New Homes
New Homes
Developers and buyers of homes pay enough
Gordon Sinclair Jr. wrote an excellent column on May 16 regarding a questionnaire that was requisitioned by the City of Winnipeg. The survey, in one form or another, has been around for years; however, it appears this year's version was attempting to verify pre-ordained answers rather than seek opinions.
Sinclair was not alone in his condemnation of the survey. Local expert Lori Wilkinson called the survey "poorly designed" and filled with bad questions.
The Winnipeg Free Press displayed the entire questionnaire online and one would have to possess the patience of Job to complete it. Long, repetitive and leading were some of my first thoughts.
Question 23, which Sinclair highlighted, particularly irked me. It asks, "In order to have development pay more fully for the city's wider costs related to growth and reduce the burden on taxpayers who currently pay fully for this cost, would you support the introduction of a new, one-time fee paid for by the developer or the new-home purchaser?"
This question is wrong in so many ways.
First, as Wilkinson states, it is a double-barrelled question; one question that actually asks two questions but only allows one answer. It desperately begs the respondent to answer yes, but doesn't permit the respondent to choose between the developer or the new home purchaser. Guess what? It doesn't matter. If this new home tax (and yes, this is nothing more than a tax) were applied at any stage of the development, it would be passed on to the builder and then eventually to the purchaser.
The question attempts to steer the respondent towards taxing the developer in a safe, anonymous fashion. After all, no one supports creating new taxes geared toward Winnipeg residents already paying among the highest taxes in the city for fewer services than in more established neighbourhoods, do they?
The question also directs the reader to believe that growth doesn't pay its own way and that existing taxpayers (those answering the phone for this survey) are subsidizing new neighbourhoods. Both are false. New growth subsidizes existing neighbourhoods, not the other way around.
In fairness, the questionnaire introduces a variety of options for paying for infrastructure, including a property tax increase, taking one per cent of the PST, increasing the gas tax and additional car registration fees. However, those questions were worded considerably clearer than question 23 and the responses were not dictated by the question.
How to pay for infrastructure is a problem all of us face. Through the co-ordinated efforts of our elected officials, city staff, the planning and development community and the public, we can strive to work toward a solution. We can certainly do better.
Mike Moore is president of the Manitoba Home Builders' Association
New Homes
Canadian Home Builders' Association takes message to Ottawa
Last Tuesday, representatives of the Canadian Home Builders' Association descended en masse to Parliament Hill to talk housing with elected and administrative officials. It was part of the annual Forum for Growth and the goal was to educate, inform and enlighten.
The residential construction industry supports more than 900,000 jobs paying more than $50 billion in wages and generating more than $125 billion in economic activity. Its basic premise is that communities should provide a wide range of housing options suited to all those who want to live and work there and that Canadians who work hard should have a reasonable opportunity to own a home.
However, affordability is becoming more difficult for young families every year. Canada's landscape has changed and the Millenials are facing a tough challenge in being able to afford a new home.
It's not interest rates or mortgage rules that are driving up the cost of a home, but rather the cost of land. Taxes and fees associated with development are used to fund a broad range of municipal services that benefit the community far beyond the new development. After decades of historic underfunding, the infrastructure needed to support strong and growing communities is simply not in place. Unfairly and excessively taxing new homebuyers is not the answer.
Densification helps to maximize the use of existing infrastructure, however it also increases land prices and property values through supply and demand. Many existing and older neighbourhoods don't wish to increase their density.
The cost of creating and maintaining high quality and efficient infrastructure must be shared equitably so that those wishing to become homeowners don't have to bear more than their fair share. Blockages impacting well-planned development drive up housing prices. Someone buying a new home shouldn't face a more onerous tax burden than a buyer of a resale home. The levying of a tax on a tax does this.
Federal research and technical support for housing innovations, federal jobs training support for skilled labour and the harmonization of codes, standards and performance would increase productivity.
Finally, the CHBA delivered a message for the federal government to fight the underground economy, thereby protecting consumers and reducing taxes and other costs for honest contractors and consumers.
The residential construction industry is a driver of the Canadian economy and an important component for growth and quality of life in our country. Through co-operative efforts of the private and public sectors, we can build strong communities.
Mike Moore is president of the Manitoba Home Builders' Association
New Homes
Tempest in teapot over 'high risk' analysis
Quite a stir was caused in Winnipeg on April 29 when Canada Mortgage and Housing Corporation CEO Evan Siddall was in town for the Housing and Homelessness Conference. The CMHC had just published its second special edition of the Housing Now Canada House Price Analysis and Assessment. In it, Winnipeg was listed as a high risk.
Those two words alone were enough to cause headlines and frantic discussion. However, when one looks at the underlying message and what the experts actually said, it was truly much ado about nothing.
The report consists of six lines and four sets of arrows on Winnipeg. It states a risk of over-valuation based on house prices rising faster than incomes. This was true for a period of a half-dozen years starting a decade ago when Winnipeg home prices were well below their rightful place. Currently, resale homes increased in value by two per cent in 2014 and less than one per cent in the first quarter of this year. New homes in this market have only increased in price by one to two per cent recently due to changes in the building codes and costs of materials.
