Can we rent our way out of the housing crisis?
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- Опубліковано 26 вер 2024
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fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you don't mind me asking?
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.
About Here doesn't post all the time - but About Here absolutely never misses. Always 10/10 content.
I'm 100% with you in regards to being conflicted about how to manage the housing crisis.
True, tho
First, your profit margin
Need to control
Racism, sexisn , classism , snobbery
Perception of renters
We need more of you Uytae! Keep pressing publish!!
seconded
Sure, we need more of these sinister geniuses who conveniently emit majority of the blame that lies on the Chinese speculators and their dirty foreign money. You look at him and it's obvious why he does that. Great video production skills though.
@@enzovirk I’m not 100 percent bro but I’m pretty sure he is Korean not Chinese either way your issue with the world is not with this guy. This guy makes great community content, and seems geared towards making Vancouver a better city. Can you say that? Goof
As a german I have to say the information in this video is only partially correct. While average housing costs across germany didn't rise drastically, it's a very different story in the big cities. Almost all of them, especially berlin, munich, frankfurt and hamburg, exploded in the last 10 years. The situation is that dire, socialists in berlin collected around 200k signatures for the expropriation of big real estate companies
+
All because of those criminal negative interest rates.
Berlin sold a lot of public housing to investors for "austerity", thats what f-ed us over
Great video, I do think however turning to renting will further accelerate the $ capital shift from the 99% to the 1%. Increasing wealth inequality for a country like ours that does not have robust social nets or social services as other countries you mentioned is a scary thought.
Exactly. Corporate money and cashflowing a group of people into perpetual renters. The path to wealth is building equity.
Problem with that analysis is the wealthy also own a bunch of condos, so it's not necessarily the 99% building equity but rather racking up debt.
@@person-yu8cu not true. Home ownership rate is over 60% so when prices rise 60% of households benefit from more wealth. Important thing is to keep the wealth as distributed as possible
@@grildcheez1504 The housing prices are several times household income and of course there's interest. So it's not really wealth, just debt and they may lose when the bubble collapses. Many people can't afford a down payment, but could afford a lower rent if more rentals were available.
@@person-yu8cu This is not new. Housing prices in many cities are many multiples of income. If house prices collapse no one will be building homes because the material and labor cost to build a home still stays the same so the only thing that would happen is new homes won't get built if people can't finance them. And this comparison to 30 years ago is fake. Vancouver was not a world class city then. Canada was not a sought after place for immigration. Vancouver specials were 2000 sqft budget homes if you compare any neighbourhood or home in 1980 to 2021. Condos never had washers/dryers, gyms, fire code, swimming pools, sprinkler, etc in them, houses didn't have 4 kitchens and 7 washrooms. Neighbourhoods weren't getting rezoned for higher density driving up land cost. It's all fake propoganda news by the government and developers to drum up more tax sops and taxes to fund themselves. People didn't have youtube/tik tok software with shopify stock options making bank with tyecnhlogy leverage www.cbc.ca/news/business/lumber-prices-covid-19-cost-of-housing-1.5973416
www.vantechjournal.com/p/vancouver-unicorns
All these newly minted vancovuer millionaire employees can buy million dollar homes easy with their equity. No probem
Wow, it's sad that Germany (that's where I live) is considered a good example in this video. I laughed out loud when hearing that - I'm currently struggling to find an affordable place to live. Rents are ridiculously high here as well, especially in cities. Certainly not as bad as those examples from Vancouver earlier in the video (over 2.000 $ for a single bedroom apartment, are you kidding?!), but still bad enough that I have a really hard time to find a decent place to live that won't cost me half my meager monthly income in rent.
The housing crisis is global, but you're going from good to bad whereas Canadian big cities are going from bad to worse. The solution is the same everywhere though: more housing (and not in the distant suburbs either).
@@tristanridley1601 is the solution more housing? Vancouver is a great example of a city that built more and more. Unfortunately all of it gold sold ot foreign investors. And the same problem stays.
@@tristanridley1601cities like berlin went from good to bad all the way back when we sold all the public housing for "austerity" which we are now trying to buy back for 10-20x the price. Absolute joke of a government
Don't forget it's Canadian dollars though. But still... it's extremely expensive.
My parents (in their 60s) recently-separated. COVID wiped out their business. Sold their farmhouse an hour outside of Toronto for 1m. Split two ways, they can't afford to live anywhere economically sustainable for either of them. Both "retired" without losing their shirts. To rent a basement apartment here is about 1800 + utilities. They have about 17~ years of rent each, and both are currently healthy. This is why there's a huge influx of boomers working at Home Depot and Walmart in their 70s. They are going to outlive their money. Two years ago, my SO and I rented a brand new apartment for 60% of what my mom pays for her grungy apartment. And relatively speaking, she got an amazing deal.
