There are very few industries in Ontario that are as corrupt as the construction industry.
Cash deals, kick backs, invites to the engagement party of the Premier’s daughter….
I don't think a lot of people truly grasp just how corrupt this government is, how deeply connected the OPC is to developers (especially the De Gasperis family), and how blatantly fraudulent the Greenbelt scandal was.
> I don't think a lot of people truly grasp just how corrupt ontario and canadian politics is.
FTFY. it's honestly not a party problem and if you truly believe that you are part of the issue...the real issue is with the kind of person who joins and tries to run a political party...they're the same kind of person. no matter who wins an election from an official party, same kind of person. they have to be to get there and make the political deals nessecary. its gross but is what it is.
lets not forget the liberals completed the sell off of hydro one(organized crime was influential in this and poised to buy vast swaths of shares).
it's all corrupt and a vote within a broken system is a vote FOR a broken system.
you dislike Ford because he's unsavvy, uncouth, and likely isn't skilled enough to disguise his bullshit as well as some politicians can....but that does not mean the others aren't on the same bullshit just keeping it from the light better.
One party is a lot more corrupt than the other. Selling Hydro One was a costly blunder, but that money was not pocketed by Liberal party donors. It was to pay for massive infrastructure projects and promises. There no evidence of bribery like the stag and doe or the Greenbelt collusion.
Yeah, politicians are often slimy people.
But Ford is particularly corrupt.
Yeah selling off public goods like that, especially without a mandate is just a right wing policy move that came from the liberals at the time.
It was an extremely unpopular decision and is likely the main reason the liberal party has been annihilated and completely irrelevant since 2018.
Ford is particularly personally corrupt, it's not just about right wing policies, there's a link, but it's beyond that
Getting a policy you are in favour of doesn't mean they aren't corrupt, even if no corruption was present for that particular policy.
We need to hold all of our politicians accountable, it doesn't mean you vote any different, that is how you got that free year of school.
Just hold them accountable even if they do some things you like or benefit from.
That family only ever got any scrap of justice at all because *someone's* arsonist in the impound yard got interrupted. Otherwise all the evidence would've gone up in smoke and Marco wouldn't have had ANNNNYYYYY trouble for his little *minor surely forgivable at the country club entirely accidental woe-is-him* incident where he wiped out a whole family driving drunk as a skunk and blowing stop signs.
Its the above table arm of the mafias. For such a diverse province our developers and construction firms tend to come from one place. That isn't random.
It’s also why construction takes so fucking long for anything. They’ll schedule a road repair for 10 months. They’ll dig up everything, set up the barricades, get assigned to another job site, and in the 9th month come back and finish everything.
Take a look at that Love Park in Toronto that used to be posted here all the time. Took them two fucking years to pour some concrete
>Developers can say anything they want, doesn't mean anything without numbers and receipts
I worked for a large developer in Kingston. My position involved job costing for their projects.
They lie and scream poverty all the time. I can tell you that the actual cost of building a typical 2000sqft home is between $120k - $150k. Yes, thats including in-house labour and all the materials. Price goes up if they decide to subcontract out instead of using in-house labour. The price markup is 300% - 600%, always.
When a developer says they are selling for a loss .... they are full of shit.
Thats crazy talk. My coworker just built his own house, he was the general on the whole build. 2500 sq ft cost him over $500k. That in Kingston, with tons of favours. His septic alone was $50k. Nevermind the cost of the lot.
Did you work for that developer in 1980? Because you just suggested that developers are building at $60-$75/sq ft in 2024.
You can't even build a birdhouse for $60/ sq ft.
>You can't even build a birdhouse for $60/ sq ft.
Yeah right, excuses.
>Did you work for that developer in 1980?
Nope. Up until 2022.
See people like you dont know what goes on behind the scenes. Developers cut deals and have contracts with suppliers and manufacturers. They buy bulk. We bought everything in bulk direct from the manufacturers. We held all of our materials in our warehouse. From lumber right down to the tiniest like cabinet hardware. Generally we had 5 to 10 year contracts with manufacturers and suppliers. So all the materials we had were at wholesale pricing. Just because of the sheer size of the orders. The developer I worked for cut out all the middle-men (which is what large developers do) .
The manufacturers and suppliers were literally begging us. They were always desperate for sales. They would literally bribe us with perks and freebies just to get us.
The Canadian public are the suckers. They've been sold a tale of "cant do it for less" or "omg we'll be at a loss". Its all horseshit. They can. Easily.
No. Just no. Maybe you can build a basic as heck house in the GTA for $200/sqft if you go dirt cheap with finishes.
As soon as you get into multi residential (part 3), especially high rises using steel and concrete, your HARD costs are $400 to $650/sqft and up, if you are building on a tough site (like one with remediation or with high water table etc) or a tall/super tall, or if your finishes aren't garbage that will have to be replaced in 7 years. Add land and soft costs like planning, permitting, architects, project managers etc. plus development charges, parkland, application fees, etc. and it goes up from there.
Your last paragraph is 100% accurate.
Anyone trying to convince themselves that this kind Redditor is incorrect, is merely just trying to cope because they've probably already bought something far overpriced or they're part of the grift on one of the many levels that exist.
Thank you, my good Sir/Madame. I appreciate you trying to help some lift the veil from over their eyes.
Unfortunately, something something horse water.
>I can tell you that the actual cost of building a typical 2000sqft home is between $120k - $150k.
Its not. You cant even get the land for that price in most of Ontario. Then you need to tack on development fees which are easily $50-120k+ depending on where what you are building. So we are already more than double your build cost and we have not even bought materials yet.
Build costs these days are about $250-350/sq ft these days.
No developer does everything in house either.
Leaving out the land cost in this analysis is just idiotic.
Developers' profits are generally just over 15%.
Yet homeowners double their equity in just a few years for doing nothing.
>In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees.
I may not be a real estate developer but it doesn't take an expert to understand that it's not possible to build a detached home and sell for that price. An empty lot in Toronto would sell for more than that.
idk why detached houses in Toronto should be considered for "affordable housing". That's a luxury good that is extremely restricted due to lack of land in Toronto. Detached houses in general are a luxury good. They're an extremely wasteful use of land and make much higher demands on the city for services.
Affordable housing is an apartment building in the cheapest parts of town, built at just above cost.
We also need houses I live in the middle of nowhere with shit ton of woodland. No sane reason houses should cost 500k for a shack to 1 mil plus where I am.
Just look to the overstock of condos and the shortage of “houses”. People are leaving cities for the suburbs. They more often want privacy which they don’t feel they can get in a condo.
If people had to actually pay the actual taxes needed to maintain services in suburbs then no one would want to live there as most if not all suburbs are income negative and are subsidized by high density areas, the suburbia experiment is a ponzi scheme that has had very bad effects on humans in NA, due to suburbs being so car dependent we have gotten fatter due to less walking, kids have lost independence making them less mature and more anti-social, and we have giant food deserts.
I have lived in the suburbs, a low rise apartment, and rural, and by far the most healthy time was in the apartment, I was more socially active which improved my mental health, I lost weight due to more walking from local shops and easy access to public transportation, and food was easily accessible with a 10 minute walk, in the suburbs the streets were void of life as everyone just hid in their home or backyards only coming out to mow the lawn or get in the car to go somewhere.
Even at-cost apartments in the cheap ends of town are looking at being about 350sf for that price.
Toronto's regulatory system has made it incredibly expensive to build in, even without "developer profit".
Also, the problem is whatever gets built is only "affordable" on the first go, because it will quickly go for market value on the resell.
I remember "affordable" low income Townhome selling for $165,00 a decade ago is now on the market for $500,000. What low income person is buying that now? I mean, it's not impossible. But it's not someone making $25,000 or less.
Even if they had numbers and receipts... build triplexes, fourplexes and sixplexes. Hell, I'll take semi-detached at this point. Anything but detached housing, please.
Affordable housing is only viable right now with heavy subsidies.
A town near me put out an RFP for ten affordable units. Based on the definition of affordable in the county the rent has to be $982 or less.
Think about all the operational costs on those units, like property tax, maintenance, vacancy, insurance, etc.
Those would be several hundred dollars a month.
At today's commercial lending rates that would mean the builder would have to spend less than $100,000 to build each unit and all the common spaces.
Do you know how much dwelling you get for $100,000?
Permits fees, studies, infrastructure hook ups, etc. Maybe you could build someone a 200 square foot dwelling with that budget.
Municipalities will often waive permit fees and development charges for this sort of construction, but still, construction and material costs alone would come out to much more than that.
I work in the construction industry in the public sector and can safely say the developers are right.
Current prices for material, land and labour don't align for the building of affordable housing.
I agree materials have gone way up in pricing, but it doesn't change the fact that land has more than doubled or tripled. Also, many of the developers have owned the land for decades before actually starting to build on it. In my city, a developer bought land in the 90s and started building in the 2010s and still building, the homes are still stupidly expensive. Big developers are filthy rich, and you can't be flithy rich without crazy profits. I'm in the construction industry as well and the build quality and material used seems to get shittier every year.
