UBC Professor Paul Kershaw's solutions to Canada's housing crisis
A typical leftist view, tax tax tax
Canada has a housing crisis by any definition, with homes prices well beyond the reach of most young Canadians and higher interest rates driving housing affordability problems to even more damaging extremes. Professor Paul Kershaw has won acclaim for his research blaming the problem on intergenerational tax policies based on a theory that baby boomers didn’t pay enough attention to the costs of their elder years and are passing the costs of their pensions and health care on to younger generations who can ill afford to pay them. The gap between income and home costs is definitely a serious problem.
Kershaw’s solution includes imposing a deferrable tax on the sale of homes valued $1 million or more and using the proceeds to assist others to enter the housing market.
Kershaw’s theory is that houses rise in value and home owners benefit from a transfer of wealth arising from that higher value which fairness dictates be taxed to assist others to become homeowners and to remedy to some extent wealth and income inequality. Kershaw’s theory of “value” is flawed.
Houses don’t rise in value - that value was fixed whent the house is built. Houses rise in price not because they are more valuable but because policy has made money less valuable. The root cause of the home ownership crisis is policy all right, but it is not Kershaw’s claim of intergenerational unfairness. It is monetary and fiscal policy, pure and simple and the solution to housing affordability is more supply and less government intervention. Building codes, permit fees, planning department approvals, zoning restrictions, a NIMBY culture in established communities and a nonsensical federal tax code and literally stupid penchant for deficit spending are the problems Canadians need to solve and, if solved, housing issues will disappear in a generation.
Progressive governments come to power and keep power by buying votes with the electorates own money and borrowing money to keep voters happy with the headline tax burden while taxing lower income people with resulting inflation, which is the real tax burden. Inflation results from two sources only - loose monetary policy and inane energy policies. Every other contributor to inflation can be traced to those roots. Drive interest rates down with quantitative easing (QE) and you drive asset prices up in every market economy. Pretend CO2 causes climate change and restrict fossil fuel investment and drive energy prices up in a world where 82% of its needed energy comes from fossil fuels. Squander trillions on a nonsensical and needless “transition” away from fossil fuels and drive up energy costs even further with downstream costs throughout transportation and industry flowing through into every product Canadians consume. Throw is a baseless “carbon tax” pretending it will “save the planet” and make the situation even worse.
Canada has billions of acres of undeveloped land yet tree huggers bitch about development. Liberal governments encourage massive immigration (a good thing for the economy longer term) without planning for the infrastructure need to house, feed and care for the population growth. Less residential construction results in the face of higher demand and what construction takes place is artificially forced to absorb higher costs. Scandals such as the Ontario “greenbelt” fiasco demonstrate an outright silly fight over a few acress of forest of no consequence to climate, health, welfare or the economy and waste time and energy on trivia.
Kershaw’s solution is to further distort the market with another tax. His accolades and awards have been earned for his contributions to the debate but his solutions reflect ideology, not logic.
Imagine thousands of dumb and dumber students got "educated" by this idiot professor!
Stop all sort of immigration at once, cut all red tapes related to housing, and raise interest to the appropriate 20%+ to that proven formula quoted by Michael and the market will adjust itself FAST.
Lefties like the tax grabbing Prof will dream up anything to tax a part of society that has managed to amass some wealth
A few more logs to throw on the bonfire of housing policy incompetence :
80% of the rental units in the GTA were built before 1980 … why not have the Prof look into why that might be the case ?
A considerable amount of residential properties along heavily subsidized public transit have NIMBY’d higher density that would be a no brainer where there is transportation access
Real Estate taxes on apartment units are levied at twice the rate as single family residences
GST hits harder on rental apartment buildings than single residences
In other words a colossal screw up by governments are behind the problem
And when FORD wanted to free up .3 of 1 % of the Greenbelt to help speed up the fixes ....The leftie media propaganda machines go nuts