As long as there are people willing to pay the ridiculous rent, the house prices will sustain themselves. $2400 a month is about a 600k mortgage. So you have people converting basements into apartments (that when built, were never intended to be lived in) and charging an additional 1800 for the basement. That revenue could justify a 900k mortgage + property taxes. See the problem?
You are people willing to pay ridiculous rents and house prices because of the lack of supply.
The US alone is lacking 5 million housing units in high demand areas. In the South, In the West and in North East from DC to Boston.
@@paxundpeace9970 Everything is overbuilt in America. Way too much excess supply.
Another huge advantage of home ownership: when you retire your mortgage, you dramatically reducing your housing costs. If your costs are mortgage+taxes+insurance+repairs, and you drp the mortgage, you can cut your housing costs by as much as 75%. Your mortgage is also fixed, so 20 years in you are paying the same amount for that part of your housing costs, while rents go up to keep up with market costs.
When you retire, if you don't have a mortgage, you can live a lot more cheaply on your fixed income. If you've rented your entire life, then you have to pay rent even after you retire.
Incorrect
Actually, it's more complicated. Mortgages are either flexible rate or fixed. If flexible, the owner is at risk of rates going up. If fixed, the terms are typically 3 or 5 years. Not longer. So by the time 20 years have gone by you have probably had to renew 4 to 6 times already, each time facing interest rate risk.
This seems like an indictment on the entire rental system. What if landlording was just illegal? (I know, it's a utopian idea so better to just join the upper class if at all possible and buy property.)
Still a fixed rate is expensive and considering higher interest rate then in the last few years. Ownership can be expensive. Mortgage rates went up in part 1000 Dollar a month.
If rent is increasing, likely property taxes have increased so they'd also increase the monthly payment on a house
2 points:
1. For myself, what's important is having control over what I can do with my living space. Economics aside, it's clear that one has more control over a space that they own...
2. There is also an interesting middle area of cooperative ownership, through co-housing or land trusts. This lowers the economic entry barrier while allowing individuals to still build equity (among other benefits). I would love to see this option more widely known/used!
Thanks for your thoughtful content!
You don't own anything until you make that last mortgage payment, until then, the bank owns you. All you own is the bills for maintenance and upkeep of the property and the taxes.
@@BoggWeasel Hardly, what you own is the value increase and equity in your place. Also, kicking out someone who has a mortgage on a property is quite a bit harder and more expensive than someone who is renting - at least in quite a few countries. This also grants security.
@@dinokknd It's still not yours until the final payment, you may have certain "property rights"... still not your land. "Whoever owns the debt owns you".
@@BoggWeasel I do not see your point. The equity is yours. The bank only owns the amount that you owe. Assuming you somehow default on your payments, it'll get sold, and the value above the amount you owe is yours. This is also not in the banks interest, as you paying off your mortgage in financially more profitable for them long term.
@@dinokknd Assuming you've been in the home long enough to develop the equity...it takes a long time time to get over that red line....meantime, anything can happen. Nearly 50% of Americans are only one or two missed paycheck from financial disaster. Your mortgage can be sold from under you and traded with a subsequent increase in repayments as the new owner can increase the interest payments, all without your permission. Banks are being far too liberal with loans, driving up prices as it creates a housing shortage and people are buying into overpriced properties they can't really afford... Signing on the dotted line for a mortgage doesn't make you safely housed or rich. Most homes are a sinkhole of expenses with property upkeep and will not be a comfortable economic fit for the owner until after at least the first 10 years...
Absolutely incredible videos man!
Super interesting and well edited content!
lol i cant say i expected to see you here :O
keep up the good work man
Thank you!
I legit get so excited whenever you upload a new video. ✨ This one was once again super educational, especially as an East Berliner who recently moved to Vancouver (and doesn't understand North America's obsession with home ownership at all).
What's not to understand ? Who wouldn't want a house? Renting puts you at the mercy of landlords slumlords, racist, $$$grubbers and neighbors you didn't know .
A life renter id love small ( not tiny ) home .
When I was renting my rent went up by at least 100$ every year at a minimum with no maintenance or upgrades. And paying rent never stops. Now I will pay the same amount every year until I only need to pay property tax. They have to build or buy the property and pay many people to manage them and they still need to pull in a profit. Owning your own is a better deal here where I live. I don't think most people need a landlord.
Renting is good for some things though. Like if you've moved to a new place and want to live there and explore for a year before buying, or if you're attending a university and will move away soon. Or a temporary job.
Could I ask you why you came from Europe (as they have great middle-level housing)? Also want to ask how it compares to living back home.
We have the exact same problem here in Auckland. We have gone down the upzoning and increasing supply route. Has worked in the sense that supply has increased but prices have not dropped
@Killer Miser But people need affordable housing NOW.
As a homeowner, I first view a home as a home. Not an investment, but a security asset that should first and foremost be used for living in.