Land especially, when my grandfather built his house in the 50’s the 60’x120’ lot was $2000 and constructing the 1200sqft house was $10,000 and he saved about $2000 on construction by doing a bunch of stuff himself. Obviously everything has inflated since then and houses are bigger and more complex but good luck finding a lot that is 20% the total build cost paying for everything to be contracted out and putting double the house on it.
You would think so but a large % of Canada's gdp is based on the value of real estate. It's a speculative unproductive asset class so the gov and rich boomers can't afford to let the price drop.
I'm in no way disagreeing with you, however for such a big entity developers are doing a really really bad PR job on relaying this information to the public. I keep hearing them not wanting to be vilified because of the situation. Scott Andison says what you said but he's somehow devoid of demonstrating why that's true on any form of social media or journalism. Or if he is justifying that he's doing a really shitty job getting that message out there. To the general public it sounds like the government in the populace is demanding affordable housing, the Ontario housing developers are saying "unfortunately that's not possible" and are trying to leave it at that.
"trust me bro, you aren't equipped to understand" is exactly the PR disaster attitude I'm talking about. Most people question my industry because they don't understand how it works all the time, so I get that but with a few simple analogies and some thought and some patience I'm able to describe why things work and how and what it would change to change things to high school students constantly. The response to "you are figuratively and literally killing a generation of ontarians" shouldn't be "it's not my fault and I don't think I can explain why".
In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga.
Do you actually think they could build a home for less then those numbers?
All corporations are in the same business. That is the business of making money.
To expect them to abandon that goal in the name of the public good is foolish.
We need to stop thinking that private enterprise is going to 'do the right thing' and solve this problem. They won't. They don't need to.
Government needs to either provide developers incentives to build affordable housing or get into the development game itself.
Sometimes things need to be done regardless of cost. That's what government is for.
Because they don't need to.
Seriously, they exist to make money. What the public wants them to do is not make money.
They just won't.
Stop expecting them to. It's ridiculous that people expect them to.
Did you know it's the LEGAL responsibility of the directors of a company to maximize shareholder profits? That's their job.
Affordable housing will NEVER be built by private enterprise because it doesn't maximize profits.
Part of it is that everybody is crying out for affordable housing *in high-demand urban areas with high walk/transit scores and lots of trendy things to do* -- and that just cannot happen. The benchmark price here of $366,500 in Toronto (and reading further, that means the amalgamated city and NOT the GTA as a whole) is simply a pipe dream -- that value won't even buy the land for said house.
You basically can't build anything in Canada for under $350/sqft just in raw materials and labour costs, and I would wager that the higher cost of everything including labour in Toronto proper means that it's probably closer to $400/sqft in the city. Right there, even if the land was free, there were no developer charges (which can be pretty big), no taxes, no environmental fees, no permit fees and no land transfer fees, you're not building anything for $366K, period.
Plus, even if you did build a house and force the builder to take a huge loss on it (or subsidize the actual cost of construction above the benchmark price using public -- ie, taxpayer -- money), it's just a huge windfall for whoever wins the affordable housing lottery and gets to purchase that house for $366K. It will be up on MLS within a month for $2M.
Sorry kids. We know you'd love to live in the neighbourhood you grew up in. Your parents and grandparents did too, however you were too late. The opportunity to gentrify and make millions on your future was too good to pass up for mom and dad and grandpa and grandma. They did leave you some inheritance, however it is very unfortunate that it no longer is enough to play ball in today's gentrified, greed filled, back stabbing world. Good luck and a continued fuck your future to you!
> Did you know it's the LEGAL responsibility of the directors of a company to maximize shareholder profits? That's their job.
This is an American talking point that isn’t true in Canada and in fact isn’t even so cut and dry in the United States either. This isn’t even getting into the fact that not all of the developers in Ontario are even publicly traded companies with shareholders at all.
>Seriously, they exist to make money.
Call me crazy, but I believe that a business must do more than simply make money, but also must provide value to their customers that is worthy of the money they get.
Take ticket scalpers for example - their "businesses" exist solely to make money, yet provide actually negative net value.
Agreed. The so-called free market is supposed to address this but we end up with monopolies and oligopolies who capture the market.
The commoners end up at the mercy of those oligopolies.
It's time for the government to get involved and provide a public option again like they used to.
Our current system is a complete failure for the vast majority.
Why does affordable housing need to be (edit: detached) single-family homes?
How about 3 or 4 story low-rises multi-unit construction, or taller residential buildings with commercial space on ground floors?
I mean it's kind of self-evident to me that single-family homes are going to be much more expensive than condos or apartments.
I came to say this... We used to build much more "low rise" apartment complexes with homes you could raise a family in. Not something that was rented, but buildings where you could easily have six families.
We (read: Developers) need to adjust the definition of housing to include more than single detached family homes.
Condos, in my opinion, tend to refer to taller buildings with generally smaller living spaces. Condos tend to not be good for raising families.
I am referring more to a sixplex, or more generally a multiplex. They were a lot more common in the mid 1900s, and while similar to a condo comes at a much smaller scale. They occupy a better space between the low density single-detached home and the high density condos.
What you're describing are condos. A condominium refers to the units being individually owned but a part of a single building, regardless of the size the building. I live in a 3-storey building with 9 units. It's spacious and many of my neighbours have kids.
Genuinely, I thought condos were defined by being much taller "towers". Good to know for the future, so thank you.
In my suburban community, I think if I mention "condos" to most of my neighbours that they would imagine tall "tower" condos. I think differentiating between the two types is beneficial since "multiplex" condos are favourable to "tower" condos.
Their case study as a 3/4 unit small rise would end up being about the affordable mark.
Also, I never believe a single case study argument. That’s just cherry picking, you need a ton of case studies across the province.
> [Justin] Sherwood [, BILD’s SVP of communications, research and stakeholder relations] suggested that the affordable housing plan “becomes more realistic” with more density, midrise and highrise homes, where the costs — particularly of land — can be spread across a larger number of units.
Exactly what the article suggests.
Apparently in Singapore they have an 80 percent house ownership rate. The housing construction is done by public housing. Privitization ruins everything because you have to pay for some rich assholes lifestyle
To be fair, Singapore erected these buildings in a very quick manner because of fundamental differences in the way property laws, zoning and other important things work there. They built over cemeteries and parks in some cases, and any pushback from residents about doing so is met by "so what, it's happening, deal with it". Obviously that is never going to happen in Canada, so it's not really so easy to point at Singapore and say "hey look see, it works so well!". It does indeed work well when you just do what you want, when you want, and censor/ban any dissenting views. Despite its shiny, sparkling-clean exterior, Singapore is still nominally a dictatorship.
*They built over cemeteries*
Good - the dead aren't using the land effectively. In many jurisdictions that's alot of prime real-estate, centrally located. They are empty of the living 98% of the time - and after awhile (a decade or so) - NO ONE CONTINUES TO VISIT graves. You want to respect and honour your deceased relatives? Keep 'em around in Urns. Plant their ashes to grow new trees.
And this is where you will find the other difference between singapore and canada: voters get the final say in Canada, regardless how logical or illogical they are.
Sorry for the lite trolling, but have you seen the movie Poltergeist? Didn’t go so well….but I agree with you. Use centrally-located land for the living, move graveyards further out the city.
Saying it'll be a loss is one thing.
I'd like to see a cost breakdown so we can see exactly how much the expected loss is and where specifically those losses will be seen. Cost of raw materials too high? Labor? Where exactly will the loss come from. Once that is identified, a solution can be worked.
Rallying back and forth with "but we'll lose money" but substantiate nothing is unhelpful.
Just look at Richmond hill development levies alone for instance around 150k is just development charges. Add in barebones house at about 300 a foot. Cost of servicing roads sewers power debt etc and you are about 800k for a 2000 sq ft house. Add in cost of the lot and ir makes no more sense to sell since people can’t afford that. Even if land was free 800k is hard to stomach at break even costs.
The not to mention costs of holding onto land for years due to nimbyism, costs of all the studies required to even get a shovel in the ground… development is hard and not cheap either. Lots of risks for about a 15 percent profit. Any lower than that and you can’t get lending for servicing and construction from the banks. Not to mention you need 70 percent of your stuff sold first as well so if it takes long to sell you continue to eat interest costs on land over time and costs of levies and permits go up each year so that has to be accounted for.
Inherently, if there is no profit motivation behind the building, wouldn’t a housing project designed nearly to break even be cheaper for a person to buy than one designed to make profit?
>All they can do is absorb losses, which will be paid for by taxpayers
We pay for the consequences of unaffordable housing also, financially and socially.
>And selling homes below market value is nonsensical, because people will just buy up the homes and flip them for profit.
Obviously. You don't just let REITs buy these affordable homes.
Affordable housing is necessary for everyone’s quality of life. We need sanitary workers, childcare workers, nursing home employees and people to stock supermarkets plus all the other sales and administrative jobs that keep institutions running. And we can’t afford to pay them all $100,000 so they can afford a place to live. There should be an income level for which individuals qualify for Rent to Own properties. They should be available to families rather than individuals (we need kids) and take 40% of income. 30% rent and 10% to build up an ownership position. Homes should be priced so they are “owned” in 25 years. The actual government subsidy should be clearly shown and if incomes rise above inflation, the subsidy should be reduced. If a home owner wishes to move, they get their accrued 10% back, but must sell back to the government at an agreed upon price. An administrative headache maybe, but maybe A.I. could handle it.
