this post was submitted on 14 Oct 2023
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Well that's interesting. That seems like a pretty sound argument - we want less consumer spending, except on housing where we want more, so you need to offset the impact of rate hikes in just that sector. Or maybe we could try an alternate way to cool the economy, besides interest rates? It'd be risky though.
I still wonder why we have this problem in the first place. It sounds like our construction industry is unproductive for it's size but I can't fathom why.
The thing everyone keeps forgetting somehow is that the goal of capitalism is to make profit, not improve quality of life.
The role of government is to regulate capitalism so that the profit goal and the quality of life goals end up being the same thing.
Unfortunately government isn't doing that right now because the number of people benefiting financially from this market distortion is larger than the number of people being negatively impacted. 65% of residential properties are still owned by the family living in them. That number will go down over time, and the government will bring in more regulation to re-align things, but we simply aren't there yet.
It's baffling how long construction takes here.
A right of way for TransCanada pipeline going between houses near where I live has been fenced off and being worked on for almost 2 years now. It's like 200m long.
The highway expansion and overpass replacement nearby has been about 1.5 years now and probably still another 6-12 months away from completion.
Highway repairs from flooding have been ongoing for 2 years now coming up next month.
That's what the data points to as well. We have an appropriate amount of construction workers (edit: or at least in a similar shortage to elsewhere), and the costs of things isn't all that different from the US either. And yet, the output is tiny.
What I really need is to hear from someone who's actually worked in construction on both sides of the border.
I'm a construction worker in Ontario, and I know it's anecdotal, but almost every trade worker has told me the same thing - we're busy as hell but we can't find guys to hire. Pretty much for the past 3 or 4 years, that's all I've heard. I was pretty much hired on the spot when I joined the carpenters union in 2019, and I worked with a 19 year old kid who walked into the union hall the day before, and they asked him if he could start the next day. With literally 0 experience. I think we are really hurting for trade workers.
That's what I hear from my buddies in construction also.
Good luck out there bud!
They're all busy as hell out here, as well. The US has a similar situation but I guess they make it work? Hmm, maybe they're relying on a lot of illegal immigrants that don't show up in stats.
Inflation is a monetary issue. You need to vacuum the excess liquidity in the economic system by having high interest rates. There is no escape to that.
Maybe if we'd removed the limitations on the building height or other law that limits the housing offers, the private sector would build more houses, who knows.
Yes, we should absolutely do that too. Calgary is going to vote on blanket rezoning all single-family housing area to allow 4-plexes (with additional basement suites), for example.
I guess the "simple" solution, looking at this data, would be to give a special BoC interest rate specifically for financing certain housing loans and mortgages, and continue raising the rate for everything else. There might be pitfalls to that that I'm not considering, though. You'd want to be sure there's no way for other instruments to inappropriately get cheaper as a result.
Tax speculators. It'll free up tons of housing.
I'm skeptical. Buying an expensive asset and collecting nothing from it is usually a good way to lose money. Didn't Vancouver already do this a couple years ago anyway?
Its two fold.
There are a lot of regulations, which are not a bad thing, but they do slow things down and make everything more expensive.
The sheer amount of immigrants. A million plus every year, year after year, adds up. Building a million homes a year would be tough for any country.
Are they really that much more restrictive than US regulations? Like, easing some of them (especially zoning!) is a great way to help, once the money issue pointed out here is taken care of, but the US industry looks really similar on paper while producing a lot more houses per capita.
That could be a factor, but if a lot of them work in construction that should actually be helpful in the long term. (And of course, blaming them makes me nervous for reasons that have nothing to do with economics)
It looks like very few new Canadians work in construction:
I suspect that we'd need a concerted effort to adjust our visa and immigration programs to increase those numbers. AFAIU, the points system rewards white collar credentials. Trades-oriented credentials seem to require Canadian experience in the temporary foreign workers program.
Huh. Yeah that's a problem, at the very least going forwards.
Yes, I don't understand it all because it's really complicated, but executive experience gets you more points that anything else, which is ridiculous given the roles that are made available to new Canadians.
A lot of construction is unionized and requires skills and training. Many immigrants cant just up and start in construction just anywhere. Especially housing which is also restricted by trades like electricians, plumbers, cabinetry, flooring, drywall, painters, etc.
Yeah, I'm sure for something like electrical you wouldn't want someone fresh from the third world in charge. Framing, on the other hand, should be eminently doable.
Hmm, what is the unionisation rate?
Even framing has a lot to learn. Not a lot of stick frame construction done outside of North America.
Does it? I wasn't aware there was a way to mess it up that bad. I used electrical because of the stricter safety standards.
It's also worth mentioning that if we're talking, like, poor refugees, they tend to be far better with their hands than first world people, since they were mending, building and working fields while we were all reading textbooks. I'm guessing the elites that we tend to prefer are more comparable to us.