I purchased my 2 bedroom condo at the previous highs of 2016, at $150k over asking.
And I could not care less if it fell by some 50% or more. The primary reason I spent that money was so that I could have a social and financial safety net, and a roof over my head in the worst case scenario where I could no longer find another place to rent.
In the meantime, my family moved out of the condo and we are presently renting a larger 3 bedroom single family home, and are renting out our condo to make up part of that rental cost.
But that condo will always remain a security and safety net, a bit like insurance. I never viewed it as an investment.
Germany's culture of renting is also supported by a strong unionized work force and better social systems. The German economy is also very robust and diverse with an automotive and manufacturing base along with petrochemicals etc. North America has offshored almost all of it's good jobs and wage stagnation has made it all but impossible to build wealth via home ownership. The wealthy own properties and the rest are just gig economy wage slaves whose rent payments make them richer.
Well put
German real estate has also become expensive.
@@zomgoose true....so called social democracies "You will own nothing and you'll be happy"....sounds a lot like communism to me
@@eutoob That's a fucking stupid way to look at things, I'm getting tired of idiots complaining about communism when that's literally capitalism at work.
@@SherrifOfNottingham But that is what communism is owning nothing and apparently being happy.
Purpose built rental = apartment complex
These have existed at least since the days of Ancient Rome.
The solution to the Housing Crisis - Tiered Interest Rates. Property 1 = Cheap Interest Rates, Property 2 = More Expensive Interest Rates, , , , , , Property 10 = Very Expensive Interest Rates. This would help make corporations and investors have less of an impact on the housing market, or if they are using the multiple properties as investments then maybe they should have more capital to invest in purchasing the property to begin with.
Yet another banger video! I'm glad we have you to contemplate metro Vancouver issues and policies. Every video of yours is just so spot on and informative, so don't stop! :)
A policy that isn't discussed enough: a progressive taxation on multiple property ownership. First property is taxed minimally, and each property owned afterward is taxed progressively more, such that it would be unaffordable for any entity to own more than a few of certain types of residential properties (single family homes, condos, townhomes). This essentially eliminates large, multi-property investors, while still giving room for regular people to own a few properties and use them as rental income. It largely de-commodifies housing, I think.
@@jusunglee6673
This is assuming landlords would try to pass the costs onto the renters, rather than sell their properties?
Honestly it would take a research paper to make any strong claims about the effects of a policy like this, but these are some of my thoughts.
Some places have laws about allowable rent increases, but outside of those places you would probably see a small increase. It would depend a lot on rental supply and renter behaviours (willingness to share space to cut individual costs, etc.) as well as how long the landlords can afford to sit on empty properties. It would also depend on what level a taxation policy like this is enacted (municipal, provincial/state, or federally). The more people and housing included in the policy, and the less likely it would be to result in significant rent increases.
However, if a taxation policy like this were enacted it is also likely that some amount of these privately owned rental properties will be placed on the market. The likely effect of this is a moderate decrease in housing prices, but again it depends a lot on local conditions, behaviours, and what level it is enacted at.
From my observations in my city, it is likely that a lot of the older (more affordable for first-time home buyers) properties would be purchased to tear down for infills. So I would be very surprised to see it have any significant effect on housing prices in the desirable inner-city neighbourhoods but could have a large local effect in decreasing suburban housing prices.
One of the other items that doesn't get talked about enough is the repurposing of housing stock for SMB offices. Lawyers and Doctors and accountants and architects often buy larger older homes (Mainly because older homes were larger) and convert them to corporate offices. Once that happens, they almost never are returned to use as accommodations. Here in Toronto in the Downtown core, I suspect as much as 10 - 15% of all Victorian homes are owned by corporations who are using them as office space. This removes them from the housing space entirely and contributes to the supply/Demand imbalance.
You're just changing who's being the landlord without addressing the problem of housing being an appreciating asset.
Having homeowners even more invested in housing does not de-commodify it.
@@bopete3204 If fewer singular entities own multiple units of housing, there should be more housing for individuals to own as primary residences. People tend to hang on to primary residences much longer than people hang on to investment properties. This should reduce property sales/turnover and slow down property price growth.
@@downhillupside Oh trickle-down economics. If we concentrate the assets under just a few large corporations then they will create more housing? We have seen that what happened is those profits get put into other long-term investments where they make no contribution to the street-level economy. They just juggle numbers on a spreadsheet and funnel the profits back into those financial constructs but never actually build anything or sell and physical goods and certainly are never given to lower-income people for the purposed of spending on real goods. This is where one of the purposes of government is to redistribute wealth and prevent excessive concentration of financial assets by building social housing, and providing items like a basic income to ensure everyone has enough money to have a place to live and sufficient funds across economic cycles to ensure the economy remains a stable functioning machine.