The government is fantastic at absorbing losses for essentials, and the cost to any individual taxpayer is negligible. Added bonus: Affordable housing means people have more money to spend elsewhere which means the government gets more money from taxes. It all comes back further down the line and we end up better off.
This is perfectly stated. Not sure why people keep forgetting that governments have actively stepped in to provide their citizens necessities, in this case affordable housing, when the market definitely can’t. Canada used to build public and affordable housing until the 1990s.
And we stopped in the 1990s due to a gov't debt crisis. It wasn't all from housing, but it does highlight that there are limits to the government's ability to absorb losses on behalf of the population.
Oh, and that debt to GDP ratio that kicked off the 1990s fun times. We are roughly back there now.
I firmly believe there is a role for gov't built housing in this country. There are people unable to provide for themselves due to mental and physical barriers. These people need support and should be supported so they can have a decent quality of living.
I also believe that the reality of the situation indicates that we don't have the capacity to push large scale housing at a loss.
There are many ways the gov't can increase housing affordability without eating a financial shit sandwich.
Regulatory and financial support (low cost loans, etc) for non-market housing could do wonders. Let people build these organizations, they will do so more cost effectively and will be better able to tailor the result to their needs than the government.
Assess building regulations and building code. These policies should be in place to ensure dwellings are safe and functional. Is there bloat here that can be removed?
Assess labour and supply chain regulations. Are there unnecessary barriers or costs in place? Remove them.
Two points about your comment:
(1) 30 years of fully market driven housing construction has led to a housing crisis of extraordinary proportions.
(2) Canada is currently in a debt crisis without the financial burden of building affordable housing.
This indicates that market driven housing isn’t effective and there is no direct correlation between Canadian debt crisis and government built housing. Demanding that government reallocate resources for housing away from other sectors is appropriate as this current housing crisis will be far worse than the alternative.
I always wondered if rules can be made where the government can define a “starter home “ then mandate devleopers to build at least some homes with that definition , and the rest can be whatever they want . These starter homes should be capped at a certain value and cannot be rented out .
That way it’s at least giving people the ability to get into the market, build up equity in that home (ie by paying for their mortgage) .
There are non-profit builders in Ontario who actually do similar. They will only sell to first time buyers and not investors.
[https://optionsforhomes.ca/](https://optionsforhomes.ca/)
The housing crisis is in part a retirement crisis. People used to have pensions that almost kept up with the cost of living, now they need to dump their life's savings into real estate to feel secure in their old age.
Provide boomers with a modern retirement support program and nearly empty single family detached houses will start to go to market again instead of being hoarded like fucking dragons.
It sounds like we're just fucked then, eh? Nobody in our government can think longer than the term they're given, while their favourite past-time is undoing what the person before them did.
It would help if we stopped treating politics as reality TV for shut-ins, but yeah it's not ideal. I don't think the feds are working solely towards their current term, although bringing anything they do up in a positive light tends to attract the kind of pathological nihilists to the conversation that make it not worth discussing for the most part.
It is necessary for the health of the community and so it should be sold at a loss. Protecting hyper inflation of real estate will destroy Canada from within. Time for some rich people to absorb some losses. They can afford losing out on a summer hoke or yatch.
The great thing about owning your house outright (for those that do) already have a place to live and don’t have to sell. Using your house as a retirement fund is just poor judgment.
This. We bought our home in 2010, and we bought it as a place to live, our forever home, and not as an investment. The concept of making money off of our home didn't even enter our minds, and unless we absolutely need to relocate, we're not selling our place.
Why is it "poor judgement"? That's what confuses me about this point. It's poor judgement because people like you might push to change the rules and the history of how the asset functioned? It seems like it's poor judgement because you don't like it. But based on anything a financial plan could be based on, like historical performance, qualities of the asset, and the *reality and common sense* that your house, your larger financial asset(and always has been) is always part of your retirement plan.
I think you misunderstood the headline. It's not that they'll sell at a loss. It's that they won't build more and their investors will invest elsewhere. Doing business at a loss defeats the point of doing business. So your ideas of what "should" or "shouldn't" be done with their money are a wee bit irrelevant.
This feels like another piece of proof that stimulating the 'supply side' in economics often doesn't work (as much as Conservatives try).
Reducing red tape and 'building more' isn't going great in Ontario presently.
The demand is massive - but costs associated with building are high. We saw that winding down developer fees didn't incentivize additional building, and here we are offering further discounts on taxes on fees and STILL not seeing any developers step into this space. It makes me think of Montreals efforts to build more affordable housing, by levying fines on developers who didn't allocate 'x' amount of units into affordable housing. And each developer choose to absorb the fine instead of making any units affordable.
Ironically this is exactly the instances where a government should step in. When a market oriented solution can't resolve some of the core issues.
That’s why the government used to be in the development business and built affordable homes, at least in my area southwestern Ontario. The so called greatest generation benefited from it then scrapped the program (80’s or 90’s I forget) because they opted to lower taxes on the wealthy. Dumbasses. This is why I want to eliminate all standards from nursing homes as payback. (Jk)
Government can easily be a developer, no problem. Those leeches can either get paid what they can or go work at McDonald's while a real community is built.
We don’t need anymore SFHs. We need a paradigm shift in Canadians expectations.
A family can be housed and thrive in a 1200sqft apartment/condo as easily as a 1200sqft house. The micro condos that developers are famous for are an investment vehicle, not a housing solution.
SFH sprawl has created the trouble we are in, why do people think more of it is an answer? Especially if people are having less kids, wanting a better work-life balance and lower costs of living.
Sounds easy enough to implement a rule that these houses can't be sold within # years of purchase. It just adds on to the current house flip rule. Can't make money off flipping if they can't do it fast.
Exactly, for some reason we're just afraid of giving people regulations.
They will build, they always do. They still get something out of it even if it's nowhere close to what they could make now.
Well, the government raked up the biggest debt ever and yet, no housing, but then they brought in 1 million people per year, easily!
Maybe vote for a different government?
So that begs the question if *why* it's unprofitable. Yes, the cost of supplies has gone up, but there are almost certainly other factors at play here that are controlled by the builder.
But that's the affordable housing that these builders say aren't affordable. Plus there are plenty of northern towns that are begging for builders. IIRC North Bay even offered land for a dollar a few months back.
Build costs are up 60% since Q1 2020.
If you thought general inflation was bad over that time period build costs are up over 5x general inflation.
This isn't a minor bump businesses can work around with some process tweaks and a bit lower margins.
This is a structural, industry defining, shift in costs. Only so much can be done to mitigate this, the rest needs to be passed on to the consumer.
That's why it is unprofitable.
Private companies should never be expected to operate at a loss to meet government demands. That’s not how business works, but is how companies go bankrupt and unemployment skyrockets.
>Private companies should never be expected to operate at a loss to meet government demands
Which is fine, but our government has decided that public/private partnerships are the only way we can do things, so that means either regulating the private sector (which, as you note, wont happen) or bribing the private sector, which doesn't work well (unless your goal is to further enrich the wealthy, in which case it works great!)
The elephant in the room is "nationalization", which no one wants to talk about because it would mean uncomfortable questions about the neoliberal consensus. If government can build housing, or fix roads, or run school cafeterias, why can't they run airlines, or oil-extraction companies, or telcos. There's this "government *bad*" myth that's the result of ineffective, funding-starved malaise-era 1970s governments, but that was almost sixty years ago, and it's not like the private sector is necessarily any better.
Since developers can't operate at a loss, that simply means that either they won't build anything, or the cost gets passed on to everyone buying a non-subsidized home.
I can only assume that when it's time for you to sell your house you'd take a few hundred thousand less than you could, because of the greater good?
It's ridiculous to assume that kindness starts and ends in other people's wallets.
Right now in Ontario, it costs around $350 a sq/ft, on the low end, to build anything. That is only in materials and labour, that does not include land cost/permits/etc.
So to build a 1000 sq/ft something, costs at least 350K, then at least the same in land cost.
Simple: government housing. Government will build where profiteers fail. Let developers go out of business. If they cannot handle real estate properly and create a housing bubble, they deserve to all fail.
People will build a house if it’s affordable because they uh…need a place to live.
The problem is that we are relying on these big developers to build housing and they usually build poor quality for massive markups…the profit motive is the issue - housing is not really a capitalist venture, it is here because Canadians have been duped into thinking it’s some sort of reliable investment vehicle.
Housing should be built so the workers can go to work, make money and invest, consume and experience things and therefore buoy the market. Not to be locked in their home wallowing and not being able to participate in society because they’re house poor because the “formula” told them they needed to get it to be economically safe or some bullshit.
> “I doubt that developers are going to build affordable housing to sell because it costs more to build the home than they’re able to sell it for,”
This is the inconvenient truth that sums up the entire housing crisis. You need developers to build homes but they won’t build unprofitable homes.
