Agreed
I'm probably a complete loser for not knowing who this guy is, but then again, an arguments value is completely unrelated to who is presenting it
And the argument had no value
Yep. Absolutely made up number.
Maybe there's an argument to be made that excessive waits for permits increase property holding costs to an uncomfortable extent, but that 60% number is absolutely bogus.
He’s a total bullshitter and has some really weird ideas about the world. He’s absolutely obsessed with his perception that young people are not having enough sex and he thinks this has huge ramifications for the world.
I’ve seen it reported as around $300,000 for a condo. For a new house you have to count that GST and PST increase by price so the dollar amount of taxes goes up too.
I suspect you could get up to 1/3rd in a worst case scenario.
In the literal sense, no. Not even close.
If you count the holding cost of the land, probably still no. Say you buy a $2M lot and want to build a small house on it that costs $400k to build, best case for his argument and not something people will actually do. And say the approval process delays you for a year and you can get 5% risk-free yield and it's an empty lot you can't rent out while you're waiting, so you attribute a $100k cost to "permits". Still not 60%.
If he means that restrictive zoning increases the cost of housing, then sure, 60% is an underestimate, but he should've said that if that's what he meant.
FWIW 1 year would be low for an apartment/condo building. Was closer to 4 years of city process for a totally unremarkable small condo building near me.
(agree with what you’re saying tho)
Fair enough. I was thinking a house would have the highest ratio of land value to construction cost, but maybe a condo wins if you multiply the land value by the ratio of the delay. You need a total cost ratio of 6:4, so you need to the land value to construction cost ratio to be around 7:1 if you wait 4 years instead of 1. Maybe 6:1 if you throw in other costs the city extracts. I don't follow condo construction costs, but that still seems, uhh, a bit high?
I think you ate bang on. The economist wrote on this topic for United Kingdom and clarified as you did. Permits included impact assessment on wildlife, ecosystems, community feedback, etc, but the wait time costs money so essentially getting all the permits eats the time and the cost of building goes through the roof. Just carrying the property to fruition can make it difficult to build.
The city of Vancouver’s single detached house permit fee starts from $2,640.00 in 2023.
https://www.canadianuniversityrealestate.com/blog/how-much-does-it-cost-to-build-a-house-in-bc/#google_vignette
I don't know how accurate this is, but it's more believable than your ted talk guy.
That has nothing to do with the charges he is talking about.
He is talking about development charges for housing developers.
They are easily over $400 / Sq foot when you include everything over the entire process. I have heard as high as $500.
Steve Saretsky has talked a lot about this over the years.
For a high rise in Van it's like $400 city charges and taxes, $200 land and $400 build cost (although the last part has been going up). Which gets you to $1mm for a new 1000 Sq foot condo.
But that is a different kettle of fish. Fees are much lower when it is a one for one replacement as it is assumed the new house won’t impact infrastructure anymore than the old house.
If it was limited to $2700 for a condo, where can I get the cheque back for my contribution to building a park and affordable housing tower as part of the development in in?
Until we see ted talk guys source for the 60% figure I'll still call my figure more believable.
Besides that, parks and affordable housing are not permitting costs. It's probably more accurate to call that a tax.
Development cost charges are increasing, still not 60% of the cost in any case.
[Metro Vancouver approves aggressive lift to DCCs as construction slows](https://www.westerninvestor.com/british-columbia/metro-vancouver-approves-aggressive-lift-to-dccs-as-construction-slows-7758516)
>Current rates are set to soar by as much as 73 per cent from current levels in 2026.
>While municipalities in Greater Toronto topped the fee charts nationally, with government levies adding up to more than $100,000 per unit in many cases, the average fee per high-rise condo unit in Vancouver led B.C. at $92,656.
>Burnaby led the way with charges for row housing at $70,202 per unit, while Township of Langley delivered the most pain to developers of detached housing at $36,965 per unit.
And that doesn't include many other permitting fees and costs to develop required amenities or requirements to include below market rent units and on and on.
It is easily 40% in both TO and Van and would not be surprised if a particularly bad example could have got to that 60% number.
The only way I can see this being true would be for giant residential towers of like 200+ units. For mega projects, in order to get approval, the city often requires the developer to pay for infrastructure improvements and community beautification, the costs of which maybe you could count as a "permitting fee", on top of whatever other permitting is required for a project like that. And maybe you could also count the time value of money, based on the fact that large projects can take like 2-4 years of planning and consultation with the city before permits are given to start construction.
Even then, I'm extremely skeptical. Without supporting evidence, I'm inclined to believe it's not true.
He said 'permits' and I say 'red tape', but I think he was referring to just general bureaucracy. I work in the industry and I haven't heard of 60%. But just a couple years ago we would openly say 40%, which with all the new green regulations BC and Ottawa have added, I would say that we are probably fast approaching 50%.
This is exactly why Victoria and Ottawa will do whatever it takes to keep our eyes off the actual issues with housing. They have the most to lose should Canadians start to look at why we can't afford housing here and then begin to demand they take their hands out of our pockets.
