{"id":11018,"date":"2023-04-03T07:21:19","date_gmt":"2023-04-03T14:21:19","guid":{"rendered":"https:\/\/www.stevesaretsky.com\/?p=11018"},"modified":"2023-04-03T07:21:22","modified_gmt":"2023-04-03T14:21:22","slug":"dissenting","status":"publish","type":"post","link":"https:\/\/www.stevesaretsky.com\/2023\/04\/news\/dissenting\/","title":{"rendered":"Dissenting"},"content":{"rendered":"\n

Happy Monday Morning!<\/p>\n\n\n\n

Everywhere you scroll these days there is some debate about the housing mess, people arguing on social media, all levels of government pointing fingers and blaming each other for the housing crisis. \u201cVote for me and i\u2019ll fix housing.\u201d It is all political theatre.<\/p>\n\n\n\n

Case in point for those following along at home, the federal government introduced a two year ban on foreign purchasers of residential real estate this year. The same government that labelled people xenophobic a few years ago for even suggesting a foreign buyer ban. They folded like a cheap tent in the wind after mounting political pressure and quickly rushed a new bill through.<\/p>\n\n\n\n

By doing so the new law prevented many developers from acquiring residential land for the purposes of building new housing supply. You see, many local developers are private corporations with non-Canadian equity partners. Any developer with more than 3% of its corporation controlled by a foreigner was prevented from acquiring new land to develop housing. In other words, you\u2019re a local Vancouver developer but your capital partner in the US who controls part of the company prevents you from building purpose-built rental condos.<\/p>\n\n\n\n

So new housing supply gets throttled at the same time the government is ramping up immigration targets, with over one million new immigrants flooding into the country in 2022. Meanwhile, the immigrants we\u2019re asking to come here and fill job vacancies and work a lot of these low paying jobs are not allowed to purchase housing, instead they must compete in the incredibly tight and undersupplied rental market.Subscribe<\/strong><\/p>\n\n\n\n

It should come as no surprise the federal government is walking back some of these policies. Amendments to the foreign buyer ban announced this past week now allow for increasing the corporate foreign control threshold from 3% to 10%, and allowing the purchase of vacant land. Work permit holders will now be able to purchase one residential property, assuming they have 183 days or more of validity remaining on their work permit or work authorization at time of purchase.<\/p>\n\n\n\n

In other news, the Federal Government dropped an updated budget. The Budget contained a net total of $43B more spending over six years. That includes $67B of new spending over the next 5 years offset only partly by about $22B of internal savings and higher taxes. I have a few things to say here but i\u2019ll pass the mic to Scotiabanks chief economist Derek Holt<\/a>\u2026<\/p>\n\n\n\n

\u201cThere are macroeconomic distortions stemming from all of this spending that include but are not limited to the following and that follow from yesterday morning\u2019s note:<\/em><\/p>\n\n\n\n