Winnipeg was a seller's market for all of those years. It is a balanced market now; exactly where most of the country sits.
The report made it very clear there were no concerns with the single-family-detached market.
Mr. Siddall used words and phrases such as, "There should be no reason for a major market adjustment," "The city's overall housing market remains healthy and robust," and "The sales-to-listings ratio remains healthy."
Ms. Himbeault made it very clear her office was not calling for a high risk of a price correction for Winnipeg. Acceleration in house prices, over-valuation and overbuilding risk factors were not increasing from the last assessment, but rather stable or unchanged. It should be noted Winnipeg, Regina and St. John's were not included in the previous (November 2014) publication.
Is it good to take note of this report and watch for future analysis? Absolutely. I take tremendous stock in CMHC publications and find them extremely astute. However, given all of the above, if Winnipeg's current housing market conditions are considered high-risk, I like our odds.
Mike Moore is president of the
Manitoba Home Builders' Association
New Homes
Housing starts on track with last year's numbers
The numbers are in for the first three months of the year and, if one looks deeper into the mix, we see that new home starts are right where they should be, with the promise of continued growth.
First-quarter starts for single-family detached homes are exactly even with last year. Last year was a good year, albeit a decline from the previous two years, which were beyond anticipation. Therefore, on one hand, starts can be considered flat or even with last year. On the other hand, being even with last year means we are on track for the fourth-best year in terms of new home starts over the past 27 years.
The numbers become skewed when we consider the multi-family starts. Winnipeg had an unusually high number of multi-family starts in January. This will even out over time and all indications are the multi-family number will finish relatively close to the forecast by year end.
Based on absolutely no science other than what I personally saw and heard during the Spring Parade of Homes, I agree the multi-family numbers will be bang on what was anticipated.
However, there appears to be a growth spurt in single-family detached homes occurring right now. It might be due to the early spring weather we have been receiving, but the sales and leads emanating from this year's Parade are far outdistancing last year's. Let's hope that shows in increased start numbers as the year goes on.
With the drop in oil prices, expect fewer Manitobans to be moving to Alberta this year. In the past, we have experienced significant negative net migration, especially to Alberta, but also recently to Saskatchewan. Both manufacturing and agriculture will benefit from the lower Canadian dollar, hopefully resulting in spending confidence on the part of consumers.
The Canadian Home Builders' Association recently conducted their annual general meeting and conference in Halifax. Part of the program includes an annual awards ceremony. Manitoba was prominent in these awards.
Derek Thorsteinson of Parkhill Homes was named CHBA builder member of the year. This prestigious honour was in recognition of Thorsteinson's tireless efforts and leadership shown at the local and national level in technical matters such as building, fire and energy codes.
Also recognized with awards of honour were Glenda Sobie of Ventura Homes and Laurie Finley of the Winnipeg Free Press for their contributions to the Manitoba Home Builders' Association and the residential construction industry.
Mike Moore is president of the
Manitoba Home Builders' Association
New Homes
Building a new home a good investment
For those of you who visited a number of show homes during the Spring Parade of Homes, you may have noticed some brochures highlighting the top reasons to build a new home. We don't have enough space to go through all of them here; however, the following are a few key ones.
Interest rates remain extremely low. There hasn't even been a hint of the most nominal increase until late 2016, and again, a small increase at that. If you want to take advantage of the variable rate, you can do so. A fixed five-year mortgage is available at astoundingly low rates.
Manitoba home values continue to increase every year. A new home is an excellent investment. Furthermore, it is an investment that has doubled in value over the past 15 years. How many of your other investments have that track record? You are living in that investment and raising your family and entertaining friends in that investment. Hard to do that with a bond or stock.
Quite immodestly, I will state Manitoba new homes are the best built in Canada. Our energy efficiency is unmatched. It has to be. We can experience a temperature swing from -40 C to 30 C in a few months. The Manitoba new-home industry stays ahead of the pack in the design and construction of new homes. We were the first in Canada to implement heat recovery ventilators. We're the first to implement drain water heat recovery systems. We made low-flush toilets the industry standard long before legislation was introduced.
We've talked about affordability and quality; the last key point to cover is choice. With a new home, you can build in the neighbourhood you choose and the lot you choose. More importantly, you choose the style of home. You don't have to wish you had an extra bedroom; you can design and build one into your home. You don't have to wish your kitchen was laid out differently; you can design and build it to your tastes. You don't have to knock out a wall or two to open things up; you can design and build it just the way you want. Why spend time and money wishing things were different when you can do it right the first time?
The Spring Parade generated a lot of interest in the new-home market. The weather was perfect and so visitors could not only see all aspects of the show home, but they could also drive to prospective neighbourhoods and actually envision that home in this specific lot with them living in that home.
There are many reasons why now is a good time to build. Revisit the various show homes from the Parade and choose your new home.
Mike Moore is president of the
Manitoba Home Builders' Association
