'We can no longer build what people can afford'
'We can no longer build what people can afford'
81 comments
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Industry professionals say unbought condos could lead to big layoffs
Everything is unaffordable, workers are all being laid off, AI is replacing people, minimum wage isn't enough to support a living wage...
What's the capitalist end-game here? A world full of poor, unemployed, desperate people likely won't make shareholders any richer, will it?
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Nobody is at the wheel. Nobody ever was.
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What's the capitalist end-game here?
That capitalists maximumize their wealth.
And ultimately that there can be only one, and they all believe that it'll be them
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Bold of you to assume any of them are looking past the next quarter or two. Long term survival is secondary to immediate profits, line must go up.
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It's a real shock, I know. Who could ever have imagined that building loads of million-dollar condos and endless suburban sprawl would fail to be the answer to our housing problems?
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Who could have guessed? The super tiny, yet still branded "luxury" condos, listed at nearly the same as a townhouse, are having troubles selling???
In Burnaby, they're building super high density 400sqft micro apartments as if land is super scarce, while next door are 6000sqft lots of single family houses. Of course older condos are selling better because they're nearly double the size and often low-rises that sit with a community, not among wannabe-downtown skyscrapers.
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Oleg Galyuk, real estate agent with Royal Pacific Realty, said in his experience older condos tend to sell better than pre-sale condos.
"The new inventory tends to sit on the market," he said.
He said the layouts of some of the new homes are one reason for lack of buyer interest, as well as a lack of parking spaces that are harder to sell and rent.
Galyuk said developers are throwing out a variety of incentives to get people to buy built units.
"They're throwing in parking stalls. They're throwing in storage lockers. They're giving cash-back on completion."
He said he thinks some developers have put too many eggs into the "investor basket."
"Right now, a lot of condos [are] coming online that people don't really want to live in."
Says it all really
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The reason older condos/townhouses sell is because they were built when there were inspectors actually doing their jobs. Step-daughter moved into a new teeny-tiny condo, and shower door fell off after 4 months. Gaps developing in the “luxury” vinyl plank flooring. Cupboard doors coming off because screws aren’t long enough. They’re garbage homes.
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Doug got rid of all trades inspectors from 2018, so any asshole with a home Depot credit card is now doing plumbing and electrical.
These are Ontario Tofu Dreg projects, years from now they will cost us a fortune to demolish.
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“The new inventory tends to sit on the market,” he said.
Because they are too small, and poorly built, a huge liability waiting to happen with no reserve funds to deal with it. Never, ever, buy a new or preconstruction condo, they are basically kickstarter housing.
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Another reason why this may be the case is that there are a lot of new condos in sprawl-y suburbs. Not everyone wants to live on the outskirts of a city and need to rely on driving for everything.
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You can replace Vancouver for Montreal and you'd have the same thing.
In Montreal we laughed for years at the 1M$ shack or mansions in Vancouver, but now in Montreal an average house is also 1M, it was like 500k 5 years ago. There is something like 3000 empties condos too in Montreal, maybe 10000-12000 airbnb too, and 25-34yo people especially those with spouse/children are leaving Montreal en masse.
It is completely fucked up right now. Rent also doubled. People on minimum wage are making ~2k$/month, an average rent is 2k$/month.
Let's not talk about an average new car at 65k$ and an average used car at 36k$
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Has the province started shutting down those Airbnbs? I thought there was a bunch of media noise about that recently.
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AirBnBs are a drop in the supply bucket. It's nice to hate on them, but when you look at the actual numbers they're a negligible impact.
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"The cost that is associated with policies at all three levels of government has made it that we can no longer build what people can afford," she said.
I'm curious what she means by this exactly. Non-market housing and art is mentioned later on. Are they expected to pay for that themselves?
It's not like they physically can't build condos people can afford. With no regulations they could build South Korea-style coffin apartments. Nor are they making money from this situation.
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What the developer is saying is that their private industry can't function anymore and it needs to be nationalized and social housing made a right.
Private industry where it can, social industry where it must.
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It wouldn't be any cheaper for the government, and the government itself has a limited amount of funding. (And that would be true regardless of the tax rate)
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I'm curious what she means by this exactly. Non-market housing and art is mentioned later on. Are they expected to pay for that themselves?
Development fees are one example. When a new apartment building is constructed, it needs water and sewer connections. The municipality typically charges the builder a development fee (on the order of 100k) to build that stuff. That immediately means the developer needs to charge buyers the development fee to recoup their costs.
Every level of government is going to add restrictions and requirements. Some may be non-negotiable: building codes to ensure the building is up to safety standards. We may want to revisit others.
