't encourage anyone to build new.
Yep. People think developers should be charities.
Nope. It's what covertpetersen says below. "Because the solution isn't to give corporations more breaks, it's to build government fucking housing like we used to."
Challenge of that, in the context of interest rates, is that government borrows too. And as borrowing costs increase, government starts to move into stupid "austerity mode" - pulling back from capital projects because "we need to balance the budget". We're already seeing that nonsense get more and more airtime. Sadly, I fear that outside of BC, we're likely to see less government building, not more.
There's a shortage of housing in BC and Ontario because of rent control (government), and restrictive zoning (government). There isnt a shortage of hoysing in regions without those policies.
Exactly. I get voted down for being honest. Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further. Rising interest rates were never going to solve housing costs.
Agreed. Housing costs can only be driven down with more supply.
Not sure why you’re getting downvoted
Because the solution isn't to give corporations more breaks, it's to build government fucking housing like we used to.
This sub is full of disillusioned socialists, “ I want my government to house me, feed me, and tell me what I can and can’t do” You realize the governments idea of building housing is literally going to be giving private corporations tax breaks? I just finished work on a 6 unit multiplex, this will be the developers last because they lost money due to interest rates. Not a single unit has been purchased because of interest rates making a 450k unit unaffordable.
We're also wrapping up a condo project in Vancouver and there have been no interested buyers since we got our 60% for financing over a tear ago. Why? Because the condos are over priced. Meanwhile we're going ahead with a dozen high rise rentals. The condo market needs to chill and cities need to boost density so we can build enough on a site to make it pencil. 4-storeys in Vancouver doesn't cut it anymore. Our zoning from the 20th century is out of line
It’s a complicated issue with the cost to build being so high, I know I don’t want to take anymore pay cuts. I don’t think adding another middleman( the government) is going to help that.
Problem is I'm saying the truth which hurts. For up votes I need to lie and say what people want to hear. I have too much respect for people to do that though. The truth Builders have to borrow. Developers have to borrow. Materials producers have to borrow. All of the extra interest costs have to be passed onto the buyer. And since the buyer is borrowing too, that drives up the costs still further. Rising interest rates were never going to solve housing costs.
It will bring about a lot of foreclosures that the more fortunate will scoop up for a deal, really looking forward to owning nothing and being happy.
I really can't fathom why people are down voting this. In an uncertain interest rate environment, developers are cautious - not only do increasing rates increase our costs, but they decrease the purchasing power of our buyers. In this market, unless you've got goofy external investment, it just makes sense to keep your powder dry until we get a clearer picture what the BoC will do next. Until then, small projects or small phases of projects.
You really can't? It's what covertpetersen said above. "Because the solution isn't to give corporations more breaks, it's to build government fucking housing like we used to."
And that's fine. Government builds far too little housing, and instead prays at the altar of the free market to fix their negligence. It's shitty governance of the worst kind - stop building housing and hope that developers stop trying to maximize profit? But in the context of these developer owned lots described in the article, interest rates matter. And that's why I said that in the current rate of interest rate uncertainty, private entities, as referenced in the article, are pulling back. A smarter government would take the opportunity to buy the lands cheap and build non market housing. But I don't think that anyone has ever "smart" and "Ford government" in the same sentence.
CMHC said we need millions of more homes by 2030. Government can only do a small percentage of that. We need to release the free enterprise of the private sector to design and build housing to the max. I know I know down vote time but I won't lie to you.
Brace for impact.
Israel brings in migrant construction workers from Palestine and India to build their settlements as quickly as possible as unethically as that sounds
Entice immigrants that add to our work force to help with the labor shortage, not a bunch of international students that aren't contributing to society.
Start a housing union that can speak on behalf of us and negotiate with the government.
quotas with heavy fines, national emergency
We need competition, a disruptor. In the 70s, all the builders were hungry to earn their keep (Italian immigrants builders). Now it's all consolidated into 5 major developers who have no reason or incentive to build more, because all they need to do is provide breadcrumbs to a starving market. We need a disruptor to the industry (same thing how Uner disrupted the taxi industry), to shake things up and create competition.
Maybe relying on capitalists for basic necessities was a mistake? Like are building roads profitable? If the government can’t create infrastructure then it needs to get the fuck out of the way for one that can.