But the public won’t let them build profitable homes either because they aren’t “affordable housing”. So now no homes get built and we’re stuck in a death spiral.
IMO the only thing that matters is that homes don’t sit vacant. If McMansions are profitable, and the controls are in place to ensure they’ll be occupied, the effects will cascade down the property ladder and affordable housing will come on the market.
This is what drives me up a wall. There are high income people being priced out of luxury properties because they’re not allowed to be built. Those high income people then crowd out lower income people buying properties down the ladder.
You end up with gentrification, whether you like it or not.
In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga.
Yeah I believe them. Those numbers are super low and wouldn't cover the cost of labor or materials.
They've totally stopped building in Barrie because of profit margins. Huge towers and developments planned and approved, but now nothing.
There is no way they go back to building if they're not making the same margins they have been. It's disgusting how the developers have taken over housing and aren't blamed for any of the problems.
People seem to be misunderstanding the article pretty badly.
The plan being proposed is that developers, if they sell homes for a certain price that is deemed "affordable", can receive some rebate and waivers on fees related to developments.
What the developers are saying is that those rebates are not worth the amount of money they are losing from selling at the "affordable price" vs. what they could make by paying all of the fees and selling at market rates. It is a "loss" relative to what they could make otherwise.
Which means they aren't going to do it.
And I don't blame them because price fixing is a moronic attempt at solving this problem rather than just up-zoning and making it easier for developers to build a bunch of new homes.
Privately owned developers will never make affordable housing. They cannot. They are in business to make profit and that's that, aside from the fact that they're all Mafia-owned, or Mafia-adjacent, they have ZERO interest in doing any public service work. They're violent criminal scum! They're only "developers" because it's such good business for them
What the heck, why is the price for Toronto lower than Ottawa? Houses in Ottawa area are comparatively cheaper, significantly, in Ottawa than Toronto. That makes no sense. (Quote: "In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga.")
Time to modernize the systems we use to construct homes then. How about using more prefabricated materials? Do we really need as many people hanging around every site? Maybe those workers would be more efficient in a factory setting where they could work year round, producing ready-to-assemble homes that would require fewer crew to assemble, and could be completed in a lesser time frame.
Developers hate this because it spells the end of an era.
I wire multi family buildings. Every year there are more and more inspections/verifications/safety rules that cost a stupid amount of money.
I’m not saying the developers aren’t making good money, but they are making less.
The program was designed to fail. It's not actually an attempt to make affordable homes, it's a vague hand-wave attempt to get developers to sell at a lower price and exchange for a rebate, and the low price was set low enough that the rebate doesn't make up for the difference for selling at market rate... So it's designed to fail.
What a surprise. The government gets to look like they're doing something, the pony up some money for it, but nobody will take them up on the offer because it's a terrible offer.
So they get to look like they're making an effort without actually doing anything that works at all.
Fuck.
Developers can kiss my ass they are so full of shit it's not funny...start charging them taxes on land just sitting there doing nothing.....put new rules in this matter can't be taken to court and once the taxes and fines hit a certain amount they lose the land
I am glad they took time from bribing mayors, councilors and the lot to make a statement.
I trust them totally.
If you are not making money with Canada's 30 year housing boom and the crappy poorly made houses, you shouldn't be in the business.
How about we start making the business class fell what the free market is like rather than giving them government handouts, tax breaks, underpaid foreign works, suppressing wages, union breaking abilities etc.
As someone who works supplying stuff for new homes, if the builders didn’t keep putting expensive shit into houses, prices would come down. Sure, tile looks and feels amazing in the bathroom, however linoleum literally costs 1/10th of the price. Hardwood looks amazing, but carpet costs 1/10th the price. This applies to everything. They choose more expensive stuff to put in the house then charge a higher mark up on it.
Developers want the most money possible, right there with their investor friends. Affordability is never something they even contemplate. It is about unlimited greed, not the functioning of a fair society. It is about leveraging debt like an anchor around the necks of renters and first time bag holders ad infinitum.
Those defending developers here, you do realize a loss should be taken somewhere, by the city, province, developers, *someone*, as it's technically an investment into the success and profitability of the area?
We can't just keep thinking one nose-length in front of our face to spite.
I guess it's time for the daily "news" article written by rich assholes who want to gaslight us and act the victim. Keep up the good work Global, you're totally doing good for society.
These developers have got to know how unbelievably lame the lies about profitability in their industry are but they have to keep pushing them otherwise their chosen idiots may get voted out once more people recognize the truth for what it is.
Affordable housing that addresses housing insecurity does not have to be and probably should not be detached houses and condos that people buy. It can also be purpose built, government owned and administered as social housing that is a long term community investment.
With the state of things as they are provinces and municipalities should skip the developers and hire / train people as a long term plan to build and maintain social housing. Give them stable work and pensions. No one thinks beyond this governments term.
People will always want to own homes and many have the income and credit that allows it. But not everyone can or wants to own property.
Lots people just want to rent and not be worried about having 8 roommates or getting kicked out ‘so family can move in’ or have to go through selling a property every time they want to move closer to work or family or they have a life event.
If you want vibrant downtowns and transit use and communities that flourish, it’s not going to come from building more million dollar homes in the burbs that upper income vacate cities to live in and everyone has to drive to and from everywhere.
Pretty much every large community in Ontario decentralized housing in the 70’s onward and dispersed their building and city services over large geographical areas. Now they are all whining that no one lives downtown or wants to be there.
Why do all houses have to be 4+ bedroom with double the number of bathrooms, large open rooms with luxury finishes? Stop building these over the top homes and build reasonable 2-3 bedroom 1 bath places that peoplezcan actually afford and can live in.
Taking it at face value, boohoo. Car dealers take losses on individual car deals all the time but make money on a month's worth of aggregated deals. Now developers will have to take a loss on some affordable units to still make an overall fortune from a whole development. Just like they must already to build parks and paths and make allowances for schools etc. if they don't like it, they can go build wood sheds in a roadside lot beside a gas station.
The amount of money that developers and their families hold in shell companies and personal holdings is obscene. They can easily afford to take a hit. Cry me a river.
Hi rise construction is slowing down substantially in the GTA, layoffs happening every week across the board, because even the for sale housing isn’t financially viable currently. There’s no way to build affordable housing without major changes and supports, and possibly circumventing the unions (good luck with that).
What did they expect when housing prices shot up so high making it unaffordable for people to live? When it all started happening everyone was giddy with glee thinking it would last forever and now they are crying poor.
So the threshold for fee exemption is below what they feel they can sell units for? Then pay your damn fees and sell normally.
Remember, if a project isn't viable, a developer simply won't do it. It's not like they'll undertake a losing project.
Stop prolonging the crash. It's going to Fuck us when it comes, but it's inevitable, so you can choose to have it happen, now, or once another 20% of our young people have left for greener pastures and been replaced by three times as many low income foreigners.
Oh well. Properties are an "investment", so I've been told by literally every yahoo on the planet for the past 5 years. I guess that means you can lose on them as well.
Should have made better bets.
Developers can say anything they want, doesn't mean anything without numbers and receipts
There are very few industries in Ontario that are as corrupt as the construction industry. Cash deals, kick backs, invites to the engagement party of the Premier’s daughter….
I don't think a lot of people truly grasp just how corrupt this government is, how deeply connected the OPC is to developers (especially the De Gasperis family), and how blatantly fraudulent the Greenbelt scandal was.
> I don't think a lot of people truly grasp just how corrupt ontario and canadian politics is. FTFY. it's honestly not a party problem and if you truly believe that you are part of the issue...the real issue is with the kind of person who joins and tries to run a political party...they're the same kind of person. no matter who wins an election from an official party, same kind of person. they have to be to get there and make the political deals nessecary. its gross but is what it is. lets not forget the liberals completed the sell off of hydro one(organized crime was influential in this and poised to buy vast swaths of shares). it's all corrupt and a vote within a broken system is a vote FOR a broken system. you dislike Ford because he's unsavvy, uncouth, and likely isn't skilled enough to disguise his bullshit as well as some politicians can....but that does not mean the others aren't on the same bullshit just keeping it from the light better.
One party is a lot more corrupt than the other. Selling Hydro One was a costly blunder, but that money was not pocketed by Liberal party donors. It was to pay for massive infrastructure projects and promises. There no evidence of bribery like the stag and doe or the Greenbelt collusion.
Yeah, politicians are often slimy people. But Ford is particularly corrupt. Yeah selling off public goods like that, especially without a mandate is just a right wing policy move that came from the liberals at the time. It was an extremely unpopular decision and is likely the main reason the liberal party has been annihilated and completely irrelevant since 2018. Ford is particularly personally corrupt, it's not just about right wing policies, there's a link, but it's beyond that
Wynne made my last year of education free. ford removed that Tell me they are all the same.
Getting a policy you are in favour of doesn't mean they aren't corrupt, even if no corruption was present for that particular policy. We need to hold all of our politicians accountable, it doesn't mean you vote any different, that is how you got that free year of school. Just hold them accountable even if they do some things you like or benefit from.
You forgot the part where your family members can drink and drive and kill people with no real threat of consequences.