This is such a well produced video. I'm a new college grad who grew up in Burnaby and moved to Toronto for school and now work. I absolutely don't see myself being able to purchase a house in Toronto, at least not for the next few years :( and I"m planning to move into a purpose-built rental next month. Personally, I always thought that I'd be renting forever, and tbh that's pretty okay for me, but this video definitely explained the pros and cons of doing that. Thank you!
More like at least not for the next couple of hundred years.
Great vid. While the question about the relationship between rental rates and affordability remains, it really touched on the key problem: inequality is growing, and in places like metro van, it's being felt acutely. With 70% of the population conceivably wanting debilitating housing costs to rise, what does this say to the democratic principle of the well-being of the minority being protected? There's no easy way forward, in fact I can see a lot of pain in our future.
As a homeowner, I do not want prices to keep going up. My home being worth twice what it is now has no real impact unless I move to a much cheaper area. It's not like I can just sell it to realize the gains as then I'd have nowhere to live. Even worse, if I want to move to a more expensive property, the additional cost due to price growth makes it more difficult. If prices went in half tomorrow the only difference would be that I could afford to sell and buy a nicer place.
The only real benefit I can imagine is that I can use the value in my home for retirement, but even that has limited impact as I'd still need somewhere to live.
@@graham1034 Thank you - folks like you suggest there is still hope.
@@graham1034 once u are old, u can sell, and plan a retirement in a rental, u will die eventually, lol.
Joke aside, I understand your point, but rmemener that the rst of the "investors"are not thinking like you, there's people out there that think that this is a sport. Also, think about the impact of the rise of prices in other social classes, Vancouver pays bad and is expensive, is simple Math, Taxes are high and yet the city doesn't provide that much help for people that can't afford to buy nor rent.
@Killer Miser A fundamental understanding of democracy is that the majority rule, with minority rights protected. Read another way, democracies must steer clear of a tyranny of the majority with the well-being of the minority in view.
If there are policies and market inputs that are preventing housing from correcting, and as a result is producing and entrenching a shocking level of inequality between two groups - as indeed there is - this would qualify as a breach of the above understanding. We're at risk of irreparably damaging our society - nothing less.
@@graham1034 a major problem is getting on the housing ladder in the first place. the cost of entery is getting higher and higher.
Living in Austria hearing "only 2000$ for a one bedroom" nearly gave me a heartattack. It would be 300€ here in Vienna
You can't have a rental culture without rent controls. This was a common idea not too long ago, but isn't even on the table now.
Germany has a population growth rate of 0.3%; Canada has a 1.4% growth rate. This could easily explain why Germany has more stable housing prices: they don't have a housing shortage due to population growth.
Another factor (especially valid for BC) is that most of this growth is immigration.
And immigration into Canada is highly biased towards net gain in money, it prioritises highly paid young professionals and international students, who pay for tuition. Sometimes you even have to bring in cash to be accepted into the country. And housing is one of the main "buckets" where this capital ends up in.
While in Germany there is a lot of EU immigrants, who don't have to be high paid nor have any requirements on bringing in the capital.
Population growth is not as big as you think. As he somewhat pointed out mind set is the biggest problem. Germany still has the mindset of a house is just a place where you live and raise a family, Canada and US also use to have this mindset. Now the Canadian and US mindset is that houses are investments that you have to make money on. With that mindset people will do what it takes to keep the value to continue going higher. This shift started to take place in the late 80's early 90's and is fully entrenched now.
There’s a better solution: you can’t own a home unless you live there. You can still rent out, but it goes through federally regulated and city owned high density housing. Contractors would make bids to the city government to build these complexes, just like arms dealers do for our military. This way, houses cannot be an investment, and renters don’t get screwed for profits because the city would only charge for utilities. From here, with housing prices being dramatically more stable, cities can apply a housing price cap based on to class of house (ie: 3 bed 2 bath, 1 bed 1 bath, 4 bed, 2.5 bath, etc…). This way, developers can’t scam home owners into paying way higher, which would create too much demand for renting for the cities to handle. Next you have zoning restrictions for where certain classes of homes can be. No more developing only gigantic, pricy houses in areas where nobody can afford it so they go into serious debt and are suffocated by their mortgage. All of this together allows the market to create variation in housing so we don’t have Stalinist architecture, but housing is still treated as a human right and not an investment it like it is in capitalist countries.
I was gonna say vacancy tax but I think this really is closer to what I want. There are some situations where I'd be okay with someone owning multiple homes, but they'd be marginal and really as long as people were driven away from owning more than a small number for a short time, and more than 1 for an extended period, that really cuts to the quick of decommodification.
Prevent corporations from owning single family housing. They have no practical use for it other than to exploit people through rent.
