Fix Housing: Tax Developers!

[@JS-yb7pr]

Excellent video. Taxing homeowners also ties in with the argument that suburbia doesn't pay enough to maintain the inflated infrastructure costs needed to keep households at arms length from each other

[@moosesandmeese969]

They all have to be subsidized by the cities that have lower infrastructure costs per person, so it's effectively wealth extraction from cities over to suburbanite homeowners. It's a blatantly unfair system

[@oriorb]

@@moosesandmeese969 Very much so. It also causes well-studied long-term issues that structurally impoverish suburbs, doubly so when combined with redlining in the states, where entire suburbs were abandoned or subsequently gutted by investors in 2008.

[@ulrichspencer]

My girlfriend's family here in Montreal built a small apartment building a few years back. First (and last) such project they'll ever do. I saw several years of constant stress, things literally going wrong every week, and all for them to just break even. Her parents are immigrants and literally came here with very little money and work in a factory to start. Truth is it should be way easier to build housing, not harder. I didn't see it first hand, just heard about it all through her, but man, it is not a lifestyle or area of business I envy in the slightest.

[@derrick3842]

Thank you for saying this. You have no idea how much hate I’ve gotten at community meetings for saying developers aren’t the enemy

[@trnstn1]

everyone at commnity meetings hate developers for making profit, but are A-okay all being millionaires with their house values they bought for cheap decades and decades ago.

[@moosesandmeese969]

​@@trnstn1 And their house values are only so high because they lobbied the city to zone in a way that keeps down the supply of housing so prices would rise.

[@Maxime_K-G]

I really like your videos. You have the same bright ideas around urban planning and environmentalism but also understand how the real economy functions and why some policies are effective but others detrimental.

[@proposmontreal]

Production through the roof Paige. Also, good points on the subject of course.

[@ttopero]

An often overlooked issue is that almost every service worker lives beyond the neighborhood or adjacent neighborhood they work in. Even most homeowners don’t work within walking or a short bike ride from their homes. By ensuring housing is attainable for people who work in the area, we lower the time & transportation tax on them, reduce the vehicle or transit requirement, reduce childcare burden, & potentially allow the people that ACTUALLY build the structures to live in one. Payment in lieu or land swaps are gifts that continue to disintegrate our social fabric. Euclidean zoning of course exacerbates this!

[@jackgibbons6013]

Great video. You touched on LVT here. But it might be deserving of its own video. There are just so many arguments for a land value tax, on every level it makes sense. Makes land less valuable, disincentives land banking, halts the largest driver of upwards wealth transfer, encourages building.

[@PaigeMTL]

Yeah, I don't really talk about it because it's something I used to blog about a decade ago. It just doesn't excite me anymore even if it's still a rational thing. I do have an angle on the subject I've talked about during my weekly livestreams.

[@acchaladka]

@@PaigeMTL there's a lot of your audience which hasn't heard those arguments, and you could probably crank a script out without much effort... sounds like something which would be a service.

[@nitePhyyre]

LVT only really makes sense in a world where it doesn't exist. A hydro dam in the middle of the desert is basically worthless. A river in the middle of nowhere is basically worthless. Put them together and it's worth billions. How do you determine the LVT? How do you stop constant lawsuits claiming that the value is all from the building?

[@rhubarb2301]

Great video as always. I run a local Green Party branch in the UK and your ideas are always excellent to bring to the council floor! I'm hoping to get a planning scoreboard introduced locally. 👍

[@bigswings2414]

Holy shit man. Great thumbnails, great production quality, and very informative. It's a surprise how you aren't at 1 millions subs yet. Keep up the great work!

[@mashdash]

Great video as always! Just want to share how everyone I've talked to in the Geography department at Concordia University watch your videos and really enjoy your content!

[@PaigeMTL]

That's a good share, nice to know locals are watching.

[@TereniaDelamay]

Thank you for this. There are so many city representative that don't understand this concept. They think forcing developers to include subsidized units is a good move despite the city research saying it will reduce the number of units built and push rent up for everyone.

