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I don't buy it. In Toronto, there are new condo buildings going up seemingly on every block, but there are still 10,000 homeless[1]. The inconvenient truth is

I don't buy it. In Toronto, there are new condo buildings going up seemingly on every block, but there are still 10,000 homeless[1]. The inconvenient truth is that building low-income housing is not very profitable and no entity driven by the profit motive wants to do it. The margins on luxury condos are much better. [1] https://www.fredvictor.org/facts-about-homelessness-in-toronto/ https://www.fredvictor.org/facts-about-homelessness-in-toron...

trinovantes 5y ago
When you're severely constrained by where you can build thanks to NIMBY, you always build whatever has the highest margins i.e. luxury 1bd condos
- azinman2 5y ago
  That's actually perfectly fine. The more you build for the top end, the more you pressure release on the lower end.
  - trinovantes 5y ago
    The people buying luxury condos are usually single professionals who previously lived with their parents. Them moving out of their parents homes don't add more housing supply to help the homeless.
    - azinman2 5y ago
      First, I'd love to see the data to support that. It's hard to imagine a single professional doesn't rent first and goes straight to buying a condo, especially in the North America where people generally move out at 18. Second, if they're buying a condo versus paying rent, that's still good because it leaves less price elastic renters in the market. You can to get those who are willing to pay much more into something higher end versus them taking the bottom and increasing its price (which is what's happened in SF).
chii 5y ago
But the increased supply of the top would put pressure on the lower end as well. It's not isolated.
jseliger 5y ago
See https://fullstackeconomics.com/how-luxury-apartment-buildings-help-low-income-renters/ https://fullstackeconomics.com/how-luxury-apartment-building... for the empirical research refuting that point and agreeing with the basic supply-demand issue. The issue in Toronto is not just the anecdotal "new condo buildings" but how much housing Toronto has built per capita for the last several decades, which is almost certainly "too little." See the link in my original post to data from Tokyo, which is one of the few cities to have done housing right. "Filtering" has always been a housing phenomenon: https://cityobservatory.org/what-filtering-can-and-cant-do/ https://cityobservatory.org/what-filtering-can-and-cant-do/ and https://cityobservatory.org/how-luxury-housing-becomes-affordable https://cityobservatory.org/how-luxury-housing-becomes-affor....
- deleted 5y ago
  [deleted]
- atweiden 5y ago
  > See [...] for the empirical research refuting that point and agreeing with the basic supply-demand issue The issue I have with this analysis is where does it end? For example, if you assume most people eventually want to live in a townhome or similar, packing people in like sardines in the name of housing affordability is a kick-the-can solution. The unstated assumption of these researchers is it’s perfectly fine for every major urban area to morph into Hong Kong given a long enough time frame.
  - Redoubts 5y ago
    Can we have just one Hong Kong then? You have 99% of America catering to your needs, why make it 100%?

trinovantes 5y ago

When you're severely constrained by where you can build thanks to NIMBY, you always build whatever has the highest margins i.e. luxury 1bd condos

azinman2 5y ago
That's actually perfectly fine. The more you build for the top end, the more you pressure release on the lower end.
- trinovantes 5y ago
  The people buying luxury condos are usually single professionals who previously lived with their parents. Them moving out of their parents homes don't add more housing supply to help the homeless.
  - azinman2 5y ago
    First, I'd love to see the data to support that. It's hard to imagine a single professional doesn't rent first and goes straight to buying a condo, especially in the North America where people generally move out at 18. Second, if they're buying a condo versus paying rent, that's still good because it leaves less price elastic renters in the market. You can to get those who are willing to pay much more into something higher end versus them taking the bottom and increasing its price (which is what's happened in SF).

chii 5y ago

But the increased supply of the top would put pressure on the lower end as well. It's not isolated.

jseliger 5y ago

See https://fullstackeconomics.com/how-luxury-apartment-buildings-help-low-income-renters/ https://fullstackeconomics.com/how-luxury-apartment-building... for the empirical research refuting that point and agreeing with the basic supply-demand issue. The issue in Toronto is not just the anecdotal "new condo buildings" but how much housing Toronto has built per capita for the last several decades, which is almost certainly "too little." See the link in my original post to data from Tokyo, which is one of the few cities to have done housing right. "Filtering" has always been a housing phenomenon: https://cityobservatory.org/what-filtering-can-and-cant-do/ https://cityobservatory.org/what-filtering-can-and-cant-do/ and https://cityobservatory.org/how-luxury-housing-becomes-affordable https://cityobservatory.org/how-luxury-housing-becomes-affor....

deleted 5y ago
[deleted]
atweiden 5y ago
> See [...] for the empirical research refuting that point and agreeing with the basic supply-demand issue The issue I have with this analysis is where does it end? For example, if you assume most people eventually want to live in a townhome or similar, packing people in like sardines in the name of housing affordability is a kick-the-can solution. The unstated assumption of these researchers is it’s perfectly fine for every major urban area to morph into Hong Kong given a long enough time frame.
- Redoubts 5y ago
  Can we have just one Hong Kong then? You have 99% of America catering to your needs, why make it 100%?