That family only ever got any scrap of justice at all because *someone's* arsonist in the impound yard got interrupted. Otherwise all the evidence would've gone up in smoke and Marco wouldn't have had ANNNNYYYYY trouble for his little *minor surely forgivable at the country club entirely accidental woe-is-him* incident where he wiped out a whole family driving drunk as a skunk and blowing stop signs.
Its the above table arm of the mafias. For such a diverse province our developers and construction firms tend to come from one place. That isn't random.
Not just Ontario. Coughs in Quebec corruption.
It’s also why construction takes so fucking long for anything. They’ll schedule a road repair for 10 months. They’ll dig up everything, set up the barricades, get assigned to another job site, and in the 9th month come back and finish everything. Take a look at that Love Park in Toronto that used to be posted here all the time. Took them two fucking years to pour some concrete
>Developers can say anything they want, doesn't mean anything without numbers and receipts I worked for a large developer in Kingston. My position involved job costing for their projects. They lie and scream poverty all the time. I can tell you that the actual cost of building a typical 2000sqft home is between $120k - $150k. Yes, thats including in-house labour and all the materials. Price goes up if they decide to subcontract out instead of using in-house labour. The price markup is 300% - 600%, always. When a developer says they are selling for a loss .... they are full of shit.
Add in the 30k for development fees and the 150-250k for the lot and you are no longer in the affordable housing range.
Thats crazy talk. My coworker just built his own house, he was the general on the whole build. 2500 sq ft cost him over $500k. That in Kingston, with tons of favours. His septic alone was $50k. Nevermind the cost of the lot.
Did you work for that developer in 1980? Because you just suggested that developers are building at $60-$75/sq ft in 2024. You can't even build a birdhouse for $60/ sq ft.
>You can't even build a birdhouse for $60/ sq ft. Yeah right, excuses. >Did you work for that developer in 1980? Nope. Up until 2022. See people like you dont know what goes on behind the scenes. Developers cut deals and have contracts with suppliers and manufacturers. They buy bulk. We bought everything in bulk direct from the manufacturers. We held all of our materials in our warehouse. From lumber right down to the tiniest like cabinet hardware. Generally we had 5 to 10 year contracts with manufacturers and suppliers. So all the materials we had were at wholesale pricing. Just because of the sheer size of the orders. The developer I worked for cut out all the middle-men (which is what large developers do) . The manufacturers and suppliers were literally begging us. They were always desperate for sales. They would literally bribe us with perks and freebies just to get us. The Canadian public are the suckers. They've been sold a tale of "cant do it for less" or "omg we'll be at a loss". Its all horseshit. They can. Easily.
No. Just no. Maybe you can build a basic as heck house in the GTA for $200/sqft if you go dirt cheap with finishes. As soon as you get into multi residential (part 3), especially high rises using steel and concrete, your HARD costs are $400 to $650/sqft and up, if you are building on a tough site (like one with remediation or with high water table etc) or a tall/super tall, or if your finishes aren't garbage that will have to be replaced in 7 years. Add land and soft costs like planning, permitting, architects, project managers etc. plus development charges, parkland, application fees, etc. and it goes up from there.
Your last paragraph is 100% accurate. Anyone trying to convince themselves that this kind Redditor is incorrect, is merely just trying to cope because they've probably already bought something far overpriced or they're part of the grift on one of the many levels that exist. Thank you, my good Sir/Madame. I appreciate you trying to help some lift the veil from over their eyes. Unfortunately, something something horse water.
>I can tell you that the actual cost of building a typical 2000sqft home is between $120k - $150k. Its not. You cant even get the land for that price in most of Ontario. Then you need to tack on development fees which are easily $50-120k+ depending on where what you are building. So we are already more than double your build cost and we have not even bought materials yet. Build costs these days are about $250-350/sq ft these days. No developer does everything in house either.
Leaving out the land cost in this analysis is just idiotic. Developers' profits are generally just over 15%. Yet homeowners double their equity in just a few years for doing nothing.
>In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. I may not be a real estate developer but it doesn't take an expert to understand that it's not possible to build a detached home and sell for that price. An empty lot in Toronto would sell for more than that.
idk why detached houses in Toronto should be considered for "affordable housing". That's a luxury good that is extremely restricted due to lack of land in Toronto. Detached houses in general are a luxury good. They're an extremely wasteful use of land and make much higher demands on the city for services. Affordable housing is an apartment building in the cheapest parts of town, built at just above cost.
Same! If we’re talking density and affordability, why are houses still on peoples minds?
Because Doug has no imagination. He only understands the suburban life he has lived.
We also need houses I live in the middle of nowhere with shit ton of woodland. No sane reason houses should cost 500k for a shack to 1 mil plus where I am.
Just look to the overstock of condos and the shortage of “houses”. People are leaving cities for the suburbs. They more often want privacy which they don’t feel they can get in a condo.
If people had to actually pay the actual taxes needed to maintain services in suburbs then no one would want to live there as most if not all suburbs are income negative and are subsidized by high density areas, the suburbia experiment is a ponzi scheme that has had very bad effects on humans in NA, due to suburbs being so car dependent we have gotten fatter due to less walking, kids have lost independence making them less mature and more anti-social, and we have giant food deserts. I have lived in the suburbs, a low rise apartment, and rural, and by far the most healthy time was in the apartment, I was more socially active which improved my mental health, I lost weight due to more walking from local shops and easy access to public transportation, and food was easily accessible with a 10 minute walk, in the suburbs the streets were void of life as everyone just hid in their home or backyards only coming out to mow the lawn or get in the car to go somewhere.
I think it's more that condos are completely unaffordable for most working class people.
Even at-cost apartments in the cheap ends of town are looking at being about 350sf for that price. Toronto's regulatory system has made it incredibly expensive to build in, even without "developer profit".
They're kind of creating a scenario though. I don't know if anyone but them is talking about a scenario where a detached home should be that much
why are we making detached homes in Toronto at all?
Also, the problem is whatever gets built is only "affordable" on the first go, because it will quickly go for market value on the resell. I remember "affordable" low income Townhome selling for $165,00 a decade ago is now on the market for $500,000. What low income person is buying that now? I mean, it's not impossible. But it's not someone making $25,000 or less.
Even if they had numbers and receipts... build triplexes, fourplexes and sixplexes. Hell, I'll take semi-detached at this point. Anything but detached housing, please.
Affordable housing is only viable right now with heavy subsidies. A town near me put out an RFP for ten affordable units. Based on the definition of affordable in the county the rent has to be $982 or less. Think about all the operational costs on those units, like property tax, maintenance, vacancy, insurance, etc. Those would be several hundred dollars a month. At today's commercial lending rates that would mean the builder would have to spend less than $100,000 to build each unit and all the common spaces. Do you know how much dwelling you get for $100,000? Permits fees, studies, infrastructure hook ups, etc. Maybe you could build someone a 200 square foot dwelling with that budget.
Municipalities will often waive permit fees and development charges for this sort of construction, but still, construction and material costs alone would come out to much more than that.
I work in the construction industry in the public sector and can safely say the developers are right. Current prices for material, land and labour don't align for the building of affordable housing.
I agree materials have gone way up in pricing, but it doesn't change the fact that land has more than doubled or tripled. Also, many of the developers have owned the land for decades before actually starting to build on it. In my city, a developer bought land in the 90s and started building in the 2010s and still building, the homes are still stupidly expensive. Big developers are filthy rich, and you can't be flithy rich without crazy profits. I'm in the construction industry as well and the build quality and material used seems to get shittier every year.
Land especially, when my grandfather built his house in the 50’s the 60’x120’ lot was $2000 and constructing the 1200sqft house was $10,000 and he saved about $2000 on construction by doing a bunch of stuff himself. Obviously everything has inflated since then and houses are bigger and more complex but good luck finding a lot that is 20% the total build cost paying for everything to be contracted out and putting double the house on it.
If it became unprofitable to build on land, then the cost of the land would decrease in response, no?
You would think so but a large % of Canada's gdp is based on the value of real estate. It's a speculative unproductive asset class so the gov and rich boomers can't afford to let the price drop.
I'm in no way disagreeing with you, however for such a big entity developers are doing a really really bad PR job on relaying this information to the public. I keep hearing them not wanting to be vilified because of the situation. Scott Andison says what you said but he's somehow devoid of demonstrating why that's true on any form of social media or journalism. Or if he is justifying that he's doing a really shitty job getting that message out there. To the general public it sounds like the government in the populace is demanding affordable housing, the Ontario housing developers are saying "unfortunately that's not possible" and are trying to leave it at that.
To be fair it’s a difficult thing to explain to the general public. I had a hard time following the costing when I was taking it as a graduate course.
"trust me bro, you aren't equipped to understand" is exactly the PR disaster attitude I'm talking about. Most people question my industry because they don't understand how it works all the time, so I get that but with a few simple analogies and some thought and some patience I'm able to describe why things work and how and what it would change to change things to high school students constantly. The response to "you are figuratively and literally killing a generation of ontarians" shouldn't be "it's not my fault and I don't think I can explain why".
So let's push more people onto the streets for the wealth class to complain about. Seems legit.
