Could the Missing Middle Solve the Housing Crisis? | The Walrus
Could the Missing Middle Solve the Housing Crisis? | The Walrus
Victoria, BC, is making an ambitious move to densify neighbourhoods. It could be a model for the rest of the country
Middle density housing is severely lacking in most of Canada. Montréal is one of the few cities that does have a bit of mid-density housing and its housing costs are lower than most other similar sized cities. Obviously there's many more factors but I definitely think mid density is important for reducing this crisis.
Mid density is extremely resource efficient (both in terms of building it, and the infrastructure serving it), and desirable -considering the property values in cities with lots of mid-density housing. It's a shame we lost so many years not building it.
Mid density building is also dense enough to support frequent transit services. You're not going to get 20 minute buses in the suburbs forcing everyone to drive which means more spread out lots to accommodate 2+ cars, larger roads, etc.
Mid density doesn't work for everyone but it works for a lot of people, the issue is we have so little of it in most Canadian cities so people aren't exposed to it enough to think of it as a viable option.
Why does the conversation always centre on us pee-ons at the bottom or the supposed 'middle' ... the ones at the steering wheel are the ones with money, power and control. They are in the drivers seat as they are taking us all over the edge and we are all arguing about how to make ourselves comfortable inside this moving vehicle.
Feels like the classic neoliberal plan of one step forward, two steps back.
Make a plan that sounds like it can solve the problem, but then add a bunch of 'well intentioned' rules (space requirements around a home, requirements for dedicated parking etc) and the new opportunities are entirely lost.
This article talks about converting a single detached to a multiplex would require 4x the empty space between property lines that a single detached would. This prevents conversions, and forces developers to acquire expensive land, bulldoze the existing home to build another structure that will have to be smaller than the original home, to fit more people on the same land space in smaller dwellings. It's impossible to drive living costs down when replacing single detached with the missing middle costs 5x to get 2-3x the units.
It makes sense to have rules and regulations with building, but government seems to be more than happy to make a big paradigm shift, while doing everything they can to stimy their own attempt at progress.
Tax the wealthy and use the taxes to build stronger government and support people at the bottom.
Otherwise we're just handing more power to the wealthy, they get more power and they find it easier to squeeze more money out of the government and all of us.
The system is built on money and whoever has it gets the power ..... as it is right now, us plebs at the bottom have no money and therefore no control.
The missing middle is used to refer to the middle size of apartment building.
TLDR: no, but not having it worsens it a great deal
Personally, I think the bubbles already popped, we just don't know it yet. Let's fast forward a year or two, when Vancouver and Victoria and Toronto, and all the other pumped up areas, are renewing their 1,300 sq ft 1.4 million dollar shacks at >6.25%.
In fact if the government and the Bank of Canada were actually serious about battling inflation and the ever so climbing housing bubble, they'd hint in the throne speech that the principle residence tax exemption is coming to an end for 2024. That would probably unleash a torrent wave of selling in the fall, that would maybe actually save some peoples behinds. But this of course won't happen..
Bubble has not popped.
When people are handing the house keys back to bank and saying fuck it, then you will know it has popped.
A good indication of that is when you start seeing for sale signs popping up everywhere and those signs stay there.
Seen it before elsewhere. Canada has done an amazing job with smoke and mirrors to keep the bubble inflated but Canadians have run out of money to prop it up.
When it pops, the government will have already run through all the ink in the money printing machines to do anything about it. Rough times ahead. Hopefully it doesn't come to that, but it seems the writing is on the wall.
That's what I'm saying though, is it's effectively popped, it just hasn't sunk in yet. Economic changes are what's known as "sticky," in that macroeconomic changes take time to spill down through the varying stratas that make up our economy. A change made today will not be felt or measureable for a few months, and so on.
Give it a year, and those signs will be staying out I think. Could be wrong, I'm not a prophet, but I agree that I also think rough times are ahead.
Removing the principle resident capital gain exemption wouldn't help anyone without a home buy a home, it would just hurt people who already have a home. Also, capital gains aren't realized till you sell, so again not really helpful.
