Your posts illustrates why Mark Carney and the liberals have failed for the past decade and will continue to fail for the next four years on housing. Their plan is for the federal government to bribe the cities to merely stop increasing discriminatory taxes on new construction. And guess what. (1) The bribes are never enough. (2) With federal taxes, deficits and miscellaneous other spending priorities already high, the federal government doesn’t have the balance sheet to pay them. Or, if it does, we’re going to get higher inflation or higher interest rates, the latter of which will (lmao) squelch construction. The federal government needs to take a hard line against discriminatory taxes on new construction, and cut off existing funding to recalcitrant jurisdictions. Otherwise, we’re just playing no-and-by-no-I-mean-yes footsie.
Edit: theoretically, Carney could bribe financially distressed jurisdictions into reforming land use. A bailout in exchange for reform. But, for relatively fat and happy jurisdictions, they simply don’t want new construction. For them, it’s not primarily about who pays for what or infrastructure burdens or whatever. They don’t want construction. And, if they also don’t need money too badly, then they say “no thanks.”
Machiavelli describes the three elements of diplomacy as persuasion, promises, and threats. By coincidence, these are also the three elements of intergovernmental relations in Canada. They're best used in combination.
My own emphasis is on *persuasion*: convincing municipalities that heavy taxes on new construction have a lot of disadvantages *even from their own perspective*. https://morehousing.ca/black-box
I don't think it would actually be that hard to replace the revenue from taxes on new construction. As Deny Sullivan points out, the cost of upgrading water/sewer infrastructure (for example) is far outweighed by the cost of housing. We spend a lot more on rent than we do on water bills. https://morehousing.ca/big-dog
As always, I enjoy your insights Russil. Thanks for this approachable explanation.
Your posts illustrates why Mark Carney and the liberals have failed for the past decade and will continue to fail for the next four years on housing. Their plan is for the federal government to bribe the cities to merely stop increasing discriminatory taxes on new construction. And guess what. (1) The bribes are never enough. (2) With federal taxes, deficits and miscellaneous other spending priorities already high, the federal government doesn’t have the balance sheet to pay them. Or, if it does, we’re going to get higher inflation or higher interest rates, the latter of which will (lmao) squelch construction. The federal government needs to take a hard line against discriminatory taxes on new construction, and cut off existing funding to recalcitrant jurisdictions. Otherwise, we’re just playing no-and-by-no-I-mean-yes footsie.
Edit: theoretically, Carney could bribe financially distressed jurisdictions into reforming land use. A bailout in exchange for reform. But, for relatively fat and happy jurisdictions, they simply don’t want new construction. For them, it’s not primarily about who pays for what or infrastructure burdens or whatever. They don’t want construction. And, if they also don’t need money too badly, then they say “no thanks.”
Machiavelli describes the three elements of diplomacy as persuasion, promises, and threats. By coincidence, these are also the three elements of intergovernmental relations in Canada. They're best used in combination.
My own emphasis is on *persuasion*: convincing municipalities that heavy taxes on new construction have a lot of disadvantages *even from their own perspective*. https://morehousing.ca/black-box
I don't think it would actually be that hard to replace the revenue from taxes on new construction. As Deny Sullivan points out, the cost of upgrading water/sewer infrastructure (for example) is far outweighed by the cost of housing. We spend a lot more on rent than we do on water bills. https://morehousing.ca/big-dog
Excellent observation on “substitution theory”: when the new build alternative to an old home increases in cost, the value of all old homes rises.