Mashbrrr

Katy Perry and Justin Trudeau at Coachella (2026)

Yes, this should be mainstream -- "land is a trap because it often outcompetes other assets and sucks capital from more productive areas. This sounds like the Canadian story." 🍁 The financialization of land as investment is often absent in conversations about our housing and productivity crisis. So it's always good to see attention given to it in prominent outlets. Wealthsimple shines a light on this in an interview with Wall St. editor for The Economist, Mike Bird "Every other asset in the world depreciates, rapidly or slowly. Houses fall down. Bridges collapse. Ideas become irrelevant. This isn’t true for land. There’s no innovative element to its value; instead, most of its value is maintained by economic activity happening around it. If you buy it and that activity continues, there’s no reason it can’t stay valuable." He identifies the tension between the overwhelming case for taxing land value and protecting household wealth. Our work on LVT shows it doesn't need to be either-or. "There’s a huge merit argument for taxing land more extensively to discourage speculation and to make land a less attractive asset. But you can’t tell people for decades that homeownership is the path to security, as many governments have, and then turn around and say, “Now we’re going to rinse you for it.” These homeowners haven’t done anything wrong. This is why it’s really tough to reform land policies." This is why we at Common Wealth Canada we've been exploring land value tax shifts (off buildings and income) that leave most households' taxes relatively unchanged. It would shift incentives away from seeking land appreciation towards productivity. The unique challenge of Canada's Land Trap is our overindexing on land as a financial vehicle and collateral for business financing. While the average property owner may not have the appetite to crater land prices, a gradual land value tax could nonetheless stall them for wages to catch up over time. This is also the reason why we probably won't be able to build our way to affordability. "Loans are secured against an entrepreneur’s residence. In a world with no homeownership, it’s difficult to imagine the vast majority of small businesses having access to credit at all... If people can’t afford land, they often don’t have collateral to borrow capital. So an entrepreneur with a good idea may never get a chance to fund their business. Then, over time, as land prices soar higher, banks slowly become mortgage originators and do far, far less business lending because land is seen as safer. Then the corporate side atrophies." Canada is unlikely to break out of the land trap any time soon. That's why many housing advocates turn to nonmarket housing and community land trusts to deliver affordability for at least some segment of Canadians. But if we're serious about tackling our deeply-intertwined housing and productivity drag, the answer must lie in rethinking our relationship to land as the prime sacrosanct, tax-shielded investment, so that Canada's economy can once again prioritize builders and workers.