Podcast Summary: Upzoned

Episode: Can a Tax on House Flipping Stop Canada’s Housing Crisis?

Date: September 10, 2025
Host: Abby Newsham (Planner, Kansas City)
Guest: Norm Van Eeden Petersman (Director of Membership, Strong Towns)

Episode Overview

This episode digs into Canada's dramatic shift in housing policy, exploring whether new taxes and regulations—especially those targeting house flipping—can meaningfully address the affordability and stability crisis in cities like Vancouver. Abby and Norm discuss how these changes may impact both local residents ("end users") and the broader housing system, with insights relevant for cities across North America wrestling with similar challenges.

Key Discussion Points and Insights

1. Market Shifts: From Investors to End Users

• [02:00] The featured Globe and Mail article highlights a pivotal change: "end users" seeking homes to live in, rather than investors, are now the main drivers of Vancouver’s housing market.

  • Quote: “They are increasingly driving demand rather than investors in Canada. … It’s interesting that there’s a name for that now.” – Abby [02:00]

• [03:53] For years, rampant foreign and speculative investment—sometimes with money laundering and “flipping”—has pushed prices through the roof, leaving homes empty and locals priced out.

• [04:00] Vancouver, previously a magnet for global capital, has experienced extreme distortions, with entire towers sitting empty while housing costs soared for residents.

  • Quote: “If all of these condos that were being built were not being lived in because they were being used for people to flip them...they would sit empty and idle.” – Norm [05:12]

2. The Mechanics of Housing Financialization

• [06:45] Canadian policy historically welcomed foreign capital, tying property investment to immigration and residency—amplifying global gentrification effects.

• [08:31] “Pre-sale” flipping allowed individuals to place deposits on unbuilt units, then resell (flip) these contracts for profit before even occupying the homes. This created “commodities” rather than “homes.”

  • Quote: “If the investment is actually about the flip rather than about the unit, you’re going to care a lot less about what that unit is like. It’s just a unit.” – Norm [09:45]

• Government responses now include:

  • Foreign buyers taxes
  • Anti-flipping tax (windfall profits taxed if properties are held less than two years)
  • Aggressive beneficial ownership registries to identify true owners

3. Consequences and Cautionary Tales

• [13:36] The impacts of speculation and absentee ownership are often “invisible but real,” draining local vitality and detaching community life from ownership.

  • Quote: “It’s almost hard to imagine what a market looks like when it’s actually driven by locals.” – Abby [13:39]

• [15:01] Land-value taxation is floated as a tool to reduce holding costs and dissuade speculative vacancy.

• [17:51] The existence of empty towers that pay taxes but contribute little else spotlights how numbers-driven real estate can undermine a city’s social and economic health.

  • Quote: “You want to have people in your city as well. … At that point, it’s not really much of a city, is it?” – Abby [17:54]

4. Policy and Systemic Trade-offs in Shifting to ‘End User’ Markets

• [20:12] Canadian regulators aim to manage a possible “collapse” of the housing market by keeping interest rates and support policies in place—but this exposes market fragility.

  • Quote: “There’s this fragility that’s built into our system.” – Norm [20:38]

• [22:12] There’s a clear contrast between:

  • Large-scale, transaction-driven development (“always another flip”)
  • Small-scale, incremental “end user” housing, where individuals, not institutions, craft dwellings and neighborhoods

5. Challenges in Encouraging Incremental Development

• [25:29] Small-scale builders face major regulatory obstacles—red tape, zoning restrictions, slow approval processes—making it almost impossible for local (and especially new) developers to enter the market.

  • Quote: “We could get there, but the difficulty now is that [the] 1500-unit tower we approved is not getting built because of financing. So we’re still not getting the things we went all in on.” – Norm [24:47]

• [27:39] Changing culture around incremental building is slow and needs both streamlined policies and “patience,” as Abby emphasizes.

  • Quote: “Even if you legalize things and make it easier and cut red tape, it takes patience to build up a culture of people that build in a certain way.” – Abby [26:04]

• [29:28] The “housing crisis” is now nearly universal, affecting rich and poor, urban and rural, and is driven by a mix of financial and generational/demographic change.

6. Rethinking Housing Culture—From House Flipping to Community Building

• [31:05] The hosts critique “HGTV flipping,” suggesting that if renovations actually promoted more meaningful, incremental changes—like adding duplexes or backyard cottages—it could fuel positive neighborhood change.

  • Quote: “If that flip involved what we would describe as taking that next step towards the next increment of development, we would have been fueling a trend that would have been really valuable.” – Norm [31:16]

• [33:28] They humorously imagine a reality show focused on the real challenges of small-scale development—a process drowning in red tape—noting: “There’s a reason nobody was doing it. … None of this is good for camera; we just want to see a sledgehammer. And you’re like, producer, wait.” – Norm [34:39]

Notable Quotes & Moments (with Timestamps)

• “You need to look at hot cities…even if you’re not a destination for international capital, many of those same pressures are emerging in your community as well.” – Norm [04:48]
• “We sometimes vilify…multifamily units are all owned by BlackRock. But also, like, if they’re holding it as a lasting financial asset, it means you’re going to have decent housing security…” – Norm [12:02]
• “It’s strange that ‘end user’ is a word for the people who are kind of intended to use the housing.” – Abby [17:58]
• “We need to get used to the idea that we can build just simple structures again.” – Norm [21:58]
• “This is, as Chuck often says, predicaments have outcomes.” – Abby [29:30]
• “If flipping had included making it a duplex, a triplex, with a backyard cottage…maybe what we need is Incremental Development Alliance inking deals with Viacom to be front and center as this new trend.” – Norm [31:14]
• The hosts pitch an “incremental development” reality show; Abby jokes about needing a producer, and the hilarity of filming endless permitting delays. [33:01–35:20]
• Norm shouts out Monty Anderson and Neal Haller for their “collaborative, community-based” local development. [16:49]

Key Takeaways

• “End user” home purchases now outpace speculative investment in Vancouver—largely due to targeted taxes and regulations.
• Foreign, institutional, and speculative capital has long distorted Canada’s and other hot markets’ housing supply, leading to dysfunctional local outcomes (empty towers, unaffordable rents, stalled communities).
• Quick profit schemes—especially “flipping”—not only undermine affordability, but damage community vitality.
• Meaningful reform requires both regulatory tools (anti-flipping taxes, foreign buyer restrictions, beneficial ownership tracking) and a return to enabling incremental, locally-driven development—currently hamstrung by red tape and cultural inertia.
• The hosts argue for patience, systemic reform, and revived local agency in building the neighborhoods cities actually need, rather than those that simply attract outside capital.

Resource Mentioned

• Book: “You’ll Pay for This: How We Can Afford a Great City for Everyone Forever” by Michelle Durrand Wood – Praised for its humor and accessibility in explaining municipal fiscal challenges. [36:03]

For Listeners Interested in Strong Towns-style Incremental Reform:

• Focus on empowering local, small-scale, mission-driven builders
• Push for regulatory reform that lowers barriers to entry for locals
• Be wary of oversimplified “big builds” as a silver bullet—true change is slow, cultural, and cumulative

(End of episode content; advertisements and outros not summarized)