If Canadians Want Houses, Give Them Houses!

[whatnext]

Interesting article showing that the strongest housing demand is for detached housing and townhouses, yet governments seem intent on encouraging condos. It's like a car salesman telling a customer looking for an Escalade, "that's sounds nice, can I interest you in this Honda Fit"!

If it's an issue of traffic congestion, than levy each house a couple grand for new transit to serve these areas.

...Frank Clayton, senior research fellow at Ryerson University’s Centre for Urban Research and Land Development, examined a handful of recent surveys of consumer housing preferences in the Greater Toronto Area (GTA). He found that despite provincial policies that have encouraged a dramatic shift toward building condos rather than houses, most prospective buyers in the region say they prefer a detached house or other low-rise properties, such as townhouses.

Millennial home buyers prefer condos in slightly higher numbers, but most also say they are looking to purchase a low-rise house, according to Mr. Clayton’s research....

...Both Mr. Clayton and the CIBC economists point the finger at provincial policies aimed at curbing urban sprawl that have restricted the amount of new land available for low-density housing developments and driven up the costs of building new houses. The Ontario government recently proposed even higher density targets for municipalities, which will also add to the shortage of land for detached homes, the CIBC economists say...
http://www.tsn.ca/toronto-housing-su...s-say-1.546673

[240glt]

Did the apartment condo thing for years, liked it in my 20's, now I have a hard time seeing myself in anything but a SFH until I'm much older

[Riise]

Originally Posted by whatnext

Interesting article showing that the strongest housing demand is for detached housing and townhouses, yet governments seem intent on encouraging condos. It's like a car salesman telling a customer looking for an Escalade, "that's sounds nice, can I interest you in this Honda Fit"!

I think it is more like parents offering their teenage child who works at McDonalds help buying their first car. The kids fancies a BMW but their parents push them toward a VW.

[240glt]

^ except the vast majority if those who buy houses can afford them. I've never heard of anyone looking for a condo being upsold to a house

They'll be upsold to higher end finishes and more square footage in a condo, but not to another dwelling type altogether

[Nouvellecosse]

Originally Posted by 240glt

^ except the vast majority if those who buy houses can afford them. I've never heard of anyone looking for a condo being upsold to a house

They'll be upsold to higher end finishes and more square footage in a condo, but not to another dwelling type altogether

The issue of cost is of course much more complex than the simple issue of buying the actual property at market prices. So much of the costs of housing was previously externalized that it's impossible to say what is and isn't affordable simply looking at the property price. There are both costs that are externalized from the cost of the home but still borne by the buyer such as increased transportation and energy costs, but also costs externalized away from the home buyer altogether and carried by wider society. We simply have so much of our planning policy and regulation that are anachronisms from a bygone era when everyone thought that low density sprawl was sustainable and desirable in the long term that there are still hidden subsidies and enticements for that model. But eliminating these things is in no way an attack on choice. It's simply showing people the true, rather than distorted choices.

Like I said in another thread, the idea that this is all just a matter of personal preference between different objectively equal options is simply false.

[240glt]

Originally Posted by Nouvellecosse

The issue of cost is of course much more complex than the simple issue of buying the actual property at market prices. So much of the costs of housing was previously externalized that it's impossible to say what is and isn't affordable simply looking at the property price. There are both costs that are externalized from the cost of the home but still borne by the buyer such as increased transportation and energy costs, but also costs externalized away from the home buyer altogether and carried by wider society. We simply have so much of our planning policy and regulation that are anachronisms from a bygone era when everyone thought that low density sprawl was sustainable and desirable in the long term that there are still hidden subsidies and enticements for that model. But eliminating these things is in no way an attack on choice. It's simply showing people the true, rather than distorted choices.

Like I said in another thread, the idea that this is all just a matter of personal preference between different objectively equal options is simply false.