I can only afford to purchase a 1 bed condo , but every time I see a place I like and look at the financials , it dawns on me that I'm basically paying double what the previous owner paid only a handful of years earlier and I'm inheriting all the big maintenance work that is inevitably coming within 5-10 years down the line as the buildings various structural and aesthetical features start reaching end of life. So not only will I have paid potentially $200k+ extra than just 3-4 years ago but I might be looking at $30-70k just in special levy over the next 5-10 years . I feel like its a trap buying apartments when the market it crazy like this , previous owners not only got to live in the place and enjoy the insane appreciation of recent years but in many cases they haven't even had to shoulder any of the heavy maintenance burdens .
I'm totally for owning your own property , specially if you are living and working in that area but at the current prices and maintenance liabilities, I'm skeptical whether some properties are going to be a legit investment or a bigger sink of your money than just renting . But ofcourse if prices double still in the next 5+ years I will be eating my words.....but then there's the question about who is buying 1 bed condos at $1-1.4 million. So for now, if your rent is still a reasonable price , that cost might still be better than all the costs associated with buying over that period.
How I think life is supposed to work is that you rent for a few years while starting out in your career until you save enough for a down payment for a property of your own. So we have the issue with rent prices being too high that prevents people from saving for a down payment, and housing prices being too high that nobody on an average salary will have any hope of owning a house, or even a condo.
Property as an investment needs to be discouraged while maintaining the ability for some property to be rented out, so yeah maybe purpose built rentals could solve this, but at the same time renting condos would need to be banned
"You will own nothing, and be happy."
Yup
I think serfs were treated like that in the middle ages. And in imperial Russia until 1920, which gave rise to the revolution.
A glorious revolutionary idea of The Party, no property for the peasants.
It's always a good day when a new About Here video shows up.
Regarding building wealth, something to consider is that there are other alternatives such as investing in securities to build wealth. An issue is that many people don't include the unrecoverable costs associated with buying and therefore treat renting as "throwing money down the drown" as if all the money spent on buying is actually going towards their investment. Ben Felix has an excellent video about this called the 5% rule. The one thing I will note however is that, as you discussed in the video, government policy largely ensures that housing continues to be too good of an investment here in Canada
This. Relying on a single real estate property as your main investment vehicle is incredibly risky. If you asked someone if they would consider taking out multiple times their yearly income in a margin loan to buy a well diversified stock and bond portfolio, they would nearly universally say "no, that's gambling". But that would be far less risky than putting that money into a single real estate property with unforeseeable idiosyncratic and localized risks.
Here's the first part in one of Ben Felix's videos on the subject: ua-cam.com/video/UuAZ4M9f_sM/v-deo.html
Well that’s another problem, with how high rents are across a number of cities and the depressed wages in Canada, the average earner doesn’t have much left to save at the end of the month, not even to build an emergency cash balance, let alone save for retirement.
i was thinking the same thing too. if the rent is affordable and extra cash can be saved, it could be invested in the securities market. many blue chip companies pay dividends. over time dividend compounding can build wealth. i think it's less risky than investing in real estate. also with real estate the cost of property taxes and big repairs can be great and also do not build equity.
Such an informative, structured, and engaging video. Loved this Utyae!
One of BC's biggest issues for renters, too, is the lack of freedom. I am a renter. I have been for about a decade. And as someone who has dreamt of designing my own interior since I was a kid, it's painful to be not allowed to alter the unit whatsoever. Can't paint, can't hang shelves up, can't increase the amount of light in a dingy basement.
It's also tough for people who want a pet companion. If you can't find a place with one cat, what about two? Or a dog? It's near impossible!
This is another reason why the appeal of ownership is perpetuated in BC.
Put down a throw rug.
One reason selling condos are also preferred is the glorious "Maintenance Fees" you still have to pay the building monthly. Yes, you "own" your condo... But the building is still owned and operated by the building owner... Thus you have to pay them these fees to maintain the building. Tada! You have recurring income without worrying about actually renting the suites, and you get your money back (and more) for building the building and condos. More money for the building owner and developer!
You can see why purpose built rentals have become less appealing to developers.
the new editing style is tight
3 reasons why we have a problem
1. we limit housing supply
2. we limit housing supply
3. we limit housing supply
supply / demand, 100,000 people accepted to immigrate into the lower mainland this next year. Where are these people going to live. I can't complain I own a house
Wow! The analytical, data driven, logical and well produced content you are producing here is really amazing. You are doing some quality work here and I'm sure that this is getting in front of the eyes of at least a few (present or future) decision makers. Well done.
@repCanada Yes property owners are bad, so let’s rezone and crank up density, so we can make money off it. Think about what is at work in this video. This guy has been paid to manipulate you - seems like it worked.
The solution is decommodification of housing altogether, but that's pretty radical. Good to see you upload!! My mouth dropped when I saw this in my sub feed. Quality video as always
This. One house per family and having to prove income used to purchase was generated in Canada. Problem solved. Want to generate wealth, start a business and do something useful to society.
