a response to: Home Renovations ROI
Let’s face it: the soaring costs of home renovations and the steady rise in property values, as highlighted in the original post, paint a familiar picture - one in which homeowners are told to keep investing in a market that feels increasingly rigged. Yes, building costs have skyrocketed by 15% each year between 2020 and 2024, and yes, the average home price in Ontario has gone up roughly 7% per year. But here’s a controversial take:
Stop pouring your money into renovations just to feed this ceaseless cycle of profit-making and speculation. Instead, we should consider a radical shift: push for stringent regulations - or even moratoriums - on real estate investment purely for profit.
Why? Because the more people chase higher property values, the less affordable homes become for everyone else. This feeds a self-perpetuating system that rewards speculation at the expense of younger buyers, new families, and anyone on a modest income who is trying to break into the market.
The Conventional Logic… and Why It’s Broken
Certainly, focusing on “profitable” renovations like an outdoor kitchen or an upgraded basement can yield a substantial return on investment. As the article says, an outdoor living structure might bump up your property value by 30%, and an outdoor kitchen can yield a 100–200% return on investment. Great news for the privileged homeowner who can drop tens of thousands on a fancy setup. Yet every time someone inflates their property value via a major renovation, the next aspiring homeowner inherits a housing market even further out of reach.
The Controversial Argument: Regulation Over Profit
Here’s the truly incendiary part: it might be time to consider regulating (or outright banning) certain forms of for-profit home renovations unless they serve an essential function - such as much-needed upgrades for health, safety, or accessibility. We already regulate food and healthcare industries because we consider them public necessities. Why treat housing, which is arguably even more fundamental, like a Wild West of unfettered capitalism?
- Mandatory Caps on Upgrade Expenditures
Instituting a cap on luxury renovations could help curb rampant cost inflation in neighborhoods. Those who exceed these limits would face steep taxation or fines -funds that could funnel back into affordable housing projects. - Penalties for ‘Flipping’ Properties
If a property is bought, overhauled, and flipped within a short window, the owner could be subject to an extra-high capital gains tax. This would discourage the type of renovation frenzy that caters to quick profit rather than community stability. - Redirecting Funds Toward Public Housing
Instead of sinking all this private money into vanity projects that drive up costs everywhere, we could champion policies that encourage homeowners to contribute to public or cooperative housing initiatives. This would bring down overall housing costs and reduce speculative bubbles.
Going Against the Grain
Naturally, these viewpoints clash with the conventional real estate wisdom that has been sold to us for decades - renovate, refinance, reinvest. However, if we’re serious about tackling housing affordability and ensuring that real estate isn’t simply a commodity used to line the pockets of an elite few, then these bigger, bolder moves might be necessary.
Closing Thoughts
Yes, the article is right about construction costs rising due to inflation, supply chain issues, and scarce resources. Yes, property values historically do go up over time, and yes, it’s entirely possible that a well-planned renovation will boost both your home’s comfort and its resale price. But the question we should ask is: At what societal cost? If the average family can no longer afford to buy a house in their own neighborhood, can we really keep cheering for endless home value appreciation?
So here’s the challenge: let’s question whether a high-return renovation is truly worth its hidden toll on the broader community. If we dare, we can shift the dialogue from “maximize your ROI” to “minimize the damage of runaway real estate speculation.” That, in itself, might be the most radical - and necessary - renovation of all.