100% disagree, but we'll leave it at that

[lio45]

Originally Posted by Nouvellecosse

The issue of cost is of course much more complex than the simple issue of buying the actual property at market prices. So much of the costs of housing was previously externalized that it's impossible to say what is and isn't affordable simply looking at the property price. There are both costs that are externalized from the cost of the home but still borne by the buyer such as increased transportation and energy costs, but also costs externalized away from the home buyer altogether and carried by wider society. We simply have so much of our planning policy and regulation that are anachronisms from a bygone era when everyone thought that low density sprawl was sustainable and desirable in the long term that there are still hidden subsidies and enticements for that model. But eliminating these things is in no way an attack on choice. It's simply showing people the true, rather than distorted choices.

Like I said in another thread, the idea that this is all just a matter of personal preference between different objectively equal options is simply false.

At first sight, I don't think it's even possible to have a true user=payer system for all aspects of living in society. Nor would it be efficient generally to do so, I suspect.

[Nouvellecosse]

Originally Posted by lio45

At first sight, I don't think it's even possible to have a true user=payer system for all aspects of living in society. Nor would it be efficient generally to do so, I suspect.

Of course not; we simply need to make planning and policy choices that shapes out society into something we can sustain. It's just that with my semi-libertarian leanings, I prefer the "thumb on the scales" method to shape demand rather than dictating to people.

Although in this case, we can start by taking the thumb off the scales so that things aren't skewed in the opposite direction.

[lio45]

Originally Posted by Nouvellecosse

Of course not; we simply need to make planning and policy choices that shapes out society into something we can sustain. It's just that with my semi-libertarian leanings, I prefer the "thumb on the scales" method to shape demand rather than dictating to people.

Although in this case, we can start by taking the thumb off the scales so that things aren't skewed in the opposite direction.

I agree with you, fellow semi-Libertarian. (Though I'd bet I'm closer to a "full" one than you )

[Mikemike]

^It's not the realtor or condo sales person doing the up-sell. There's a whole bunch of influences from TV home shows to new neighbourhood adds to peer/family influence. Just like the fast and the furious and Car adds that show only open roads influence buyers toward performance vehicles whether they make sense or not. And, like the BMW, many of us can afford it but don't need it - in a non-speculative/transitioning market with only normal equity growth they would have more resources for other things if they rented or bought smaller.

Most SFH dwellers have had neighbours who never (ever) use their yards, except to mow. Most of those people don't need houses.

[someone123]

Originally Posted by Mikemike

Most SFH dwellers have had neighbours who never (ever) use their yards, except to mow. Most of those people don't need houses.

Part of what's going on is that housing is standardized and you can't get some things without others. For example, if you want to be able to play loud music and have late parties you pretty much need to have a house (or live in a generally crummy building where everyone is partying all the time). There aren't a lot of condos out there with good soundproofing. A lot of newer buildings are actually worse than some buildings from the 1980's.

It's also hard to find affordable condos beyond a certain size. There a large and fancy penthouses for a lot of money but there aren't a lot of cheap 2,000 square foot condos. I think this is mostly because Canadian cities generally either have plentiful single family dwellings or a scarcity of both detached housing and multi-unit zoning. Even condo space in Vancouver is unaffordable because relatively little well-located land is zoned for cost-efficient midrise condo construction.

If I could get a 1,500 square foot condo in a good neighbourhood with a decent layout with good enough soundproofing to not hear the neighbours I'm not sure I'd ever want a house. I don't actually want to deal with the added maintenance of a house and other issues like ground-floor entry that makes break-ins more common.

[someone123]

There are other separate, deeper issues that are probably worth thinking about as well. For example, why do we expect that so much population growth should be concentrated in the most expensive cities? That is not true in the US; the fastest metropolitan areas are cheap places like Dallas, and expensive areas like San Francisco don't grow much.

There are in fact alternatives to living in Toronto and Vancouver. Lots of Canadian cities have (or could have) plentiful housing.

Immigration is also at odds with the housing issue. We are told on the one hand that Canada has lots of resources and that we will all be better off if there is more immigration. But in practice provincial governments have been blocking off development of new housing for fear of encroachment on small and dwindling reserves of farmland.