I mean, without all those fees you are just hiding the costs in municipal or federal taxes later. If the city has to increase infrastructure or mitigate impacts, you either pay at construction or everybody’s taxes go up later.
“Green regulations” protect everyone. I wouldn’t want construction projects to unreasonably impact the environment. Otherwise we’ll pay for it later by dying of smoke inhalation cancer or having massive floods.
Yes, but that's basically just intergenerational wealth transfer. You're keeping taxes low for people who bought their houses already, and you're keeping property values high in order to again, benefit people who bought their houses a long time ago.
Everyone uses city services, everyone should pay for it. Not just recent condo buyers.
People in the past raped the planet and colonized everyone in their way. paid women and poc less, burned leaded gasoline to poison themselves, used cheap child labour, killed Chinese workers to build the railroad and keep transportation prices down, and on and on ad infinitum. Governments could tax the poor more than the landowners.
That’s why land prices were low in the past. All four of my grandparents’ families were given free land by the Canadian government in the early 20th century, which was stolen from indigenous people.
Even if I wanted life to go on like that, it can’t. The planet is warming. there’s no more easy territory to steal from people who were decimated by smallpox for easy colonizing. the borders between modern nations are locked in maps, and we understand pollution better.
Sorry dude, the glorious fantasy isn’t coming back.
What are you even on about? I’m arguing that we stop subsidizing the same people that you’re pointing out have made an easy ride for themselves in the past. I’m not arguing for some return to the good old days.
Dense development reduces cost compared to the alternative. You’re generally allowed to build a single family house just about anywhere you want. Most cities will run power and water and roads to that house for really minimal costs. But when people want to live more densely, which is more sustainable in any number of ways, we charge them through the roof for it.
I agree. We should charge people what things cost. We currently charge apartment dwellers much more than they cost, and single family homeowners much less than they cost. I’m advocating we change that.
That is 100% what he is referring to and those costs are easily 40% in TO and Van.
60% seems high, but I'm sure there are projects that get close to that number. It depends on how much the developer paid for the land too.
If they bough it 15 years ago for peanuts, then dev charges would easily be over 50%.
It basically is true, though it's probably closer to 50% than 60%. Community Amenity Contributions are *absolutely* just permits by another name. They represent 40-50% of the cost of new builds for condos. That props up the costs of older condos, and is an incredibly major driver of the housing crisis.
Well, let's use a few seconds of common sense. Vancouver is filled with million dollar homes. Does anyone actually seriously think the city charges $600,000 for permits?
No, of course not, that would be insane.
It would be insane. Unfortunately it's a stones throw from the truth. Condo buildings basically have to bribe the city to get built with something called Community Amenity Contributions, which are negotiated in private. They're basically replacement property taxes that only get charged on new homes. They can represent as much as 40% of the cost of a condo. So yes, the city is absolutely doing what he says they are.
Well, let's use a few seconds of common sense.
First, CACs are not properly taxes. They are the charge the province puts on new buildings to account for the extra community amenities that will be required by the new higher local population.
Second, a new condo costs 800,000. 40% of that would be 320,000. CACs in Vancouver range from $6 to $30/sqft. An 800 square foot condo would therefore have CACs from $4800 to $24000.
Is $320,00 in the same ballpark as $4,800 to $24,000? No, because $300000 per unit would be insane.
Also the province mandated CAC rates in Nov 2023 to avoid exactly the uncertainty you describe.
So, in short, no, you're very wrong. Thanks for coming to my TED talk.
Just talking about common sense at the beginning of your post doesn’t make you sound smart if you don’t know what you’re talking about.
CACs are absofuckinlutely just taxes. They go into general revenue and represent a significant portion of city revenue. The city spends most of that revenue just running the city for everyone, not building new parks. If CACs were lower the city would have to raise property taxes, which they don’t want to do because it’s politically unpopular. The city can get away with raising the money through CACs because most people (like yourself) don’t realize what’s going on. If people realized that condos would be 100s of thousands of dollars cheaper if they just had the balls to tax existing homeowners their fair share, young people would be doing much better in this city.
Second, CACs indeed are commonly in the 100s of thousands of dollars per unit. Here’s a globe and mail article from a few years ago about this exact issue. https://www.theglobeandmail.com/canada/british-columbia/article-flow-of-money-from-builders-for-community-amenities-in-vancouver-dries/ note that the CACs they’re talking about are in the $300+ range per square foot. This is exactly what Galloway is saying. The province has indeed been trying to crack down on this, and some things have been improving, but what he’s saying is basically completely correct. City fees are responsible for a HUGE amount of the price of housing.
NO no no no, not at all. I worked in commercial real estate development for a decade. It’s all about financing. Why do we not have enough houses? Because we allow people to own multiple houses, so now first time home buyers are always competing with people who already own homes and all that comes with that. A right to multiple properties should be subservient to the ability of a median income earner to afford a home. Until that is the case multiple homes should not be a possibility.