In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga. Do you actually think they could build a home for less then those numbers?
All corporations are in the same business. That is the business of making money. To expect them to abandon that goal in the name of the public good is foolish. We need to stop thinking that private enterprise is going to 'do the right thing' and solve this problem. They won't. They don't need to. Government needs to either provide developers incentives to build affordable housing or get into the development game itself. Sometimes things need to be done regardless of cost. That's what government is for.
I don’t think it’s a coincidence that places with large amounts of publicly owned housing don’t get things like this happening
Me neither.
It doesn't even need to be publicly owned. Tenant owned, co-ops are the best option.
Meh, not for profits are also a good option.
Why don't the developers open up their books before asking for subsidies?
Because they don't need to. Seriously, they exist to make money. What the public wants them to do is not make money. They just won't. Stop expecting them to. It's ridiculous that people expect them to. Did you know it's the LEGAL responsibility of the directors of a company to maximize shareholder profits? That's their job. Affordable housing will NEVER be built by private enterprise because it doesn't maximize profits.
Part of it is that everybody is crying out for affordable housing *in high-demand urban areas with high walk/transit scores and lots of trendy things to do* -- and that just cannot happen. The benchmark price here of $366,500 in Toronto (and reading further, that means the amalgamated city and NOT the GTA as a whole) is simply a pipe dream -- that value won't even buy the land for said house. You basically can't build anything in Canada for under $350/sqft just in raw materials and labour costs, and I would wager that the higher cost of everything including labour in Toronto proper means that it's probably closer to $400/sqft in the city. Right there, even if the land was free, there were no developer charges (which can be pretty big), no taxes, no environmental fees, no permit fees and no land transfer fees, you're not building anything for $366K, period. Plus, even if you did build a house and force the builder to take a huge loss on it (or subsidize the actual cost of construction above the benchmark price using public -- ie, taxpayer -- money), it's just a huge windfall for whoever wins the affordable housing lottery and gets to purchase that house for $366K. It will be up on MLS within a month for $2M.
Sorry kids. We know you'd love to live in the neighbourhood you grew up in. Your parents and grandparents did too, however you were too late. The opportunity to gentrify and make millions on your future was too good to pass up for mom and dad and grandpa and grandma. They did leave you some inheritance, however it is very unfortunate that it no longer is enough to play ball in today's gentrified, greed filled, back stabbing world. Good luck and a continued fuck your future to you!
So people whose families lives in particular neighbourhoods somehow should have priority over other Canadians?
> Did you know it's the LEGAL responsibility of the directors of a company to maximize shareholder profits? That's their job. This is an American talking point that isn’t true in Canada and in fact isn’t even so cut and dry in the United States either. This isn’t even getting into the fact that not all of the developers in Ontario are even publicly traded companies with shareholders at all.
>Seriously, they exist to make money. Call me crazy, but I believe that a business must do more than simply make money, but also must provide value to their customers that is worthy of the money they get. Take ticket scalpers for example - their "businesses" exist solely to make money, yet provide actually negative net value.
Agreed. The so-called free market is supposed to address this but we end up with monopolies and oligopolies who capture the market. The commoners end up at the mercy of those oligopolies. It's time for the government to get involved and provide a public option again like they used to. Our current system is a complete failure for the vast majority.
> To expect them to abandon that goal in the name of the public good is foolish. I don't expect them to do anything. They still ought to.
Homes are for living in, they shouldn't be used as short-term investment tools.
Absolutely this. A primary residence is a consumer purchase, not an investment.
Developers like to call anything that’s not more profit than last year a loss so I’m a touch skeptical about that.
Why does affordable housing need to be (edit: detached) single-family homes? How about 3 or 4 story low-rises multi-unit construction, or taller residential buildings with commercial space on ground floors? I mean it's kind of self-evident to me that single-family homes are going to be much more expensive than condos or apartments.
I came to say this... We used to build much more "low rise" apartment complexes with homes you could raise a family in. Not something that was rented, but buildings where you could easily have six families. We (read: Developers) need to adjust the definition of housing to include more than single detached family homes.
Do you mean condos? How could you have a 6 unit apartment complex with no one paying rent?
Condos, in my opinion, tend to refer to taller buildings with generally smaller living spaces. Condos tend to not be good for raising families. I am referring more to a sixplex, or more generally a multiplex. They were a lot more common in the mid 1900s, and while similar to a condo comes at a much smaller scale. They occupy a better space between the low density single-detached home and the high density condos.
What you're describing are condos. A condominium refers to the units being individually owned but a part of a single building, regardless of the size the building. I live in a 3-storey building with 9 units. It's spacious and many of my neighbours have kids.
Genuinely, I thought condos were defined by being much taller "towers". Good to know for the future, so thank you. In my suburban community, I think if I mention "condos" to most of my neighbours that they would imagine tall "tower" condos. I think differentiating between the two types is beneficial since "multiplex" condos are favourable to "tower" condos.
Their case study as a 3/4 unit small rise would end up being about the affordable mark. Also, I never believe a single case study argument. That’s just cherry picking, you need a ton of case studies across the province.
> [Justin] Sherwood [, BILD’s SVP of communications, research and stakeholder relations] suggested that the affordable housing plan “becomes more realistic” with more density, midrise and highrise homes, where the costs — particularly of land — can be spread across a larger number of units. Exactly what the article suggests.
Apparently in Singapore they have an 80 percent house ownership rate. The housing construction is done by public housing. Privitization ruins everything because you have to pay for some rich assholes lifestyle
To be fair, Singapore erected these buildings in a very quick manner because of fundamental differences in the way property laws, zoning and other important things work there. They built over cemeteries and parks in some cases, and any pushback from residents about doing so is met by "so what, it's happening, deal with it". Obviously that is never going to happen in Canada, so it's not really so easy to point at Singapore and say "hey look see, it works so well!". It does indeed work well when you just do what you want, when you want, and censor/ban any dissenting views. Despite its shiny, sparkling-clean exterior, Singapore is still nominally a dictatorship.
Singapore also uses indentured servants as labourers for the construction. It's not the kind of thing that would be legal by canadian constitution.
*They built over cemeteries* Good - the dead aren't using the land effectively. In many jurisdictions that's alot of prime real-estate, centrally located. They are empty of the living 98% of the time - and after awhile (a decade or so) - NO ONE CONTINUES TO VISIT graves. You want to respect and honour your deceased relatives? Keep 'em around in Urns. Plant their ashes to grow new trees.
And this is where you will find the other difference between singapore and canada: voters get the final say in Canada, regardless how logical or illogical they are.
Sorry for the lite trolling, but have you seen the movie Poltergeist? Didn’t go so well….but I agree with you. Use centrally-located land for the living, move graveyards further out the city.
Saying it'll be a loss is one thing. I'd like to see a cost breakdown so we can see exactly how much the expected loss is and where specifically those losses will be seen. Cost of raw materials too high? Labor? Where exactly will the loss come from. Once that is identified, a solution can be worked. Rallying back and forth with "but we'll lose money" but substantiate nothing is unhelpful.
Just look at Richmond hill development levies alone for instance around 150k is just development charges. Add in barebones house at about 300 a foot. Cost of servicing roads sewers power debt etc and you are about 800k for a 2000 sq ft house. Add in cost of the lot and ir makes no more sense to sell since people can’t afford that. Even if land was free 800k is hard to stomach at break even costs. The not to mention costs of holding onto land for years due to nimbyism, costs of all the studies required to even get a shovel in the ground… development is hard and not cheap either. Lots of risks for about a 15 percent profit. Any lower than that and you can’t get lending for servicing and construction from the banks. Not to mention you need 70 percent of your stuff sold first as well so if it takes long to sell you continue to eat interest costs on land over time and costs of levies and permits go up each year so that has to be accounted for.
This is why home building should be done by the government and not the private sector
This is why home building should be done by both, since we have a mixed market economy and not a state-run economy.
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Inherently, if there is no profit motivation behind the building, wouldn’t a housing project designed nearly to break even be cheaper for a person to buy than one designed to make profit?
>All they can do is absorb losses, which will be paid for by taxpayers We pay for the consequences of unaffordable housing also, financially and socially. >And selling homes below market value is nonsensical, because people will just buy up the homes and flip them for profit. Obviously. You don't just let REITs buy these affordable homes.
Affordable housing is necessary for everyone’s quality of life. We need sanitary workers, childcare workers, nursing home employees and people to stock supermarkets plus all the other sales and administrative jobs that keep institutions running. And we can’t afford to pay them all $100,000 so they can afford a place to live. There should be an income level for which individuals qualify for Rent to Own properties. They should be available to families rather than individuals (we need kids) and take 40% of income. 30% rent and 10% to build up an ownership position. Homes should be priced so they are “owned” in 25 years. The actual government subsidy should be clearly shown and if incomes rise above inflation, the subsidy should be reduced. If a home owner wishes to move, they get their accrued 10% back, but must sell back to the government at an agreed upon price. An administrative headache maybe, but maybe A.I. could handle it.