[@mariusfacktor3597]

Amazing video. I've always wondered what people though about "inclusionary zoning" and how it affected things. Now that you've pointed it out, it is very weird to tax builders to pay for a social program. When builders are the very thing we desperately need so that less people need that social program in the first place. It's counter productive for sure. Also great point about taxing homeowners. They profited from denying housing to other people so yes absolutely they should pay for the harm that THEY created.

[@PaigeMTL]

Thanks, yeah. It's a thing that so effectively plays to our emotions, we don't even think it through. It's such a great idea to have inclusionary zoning and aspire to be a society that has people of all levels of wealth living alongside each other, it's just crazy that we choose to fund it by making constructing new housing more expensive.

[@nitePhyyre]

It's not counter productive. Developers are never going to overbuild to such an extent that they drive prices down for people of low income.

[@mariusfacktor3597]

@@nitePhyyre Check out Houston. Horrible urban layout, but they do some things right. They build a tremendous amount of housing every year so landlords are desperate for tenants. You can find some really low rents on new luxury apartments. This abundance of homes also allows Houston to find permanent housing for their homeless population much faster than all the other American cities.

[@nitePhyyre]

@@mariusfacktor3597 Sounds awesome. When you say "they build", who is they? The city, developers left to their own devices, ppp, something else?

[@matthewwiecek8082]

​@@nitePhyyre The developers in anti-tax anti-government Houston are mostly left to their own devices (due to incredibly lax Houston zoning) and they build enough housing to keep housing affordable. Similar situation in Tokyo (they're not anti-government, but do have lax zoning). So, yes, developers really will build enough housing to make it affordable for people of pretty modest means.

[@JamesTaylor-zs2gq]

Another great video! What you're talking about at the end sounds a lot like land value capture. Cities do impose a number of fees and charges that go towards public infrastructure, amenities or other public goods such as below/non-market housing. The irony is, since these charges are techincally imposed on developers, the development community likes to argue that they have a negative impact on housing affordablility. The reality is that, unless the fees weren't anticipated (so-called "late hits"), the developers simply factor them in to the price they're willing to pay for land, so it actually just cuts into the profits of land owners, who did fuck all to deserve the windfall anyway.

[@bopete3204]

There's another wrinkle though, which is that if developers aren't willing to pay enough for land then the land doesn't get sold and the existing use is continued. That's how the cost is passed on to consumers. Developers are willing to pay less for land, and so they buy less land and build less housing which means less supply and higher rents. It's only land value capture if you're actually creating more value while you implement the fee. For example, if you upzone at the same time, that prompts developers to bid more and so you capture that value without resulting in fewer lots redeveloped. But housing value increases due to scarcity can't fully be captured because the value of the existing use is also increasing so you do naturally have to pay more for the existing owner to be willing to sell. Basically, people like Patrick Condon are kinda too cute by half because they don't take the implications of developers paying less for land all the way. Think of how much of a premium developers have to pay to assemble SFHs. If the amount developers offer decreases, some homeowners will walk away and fewer projects will be able to move forward. The best way to tax landowners is to just tax landowners directly.

[@PaigeMTL]

I mean land value capture is in the same family of policies, but quite different. It does distort the market as all these things do, but overall seems less of a hindrance to housing being built when done in a way that makes the net amount of housing increase. For example it's being used in Montreal to pay for the REM, but that project is making massive amounts of densification possible.

[@JamesTaylor-zs2gq]

@@bopete3204 Fair points. I'm thinking mostly of fees associated with additional density, such as density bonus contributions. The city I work for has a number of density bonus options (some is cash for amenities, some is additonal density for building rental). The system has been quite successful; it's rare that a developer doesn't use it.

[@SPAMMAN123456789]

nice to see you again and once again a banger on the realities of a topic often oversimplified and sensationalized

[@PaigeMTL]

Thanks, back for the winter hopefully

[@CurtisThorpe]

Real cliffhanger with the bike on the last episode.