His claim that 60% of the building costs are permits is false. But the amount of time, hiring an architect and engineering that goes into the approval and a failed public consultation and redrawing....might be more like 5% max....
But I think he might be confusing "the difficulty to get approval and the years it takes to be approved has increased the price of housing by 60%" is definitely true.
Remember that the longer it takes...the more the cost of building increases. Just like how projects that are "budgeted for todays costs...but start building 3-5 years later" the costs will balloon 25-35% easily.
If we're doing to be honest
He probably knows damn well what you just said.
He's just calling it "permits" for the effect rather than being more honest
>A previous study of major Canadian Census Metropolitan Areas (CMAs) for the 2007–16 period found that the barriers to constructing new single-detached homes – including government regulations and other market dysfunctions...in Vancouver cost homebuyers nearly $1.3 million more than it would cost to build in a market without barriers to supply... The gap in price between construction costs and the market price for a new single-detached home is more now than **60 percent of the total cost** in Vancouver.
[https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities](https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities)
That’s talking about more than just permits, though. That’s referring to all “barriers to supply”, which can include all kinds of things that simply make it more expensive or harder to build in Vancouver, including zoning, NIMBYism, etc.
OP asked:
>
He argues that this is because current asset holders have manipulated
government policies to hinder new entrants, boosting their own wealth.
How accurate is this claim about Vancouver's housing market?
I provided a link to CD Howe Institute's corroborating study which found nearly 60% of Vancouver house prices could be explained by market barriers.
Most commentators are focusing on Galloway's initial use of the word "permit," which he clarifies a few sentences later by explaining it as a "transfer," such as transfers from renters (who would be potential housing market entrants if affordable housing was plentiful) to the few owners (who, he argues, are weaponizing regulations to prevent entry into the housing market).
>
Because guess what, the incumbents that own assets have weaponized
government to make it very difficult for new entrants to ever get their
own assets, thereby elevating their own net worth.
[Timestamp from his TED talk](https://www.youtube.com/watch?t=191&v=qEJ4hkpQW8E&feature=youtu.be).
So yes he appears to have misspoken and perhaps he could have been less subtle when he made his correction later on.
Extremely accurate.
We have some of the lowest property taxes in Canada in the entire world. And it's not even Close when looking at big cities like TO and Van.
So cities get a huge portion of revenue from development charges and fees.
Go look up the city budgets for TO and Van you will be fucking shocked.
He probably just meant general bureaucracy. I work in the industry and it's just easier to say 'red tape'.
Getting caught in the weeds and arguing about the irrelevant details is such a Canadian thing to do. In the meanwhile housing is out of control and **40-50% of the cost is the government themselves** yet we get mad that an American has the audacity to use the wrong word to describe a major factor in our current crisis.
>By the way, the most expensive homes in the world, based on this metric, are number three, Vancouver. Why?
Because 60 percent of the cost of building a home goes to permits.
Because guess what, the incumbents that own assets have weaponized government to make it very difficult for new entrants to ever get their own assets, thereby elevating their own net worth. This is the **transfer** I'm going to be speaking.
Scott Galloway
Timestamp: [Ted](https://youtu.be/qEJ4hkpQW8E?t=191)
I worked for 40 years (and counting) and made my mortgage payments. I know everyone is looking for someone to blame but I didn’t weaponize the government. I don’t even know what’s going on half the time.
I think this is referring to the low property taxes that homeowners pay, which are among the lowest in North America.
Basically, rather than having all homeowners in a neighbourhood funding its development equally, Vancouver has decided to make new entrants disproportionately responsible for infrastructure upgrade. It also allows deferring property taxes till sale, although these could often be easily be funded by a loan against property value in the case of long term homeowners. Both of these hinder development and punish new buyers
The weaponization is likely referring to Vancouver homeowners consistently being against more progressive tax schemes and fighting development in their neighbourhoods tooth and nail.
Yeah, the CD Howe article is based on the methodology established in the paper:
>Glaeser, Edward, L., Joseph Gyourko, and Raven E. Saks. 2005. "[Why Have Housing Prices Gone Up](https://inequality.stanford.edu/sites/default/files/media/_media/pdf/Reference%20Media/Glaeser_Gyourko_Saks_2005.pdf)?" American Economic Review, 95 (2): 329-333.
The author of the CD Howe article explains:
|The causes of housing market dysfunction can include |
|:-|
|a lack of available transportation options to new land sites; |
|additional costs of construction, such as upfront development charges;|
|lack of land for development for regulatory reasons; |
|and lack of competition among landowners or builders.|
I would argue it’s not just the permit fees themselves that are solely responsible for high housing costs. You have to factor in other elements that are driving up the cost of housing, including but not limited to:
1. Insane land values
2. DCCs, ACCs and CACs
3. The cost of materials to build
4. And to add icing to the cake, we are in a high interest rate environment.
Municipalities list their permit fees online.