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Note - I work in Ontario, and this is my experience as an engineering consultant working with dozens of municipalities.
We're finally at the end of infrastructure lifespan point for a good chunk of the province. That means Water/Wastewater plants, as well as the hundreds of kilometers of pipes required to transmit those liquids are at the end of their life for the first time since being installed (50-70 years).
The cost to replace those is enormous, and IMO, should be covered primarily by property tax and/or useage fees. However those fees have not actually set aside the money required in many places, which means that municipalities have been propping up their old infrastructure costs by charging large development fees. Doug Ford, as much as I hate him, slashed development fees allowed, which forced property tax rates to rise. This more accurately reflects the ACTUAL cost of owning a home with services by the municipality. Given that I believe growth stagnation is required, this is the direction we need to head. We can't keep running this ponzi scheme of funding old infrastructure with new infrastructure fees. Its unfair to new buyers and subsidizing older homeowners.
We also likely need to take a look at the actual fees and costs associated with maintaining our infrastructure. Stormwater ponds, seen typically in subdivisions, are HORRIBLY under-serviced, with a recent investigation in our area revealing 75% of them had never been cleaned out since being put into service ~30-50 years ago. They typically have a service life of 10-20 years, and have been leaking pollutants into our creeks and waterways since. The primary reason - you guessed it, budget. At 1+Mil/cleanout, they're expensive.
We've skated by up till now by externalizing these costs and letting the damages build up for tomorrow's solutions. We can't keep putting off those costs.
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Yeah, but development fees of that kind seem like they should only vary so much. Probably not to the degree of scuttling condos in Vancouver while they get made like sausages in Calgary.
Fire-prone slum construction isn't the answer, that's true. Regulations tend to wander into catering to nimby sensibilities in the West, though. Or into trying to externalise costs the government really should bear, like I'm kind of suspecting with the non-market housing mentioned.
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“The cost that is associated with policies at all three levels of government has made it that we can no longer build what people can afford,” she said.
Ontario is rife with billionare developers in Vaughan.
But the real point is we cannot build housing relying on private industry any more.
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It wouldn't be any cheaper for the government, at least if the government is following the same rules.
Could they build houses? Sure. Will they? BCH is already starting up. Will it solve this particular problem? Not directly.
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I bought a condo that was part of an HOA. 5 year old construction. Purchased right before covid hit. Within the first year I had a chandelier fall out of the ceiling with no provocation, which I had to pay to fix. Then my 2nd bedroom started leaking from the roof and window during rain. A fucking 5 year old roof should not be leaking. The best part, I couldn't pay to get the roof fixed because it was on the outside of the house and those repairs had to go through the HOA. During covid, I'd be in my garage making art, and people would drive through the cul-de-sac asking if any of the condos were for sale. It was my sign to get out. I hated it so much, still couldn't get my roof fixed, and I still managed to sell it and make 20K profit. Much of the newer construction is absolute trash. Also, fuck HOAs.
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So stop building. Stop growing.
Degrowth is the way.
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Of course, who needs a house? /s
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What a disingenuous rhetoric. Degrowth is centered on meeting people's needs. No one needs a house. Everyone needs a home. Not everyone needs a home in Vancouver.
One central tenet of degrowth is accepting that nearly everything, at some point, will have to stop growing. This includes Vancouver, and a reasonable person could conclude that this headline is an econonic signal that now is probably the time.
Until absolute population declines, It's a big country, medium density development in other areas can accomodate everyone more cost effectively than more unaffordable skytowers in earthquake vulnerable Vancouver.
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You know how I know there's nothing in this article that pertains to the best interests of Canadians? It's sources are in the real estate industry, the least talented yet most entitled group of "entrepreneurs" the world has thus far produced.
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Negotiate harder with your suppliers?
81 comments
So prices will go down, right?
...Prices will go down, right?
Economics is only a pseudo-science for the rich. For the poor, it's always an ineffable mystery.
Where is your source for this statement?
Maybe for a bit as those companies go out of business. Then they go way up because there's no new houses. Or we could solve whatever the underlying problems are.
The absolute gall of you, talking about solving problems. Are you even thinking about those poor rich folks out there?
The underlying problem is houses are priced to high. There is no such thing as an "unsold home" - they are overpriced. Mystery solved.
there are over 100,000 empty in Ontario.
These idiots who keep telling us housing is priced by supply and demand need to fuck off.
The market can stay irrational longer than you can remain solvent.
Like. Since all these Ricky dinky pieces of shit started being out I've firmly believed they were a ticking time bomb waiting to happen. I feel like the whole fucking real estate market is.
Sooner or later the chickens will come home to roost.
Bkawwwwww