Housing prices dipped in the downturn in the 1990s and again in the stock market crash of 2008. And for people who want to go back far enough, the 1980s had a housing collapse linked to oil prices and deep recession that had people hurt badly in Alberta. Back then, prices dropped around 30%. In Winnipeg, prices really didn't budge for years in the 1980s.
It goes to show that there isn't a constant trajectory upwards for house prices and that expecting a 10% return a month is insanity. Those buying a house now for hundreds of thousands today have to ask themselves what the value of the house might when they sell it. If it is much lower, then is going to be painful selling. The seller who is downsizing stands to win if they bought decades back. Still, buying is more expensive no matter what size place. The interest rates, the prices of houses and taxes are all contributing to this.
The Feds under Mark Carney have ended GST for new house sales capped at a rate high enough for most buyers to benefit. The accelerator fund started under Trudeau, which sends federal money to municipalities for shovel-ready projects. In Winnipeg, the program has filled not once but twice. Some of those projects are well under way now. Affordable housing is key to those projects going forward and they just aren't provincial housing but housing owned by non-profits, churches, universities and the like.
One of things learned about developing affordable housing is that it involves all levels of government, various private, no-profit and charity groups, supply chains and financing. To make matter worse, to get any zoning done in any jurisdiction means having people say how important housing is while making it impossible to build it.
We have some cases in Winnipeg where it has taken decades to get stuff built even on land not occupied. There are cases like that all over the country. In some cases having to go to court for obstructions on the part of local governments. Give the shortage of housing, this seems completely irresponsible. Literally thousands of housing units have been held up for years because of council and administration bungling and deliberately sabotage.
The best way to avoid homelessness is to stop tearing down people's home or letting them burn down. And to stop evicting them for renovations and huge increases in rent they can't afford. Or to sell their building once the federal or provincial supports end and once again putting people on the streets. The goal of provincial and the federal governments has to be preserve housing rather making it unaffordable and putting people on the streets. People who are homeless now once lived somewhere. More needs to be done to stop demolitions, arsons or derelict buildings to sit idle or people on the street will accelerate further.
Even as the governments push for more housing, there has been a slow increase as of recent in home sales. Interest rates and uncertainty in the market because of what is happening south of the border are affecting thigs. But pent up demand and the needs of the population won't be denied. Job transfers, retirements, children and other life changes mean people are looking to buy and sell.
The upcoming federal budget will see the government make an effort to get the costs down on things such as GST on newly built houses. The accelerator program will continue to add deeply affordable housing. Developers will only provide it generally if government mandates and funds it. Zoning changes at the municipal level can also help in terms of where building go up and how they are built. With better fire codes you don't need two stairwells or apartments built of steel and concrete. Wood is being used over the world for high rises.
It is going to take a combination of approaches to meet the housing needs. However, the country has done this work in the past and seems committed to doing it now. It still seems painfully slow but the main thing is to keep pressing on. Part of the problem we are facing now is years and even decades of not doing anything.
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