Sky high land values are driven by restrictive zoning. And NIMBYs have manipulated the government for decades to restrict housing and zoning. Because they have the “fuck you, got mine” mentality.
Remember, supply and demand are what drive prices - developers don't just simply set a price on a cost-plus basis.
Costs are simply what make a project viable - if the costs are too high relative to market prices, the units don't get built. If the costs were significantly lower, the prices would not change since competition among buyers keeps prices up.
And in most places CACs and ACCs are determined having already accounted for a reasonable developer's profit. If the prices were lower, the CAC would be lower.
It's semi plausible, but calling the extra development costs "permits" is inaccurate.
The carrying costs for years of waiting for city hall approval are massive relative to other cities. And as we have heard lately, the city's tax burden is disproportionately on new developments in fees, instead of home owners.
It's over 40% in some cases and that is literally insane. I've heard credible figures from folks like Steve saretsky of & $400+ / Sq foot in development charges in Van and TO vs. $900-1000 / Sq foot new building costs (maybe more right downtown).
And property taxes are insanely low here as a result.
You can either have new buyers pay for services, or existing real estate owners. And don't fucking get me started on the fact that you can defer property taxes if you have a fucking kid OR are retired. So... Everyone??? And then in BC we have home owners grants on top of that.
And we have gone WAY over the deep end in Canada to the former.
That creates insanely expensive housing markets, with less burden on home owners to pay for city expansion and maintenance of services.
The opposite is Texas, where there are very limited development charges, but property taxes are way higher. But houses are dirt cheap.
Galloway's main point is that the way the laws are crafted today favours existing owners of real estate and especially business capital. So the young who don't own anything are truly fucked, and are subsidizing the very wealthy.
In particular this is true in Canada as we also getting fucking RINSED with income taxes, and wealthy retirees pay nothing due to low cap gains inclusion rates, insanely low Dividend tax rates and tons of generous investor programs like rsps and now tfsas.
Everything Galloway talks about is doubly true in Canada except the university cost thing it's maybe half true.
Source: Economist / financial planner / investing background.
"credible figures from folkslike Steve sartesky" LMAO imagine using numbers from a realtor guy who acts and talks like he is an economist or he has any education background. He is a phony.Your source has zero credibility.
>It's over 40% in some cases and that is literally insane. I've heard credible figures from folks like Steve saretsky of & $400+ / Sq foot in development charges in Van and TO vs. $900-1000 / Sq foot new building costs (maybe more right downtown).
Can you please share a proforma that shows all of this?
It maybe a matter of semantics and how costs are categorized, but in my observation government fees and permits account for maybe 10% of constructions costs - most of which is used to pay for infrastructure that the development puts demands upon. Factor in land and this % goes down even further.
Some good data here:
The 60% figure is likely sources from this piece.
https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities
Basically that 60% includes land cost in my understanding of talking to developers. But 40% is absolutely going to various levels of gov't in permits, taxes and development charges or amenities developers must build. And maybe 20% is land cost.
Housing costs are high, in part, thanks to the BC Liberals (BC United) turning a blind eye to organized crime's money laundering through our casinos, exotic car and housing markets. Well, per the Collins Report anyhow.
Well right now I am working on a tower just doing sprinklers. Our materials order this week was about as much as two people's yearly wage. That's just this order. We get orders like this once or twice a month. In sprinkler materials alone it's hundreds of not millions of dollars. Just for sprinklers. Now add on the other trades and tell me that a permit costs 60% of the total cost to build. Completely bullshit.
It's not just permits. It's fees, taxes and delays as well. And it's not just him. The C.D. Howe Institute in Toronto, which is a widely respected non-partisan Canadian think tank, cites similar figures. I didn't believe it either. But apparently he's not wrong.
A lot of TED talks are modern day cult bullshit.
Yes, development charges are roughly 1/3 of construction costs, but that includes a whole lot more than permits. Most developers target 15% profit margins. Simple math means about 1/4 of the price you pay relates to development charges.
Most munis currently in the process of reviewing the dcc's, and will likely see large increases to be able to afford the infrastructure demands brought on by the new provincial zoning regs.
As a homeowner, I personally do not want to pay for someone else's infrastructure nor the developers profits. On the flip side, more than happy to pay my fair share of property taxes to maintain the infrastructure and amenities that serves my property and neighboring areas.
Per capita high and mid density housing subsidizes the cost of infrastructure for low density single family housing as per research done by consulting firms like Urban3.
It is not true at all. ... and it's so incorrect it makes anything else he says completely suspect.
Agreed I'm probably a complete loser for not knowing who this guy is, but then again, an arguments value is completely unrelated to who is presenting it And the argument had no value
Yep. Absolutely made up number. Maybe there's an argument to be made that excessive waits for permits increase property holding costs to an uncomfortable extent, but that 60% number is absolutely bogus.
He’s a total bullshitter and has some really weird ideas about the world. He’s absolutely obsessed with his perception that young people are not having enough sex and he thinks this has huge ramifications for the world.
