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The global elite are not the cause of high housing costs. Housing prices have risen globally - NYC, Mumbai, Vancouver, London, etc. There just aren't enough wea

The global elite are not the cause of high housing costs. Housing prices have risen globally - NYC, Mumbai, Vancouver, London, etc. There just aren't enough wealthy people to take much housing out of circulation. http://marketurbanism.com/2016/06/27/do-the-rich-cause-high-rents/ http://marketurbanism.com/2016/06/27/do-the-rich-cause-high-... I did some calculations a few months ago; if every wealthy person in NYC bought 10 homes, that would have the same (negligible) impact on the housing supply as building another NYU. https://news.ycombinator.com/item?id=12022235#12022920 https://news.ycombinator.com/item?id=12022235#12022920 This is not an effective use of public policy. It's just an attempt to find a scapegoat while ignoring the real problems - exclusionary zoning, low density and bad local regulations.

andkon 10y ago
Vancouver has an annual average income of around $70,000. At current benchmark prices of ~$1mm, we're paying 14x our average salaries for homes. That's roughly as unaffordable as Hong Kong — the world's most unaffordable housing market. Whether or not zoning and high density would bring housing prices down (it almost certainly would), you gotta ask: if Vancouverites can't afford these places right now, who can? People who have a lot of money. http://business.financialpost.com/personal-finance/mortgages-real-estate/vancouver-ranked-third-most-unaffordable-housing-market-in-world-worse-than-new-york-and-london http://business.financialpost.com/personal-finance/mortgages...
- Moshe_Silnorin 10y ago
  A government passes a law limiting the number of cars that can be sold. Manufacturers switch to exclusively luxury cars as they have much higher margins. Rich people buy them because they can afford them and need them. Everyone gets mad at the manufacturers and the rich people instead of the idiotic legislation. If we killed zoning laws, allowed modular housing and dorm housing, rents would drop very quickly.
  - snrplfth 10y ago
    Yeah, it's hard to get this across to people who live in a city where it feels like supply is increasing fast (because it's in huge, highly visible towers), but as a percentage of the total stock, is growing quite slowly. I lived in Vancouver for a while, and though people were totally on board with the idea that increases in demand for housing would push up prices, they were highly skeptical of the idea that increased supply could decrease prices.
  - naasking 10y ago
    > If we killed zoning laws, allowed modular housing and dorm housing rents would drop very quickly. Except you just screwed existing home owners, which is why this will probably never fly.
    - Moshe_Silnorin 10y ago
      I agree. This is a sustainable equilibrium. But blame the equilibrium or the homeowners for supporting terrible laws, don't start burning witches.
- refurb 10y ago
  What was the latest data on citizenship of home purchases in Vancouver? 10% foreign, 90% Canadian. And almost 30% of those Canadian purchasers were speculators. Are the Chinese causing home prices to go up in Vancouver? Probably a little. The much bigger problem are the Canadians over extending themselves by speculating on home values.
stuartaxelowen 10y ago
Perhaps you don't about the situation in Vancouver BC, but it is a very common place for wealthy Chinese nationals invest in a "safer" place outside their country. This is well known to the locals and those in the region.
- afarrell 10y ago
  I've heard this about many cities, including Boston, London, and New York. Do you have evidence that it is true in large numbers?
  - Scoundreller 10y ago
    If you're trying to stash illegitimate money overseas, would you do it in your own name, or use a trustworthy local stand-in when available? Secondly, even if the money is legitimate, Canada does not tax capital gains on residences that are your primary residence. So if one wants to buy 5 homes, one could buy 1 yourself, and find stand-ins for the other 4. Or if one doesn't plan on living in any, 5 stand-ins.
  - twistedpair 10y ago
    I've got a home in Boston. Zillow tells me it's appreciated 45% in several years. Since I (1) got a very low interest rate and (2) got a house in a hard to come by area and (3) would have to pay realtor fees to sell, why wouldn't I just rent it out when I decide to move somewhere else? If other people keep doing that in their lifecycle (move further out when deciding to have kids), you end up with many homes as investments where the home owners have no intention to combat high housing prices, as that only leads to higher rents and more profits.
    - afarrell 10y ago
      If you rent it out, the home isn't empty.
- yummyfajitas 10y ago
  People make similar claims about NYC, Mumbai, etc. The numbers just don't add up. There aren't that many rich Chinese people. In any case, suppose you are right. Why not keep building homes and selling them to those dirty chinamen? They want to throw money at Canada, why not take as much of it as possible? Oh right, exclusionary zoning. Which I'm sure is also somehow the fault of evil foreign scapegoats rather than nice white middle class Canadians. Maybe you guys should build a wall, and make the Chinese pay for it. Make Canada Great Again!
hesarenu 10y ago
It does not have to be wealthy people, just people who make substantially more then the locals. Housing prices have risen in my city(2nd tier city) in India. Most are brought by NRI's/outsiders, many vacant. There are numerous flats coming up. For locals it very difficult to acquire one, hence they are buying out in smaller cities, and prices have risen in smaller cities as well.