[@PaigeMTL]

Well, the patrons know

[@acchaladka]

@@PaigeMTL damn you, one more patron subscription. *shakes fist*

[@ptolemy36]

Great video! As someone who's been wondering about this for a while your, video did a great job at explaining things.

[@Amir-jn5mo]

Dude how many boomer movies are about greedy developers lol. When can I watch my share of movies about NIMBY's and their horror of shadows and poor people?

[@ulrichspencer]

Also, the last segment of your video definitely sounds like you're familiar with Land Value Tax, but it'd be amazing if you did a follow-up video specifically on it. It's considered by economists of all stripes to be basically the perfect tax, it promotes density, grows the economy, reduces economic inequality, and is pretty much impossible to evade.

[@freezerlunik]

IMO LVT is just like the municipal property tax, but more blunt and effective.

[@trnstn1]

inclusionary costs are just divided up and shifted to the market-rate units in the same project making it more expensive for middle/average income buyers/ renters. It's a market distortion that will just discourage projects from getting built. Instead of having some housing we end up with none.

[@LoneGunman90]

In my area the low income units are strictly controlled such that no one who “purchases” them is allowed to sell them for market value, it must be sold as a low income unit again and again. So you wind up with a unit that has the lottery/waitlist problem of government managed non-market housing without many of the benefits of private ownership to the buyer. I suppose one benefit is that you create a unit that is basically always going to have a loan on it, by the time someone has significant equity in one of these units they should try to get into the actual private real estate market. The main benefit to the town is that by simply designating that the minimum number of units required by law to be permanently low-income, you’ve solved the housing affordability crisis permanently.

[@herlsone]

The only reason for too high prices and not enough housing in EVERY price range, is government restrictions on building new homes, zoning laws, etc... There is no other reason.

[@Yuvraj.]

Unbelievably simple yet as most people are NIMBY’s they will come up with the most morally bankrupt claims to cover this up

[@shauncameron8390]

@@Yuvraj. This is not a moral issue, though.

[@Yuvraj.]

@@shauncameron8390 ignoring the vast underbuilding that’s been going on in this city and province and country to be honest for decades in favour of myopic conversation of single family or other less dense urban forms while the poor and the young are priced out from ever being able to afford a home is the outcome of a bunch of homeowners voting against new housing every election. This is a moral issue, and if you aren’t for significant amounts of new market and non-market rate housing to release pressure from our overcooking housing market, you’re condemning our future generations to a life of misery for short term profits.

[@shauncameron8390]

High land values, development fees, etc.

[@etbadaboum]

Bring back land tax! Georgism! Great video, I don't get why your channel didn't already exploded.

[@tobstatvbaum1932]

amazing video

[@robertcartwright4374]

Bravo! New Zealand's loss is Canada's gain. (Sorry New Zealand, eh?)

[@Bismvth]

Dawg the music shift to 8-bit only.... who does the music on these. That's fuckin' hard

[@bopete3204]

My comment before watching is that taxing developers to capture value from up zonings is a great policy when calibrated right (why not capture that value for the public) but the long-term goal needs to be to get the value generated by upzonings close to 0 (because it means renters and new buyers are no longer paying the cost of restricted supply due to land use restrictions)

[@bopete3204]

I think we're pretty much on the same page

[@jackgibbons6013]

Developers aren’t the ones capturing the value from up-zoning though. Land owners are. Have a land value tax.

[@lifetime805]

If society wants social housing, then society should pay the tax to fund it, not randomly dump it all on a select group (new home buyers).

[@jiffyb333]

Very important video :)

[@cw4959]

Imo building a shit ton of non market housing/ radical tenants unions to take control of housing units through squats etc is the only way out of the housing crisis

[@NamelessProducts]

Farmers farm and provide us our food because they are able to make a living from it. "Developers" are the system in which we create housing, and they do so because they are able to make a living from it.

[@nitePhyyre]

There isn't really an alternative to farmers. There are plenty of alternatives to the "developers" system.

[@shauncameron8390]

@@nitePhyyre Which are?

[@jaimiepotts]

@@shauncameron8390 you can just have local authorities/councils build housing

[@happyyorkie5252]

Let’s tax homeowners!!!!!!!