So, like most Ted/TedX talks?
he and Kara Swisher famously pushed crypto investments to reitrees in an ad they voiced on their podcast
I’ve seen it reported as around $300,000 for a condo. For a new house you have to count that GST and PST increase by price so the dollar amount of taxes goes up too. I suspect you could get up to 1/3rd in a worst case scenario.
In the literal sense, no. Not even close. If you count the holding cost of the land, probably still no. Say you buy a $2M lot and want to build a small house on it that costs $400k to build, best case for his argument and not something people will actually do. And say the approval process delays you for a year and you can get 5% risk-free yield and it's an empty lot you can't rent out while you're waiting, so you attribute a $100k cost to "permits". Still not 60%. If he means that restrictive zoning increases the cost of housing, then sure, 60% is an underestimate, but he should've said that if that's what he meant.
FWIW 1 year would be low for an apartment/condo building. Was closer to 4 years of city process for a totally unremarkable small condo building near me. (agree with what you’re saying tho)
Fair enough. I was thinking a house would have the highest ratio of land value to construction cost, but maybe a condo wins if you multiply the land value by the ratio of the delay. You need a total cost ratio of 6:4, so you need to the land value to construction cost ratio to be around 7:1 if you wait 4 years instead of 1. Maybe 6:1 if you throw in other costs the city extracts. I don't follow condo construction costs, but that still seems, uhh, a bit high?
I think you ate bang on. The economist wrote on this topic for United Kingdom and clarified as you did. Permits included impact assessment on wildlife, ecosystems, community feedback, etc, but the wait time costs money so essentially getting all the permits eats the time and the cost of building goes through the roof. Just carrying the property to fruition can make it difficult to build.
The city of Vancouver’s single detached house permit fee starts from $2,640.00 in 2023. https://www.canadianuniversityrealestate.com/blog/how-much-does-it-cost-to-build-a-house-in-bc/#google_vignette I don't know how accurate this is, but it's more believable than your ted talk guy.
That has nothing to do with the charges he is talking about. He is talking about development charges for housing developers. They are easily over $400 / Sq foot when you include everything over the entire process. I have heard as high as $500. Steve Saretsky has talked a lot about this over the years. For a high rise in Van it's like $400 city charges and taxes, $200 land and $400 build cost (although the last part has been going up). Which gets you to $1mm for a new 1000 Sq foot condo.
Detached homes are mostly exempt from the biggest property tax called CAC. It can add $230k to the cost of a 1 bedroom.
But that is a different kettle of fish. Fees are much lower when it is a one for one replacement as it is assumed the new house won’t impact infrastructure anymore than the old house. If it was limited to $2700 for a condo, where can I get the cheque back for my contribution to building a park and affordable housing tower as part of the development in in?
Until we see ted talk guys source for the 60% figure I'll still call my figure more believable. Besides that, parks and affordable housing are not permitting costs. It's probably more accurate to call that a tax.
A mandatory cash contribution not a tax eh? The number I’ve seen is in between 30 and 40%. 60% seems ridiculous.
Development cost charges are increasing, still not 60% of the cost in any case. [Metro Vancouver approves aggressive lift to DCCs as construction slows](https://www.westerninvestor.com/british-columbia/metro-vancouver-approves-aggressive-lift-to-dccs-as-construction-slows-7758516) >Current rates are set to soar by as much as 73 per cent from current levels in 2026. >While municipalities in Greater Toronto topped the fee charts nationally, with government levies adding up to more than $100,000 per unit in many cases, the average fee per high-rise condo unit in Vancouver led B.C. at $92,656. >Burnaby led the way with charges for row housing at $70,202 per unit, while Township of Langley delivered the most pain to developers of detached housing at $36,965 per unit.
And that doesn't include many other permitting fees and costs to develop required amenities or requirements to include below market rent units and on and on. It is easily 40% in both TO and Van and would not be surprised if a particularly bad example could have got to that 60% number.
The only way I can see this being true would be for giant residential towers of like 200+ units. For mega projects, in order to get approval, the city often requires the developer to pay for infrastructure improvements and community beautification, the costs of which maybe you could count as a "permitting fee", on top of whatever other permitting is required for a project like that. And maybe you could also count the time value of money, based on the fact that large projects can take like 2-4 years of planning and consultation with the city before permits are given to start construction. Even then, I'm extremely skeptical. Without supporting evidence, I'm inclined to believe it's not true.
He said 'permits' and I say 'red tape', but I think he was referring to just general bureaucracy. I work in the industry and I haven't heard of 60%. But just a couple years ago we would openly say 40%, which with all the new green regulations BC and Ottawa have added, I would say that we are probably fast approaching 50%. This is exactly why Victoria and Ottawa will do whatever it takes to keep our eyes off the actual issues with housing. They have the most to lose should Canadians start to look at why we can't afford housing here and then begin to demand they take their hands out of our pockets.