I GET SO HAPPY WHEN YOU UPLOAD
Just do what Shenzhen does, tax based on sq ft. So say each person gets 500 sq ft that's not taxable, anything beyond that, taxable. Increase the carrying cost
You explained the current housing market in 15 minutes better than anyone else. Keep up the good work man!
Glad I stumbled on to your videos. Very well put together and very interesting. I hope you don't pay too much attention to any criticism in the comments. You are tackling monstrously complicated topics and doing so accurately, concisely and entertainingly. Keep up the great work!
Another excellent video as usual. The thing people don't seem to get is that housing can't be affordable as long as it's an investment, it simply doesn't fit.
In a place where 70% of residents are homeowners and profit from renting, why would anyone want houses to become cheaper to start with?
The Graham Stephan part I died
You looked at investment and housing ( as in having a roof over your head). What was missed was 1) neighborhood/neighborhood community allowed in the single family residential setting creating cohesive relations as well as 2) the creativity allowed when you don't have the unspoken rules of density, i.e. stay in line. When you grow up with density and then leave density, one feels a thrill of freedom, a burst of energy, the unburdening of a micro constructed society. I've been away from Chicago for 53 years and I'm still on vacation.
Now this is real journalism!! Much love from Prince Rupert!!
Id argue that condos are not for owners since you never own the land
You never own the land. It's called property tax.
There is a third option though, one with a long and proud history in British Columbia. Cooperative housing!
Are you crazy! Why would anyone buy if they can just rent in a coop. Why do you think they stopped building it after the 80s. :) Vancouver unfortunately is just a greater fool scheme.
But that’s communist!!! 😂
Really enjoy all your videos, I learn a lot about urban planning and Vancouver history from you. Awesome to see Urbanarium are sponsoring you to make cool things. I’d be interested to hear in a future video what you think about city’s with high numbers of renters that have kept costs low e.g Vienna or even ones that focus on low cost public housing but high homeownership like Singapore.
A land value tax would fix the problem of speculation without having to force housing for rent.
The only solution is to bar corporate ownership of residential property, and placing a limit on the maximum number of residential units any individual can own.
Get rid of single-family zoning. Replace it with a 4 stories tall building limit. That way if you want to you can build a single-family house but you can also make a 4 story walk up. Also, get rid of commercial and residential zoning and make it all mixed-use.
Omg someone who actually understands the housing crisis
Very interesting discussion, also love to see this Vancouver based! Love that there was a scene with the frying pan truck, I love that place to eat!
Oh nice! It has been awhile.
The other advantage of home ownership is housing security. With a house that I own, I don't have to worry about having a place to live. No renovictions, no worries about rent increases making my place unaffordable. Of course it helps that I bought in rural Nova Scotia 20 years ago and so the price of a home wasn't really an issue (4 bedroom 2 story for 85k).
I absolutely love your videos. Keep up the good work!! Love from Piacenza, Italy
Housing is not an investment, housing is not a service, housing is a right.
Ayyyy quality over quantity
I want the CMHC to build co-ops like they used to. We need co-op housing in every neighbourhood, not just False Creek and Grandview-Woodlands.
But we need social assistance shelter allowances to rise to realistic market levels and to have a basic income for those who are working but need affordable housing not social housing and a way to live affordably and save for a private house purchase. It becomes a step on the ladder rather than an end goal in and of itself. One of the purposes of government is to redistribute weal more equitably and this seems to have been forgotten in the last several decades. The other two legs are healthcare and education. All three need to be present to make a stable stool to sit on or a place to live in while you are building your down payment. The other issue is wages have not kept pace with prices in the general economy. That can be addressed by a basic income as well by reducing the concentration of wealth in the one percent demographic group.
as a developer you can setup a strata company after the condos are built
the strata company charges residents a strata fee typically for common area and building maintenance
but looking into the numbers most starta fees woulda been the profit portion of rent
so think about it for a minute so sell the building and recoup the cost of building and make it mandatory to pay the starta fee otherwise they force sell it on your behalf
the strata company collects "fees" equivalent to rent
where as a if a PBR is built and the rent collected wont recoup the building cost for many years
you dont own the condo it owns you
I love these videos! So informative and so educational especially in the city we live in. Please keep making this and uploading. I've binged all your videos so far!
I live in a Midwestern American city where the bulk of rental properties were 2 - 4 flats. They were intended to be owner occupied and were a source of income for the owners. Those buildings were first torn down, or bought and converted to condominiums. Big loss to their communities. Same with the midrange rental properties of 6 - 18 units. They were of a size that someone who knew property management could leverage the value built up in their 2- 4 flat into the purchase of a midsized property. All of that is being turned into condos.
Which brings up a new issue. Or I should say old. Condominium is a Latin word for a form of housing that has been around for a very long time. Like since humans built dense cities. We may do them differently now, but it is not a new idea.
Great video! Super though-provoking and incredible quality. Defs subscribing and smashing the like button!!!