andkon 10y ago

Vancouver has an annual average income of around $70,000. At current benchmark prices of ~$1mm, we're paying 14x our average salaries for homes. That's roughly as unaffordable as Hong Kong — the world's most unaffordable housing market. Whether or not zoning and high density would bring housing prices down (it almost certainly would), you gotta ask: if Vancouverites can't afford these places right now, who can? People who have a lot of money. http://business.financialpost.com/personal-finance/mortgages-real-estate/vancouver-ranked-third-most-unaffordable-housing-market-in-world-worse-than-new-york-and-london http://business.financialpost.com/personal-finance/mortgages...

Moshe_Silnorin 10y ago
A government passes a law limiting the number of cars that can be sold. Manufacturers switch to exclusively luxury cars as they have much higher margins. Rich people buy them because they can afford them and need them. Everyone gets mad at the manufacturers and the rich people instead of the idiotic legislation. If we killed zoning laws, allowed modular housing and dorm housing, rents would drop very quickly.
- snrplfth 10y ago
  Yeah, it's hard to get this across to people who live in a city where it feels like supply is increasing fast (because it's in huge, highly visible towers), but as a percentage of the total stock, is growing quite slowly. I lived in Vancouver for a while, and though people were totally on board with the idea that increases in demand for housing would push up prices, they were highly skeptical of the idea that increased supply could decrease prices.
- naasking 10y ago
  > If we killed zoning laws, allowed modular housing and dorm housing rents would drop very quickly. Except you just screwed existing home owners, which is why this will probably never fly.
  - Moshe_Silnorin 10y ago
    I agree. This is a sustainable equilibrium. But blame the equilibrium or the homeowners for supporting terrible laws, don't start burning witches.
refurb 10y ago
What was the latest data on citizenship of home purchases in Vancouver? 10% foreign, 90% Canadian. And almost 30% of those Canadian purchasers were speculators. Are the Chinese causing home prices to go up in Vancouver? Probably a little. The much bigger problem are the Canadians over extending themselves by speculating on home values.

stuartaxelowen 10y ago

Perhaps you don't about the situation in Vancouver BC, but it is a very common place for wealthy Chinese nationals invest in a "safer" place outside their country. This is well known to the locals and those in the region.

afarrell 10y ago
I've heard this about many cities, including Boston, London, and New York. Do you have evidence that it is true in large numbers?
- Scoundreller 10y ago
  If you're trying to stash illegitimate money overseas, would you do it in your own name, or use a trustworthy local stand-in when available? Secondly, even if the money is legitimate, Canada does not tax capital gains on residences that are your primary residence. So if one wants to buy 5 homes, one could buy 1 yourself, and find stand-ins for the other 4. Or if one doesn't plan on living in any, 5 stand-ins.
- twistedpair 10y ago
  I've got a home in Boston. Zillow tells me it's appreciated 45% in several years. Since I (1) got a very low interest rate and (2) got a house in a hard to come by area and (3) would have to pay realtor fees to sell, why wouldn't I just rent it out when I decide to move somewhere else? If other people keep doing that in their lifecycle (move further out when deciding to have kids), you end up with many homes as investments where the home owners have no intention to combat high housing prices, as that only leads to higher rents and more profits.
  - afarrell 10y ago
    If you rent it out, the home isn't empty.
yummyfajitas 10y ago
People make similar claims about NYC, Mumbai, etc. The numbers just don't add up. There aren't that many rich Chinese people. In any case, suppose you are right. Why not keep building homes and selling them to those dirty chinamen? They want to throw money at Canada, why not take as much of it as possible? Oh right, exclusionary zoning. Which I'm sure is also somehow the fault of evil foreign scapegoats rather than nice white middle class Canadians. Maybe you guys should build a wall, and make the Chinese pay for it. Make Canada Great Again!

hesarenu 10y ago

It does not have to be wealthy people, just people who make substantially more then the locals. Housing prices have risen in my city(2nd tier city) in India. Most are brought by NRI's/outsiders, many vacant. There are numerous flats coming up. For locals it very difficult to acquire one, hence they are buying out in smaller cities, and prices have risen in smaller cities as well.