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> most money is spent on housing and health care In Canada? Would not an increase in demand for such things lead to a corresponding increase in supply? Or is

> most money is spent on housing and health care In Canada? Would not an increase in demand for such things lead to a corresponding increase in supply? Or is there something I don't know about supply restrictions in Canada?

angstrom 7y ago
Yes. Everytime someone says the price will just go up to match it's like some imaginary world where the one thing you can't apply supply/demand is the welfare of people. Housing is not fixed and healthcare is a function of prevention which is best served by proactive measures instead of reactive which are generally more expensive. We can actually save money by not being so inefficient with the capital in the first place.
pingyong 7y ago
Coming from Germany (not Canada, but maybe closer to Canada than the US in terms of spending): Housing absolutely, health care probably not for most people. But yeah, if you live on full time minimum wage here that's ~1200€ per month, of which probably 500-800 depending on where you live will go to rent. And if it's 800, it would probably be 1800 if everyone got 1000€ per month. So in that sense, he might be right. On the other hand some people just might actually quit their job with 1000€ per month and live somewhere further away from cities, since they don't have to live there to work. And maybe that would incentivize employers to try to create more work outside cities. Seems almost impossible to really predict the large scale effects here.
- shkkmo 7y ago
  At the bare minimum, if the monthly income from rental properties doubled, I suspect that would have a major impact on housing development. It all depends on why development isn't happening, but I have a really hard time imagining that supply would not increase even if the major restrictions are due to other factors than development costs.
  - pingyong 7y ago
    Well, the thing in Germany is that (1) there is actually a decent amount of new housing being built in cities but (2) there are often strict limits around where you're allowed to build, what you're allowed to demolish, and how high you're allowed to build. And during the past 5 years, demand has vastly outpaced supply. Property prices and rents in cities are absolutely insane, and there is no indication that that is going to stop. And the reaction to it from people is quite... shortsighted? From my perspective. Often the exact people who would benefit from a better housing market vote for parties who are more restrictive in terms of new buildings. There's this perception that new buildings are only being built for "rich" people, which is true, but it also means the rich people aren't competing for your shitty apartment anymore. But somehow, people don't really think about that.
vzidex 7y ago
Canadian here, the supply of housing depends on which part of the country you're talking about. As far as I've heard/seen the supply of housing is generally increasing with demand in most parts of the country - some of my relatives who live in a small town a couple of hours from Toronto were saying the town is getting its first block of apartments. However, the moment you start looking at Toronto, Vancouver, and to some extent Montreal and Ottawa, the trend no longer holds. The populations of Torcouver are going up far faster than supply is able to increase, for a variety of reasons including the cost of building, regulations, NIMBYism, etc. The problem is further exacerbated by demand-side issues driving it up, such as speculation leading to housing sitting empty and illegal AirBNBs keeping units from being rented.

angstrom 7y ago

Yes. Everytime someone says the price will just go up to match it's like some imaginary world where the one thing you can't apply supply/demand is the welfare of people. Housing is not fixed and healthcare is a function of prevention which is best served by proactive measures instead of reactive which are generally more expensive. We can actually save money by not being so inefficient with the capital in the first place.

pingyong 7y ago

Coming from Germany (not Canada, but maybe closer to Canada than the US in terms of spending): Housing absolutely, health care probably not for most people. But yeah, if you live on full time minimum wage here that's ~1200€ per month, of which probably 500-800 depending on where you live will go to rent. And if it's 800, it would probably be 1800 if everyone got 1000€ per month. So in that sense, he might be right. On the other hand some people just might actually quit their job with 1000€ per month and live somewhere further away from cities, since they don't have to live there to work. And maybe that would incentivize employers to try to create more work outside cities. Seems almost impossible to really predict the large scale effects here.

shkkmo 7y ago
At the bare minimum, if the monthly income from rental properties doubled, I suspect that would have a major impact on housing development. It all depends on why development isn't happening, but I have a really hard time imagining that supply would not increase even if the major restrictions are due to other factors than development costs.
- pingyong 7y ago
  Well, the thing in Germany is that (1) there is actually a decent amount of new housing being built in cities but (2) there are often strict limits around where you're allowed to build, what you're allowed to demolish, and how high you're allowed to build. And during the past 5 years, demand has vastly outpaced supply. Property prices and rents in cities are absolutely insane, and there is no indication that that is going to stop. And the reaction to it from people is quite... shortsighted? From my perspective. Often the exact people who would benefit from a better housing market vote for parties who are more restrictive in terms of new buildings. There's this perception that new buildings are only being built for "rich" people, which is true, but it also means the rich people aren't competing for your shitty apartment anymore. But somehow, people don't really think about that.

vzidex 7y ago

Canadian here, the supply of housing depends on which part of the country you're talking about. As far as I've heard/seen the supply of housing is generally increasing with demand in most parts of the country - some of my relatives who live in a small town a couple of hours from Toronto were saying the town is getting its first block of apartments. However, the moment you start looking at Toronto, Vancouver, and to some extent Montreal and Ottawa, the trend no longer holds. The populations of Torcouver are going up far faster than supply is able to increase, for a variety of reasons including the cost of building, regulations, NIMBYism, etc. The problem is further exacerbated by demand-side issues driving it up, such as speculation leading to housing sitting empty and illegal AirBNBs keeping units from being rented.