What a fantastic video. It really lays out the core of the issue and presents some possible solutions with likely downsides. It is really unfortunate that this is such a complex issue that we can't point to one single thing as a solution.
This is going to sound hella naive, but I'm just going to throw out the idea, what if we had publicly owned purpose built rentals?
The problem with that is that governments are notoriously inefficient at that kind of thing
We obfusicate the price discover of the market and it's now a more opaque methodology of developers selling to one customer. The government. When other people spend your money they are less likely to spend it well for you. The government will be spending OPM and won't even be living there. This is a recipe for substandard and over priced construction. When people buy their own property there is a better feedback loop from the developer to the customer. (mom and pop) which makes the entire system more honest and effecient.
Appreciate the humor. 🙂
If we had more affordable housing and bigger rent-geared-to-income programs it would greatly ease the housing crisis. My greatest incentive for owning a home is the thought that once I pay off my mortgage, I’ll have a place to live “rent-free”. So once I retire and have a low income, I won’t have to worry about all my money going towards housing alone. But if I had easy access to affordable housing, I won’t need to worry about that. In Toronto, there’s currently a 7-12 yr waitlist for subsidized housing. The options are limited (and often geared to certain ethnicities???) and you are required to take what you can get. That’s very unattractive.
Dude. I love the flow of your videos. So easy to watch and incredibly educational.
As AI becomes more efficient at replacing humans, being owners is pretty much all that will be left for humans. Either you share ownership in companies that provide goods or services, or you own real estate for renting.
really good video, thanks.
the answer here, if you want a culture where housing can be treated as a service rather than a way of accumulating wealth (for both renters and owners) is land value taxation.
an LVT ensures that, as long as you don't have artificial restrictions on the supply of housing (which i know is not the case right now but still), housing will not passively accumulate value and can be treated strictly as a durable good like a car or anything else.
the effect is that land owners HAVE to build enough on their properties in order to continue profiting from the rising tide of a city's land value, or else sell to someone who will.
it works really well, the only difficulty is enacting it in the first place, as existing land owners will not prefer such an arrangement and will want to keep profiting off their land holdings. theres lots of potential solutions to this, like progressively enacting the LVT, or only switching to the new tax scheme when a property changes hands, but the truth is that we are presently a long ways away from land value taxation rising to the level of attention needed to have it be the solution to this seemingly impossible problem of the "housing as an investment" cycle you talk about.
You know Uytae is classy af when he ends the video with Strasbourg/St. Denis
The answer is put more garbage dumpsters on empty lots for peoploe to live in.
8:20 "Nobody buys gym memberships they don't intend to use." LOL. The business model of gyms is designed around people starting memberships and NOT going.
A big problem with increasing rentals is you’re only really increasing the wealth gap by giving tons of money to a few people who own all the land.
With an entire building renting all the units, there is 1 owner for let’s say 600 units. All the wealth is funnelling into one person, while the renters have 0 equity because the own nothing.
The only way to fix this is have the government make the buildings. 80% of all housing in Singapore was constructed by the government. They make huge condo buildings and sell them to citizens. Because it’s government owned and built, they aren’t after profits so pricing isn’t a huge issue.
In Vancouver, you said it yourself in the video, rental units aren’t common because they’re not lucrative. The developers only care about one thing, making money, housing people is just a bonus but they could care less.
Vox level quality videos for Metro Vancouver, keep it up Uytae!
at the end of the day it's a simple supply and demand equation (that is anything but simple. If the purpose built rent units are more expensive than condos/apartments, it will just allow landlords to charge more. Mid-rises and apartments/multiplex units often block views for house owners, so I don't see that in the foreseeable future (at least for city of vancouver). Maybe we will see more apartments and mini city centres in surrounding areas like delta, richmond and surrey. (north shore is out of the question too)
Sometimes I wonder if municipalities owned and profited from purpose-built rentals, if then they could use that money to invest into the communities in which they serve. So instead of a renter's rent making somebody else rich, that rent was instead invested in the community. The major corporations who want to profit off of making condos and executive homes can continue to do so keeping the 'American dream' alive.
I'm not talking about low income housing but market price housing. It would also help real estate company with older real estate that requires work in order to meet climate goals easily offload properties that they don't see as profitable anymore and may not be able to sell.
RETURN OF THE LEGEND!
We need About Here Toronto version. Great video! Been a fan for a while and I don't even live in Vancouver.
An average Vancouver couple (both working) would have to save for 14 years to buy the average detached home in Vancouver. And that math is based on the value of the detached home NOT rising, which of course it logically will. I understand that this is just an example made non-existent "average" couples, but that's a bad sign for how severe the problem has gotten.
The scary thing is that the median price to income ratio in Shenzen (China) is over 40. This is not just a Vancouver thing.