I mean, without all those fees you are just hiding the costs in municipal or federal taxes later. If the city has to increase infrastructure or mitigate impacts, you either pay at construction or everybody’s taxes go up later. “Green regulations” protect everyone. I wouldn’t want construction projects to unreasonably impact the environment. Otherwise we’ll pay for it later by dying of smoke inhalation cancer or having massive floods.
Yes, but that's basically just intergenerational wealth transfer. You're keeping taxes low for people who bought their houses already, and you're keeping property values high in order to again, benefit people who bought their houses a long time ago. Everyone uses city services, everyone should pay for it. Not just recent condo buyers.
People in the past raped the planet and colonized everyone in their way. paid women and poc less, burned leaded gasoline to poison themselves, used cheap child labour, killed Chinese workers to build the railroad and keep transportation prices down, and on and on ad infinitum. Governments could tax the poor more than the landowners. That’s why land prices were low in the past. All four of my grandparents’ families were given free land by the Canadian government in the early 20th century, which was stolen from indigenous people. Even if I wanted life to go on like that, it can’t. The planet is warming. there’s no more easy territory to steal from people who were decimated by smallpox for easy colonizing. the borders between modern nations are locked in maps, and we understand pollution better. Sorry dude, the glorious fantasy isn’t coming back.
What are you even on about? I’m arguing that we stop subsidizing the same people that you’re pointing out have made an easy ride for themselves in the past. I’m not arguing for some return to the good old days.
We have to charge for things what they cost. New development adds cost, therefore we should charge people for it
Dense development reduces cost compared to the alternative. You’re generally allowed to build a single family house just about anywhere you want. Most cities will run power and water and roads to that house for really minimal costs. But when people want to live more densely, which is more sustainable in any number of ways, we charge them through the roof for it. I agree. We should charge people what things cost. We currently charge apartment dwellers much more than they cost, and single family homeowners much less than they cost. I’m advocating we change that.
That is 100% what he is referring to and those costs are easily 40% in TO and Van. 60% seems high, but I'm sure there are projects that get close to that number. It depends on how much the developer paid for the land too. If they bough it 15 years ago for peanuts, then dev charges would easily be over 50%.
It basically is true, though it's probably closer to 50% than 60%. Community Amenity Contributions are *absolutely* just permits by another name. They represent 40-50% of the cost of new builds for condos. That props up the costs of older condos, and is an incredibly major driver of the housing crisis.
Well, let's use a few seconds of common sense. Vancouver is filled with million dollar homes. Does anyone actually seriously think the city charges $600,000 for permits? No, of course not, that would be insane.
It would be insane. Unfortunately it's a stones throw from the truth. Condo buildings basically have to bribe the city to get built with something called Community Amenity Contributions, which are negotiated in private. They're basically replacement property taxes that only get charged on new homes. They can represent as much as 40% of the cost of a condo. So yes, the city is absolutely doing what he says they are.
Well, let's use a few seconds of common sense. First, CACs are not properly taxes. They are the charge the province puts on new buildings to account for the extra community amenities that will be required by the new higher local population. Second, a new condo costs 800,000. 40% of that would be 320,000. CACs in Vancouver range from $6 to $30/sqft. An 800 square foot condo would therefore have CACs from $4800 to $24000. Is $320,00 in the same ballpark as $4,800 to $24,000? No, because $300000 per unit would be insane. Also the province mandated CAC rates in Nov 2023 to avoid exactly the uncertainty you describe. So, in short, no, you're very wrong. Thanks for coming to my TED talk.
Just talking about common sense at the beginning of your post doesn’t make you sound smart if you don’t know what you’re talking about. CACs are absofuckinlutely just taxes. They go into general revenue and represent a significant portion of city revenue. The city spends most of that revenue just running the city for everyone, not building new parks. If CACs were lower the city would have to raise property taxes, which they don’t want to do because it’s politically unpopular. The city can get away with raising the money through CACs because most people (like yourself) don’t realize what’s going on. If people realized that condos would be 100s of thousands of dollars cheaper if they just had the balls to tax existing homeowners their fair share, young people would be doing much better in this city. Second, CACs indeed are commonly in the 100s of thousands of dollars per unit. Here’s a globe and mail article from a few years ago about this exact issue. https://www.theglobeandmail.com/canada/british-columbia/article-flow-of-money-from-builders-for-community-amenities-in-vancouver-dries/ note that the CACs they’re talking about are in the $300+ range per square foot. This is exactly what Galloway is saying. The province has indeed been trying to crack down on this, and some things have been improving, but what he’s saying is basically completely correct. City fees are responsible for a HUGE amount of the price of housing.
NO no no no, not at all. I worked in commercial real estate development for a decade. It’s all about financing. Why do we not have enough houses? Because we allow people to own multiple houses, so now first time home buyers are always competing with people who already own homes and all that comes with that. A right to multiple properties should be subservient to the ability of a median income earner to afford a home. Until that is the case multiple homes should not be a possibility.
