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and then foreign investors will buy up those units instead and people will make up more excuses.

by serge2k 10y ago

davidw 10y ago
If you build enough, they'll stop buying because they will realize there are better places to invest in. Actually... you probably don't even need to do that. Just credibly threaten to allow the market to work, and enough to be built, and it'll likely start to cool things down.
- mthoms 10y ago
  It's not nearly as simple as you're implying. The most obvious reasons have already been discussed, but I'll add that the construction industry in Vancouver is operating at full employment and has been for a long time. So where do these workers come from? Who will employ them, and better yet… where do you house them? Chicken meet egg.
- Tiktaalik 10y ago
  The frustrating thing about the supply side solution is that the answer to every argument is always "add more supply!" even if the city is obviously already doing so at an aggressive pace. The reality is that there are real world physical limits to adding supply. There are a limited amount of trades for example. There is a limited capacity to review and process development applications. It takes time to complete buildings. Unlike Silicon Valley Metro Vancouver has steadily built condos for decades and the region currently has more housing starts than at any other time ever. Vancouver's issues are deeper and more urgent than a one dimensional supply side solution can solve.
- bzbarsky 10y ago
  The problem is that the "foreign investors" are not _investors_. They are more like money launderers in terms of what they're looking for out of their "investment". That is, for these people it's totally ok to pay X now and only get 0.9X out of the property later, because their other option is not having the use of the money at all. It may well be OK for many of them to pay X now and only get 0.5X out later, and for some of them it's ok to pay X now and only get 0.1X out later. They would obviously prefer a better deal, but unlike a normal home-buyer or real-estate investor expecting a huge loss on later sale of the property is not necessarily something that will stop them from buying. There may be better places to "invest" in, but finding them may be more trouble than they are willing to take.
  - davidw 10y ago
    That's a fair point, and something that would warrant other solutions. It'd be interesting to read more about the actual numbers involved. People invoke the 'foreign investor' bogeyman in places like New York City, but it turns out that it is a tiny, tiny percentage of housing there. Sounds like it's different in Vancouver.
    - bzbarsky 10y ago
      > It'd be interesting to read more about the actual numbers involved. Indeed. It's hard to get actual numbers because Canada is one of the few Western countries that doesn't make public the statistics it collects on who's buying stuff... > but it turns out that it is a tiny, tiny percentage of housing there The relevant metric is the percentage of sales, not the percentage of total housing stock. But yes, the situation in New York is nothing like Vancouver; New York has tons of rich locals driving up prices and even a lot of the absenteeish owners in New York really do want an apartment in New York to use for that one week a year they're in town. They may be somewhat price insensitive, but not desperate to buy anything right now to get their money into real estate in New York.
    - msie 10y ago
      Several studies show them to be a tiny percentage but some people aren't satisfied.

and then foreign investors will buy up those units instead and people will make up more excuses.

by serge2k 10y ago

and then foreign investors will buy up those units instead and people will make up more excuses.

If you build enough, they'll stop buying because they will realize there are better places to invest in. Actually... you probably don't even need to do that. Just credibly threaten to allow the market to work, and enough to be built, and it'll likely start to cool things down.

mthoms 10y ago
It's not nearly as simple as you're implying. The most obvious reasons have already been discussed, but I'll add that the construction industry in Vancouver is operating at full employment and has been for a long time. So where do these workers come from? Who will employ them, and better yet… where do you house them? Chicken meet egg.
Tiktaalik 10y ago
The frustrating thing about the supply side solution is that the answer to every argument is always "add more supply!" even if the city is obviously already doing so at an aggressive pace. The reality is that there are real world physical limits to adding supply. There are a limited amount of trades for example. There is a limited capacity to review and process development applications. It takes time to complete buildings. Unlike Silicon Valley Metro Vancouver has steadily built condos for decades and the region currently has more housing starts than at any other time ever. Vancouver's issues are deeper and more urgent than a one dimensional supply side solution can solve.
bzbarsky 10y ago
The problem is that the "foreign investors" are not _investors_. They are more like money launderers in terms of what they're looking for out of their "investment". That is, for these people it's totally ok to pay X now and only get 0.9X out of the property later, because their other option is not having the use of the money at all. It may well be OK for many of them to pay X now and only get 0.5X out later, and for some of them it's ok to pay X now and only get 0.1X out later. They would obviously prefer a better deal, but unlike a normal home-buyer or real-estate investor expecting a huge loss on later sale of the property is not necessarily something that will stop them from buying. There may be better places to "invest" in, but finding them may be more trouble than they are willing to take.
- davidw 10y ago
  That's a fair point, and something that would warrant other solutions. It'd be interesting to read more about the actual numbers involved. People invoke the 'foreign investor' bogeyman in places like New York City, but it turns out that it is a tiny, tiny percentage of housing there. Sounds like it's different in Vancouver.
  - bzbarsky 10y ago
    > It'd be interesting to read more about the actual numbers involved. Indeed. It's hard to get actual numbers because Canada is one of the few Western countries that doesn't make public the statistics it collects on who's buying stuff... > but it turns out that it is a tiny, tiny percentage of housing there The relevant metric is the percentage of sales, not the percentage of total housing stock. But yes, the situation in New York is nothing like Vancouver; New York has tons of rich locals driving up prices and even a lot of the absenteeish owners in New York really do want an apartment in New York to use for that one week a year they're in town. They may be somewhat price insensitive, but not desperate to buy anything right now to get their money into real estate in New York.
  - msie 10y ago
    Several studies show them to be a tiny percentage but some people aren't satisfied.