@@davidbarry6900 house:income is 40? Jeez, that's actually worse than Vancouver. Here the median before taxes is $72,585 (we pay a lot of tax). Average home is at $1,362,105. So our ratio is only 19. We do have fairly strict mortgage rules but even then 40 is insane.
You're amazing! I love your channel. Youre hitting every Greater Vancouver-centric and BC issue on the head.
I rarely comment on videos, but I happily take a moment to say that your videos are absolutely amazing. Keep up the great work!
Great video. That dinging noise hurts my ears cant sleep to this video.
As a guy who loves BC Real Estate I absolutely love your content
welcome back brother love your stuff
Amazing video 유태! I think this alludes to the fact that since there is just a clear need and desire to accumulate mass amount of wealth, that owning a house is a great way of doing so. And like you mentioned, in those Nordic countries (and Germany), they have great wealth equality. So I think this housing problem is a manifestation to a whole bigger problem that people aren't addressing. Honestly, (kinda off topic), but Vancouver's high standard of living cost and clear lack of night life has made me want to leave Vancouver haha. Keep up the amazing work bro! Seriously love all your videos. You're definitely the biggest under-rated youtuber I know. I'm quite curious if you will expand your content to other regions. If not, all good too. As the zoomers say "you do you boo boo".
The govt should offer big incentives for owner-occupiers so they can compete with investors. And, make those incentives predicated on the buyer living in the property for at least 2 years.
Remove Government intervention, notably including artificially suppressed interest rates, and then let the market do its own price discovery. House prices will not only drop to sensible levels, but will stabilize. The primary problem is excessive debt. It's that simple.
The problem is that by incentivizing people to borrow, people borrow more, and that pushes up prices (among a bunch of other things). Consider that said borrowing is generally exclusive to houses and not to anything else. Now if the Gov were to stop manipulating markets, markets could correct to where they should be - problem solved. But that would be a "crash" and people would go bankrupt. That breaks their paradigm however, so they won't let it happen.
Attempting anything else is just pissing into the wind, really. Especially MORE intervention, as that's what has caused this mess in the first place. We should start by looking where things should be and work backwards, but that would be the smart thing to do, so.
Also, it's not really "renting your way out of it" because the solution being proposed is basically saying that people should just abandon the idea of ownership and accept being life-long renters. There is no end goal of full ownership (by those who want it) or more affordable prices.
tax the hell out of houses not being lived in by the owner and ban airbnb, now you have 20% more housing!
I like these videos- you should do one on the homeless issue , which is not about homes but mental illness and drugs, and how they are ruining the downtown...
Just moved to Van and I'm really enjoying your discussions of housing issues! Keep it up 👍
Zoning for multi units does not make it affordable. The builders sell these multi family developments to companies like
Berkshire who charge up the yazoo for rent. Even here in Florida, the rental costs are now as much as a mortgage. Many blame
relocation of Californian refugees where rents are even higher. Almost none of these multi units are for sale...most are rentals only.
The city administration is largely responsible for the lack of purpose built rentals through development requirement costs and landlord tenant regulations.
I'm an Aviation geek. I approve the Condor!!! Thanks for the video! I am looking for a condo in Toronto. the prices are insane
Renting or owing house is choice. When you are renting, you can use your saving to invest in stock market. When you are owing house, you put your money into your house asset.
A few companies buy all the housing and sit on it. This reduces supply and increases the value of the houses. LA is famous for this and real estate companies make double selling a property that just sat empty.
also of note is the possibility of more renting, AND limiting ownership and construction of those rental properties to entities which aren't trying to profit from them, such as governments, churches, non-profit corporations, and unions. this is done to varying degrees in some European countries, and was more common in postwar American cities. this obviously lowers rents, as everyone is simply paying the costs to build and maintain their building without a profit margin on top.
Okay, serious question here. Imagine a not too distant future where housing was a right, not a privilege. So anyone with a heartbeat - wait that's too utopian - any citizen or permanent resident has the right to a basic shelter. Something small like the extreme micro flat you might see in NYC. And anyone can live in one for free, just paying for the electricity and water they use. What would that do to the housing market? There would still be a demand for nice places, but gone would be the rent or die on the street issue. And with a choice, would people still be paying 70% of their income in rent, or would everyone opting to take the free option force rental prices to be more reasonable? To even get there, a lot of these micro flat would need to be built. If the government was on the hook to provide free housing, would this lead to terribly unsafe, cheaply made buildings? Or would we see some modern housing infrastructure being made as a government project?
That condor joke got me so hard. Amazing vid!
I mean in Germanys case yea the prices stay stable but they are still insanely high. Of course prices can stay stable when a mortgage is spread across three generations.
The thing is... some entity will always own the property. Even if more of the general population rents rather than buys their home, that just means more profit into the hands of developers or REITs. Someone has to provide the rental service in this model and they will expect to be compensated in return. Wouldn't this lead to further wealth inequality?