[@shauncameron8390]

That would be 66% of Canadians.

[@someidiot4570]

the one problem with this argument is that the reason most people aren't property developers is because of a lack of starting capital. developers and landlords have HUGE margins and are almost always obscenely wealthy. of course they can afford a bit extra in taxes.

[@xtrememanster]

Taxing something will lead to less of it being produced, thats the law of supply. Even if they could afford extra taxes that doesn't negate the effect those taxes will have on overall production, lower returns means other investments like the stock market are more attractive, and without investor capital the construction market won't have the money to seriously ramp up production.

[@PaigeMTL]

Hit thumbs up on the comment above if you don't know many developers or obscenely rich people.

[@bopete3204]

The fact that the capital requirements are so high also contributes to a less competitive market with less supply and higher prices, and it's something that we should try to address (by streamlining the approvals process, especially for smaller infill developments). And no the developers don't just eat the tax. The factors that allow them to maintain high margins (like riskiness keeping out lower-margin competition and a complex approvals process favouring knowledgable and experienced political insiders) also allow them to pass on the costs to either landowners or renters/buyers. And at the margin, some landowners will walk away from development deals if they don't get enough money and just maintain the current use, which means less supply and the cost passed to end consumers. This can be offset by policies that loosen land use rules to allow more housing to be built at the same time (keeping landowners paid enough to get them to sell) or by simply taxing property owners directly by raising property taxes (or better yet taxing land values specifically).

[@jackgibbons6013]

Then argue for a wealth tax, or way better, a land tax. Don’t tax wealthy people doing something that happens to align with society’s needs (more housing).

[@nitePhyyre]

@@jackgibbons6013 profiteering off the fact that people need shelter isn't really aligning with society's interests.

[@nitePhyyre]

@6:10 that's the actual problem. If society wants social housing, society should handle it. Doesn't really make sense to come up with convoluted schemes to align interest with social benefits and pay profits to developers instead of just getting the job done directory. The neoliberal mantra of "privatize, privatize, privatize" doesn't work. On a seperate note, when you're talking about the old scheme of up zoning in exchange for low income housing, it would have been interesting to go into how zoning itself contributes, or doesn't, to the housing crisis.

[@PaigeMTL]

Great idea, but we should divide up the work on this. While you work on your idea, I'm going to work on getting this policy tweaked so we can get a few 100k more houses built for residents. That way if you don't succeed in overhauling the economic system, we can have this as a fallback. Best of luck!

[@YourCapyFrenBigly_3DPipes1999]

I appreciate this video but aren't two possible solutions to have the federal or regional government underwrite the developers in the case of loss and also to build plentiful additional public housing units? I'm willing to grant that maybe not all developers are super ultra-wealthy and are mustache-twirling bad guys but both in Canada and the US the affordable housing crisis is at an all-time high, both renting and owning. So what are we going to do about it? I heard on another video that Canada's federal government is actively trying to limit the supply of new housing via prohibitive regulations and taxes in order to drive up the value of the units they already personally own? In your opinion is this true? If so that's pretty disgraceful. (Not that it would surprise me, these are politicians we're talking about after all)

[@nunyabidness3075]

Government needs to stop pushing their job off onto everyone else. If the people want to feed Bob, then the people should give Bob food or money. And the same for everything else! Seriously. Housing is just the latest thing blowing up after decades of free lunch policies. Stop the mandates. My employer should give me cash, or whatever we agree on. The government can just butt out of it.

[@acchaladka]

Paige i like this topic a lot and appreciate you taking the time to do this video, as well as all the clips from crucial moments in cinéma history. However I would also like to hear the counter-arguments from a worthy debater. Who is that intellectually honest and worthy counterpoint?

[@PaigeMTL]

I think you’d have a hard time hearing counter arguments from any single source because my position is a hybrid. There are free markets people who say inclusionary zoning and policies like it are the reason housing is expensive, so we should just not have it (or any) government involvement. Then on the other side are people who like big government and think housing should be nationalized and centrally planned to end all crisis and inequality forever. I personally find both groups start with a political ideology then work backwards from there to create a very naive and unrealistic solution.