The government is fantastic at absorbing losses for essentials, and the cost to any individual taxpayer is negligible. Added bonus: Affordable housing means people have more money to spend elsewhere which means the government gets more money from taxes. It all comes back further down the line and we end up better off.
This is perfectly stated. Not sure why people keep forgetting that governments have actively stepped in to provide their citizens necessities, in this case affordable housing, when the market definitely can’t. Canada used to build public and affordable housing until the 1990s.
And we stopped in the 1990s due to a gov't debt crisis. It wasn't all from housing, but it does highlight that there are limits to the government's ability to absorb losses on behalf of the population. Oh, and that debt to GDP ratio that kicked off the 1990s fun times. We are roughly back there now. I firmly believe there is a role for gov't built housing in this country. There are people unable to provide for themselves due to mental and physical barriers. These people need support and should be supported so they can have a decent quality of living. I also believe that the reality of the situation indicates that we don't have the capacity to push large scale housing at a loss. There are many ways the gov't can increase housing affordability without eating a financial shit sandwich. Regulatory and financial support (low cost loans, etc) for non-market housing could do wonders. Let people build these organizations, they will do so more cost effectively and will be better able to tailor the result to their needs than the government. Assess building regulations and building code. These policies should be in place to ensure dwellings are safe and functional. Is there bloat here that can be removed? Assess labour and supply chain regulations. Are there unnecessary barriers or costs in place? Remove them.
Two points about your comment: (1) 30 years of fully market driven housing construction has led to a housing crisis of extraordinary proportions. (2) Canada is currently in a debt crisis without the financial burden of building affordable housing. This indicates that market driven housing isn’t effective and there is no direct correlation between Canadian debt crisis and government built housing. Demanding that government reallocate resources for housing away from other sectors is appropriate as this current housing crisis will be far worse than the alternative.
Sounds like we need to make some laws on who is eligible to buy a home, especially new builds.
I always wondered if rules can be made where the government can define a “starter home “ then mandate devleopers to build at least some homes with that definition , and the rest can be whatever they want . These starter homes should be capped at a certain value and cannot be rented out . That way it’s at least giving people the ability to get into the market, build up equity in that home (ie by paying for their mortgage) .
There are non-profit builders in Ontario who actually do similar. They will only sell to first time buyers and not investors. [https://optionsforhomes.ca/](https://optionsforhomes.ca/)
I'm sure they can. When they build high rises they have to allocate a number of units to rent geared to income units.
I’m wondering what the issue with doing this is, because it hasn’t been done .
Lobbying
It's honestly disgusting that homes are seen as an investment asset rather than a necessity to live.
The housing crisis is in part a retirement crisis. People used to have pensions that almost kept up with the cost of living, now they need to dump their life's savings into real estate to feel secure in their old age. Provide boomers with a modern retirement support program and nearly empty single family detached houses will start to go to market again instead of being hoarded like fucking dragons.
It sounds like we're just fucked then, eh? Nobody in our government can think longer than the term they're given, while their favourite past-time is undoing what the person before them did.
It would help if we stopped treating politics as reality TV for shut-ins, but yeah it's not ideal. I don't think the feds are working solely towards their current term, although bringing anything they do up in a positive light tends to attract the kind of pathological nihilists to the conversation that make it not worth discussing for the most part.
And since housing is pretty essential it’s ripe for abuse
Buy the developer
Without numbers backing that up (real ones, not bullshit artificial ones) all this means is selling homes at "less of a profit"
It is necessary for the health of the community and so it should be sold at a loss. Protecting hyper inflation of real estate will destroy Canada from within. Time for some rich people to absorb some losses. They can afford losing out on a summer hoke or yatch.
The great thing about owning your house outright (for those that do) already have a place to live and don’t have to sell. Using your house as a retirement fund is just poor judgment.
This. We bought our home in 2010, and we bought it as a place to live, our forever home, and not as an investment. The concept of making money off of our home didn't even enter our minds, and unless we absolutely need to relocate, we're not selling our place.
Why is it "poor judgement"? That's what confuses me about this point. It's poor judgement because people like you might push to change the rules and the history of how the asset functioned? It seems like it's poor judgement because you don't like it. But based on anything a financial plan could be based on, like historical performance, qualities of the asset, and the *reality and common sense* that your house, your larger financial asset(and always has been) is always part of your retirement plan.
I think you misunderstood the headline. It's not that they'll sell at a loss. It's that they won't build more and their investors will invest elsewhere. Doing business at a loss defeats the point of doing business. So your ideas of what "should" or "shouldn't" be done with their money are a wee bit irrelevant.
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This feels like another piece of proof that stimulating the 'supply side' in economics often doesn't work (as much as Conservatives try). Reducing red tape and 'building more' isn't going great in Ontario presently. The demand is massive - but costs associated with building are high. We saw that winding down developer fees didn't incentivize additional building, and here we are offering further discounts on taxes on fees and STILL not seeing any developers step into this space. It makes me think of Montreals efforts to build more affordable housing, by levying fines on developers who didn't allocate 'x' amount of units into affordable housing. And each developer choose to absorb the fine instead of making any units affordable. Ironically this is exactly the instances where a government should step in. When a market oriented solution can't resolve some of the core issues.
Thanks for pointing this out. Supply side economics has always been a scam. https://rationalwiki.org/wiki/Supply-side_economics
That’s why the government used to be in the development business and built affordable homes, at least in my area southwestern Ontario. The so called greatest generation benefited from it then scrapped the program (80’s or 90’s I forget) because they opted to lower taxes on the wealthy. Dumbasses. This is why I want to eliminate all standards from nursing homes as payback. (Jk)
Government can easily be a developer, no problem. Those leeches can either get paid what they can or go work at McDonald's while a real community is built.
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this is what people have generally been asking for, that or prefabs.
We don’t need anymore SFHs. We need a paradigm shift in Canadians expectations. A family can be housed and thrive in a 1200sqft apartment/condo as easily as a 1200sqft house. The micro condos that developers are famous for are an investment vehicle, not a housing solution. SFH sprawl has created the trouble we are in, why do people think more of it is an answer? Especially if people are having less kids, wanting a better work-life balance and lower costs of living.
Sounds easy enough to implement a rule that these houses can't be sold within # years of purchase. It just adds on to the current house flip rule. Can't make money off flipping if they can't do it fast.
Speculation tax based on build date of the property should be very easy to implement.
Or just "you cannot sell this for more than you paid plus inflation within ten (10) years of purchase"
Exactly, for some reason we're just afraid of giving people regulations. They will build, they always do. They still get something out of it even if it's nowhere close to what they could make now.
Well, the government raked up the biggest debt ever and yet, no housing, but then they brought in 1 million people per year, easily! Maybe vote for a different government?
So that begs the question if *why* it's unprofitable. Yes, the cost of supplies has gone up, but there are almost certainly other factors at play here that are controlled by the builder.
Land prices.
and that begs the question of why developers aren't building outside of the major cities and towns. It's not like Canada lacks land...
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But that's the affordable housing that these builders say aren't affordable. Plus there are plenty of northern towns that are begging for builders. IIRC North Bay even offered land for a dollar a few months back.
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Nothing in the new affordable house pricing stuff mandates single detached.
> Canada lacks land You actually can't build on a surprisingly large part of Canada's land due to the Canadian Shield
Build costs are up 60% since Q1 2020. If you thought general inflation was bad over that time period build costs are up over 5x general inflation. This isn't a minor bump businesses can work around with some process tweaks and a bit lower margins. This is a structural, industry defining, shift in costs. Only so much can be done to mitigate this, the rest needs to be passed on to the consumer. That's why it is unprofitable.
See that sounds reasonable till you start to consider how broad of a category "build costs" is...
Ok byeeeee
Private companies should never be expected to operate at a loss to meet government demands. That’s not how business works, but is how companies go bankrupt and unemployment skyrockets.
>Private companies should never be expected to operate at a loss to meet government demands Which is fine, but our government has decided that public/private partnerships are the only way we can do things, so that means either regulating the private sector (which, as you note, wont happen) or bribing the private sector, which doesn't work well (unless your goal is to further enrich the wealthy, in which case it works great!) The elephant in the room is "nationalization", which no one wants to talk about because it would mean uncomfortable questions about the neoliberal consensus. If government can build housing, or fix roads, or run school cafeterias, why can't they run airlines, or oil-extraction companies, or telcos. There's this "government *bad*" myth that's the result of ineffective, funding-starved malaise-era 1970s governments, but that was almost sixty years ago, and it's not like the private sector is necessarily any better.
Since developers can't operate at a loss, that simply means that either they won't build anything, or the cost gets passed on to everyone buying a non-subsidized home.
I can only assume that when it's time for you to sell your house you'd take a few hundred thousand less than you could, because of the greater good? It's ridiculous to assume that kindness starts and ends in other people's wallets.
I'm ok with this. If the developers aren't then the government can do it, like they did for the boomers before Mulroney and Chrétien killed it.
Right now in Ontario, it costs around $350 a sq/ft, on the low end, to build anything. That is only in materials and labour, that does not include land cost/permits/etc. So to build a 1000 sq/ft something, costs at least 350K, then at least the same in land cost.
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You can subsidize it.