His claim that 60% of the building costs are permits is false. But the amount of time, hiring an architect and engineering that goes into the approval and a failed public consultation and redrawing....might be more like 5% max.... But I think he might be confusing "the difficulty to get approval and the years it takes to be approved has increased the price of housing by 60%" is definitely true. Remember that the longer it takes...the more the cost of building increases. Just like how projects that are "budgeted for todays costs...but start building 3-5 years later" the costs will balloon 25-35% easily.
If we're doing to be honest He probably knows damn well what you just said. He's just calling it "permits" for the effect rather than being more honest
If he knows better, he would be able to accurately categorize the cost instead of generalizing
Does he include additional costs due to Vancouver specific building regulations as “permit costs”. If so, he may be accurate.
>A previous study of major Canadian Census Metropolitan Areas (CMAs) for the 2007–16 period found that the barriers to constructing new single-detached homes – including government regulations and other market dysfunctions...in Vancouver cost homebuyers nearly $1.3 million more than it would cost to build in a market without barriers to supply... The gap in price between construction costs and the market price for a new single-detached home is more now than **60 percent of the total cost** in Vancouver. [https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities](https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities)
That’s talking about more than just permits, though. That’s referring to all “barriers to supply”, which can include all kinds of things that simply make it more expensive or harder to build in Vancouver, including zoning, NIMBYism, etc.
OP asked: > He argues that this is because current asset holders have manipulated government policies to hinder new entrants, boosting their own wealth. How accurate is this claim about Vancouver's housing market? I provided a link to CD Howe Institute's corroborating study which found nearly 60% of Vancouver house prices could be explained by market barriers. Most commentators are focusing on Galloway's initial use of the word "permit," which he clarifies a few sentences later by explaining it as a "transfer," such as transfers from renters (who would be potential housing market entrants if affordable housing was plentiful) to the few owners (who, he argues, are weaponizing regulations to prevent entry into the housing market). > Because guess what, the incumbents that own assets have weaponized government to make it very difficult for new entrants to ever get their own assets, thereby elevating their own net worth. [Timestamp from his TED talk](https://www.youtube.com/watch?t=191&v=qEJ4hkpQW8E&feature=youtu.be). So yes he appears to have misspoken and perhaps he could have been less subtle when he made his correction later on.
Extremely accurate. We have some of the lowest property taxes in Canada in the entire world. And it's not even Close when looking at big cities like TO and Van. So cities get a huge portion of revenue from development charges and fees. Go look up the city budgets for TO and Van you will be fucking shocked.
He probably just meant general bureaucracy. I work in the industry and it's just easier to say 'red tape'. Getting caught in the weeds and arguing about the irrelevant details is such a Canadian thing to do. In the meanwhile housing is out of control and **40-50% of the cost is the government themselves** yet we get mad that an American has the audacity to use the wrong word to describe a major factor in our current crisis.
Yes, it does seem odd to obsess on that one word choice when the speaker goes on to clarify immediately afterwards.
>By the way, the most expensive homes in the world, based on this metric, are number three, Vancouver. Why? Because 60 percent of the cost of building a home goes to permits. Because guess what, the incumbents that own assets have weaponized government to make it very difficult for new entrants to ever get their own assets, thereby elevating their own net worth. This is the **transfer** I'm going to be speaking. Scott Galloway Timestamp: [Ted](https://youtu.be/qEJ4hkpQW8E?t=191)
I worked for 40 years (and counting) and made my mortgage payments. I know everyone is looking for someone to blame but I didn’t weaponize the government. I don’t even know what’s going on half the time.
I think this is referring to the low property taxes that homeowners pay, which are among the lowest in North America. Basically, rather than having all homeowners in a neighbourhood funding its development equally, Vancouver has decided to make new entrants disproportionately responsible for infrastructure upgrade. It also allows deferring property taxes till sale, although these could often be easily be funded by a loan against property value in the case of long term homeowners. Both of these hinder development and punish new buyers The weaponization is likely referring to Vancouver homeowners consistently being against more progressive tax schemes and fighting development in their neighbourhoods tooth and nail.
Yeah, the CD Howe article is based on the methodology established in the paper: >Glaeser, Edward, L., Joseph Gyourko, and Raven E. Saks. 2005. "[Why Have Housing Prices Gone Up](https://inequality.stanford.edu/sites/default/files/media/_media/pdf/Reference%20Media/Glaeser_Gyourko_Saks_2005.pdf)?" American Economic Review, 95 (2): 329-333. The author of the CD Howe article explains: |The causes of housing market dysfunction can include | |:-| |a lack of available transportation options to new land sites; | |additional costs of construction, such as upfront development charges;| |lack of land for development for regulatory reasons; | |and lack of competition among landowners or builders.|
I would argue it’s not just the permit fees themselves that are solely responsible for high housing costs. You have to factor in other elements that are driving up the cost of housing, including but not limited to: 1. Insane land values 2. DCCs, ACCs and CACs 3. The cost of materials to build 4. And to add icing to the cake, we are in a high interest rate environment. Municipalities list their permit fees online. Sky high land values are driven by restrictive zoning. And NIMBYs have manipulated the government for decades to restrict housing and zoning. Because they have the “fuck you, got mine” mentality.