If you already own land, population growth is great. If you hire workers, a growing labour pool is great. If you are a worker, increasing the labour market is not necessarily great and if you are a renter population growth may not be your friend. I don't think it's an accident that well-off politicians favour pro-growth agendas; either they or their patrons are the main beneficiaries of those policies.

[O-tacular]

No one is saying you can't buy a SFH. The name of this thread and that article is misleading. It's the same thing in Calgary when they opted to make developers account for the cost of utilities and infrastructure in their pricing for new homes. Sure everyone wants a SFH but the fact is land is not infinite. Urban sprawl has a cost. This just smacks of more reactionary baby boomer nostalgia for the dream of the 50's with a sfh occupied by a nuclear family with a patch of lawn and a white picket fence.

[240glt]

Originally Posted by O-tacular

No one is saying you can't buy a SFH. The name of this thread and that article is misleading. It's the same thing in Calgary when they opted to make developers account for the cost of utilities and infrastructure in their pricing for new homes. Sure everyone wants a SFH but the fact is land is not infinite. Urban sprawl has a cost. This just smacks of more reactionary baby boomer nostalgia for the dream of the 50's with a sfh occupied by a nuclear family with a patch of lawn and a white picket fence.

Except that's not really true at all. i think that's just what the urbanazis say when someone says they want to own a house

We are the furthest thing from fitting that stereotype, and there are many like us. It's very simple, much more simple than you think. Some (many) prefer a SFH

Modern subdivisions are far better designed than my mature central suburb, so in fact what's being built is far more dense, and in areas like mine, developers have the opportunity to double the density of a parcel like mine.

Trying to engineer change like you and Nouvellecosse are suggesting is a recipe for disaster and will only serve to drive people to find less sustainable alternatives

[lio45]

Originally Posted by someone123

If you already own land, population growth is great.

There was a fascinating thread (to me at least as a real estate investor) about real estate in Japan not too long ago in the City Discussions subforum.

People in general tend to accept the dogma that real estate goes up in value with time but that's only true if population goes up with time. The latter isn't a given forever.

[someone123]

Originally Posted by lio45

There was a fascinating thread (to me at least as a real estate investor) about real estate in Japan not too long ago in the City Discussions subforum.

People in general tend to accept the dogma that real estate goes up in value with time but that's only true if population goes up with time. The latter isn't a given forever.

Yep. Back in 1989 people were saying "they're not making more land in Tokyo!" and they thought real estate investments there were guaranteed to continue to increase in value.

Another interesting thing to look at is how technology has changed land values. People often think that better transportation options raise land values farther out but they can also depress land values in more expensive areas. This happened dramatically when streetcars and subways were built and again with highways. I'm guessing land prices in a lot of towns peaked in the 1800's. Poor infrastructure investment is a big factor contributing to housing affordability problems in places like Vancouver and Toronto. Maybe it's a silver lining but I think the lack of good metropolitan transportation options is why downtown condos are becoming so desirable in so many Canadian cities.

[hipster duck]

Originally Posted by someone123

There are other separate, deeper issues that are probably worth thinking about as well. For example, why do we expect that so much population growth should be concentrated in the most expensive cities? That is not true in the US; the fastest metropolitan areas are cheap places like Dallas, and expensive areas like San Francisco don't grow much.

I think the US is the anomaly here, not Canada. Most people in industrialized countries tend to gravitate to the most expensive cities. This could be either the expected one-way relationship (i.e. people move to a city, driving up housing demand, resulting in higher prices) or even a reverse relationship (people are attracted to high-priced places for a variety of reasons including the fact that high-priced places privilege an upper middle class aspirational lifestyle, the returns on higher priced property have been higher than on property in lower-priced cities attracting further investment, etc.).

The sunbelt is strange. Cities like Phoenix initially attracted people precisely because they were cheap, not because there were jobs there. Once there was a critical mass, some economic diversification began to materialize, but it took millions of people to actually come there for that to happen. Only the US has (a) that amount of people, and, (b) a culture where people are willing to pull up roots and move to a strange place with no guarantees for immediate economic gratification.