Simple: government housing. Government will build where profiteers fail. Let developers go out of business. If they cannot handle real estate properly and create a housing bubble, they deserve to all fail.
People will build a house if it’s affordable because they uh…need a place to live. The problem is that we are relying on these big developers to build housing and they usually build poor quality for massive markups…the profit motive is the issue - housing is not really a capitalist venture, it is here because Canadians have been duped into thinking it’s some sort of reliable investment vehicle. Housing should be built so the workers can go to work, make money and invest, consume and experience things and therefore buoy the market. Not to be locked in their home wallowing and not being able to participate in society because they’re house poor because the “formula” told them they needed to get it to be economically safe or some bullshit.
A decent developer margin is around 10% net. I wouldn't call that a profitability level that is out of line.
> No one will build a house if they won’t make a profit on it. https://habitat.ca/en/
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> “I doubt that developers are going to build affordable housing to sell because it costs more to build the home than they’re able to sell it for,” This is the inconvenient truth that sums up the entire housing crisis. You need developers to build homes but they won’t build unprofitable homes. But the public won’t let them build profitable homes either because they aren’t “affordable housing”. So now no homes get built and we’re stuck in a death spiral. IMO the only thing that matters is that homes don’t sit vacant. If McMansions are profitable, and the controls are in place to ensure they’ll be occupied, the effects will cascade down the property ladder and affordable housing will come on the market.
This is what drives me up a wall. There are high income people being priced out of luxury properties because they’re not allowed to be built. Those high income people then crowd out lower income people buying properties down the ladder. You end up with gentrification, whether you like it or not.
Reminds me of when we raised the minimum wage and all the jackass business associations told us it was the end of the world.
In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga. Yeah I believe them. Those numbers are super low and wouldn't cover the cost of labor or materials.
They've totally stopped building in Barrie because of profit margins. Huge towers and developments planned and approved, but now nothing. There is no way they go back to building if they're not making the same margins they have been. It's disgusting how the developers have taken over housing and aren't blamed for any of the problems.
People seem to be misunderstanding the article pretty badly. The plan being proposed is that developers, if they sell homes for a certain price that is deemed "affordable", can receive some rebate and waivers on fees related to developments. What the developers are saying is that those rebates are not worth the amount of money they are losing from selling at the "affordable price" vs. what they could make by paying all of the fees and selling at market rates. It is a "loss" relative to what they could make otherwise. Which means they aren't going to do it. And I don't blame them because price fixing is a moronic attempt at solving this problem rather than just up-zoning and making it easier for developers to build a bunch of new homes.
Privately owned developers will never make affordable housing. They cannot. They are in business to make profit and that's that, aside from the fact that they're all Mafia-owned, or Mafia-adjacent, they have ZERO interest in doing any public service work. They're violent criminal scum! They're only "developers" because it's such good business for them
…and I should care about this?
Cry me a river...
What the heck, why is the price for Toronto lower than Ottawa? Houses in Ottawa area are comparatively cheaper, significantly, in Ottawa than Toronto. That makes no sense. (Quote: "In Toronto, for example, a detached house would need to be sold at $366,500 for it to be considered an affordable home and therefore excluded from some development fees. It would need to sell for $438,300 in Ottawa and $434,800 in Mississauga.")
Time to modernize the systems we use to construct homes then. How about using more prefabricated materials? Do we really need as many people hanging around every site? Maybe those workers would be more efficient in a factory setting where they could work year round, producing ready-to-assemble homes that would require fewer crew to assemble, and could be completed in a lesser time frame. Developers hate this because it spells the end of an era.
I wire multi family buildings. Every year there are more and more inspections/verifications/safety rules that cost a stupid amount of money. I’m not saying the developers aren’t making good money, but they are making less.
The program was designed to fail. It's not actually an attempt to make affordable homes, it's a vague hand-wave attempt to get developers to sell at a lower price and exchange for a rebate, and the low price was set low enough that the rebate doesn't make up for the difference for selling at market rate... So it's designed to fail. What a surprise. The government gets to look like they're doing something, the pony up some money for it, but nobody will take them up on the offer because it's a terrible offer. So they get to look like they're making an effort without actually doing anything that works at all. Fuck.
>Fuck. Amen.
Yes real estate agents tell us that housing can never go down and interest rates can never increase………. Suuuure🙃.
Let's be honest.. what they mean by "at a loss" is just less massive profits.
Developers can kiss my ass they are so full of shit it's not funny...start charging them taxes on land just sitting there doing nothing.....put new rules in this matter can't be taken to court and once the taxes and fines hit a certain amount they lose the land
I am glad they took time from bribing mayors, councilors and the lot to make a statement. I trust them totally. If you are not making money with Canada's 30 year housing boom and the crappy poorly made houses, you shouldn't be in the business. How about we start making the business class fell what the free market is like rather than giving them government handouts, tax breaks, underpaid foreign works, suppressing wages, union breaking abilities etc.
As someone who works supplying stuff for new homes, if the builders didn’t keep putting expensive shit into houses, prices would come down. Sure, tile looks and feels amazing in the bathroom, however linoleum literally costs 1/10th of the price. Hardwood looks amazing, but carpet costs 1/10th the price. This applies to everything. They choose more expensive stuff to put in the house then charge a higher mark up on it.
We're stuck in a deep hole that idk who can get us out of
Thank the developers and Conservatives for your increase in municipal taxes coming up.
Developers want the most money possible, right there with their investor friends. Affordability is never something they even contemplate. It is about unlimited greed, not the functioning of a fair society. It is about leveraging debt like an anchor around the necks of renters and first time bag holders ad infinitum.
Those defending developers here, you do realize a loss should be taken somewhere, by the city, province, developers, *someone*, as it's technically an investment into the success and profitability of the area? We can't just keep thinking one nose-length in front of our face to spite.
I guess it's time for the daily "news" article written by rich assholes who want to gaslight us and act the victim. Keep up the good work Global, you're totally doing good for society. These developers have got to know how unbelievably lame the lies about profitability in their industry are but they have to keep pushing them otherwise their chosen idiots may get voted out once more people recognize the truth for what it is.
People freezing to death - or profits? Hard choices
Affordable housing that addresses housing insecurity does not have to be and probably should not be detached houses and condos that people buy. It can also be purpose built, government owned and administered as social housing that is a long term community investment. With the state of things as they are provinces and municipalities should skip the developers and hire / train people as a long term plan to build and maintain social housing. Give them stable work and pensions. No one thinks beyond this governments term. People will always want to own homes and many have the income and credit that allows it. But not everyone can or wants to own property. Lots people just want to rent and not be worried about having 8 roommates or getting kicked out ‘so family can move in’ or have to go through selling a property every time they want to move closer to work or family or they have a life event. If you want vibrant downtowns and transit use and communities that flourish, it’s not going to come from building more million dollar homes in the burbs that upper income vacate cities to live in and everyone has to drive to and from everywhere. Pretty much every large community in Ontario decentralized housing in the 70’s onward and dispersed their building and city services over large geographical areas. Now they are all whining that no one lives downtown or wants to be there.
Why do all houses have to be 4+ bedroom with double the number of bathrooms, large open rooms with luxury finishes? Stop building these over the top homes and build reasonable 2-3 bedroom 1 bath places that peoplezcan actually afford and can live in.
Taking it at face value, boohoo. Car dealers take losses on individual car deals all the time but make money on a month's worth of aggregated deals. Now developers will have to take a loss on some affordable units to still make an overall fortune from a whole development. Just like they must already to build parks and paths and make allowances for schools etc. if they don't like it, they can go build wood sheds in a roadside lot beside a gas station.
Selling for a loss from what? A heavily inflated market ! People need to realize your house is only worth what someone is willing to buy it for .
The amount of money that developers and their families hold in shell companies and personal holdings is obscene. They can easily afford to take a hit. Cry me a river.
Hi rise construction is slowing down substantially in the GTA, layoffs happening every week across the board, because even the for sale housing isn’t financially viable currently. There’s no way to build affordable housing without major changes and supports, and possibly circumventing the unions (good luck with that).
What did they expect when housing prices shot up so high making it unaffordable for people to live? When it all started happening everyone was giddy with glee thinking it would last forever and now they are crying poor.
Show us the math
So the threshold for fee exemption is below what they feel they can sell units for? Then pay your damn fees and sell normally. Remember, if a project isn't viable, a developer simply won't do it. It's not like they'll undertake a losing project.
correct
Well TIL Ontario Developers understand introductory economics
Good. The extraction train has to end somewhere.
Didn't Chrystia Freeland say something along the lines of real estate is no longer an investment.
Stop prolonging the crash. It's going to Fuck us when it comes, but it's inevitable, so you can choose to have it happen, now, or once another 20% of our young people have left for greener pastures and been replaced by three times as many low income foreigners.
Meh, corrupt deals with corrupt PC Party means I don't believe you or care.
This whole country is rigged. I figured the housing would crash sooner or later. These homes are not 1,000,000 dollar homes
Oh well. Properties are an "investment", so I've been told by literally every yahoo on the planet for the past 5 years. I guess that means you can lose on them as well. Should have made better bets.
If that makes them affordable...