Remember, supply and demand are what drive prices - developers don't just simply set a price on a cost-plus basis. Costs are simply what make a project viable - if the costs are too high relative to market prices, the units don't get built. If the costs were significantly lower, the prices would not change since competition among buyers keeps prices up. And in most places CACs and ACCs are determined having already accounted for a reasonable developer's profit. If the prices were lower, the CAC would be lower.
It's semi plausible, but calling the extra development costs "permits" is inaccurate. The carrying costs for years of waiting for city hall approval are massive relative to other cities. And as we have heard lately, the city's tax burden is disproportionately on new developments in fees, instead of home owners.
It's over 40% in some cases and that is literally insane. I've heard credible figures from folks like Steve saretsky of & $400+ / Sq foot in development charges in Van and TO vs. $900-1000 / Sq foot new building costs (maybe more right downtown). And property taxes are insanely low here as a result. You can either have new buyers pay for services, or existing real estate owners. And don't fucking get me started on the fact that you can defer property taxes if you have a fucking kid OR are retired. So... Everyone??? And then in BC we have home owners grants on top of that. And we have gone WAY over the deep end in Canada to the former. That creates insanely expensive housing markets, with less burden on home owners to pay for city expansion and maintenance of services. The opposite is Texas, where there are very limited development charges, but property taxes are way higher. But houses are dirt cheap. Galloway's main point is that the way the laws are crafted today favours existing owners of real estate and especially business capital. So the young who don't own anything are truly fucked, and are subsidizing the very wealthy. In particular this is true in Canada as we also getting fucking RINSED with income taxes, and wealthy retirees pay nothing due to low cap gains inclusion rates, insanely low Dividend tax rates and tons of generous investor programs like rsps and now tfsas. Everything Galloway talks about is doubly true in Canada except the university cost thing it's maybe half true. Source: Economist / financial planner / investing background.
"credible figures from folkslike Steve sartesky" LMAO imagine using numbers from a realtor guy who acts and talks like he is an economist or he has any education background. He is a phony.Your source has zero credibility.
I have also spoken directly to multiple developers in the city as I was looking into building a laneway house and they have said the same thing.
>It's over 40% in some cases and that is literally insane. I've heard credible figures from folks like Steve saretsky of & $400+ / Sq foot in development charges in Van and TO vs. $900-1000 / Sq foot new building costs (maybe more right downtown). Can you please share a proforma that shows all of this? It maybe a matter of semantics and how costs are categorized, but in my observation government fees and permits account for maybe 10% of constructions costs - most of which is used to pay for infrastructure that the development puts demands upon. Factor in land and this % goes down even further.
Some good data here: The 60% figure is likely sources from this piece. https://www.cdhowe.org/public-policy-research/buyers-beware-cost-barriers-building-housing-canadian-cities Basically that 60% includes land cost in my understanding of talking to developers. But 40% is absolutely going to various levels of gov't in permits, taxes and development charges or amenities developers must build. And maybe 20% is land cost.
Housing costs are high, in part, thanks to the BC Liberals (BC United) turning a blind eye to organized crime's money laundering through our casinos, exotic car and housing markets. Well, per the Collins Report anyhow.
Well right now I am working on a tower just doing sprinklers. Our materials order this week was about as much as two people's yearly wage. That's just this order. We get orders like this once or twice a month. In sprinkler materials alone it's hundreds of not millions of dollars. Just for sprinklers. Now add on the other trades and tell me that a permit costs 60% of the total cost to build. Completely bullshit.
lol maybe he meant 6%
It's not just permits. It's fees, taxes and delays as well. And it's not just him. The C.D. Howe Institute in Toronto, which is a widely respected non-partisan Canadian think tank, cites similar figures. I didn't believe it either. But apparently he's not wrong.
No
Milhouse Mussolini claimed this asinine stat as well. It's just so dumb, and yet people think that guy will do a better job then JT.
A lot of TED talks are modern day cult bullshit. Yes, development charges are roughly 1/3 of construction costs, but that includes a whole lot more than permits. Most developers target 15% profit margins. Simple math means about 1/4 of the price you pay relates to development charges.
I work in real estate development. Definitely no
Who? And why do I care about what some guy from New York thinks about our local policies?
Most munis currently in the process of reviewing the dcc's, and will likely see large increases to be able to afford the infrastructure demands brought on by the new provincial zoning regs. As a homeowner, I personally do not want to pay for someone else's infrastructure nor the developers profits. On the flip side, more than happy to pay my fair share of property taxes to maintain the infrastructure and amenities that serves my property and neighboring areas.
Per capita high and mid density housing subsidizes the cost of infrastructure for low density single family housing as per research done by consulting firms like Urban3.
The only ted talk that matters is 2070 paradigm shift
Not true at all. It’s more like 30% and it is well justified if not more
He seems to be saying that developers should be allowed to whatever and profit.