[someone123]

Originally Posted by hipster duck

I think the US is the anomaly here, not Canada. Most people in industrialized countries tend to gravitate to the most expensive cities.

Australia growth rates are pretty even. Melbourne is slightly smaller than Sydney and is growing a little faster, then a few other much smaller cities are about the same. I am not sure about Germany. A lot of developed countries are so small that few people can live far away from the dominant metropolitan area; there's nothing analogous to a typical out-of-province move. But I had a look at France as one example and Lyon is actually growing at a faster rate than Paris.

Partly the situation in the US must be driven by problems in the older US cities (poor services, crime, pension issues), but I think better infrastructure and consumer choices play a role too and I would hope that Canada is headed in that direction. The EU seems to be like that too.

Here in Canada it costs an arm and a leg to travel and a lot of jobs are with the government or in protected industries so people are discouraged from moving around and more and more development just ends up in the same old places.

The sunbelt is strange. Cities like Phoenix initially attracted people precisely because they were cheap, not because there were jobs there.

And a lot of those places have good weather (if you have AC) or at least no winter. There's nothing even close to a Minneapolis -> San Diego climate upgrade in Canada.

[Andy6]

Originally Posted by someone123

There are other separate, deeper issues that are probably worth thinking about as well. For example, why do we expect that so much population growth should be concentrated in the most expensive cities? That is not true in the US; the fastest metropolitan areas are cheap places like Dallas, and expensive areas like San Francisco don't grow much.

There are in fact alternatives to living in Toronto and Vancouver. Lots of Canadian cities have (or could have) plentiful housing.

I don't understand why government doesn't try to discourage the growth of Toronto (or Vancouver etc.) by encouraging jobs to go elsewhere. Instead of adding population to cities that could use it and which have plentiful residential areas and affordable houses, everyone keeps squeezing into Toronto, creating a need for ridiculously expensive infrastructure upgrades and driving up the cost of houses to the point that you need to be a two-professional-income family to afford one.

Maybe a good start would be to relocate the capital of Ontario somewhere else, along with at least 3/4 of the civil service jobs that are currently located here. Queen's Park is basically ignored by Torontonians anyway; I'm sure many of them have no idea what the building is. Move it piece by piece to a new capital -- somewhere like Owen Sound that would actually enjoy being capital -- and use the land for a much-needed park.

[manny_santos]

Originally Posted by Andy6

I don't understand why government doesn't try to discourage the growth of Toronto (or Vancouver etc.) by encouraging jobs to go elsewhere. Instead of adding population to cities that could use it and which have plentiful residential areas and affordable houses, everyone keeps squeezing into Toronto, creating a need for ridiculously expensive infrastructure upgrades and driving up the cost of houses to the point that you need to be a two-professional-income family to afford one.

Maybe a good start would be to relocate the capital of Ontario somewhere else, along with at least 3/4 of the civil service jobs that are currently located here. Queen's Park is basically ignored by Torontonians anyway; I'm sure many of them have no idea what the building is. Move it piece by piece to a new capital -- somewhere like Owen Sound that would actually enjoy being capital -- and use the land for a much-needed park.

I don't think that would have much effect. Vancouver is not the capital of BC but look how much bigger it is than Victoria - likewise with Montreal vs Quebec City in Quebec. And Ottawa-Gatineau is only the sixth largest CMA in Canada, despite the federal capital being there.

The reason for Toronto - especially downtown Toronto - having so many jobs is because of decisions made by private business. I suspect it's a herd mentality; everyone else is here so we should be too, and there's a sense of prestige and even snobbery around it. I've heard colleagues of mine openly scoff about other companies in our industry that chose to locate in areas like Don Mills or Scarborough, it's like they're not "legitimate" unless they're downtown.

That said, the one big advantage of having major offices in cities like Toronto or Montreal is proximity to major airports - it makes getting employees or clients together for meetings easier. You don't get that luxury if your head office is in New Liskeard or Wingham.