The way to alleviate the issue is implement a progressive property tax on second homes. Each home beyond the first has a 100% increase in property tax for every home besides the primary residence. 2 homes: 100% increase, 3 homes: 200% increase, etc.
Housing shouldn't be an investment, but punishing people who have only 1 house is the wrong way to go about this.
It's definitely fucking shitty, and you are absolutely right that it doesn't punish the people responsible OR help people priced out immediately. Don't get me wrong. But it's ultimately going to be one of the tools needed to pop the bubble. Your capital gains statement, is the key to how it'll work. It's going to hold quite a lot of people from selling is what its going to do. It's going to be one of the elements to stall the market. And that's what's needed to start spilling through the system. If it holds off folks from buying/selling and pumping up the market, it's going to stop the cycle. If you were hoping to sell your house that you bought for $300 at $700 in this crazy market, it's going to wipe out probably $70-$100k right off the top that you were going to spend on your new house, because that's now less money you have in your pocket. While this sounds minor at a micro scale, think about the effect of this at a macro scale + the fact your new mortgage will be at about 5-6% higher interest, which is also going to erode both borrowing power and will to borrow. We are talking about probably $200k of impact here for some, if not more (depending on personal situations). Especially in light of the financial conditions of general Canadians at the moment, that will likely be enough to remove a material amount of participants from the marketplace, because that $400k gain you were hoping to captialize on, in your move up, has now been severely eroded.
It also will hopefully stall the Toronto/Vancouver retirement plans, where the boomers who have capitalized on an ever rising marketplace, will suddenly be facing a big tax bill on the ol' dump and downsize plan. It cuts a lot off the top, so hopefully giving these folks some pause. If they are suddenly looking at a $200k tax bill, it might cool their jets a bit too. Which in turn would take a bite out of the market they were looking to turn to, as a result. Won't be every case, but it would likely remove some from entering the market.
It isn't perfect, and it won't solely cause the cycle to stop, but it's one of the tools that could be (and arguably should be) used. For everyone else, they can easily get themselves out of this tax issue they unfairly face, by remaining put where they are. Hence taking even more heat out of the market.
Your property tax bill is kind of a neat idea by the way. I don't know if it would be effective though, because property taxes aren't generally high enough to cause pause. A 100% property tax increase on my house for instance would only remove another $4k from my pocket. Don't get me wrong though, an out of the box tax solution like this will be needed to keep the prices surppressed, once the market pops. That and just an outright ban on HGTV, which while I have no actual objective proof, is I believe also responsible for the bullshit situation we find ourselves in.
I can't read the article right now but I'm assuming they mentioned the 99pi podcast on the subject?
Did it solve it in this tokyo?
Nope. The thing making tokyo somewhat affordable is absolutely tiny units and a declining population.
What it does do is stabilize city budgets. Low density suburban units carry a huuuuuge infrastructure burden on cities to maintain. In most places, the suburbs cost more to maintain than they generate in tax revenue, hence why so many North American cities are in such poor finances
Kind of. Per unit of area Tokyo is every bit as expensive as even the most expensive parts of Canada, yes, but when you are buying a smaller area that does put it in greater reach of the average person. The idea being presented is that people would rather have a small space to call their own over having no space, while current policy pushes for a minimum amount of space that is usually larger than the small spaces people will accept.
Which makes a ton of sense if BC was tiny, but it isn't. Even the lower mainland and the island are larger than tokyo physically with only 1/10th the population. So shouldnt we be able to fit everyone into 1000 square feet per person instead of 100?
The declining population argument doesn't really work because, while the country as a whole is bleeding population, everyone still wants to live and work in Tokyo.
Tokyos population has been stagnant for a decade and has declined for the last few years. That means everyone doesn't actually want to live and work there, since there aren't enough people moving there to keep the population growing.
Metro area Tokyo has as many people as Canada.
So? What does it's absolute size have to do with a policy not working there but working here?