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Supply is part of the problem, but the real culprit is that housing has been financialized and opened up as an investment vehicle for global capital. It doesn’t

Supply is part of the problem, but the real culprit is that housing has been financialized and opened up as an investment vehicle for global capital. It doesn’t really matter if you change zoning laws if everything that gets built is to serve this kind of investment. Major cities in the US, such as LA and NYC, simultaneously have huge lots of vacant luxury housing stock and homelessness crises for precisely this reason.Vancouver has obviously taken steps to curb the worst excesses of this, but it’s still vulnerable to this form of “market failure.”

pkaler 9y ago
This is not empiracly true for Vancouver. Global capital is flooding into RS-1 and CD-1. There is very little speculation into RM-4.
eloff 9y ago
I think this contributes, but it's not the principal problem. The core problem is supply shortage, which given the current astronomical prices has everything to do with zoning. Relax that enough and the market will solve the problem in a matter of years.
- Tiktaalik 9y ago
  This would be a satisfying solution were it not for the fact that Vancouver's housing starts and completions graph is a giant up and to the right. Vancouver has been building supply. At this point if you're a politician in Vancouver that is promising to solve the problem in a few years you're going to get dumped. People wanted this problem solved yesterday.
  - eloff 9y ago
    It takes years. Whether people like it or not. It's never too late to start doing something about it.
  - toasterlovin 9y ago
    Absolute growth in housing supply doesn’t matter. It’s growth in housing supply relative to growth in population.
thowawayburnout 9y ago
I work in Vancouver and have lots of coworkers who have recently bought homes. The more I look into it, the more I think the majority of this problem is related to extremely low interest rates. As rates went down, real estate all over Canada shot up a huge amount. Now that rates are rising, it immediately cooled.
stale2002 9y ago
The solution to housing being used as an investment is to build so much housing supply that this investment becomes worthless. Why SHOULDN'T we just let the Chinese build a bunch of empty buildings? It's their money and if they want to waste it building us cheap housing on an investment that will eventually go bust, I say we let them. The solution is scorched earth, "LOL, you thought your investment was going to go up, but instead we built such a ridiculous amount of housing that houses are now free for everyone".
- fatbird 9y ago
  Nihilism is never a solution.
  - chii 9y ago
    That's not nihilism, but a correct free market response to over-investment in a particular asset type. The fact that this didn't happen is due to regulation and other market distortions.
    - fatbird 9y ago
      I'm not sure why I should give the "correct free market response" any airtime at all, given that 1) it would appear to require making one of the top 5 Canadian cities into "scorched earth", meaning a wasteland of empty housing in order to drive out investment money so that... why? and 2) any one of a hundred or more demonstrable failures of free markets that have fueled the drive for regulation more than anything else over the same period.
      - stale2002 9y ago
        Because having a bunch of free, empty apartments that investors paid for is wonderful! It means that they can be used and are available for all the productive things that building are, on the cheap. If you could wave a magic wand and do the same thing for food and water wouldn't you do so?

pkaler 9y ago

This is not empiracly true for Vancouver. Global capital is flooding into RS-1 and CD-1. There is very little speculation into RM-4.

eloff 9y ago

I think this contributes, but it's not the principal problem. The core problem is supply shortage, which given the current astronomical prices has everything to do with zoning. Relax that enough and the market will solve the problem in a matter of years.

Tiktaalik 9y ago
This would be a satisfying solution were it not for the fact that Vancouver's housing starts and completions graph is a giant up and to the right. Vancouver has been building supply. At this point if you're a politician in Vancouver that is promising to solve the problem in a few years you're going to get dumped. People wanted this problem solved yesterday.
- eloff 9y ago
  It takes years. Whether people like it or not. It's never too late to start doing something about it.
- toasterlovin 9y ago
  Absolute growth in housing supply doesn’t matter. It’s growth in housing supply relative to growth in population.

thowawayburnout 9y ago

I work in Vancouver and have lots of coworkers who have recently bought homes. The more I look into it, the more I think the majority of this problem is related to extremely low interest rates. As rates went down, real estate all over Canada shot up a huge amount. Now that rates are rising, it immediately cooled.

stale2002 9y ago

The solution to housing being used as an investment is to build so much housing supply that this investment becomes worthless. Why SHOULDN'T we just let the Chinese build a bunch of empty buildings? It's their money and if they want to waste it building us cheap housing on an investment that will eventually go bust, I say we let them. The solution is scorched earth, "LOL, you thought your investment was going to go up, but instead we built such a ridiculous amount of housing that houses are now free for everyone".

fatbird 9y ago
Nihilism is never a solution.
- chii 9y ago
  That's not nihilism, but a correct free market response to over-investment in a particular asset type. The fact that this didn't happen is due to regulation and other market distortions.
  - fatbird 9y ago
    I'm not sure why I should give the "correct free market response" any airtime at all, given that 1) it would appear to require making one of the top 5 Canadian cities into "scorched earth", meaning a wasteland of empty housing in order to drive out investment money so that... why? and 2) any one of a hundred or more demonstrable failures of free markets that have fueled the drive for regulation more than anything else over the same period.
    - stale2002 9y ago
      Because having a bunch of free, empty apartments that investors paid for is wonderful! It means that they can be used and are available for all the productive things that building are, on the cheap. If you could wave a magic wand and do the same thing for food and water wouldn't you do so?