[@digital_benadryl]

I've offered a comment above in support of inclusionary, that I hope will be taken in good-faith as honest and constructive. It is also a hybridized take, like Paige's, that I hope is seen as flexible. I am a leftist but not one so dogmatic that I can't understand economics and political realities

[@martinplasse174]

Go vegan!

[@Andre-qo5ek]

why are we pretending that these corps are not international landlords... like BlackRock. lets stick with the idea that only the small contractors are ddoing these projects. the protesting against this class of contractors is because they are the Petite bourgeoisie. they can be swayed. the Petite bourgeoisie is much more susceptible to a communities demands.

[@skeebob]

I'll stop treating developers like cartoon villains (excellent montage btw) when they stop behaving like it. I know this channel is MTL based but just a few hours away in Toronto, literally as this video was being published, the government was taking an axe to developers' obligations to pay **anything** to municipalities for the right to build. Literal billionaire developers successfully bought enough influence to get the gov't to remove swathes of green belt, resulting in massive profits and more sprawl on ecologically significant lands. They are going to pave farms a couple kilometres from my house and I'd bet all the money in my wallet that what will be built is sorta-dense row housing that's entirely car dependent and built with zero regard for green building standards because, oh wait, the government gutted those too. Explain to me again how developers can be trusted to build in the public interest when their motivation is profit?

[@PaigeMTL]

I don't trust developers so I wouldn't propose a solution as incompetent and frankly corrupt as Ontario. My previous video on the greenbelts for example specifically said that all future greenfield developments should be car-free, high density and intentionally part of a strategy of densifying the suburbs. Real Estate is literally the largest industry in Canada, with many of the most wealthy and powerful entities in the country involved in it. What happened in Ontario wasn't motivated by what citizens like me who advocate for more housing wanted, it was mostly what some politically connected developers wanted. Just because I want an industry to increase its output doesn't mean I trust the millions of people who work in the industry and want to see them capture their regulators.

[@skeebob]

​@@PaigeMTL Thanks for the reply! I think we agree that Ontario's "Building More Homes Faster Act" is a disaster. I've also watched your greenbelt video (and most of your channel), and given that I live a stone's throw from one I couldn't agree more on the need for densification of this suburban nonsense. I guess what I want your opinion on is: if "development" [real estate, construction, etc.] in Canada is largely captured by billion-dollar entities, how does that map onto your characterization that it's the money of "friends & family", or that it's "the people who build houses" who are paying for inclusionary zoning? It's wealthy private corporations, not the contractor building the thing and getting paid pretty well because their skills are in high demand. I'd also like to point out that the exemption of principal residences from capital gains tax has been around for 50 years (i.e. since the introduction of capital gains tax in Canada in 1972 after 10 years of study & consultation). The video makes it seem like it's recent thing. The political will and capital required to change that system would be enormous. The video kind of skips over that fact that ~2% land transfer taxes already exist, probably precisely because a ~27% capital gains tax on the sale of a principal residence will just never get passed. By all means, gradually increase the land transfer tax though, or make it more progressive, or clamp down on flippers.

[@PaigeMTL]

Probably going to make my first Ontario video on this, it’s an interesting mixed bag of a bill that shows how implementation of reforms happens in the messy real world. The bill has good things, bad things and corrupt things in it. It kind of feels like peering into a shipping container for the first time on that show storage wars. I see lots of things that could be something.

[@skeebob]

@@PaigeMTL LOL great analogy. By-right duplexes/triplexes/garden suites (GOOD) / gutting conservation authorities & local planning (BAD) / paving farmland while enriching your developer buddies (UGLY). Would be interested in your take. Thanks again for the replies.

[@cenicholas3251]

p̷r̷o̷m̷o̷s̷m̷ 💘

[@christopher480]

wow clearly you are not a developer.....dude no 2 ways about it they make a very tidy profit......if not they wouldnt do it.....its that simple.