06-08-2022, 09:47 PM
(06-08-2022, 09:06 PM)nms Wrote: Fine, add the levy to all new units, I don't care. The prices are going up anyways, whether or not the Cities figure out a way to fund affordable housing. Offering $350,000 on a development with 464 proposed units is an insult. Even if every one of the proposed 464 units in this development sold for $350,000 (and you can bet that they will be a lot higher than that), the project will gross $162,400,000. (I would not be surprised if the gross sales number was close to double that figure) $350,000 is 0.2% of the total cost of the project.
On a whim, Mr. Google answered the question: "What's the typical profit when building a condominium tower in Ontario" with this article:
Quote:In the ever-growing real estate industry, you are probably wondering how big the developer’s slice of the pie is. You may be in for a shock here, as the developer’s profit margin can be as low as just 12 percent. The average figure is between 12-20 percent, once all costs have been taken into consideration. Given the recent upwards trajectory in the Toronto property market, that figure may come as a surprise.
Am I to believe that an industry that could give me between $19,488,000 (12%) and $32,480,000 (20%) in profit per project (such as this one) is not a caricature of a "greedy developer"? Where do you think all of your favourite local developers found the money to buy up even more local property and grace our skyline with their spectacular projects?
It's also interesting that this article popped up on CBC KW's Morning Edition today: "As rents rise this Waterloo student mulls cramming into a house with 5 others" Has anyone had any success to figure out whether all of the built units in the Region are actually occupied? I don't have the numbers handy, but I'm pretty sure that the number of newly built units was far outstripping both increasing university and college enrollment, as well as general population growth in the area. Something isn't making sense.
Right, which is equal to ~4-10% annual compounding interest on that money for a 2-3 year project. Financiers want to make money, and that isn't a wild return. I don't expect that anyone developing suburban homes (or frankly mid-rise) is doing any worse on returns or there wouldn't be money worth making. I would agree all of the above should do more to contribute to a market that is enabling their profit.
My comment was actually asking whether current homeowners are paying their way enough. We don't have capital gains on a primary residence, land value tax, etc. - is that right?
If a levy is perhaps reasonable on above-market condos (fine with me if it adds more affordable units), on even more city resource and land demanding sprawl (more fine with me), why are incumbent residents off the hook in the present tense when they hold onto abnormally low density housing accruing equity, or when they exit to downsize or move to a lower cost city?
Saying this as an owner of one of those downtown homes (who wishes there had been more available options for denser family housing when we were buying).