6 ms·

>I think that blind bidding is a bit of a scape-goat here: Almost everything mentioned in the various comments here is a scapegoat. These all might contribute

by slg 5y ago

>I think that blind bidding is a bit of a scape-goat here: Almost everything mentioned in the various comments here is a scapegoat. These all might contribute a little to the escalating prices at the margins, but they are not the root cause. The root cause is that many capitalist societies have decided that purchasing a house is the most expensive and important investment most people will make in their lifetime. Therefore these societies gradually shape their policies to ensuring these investments continue to increase or else there are widespread repercussions. The end result is we have collectively refused to build enough housing to keep prices stable or decreasing. The prices need to go up. I don't understand why no one is willing to admit this. All the other problems originate from this. The reason foreigners want to buy homes as speculation or a place to park their money is because governments are committed to ensuring that housing is a safe and profitable investment. It all comes back to us deciding that a basic human need should also be an investment that always is increasing in value.

bennysomething 5y ago
I think the root cause is supply, demand, the salaries of buyers, interest rates and multiple of salary for mortgages permitted by law.
- katbyte 5y ago
  which are all influenced at every level by the desire (need?) to keep housing prices high and increasing..
- slg 5y ago
  Those are downstream effects of the problem with housing being an investment. We don't want prices to go down so we don't build enough supply. The policies that make housing a good investment increase demand from speculators and investors above the natural need for housing. There are all sorts of subsidies that exist to give people more money to buy housing instead of trying to make housing actually cheaper. Interest rates are a lever the government uses to support its political goals which includes increasing housing values. It all comes back to the same root cause.
  - ipaddr 5y ago
    Where are you building these houses in the protected Oak Ridges Moran? Building requires space to begin with.
    - slg 5y ago
      Canada, famously a country with no free space. Even if the problem was a lack of space, building denser is always an option and none of the big Canadian cities are really overflowing due to population density.
      - JacobThreeThree 5y ago
        You kid, but 90% of land in Canada is crown land. Nobody is allowed to own it.
        slg 5y ago
        Which would still leave more land than exists in France, Germany, UK, Italy, Japan, and numerous other countries with larger populations.
  - bennysomething 5y ago
    I doubt there is a conspiracy to stop house building, there's just planning laws that prevent and slow down development. The public want to two contradictory things, homes their children can afford and banning anything that could reduce their house price. Hence politicians look for scape goats like foreign Investors. Two conservative governments in the uk have tried to simplify planning law , and failed. We try all sorts of hacks like "affordable housing" legislation. The fact is, we make it hard to build where demand is greatest.
FpUser 5y ago
>"The prices need to go up. I don't understand why no one is willing to admit this." No, rather somebody at the top needs to go down.
BurningFrog 5y ago
I almost agree, but I think you've got the causality backwards. > The end result is we have collectively refused to build enough housing to keep prices stable or decreasing This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up. I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.
- slg 5y ago
  >This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.
  - BurningFrog 5y ago
    Sure. The question is why they didn't do that until ~1970, which is when I think that era started. It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.
    - seanmcdirmid 5y ago
      That isn't true. The housing projects of Lyndon Johnson's Great Society poverty reduction efforts didn't start until mid decade. Before that, you could infer that there was an actual need for it (even though it ultimately failed).
      - BurningFrog 5y ago
        I don't think the people who moved to the housing projects were typically sleeping on the streets. I think it was more a case of upgrading to modern sanitation standards etc. That said, I have no real detailed knowledge, and would be happy to learn how wrong I am about this :)
orangecat 5y ago
Policies that forbid landowners from building housing are central planning and the opposite of capitalism. That aside, this is absolutely correct. It's constantly irritating to hear politicians praise "strong housing markets" when "strong" means "unaffordable if you're not already wealthy".
- imtringued 5y ago
  > Policies that forbid landowners from building housing are central planning and the opposite of capitalism. You mean opposite of a free market. Property rights, aka the exclusion of other people, is actually an inherent part of capitalism. When you think about it, capitalism isn't actually about physical capital. It's actually about having the rights to be allowed to do things and restricting other people's rights while boosting your own rights is considered perfectly okay under the guise of private property. When you think about it. We have built a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. It's like a brain cage that tells people they are powerless when they really aren't, they just aren't allowed to help themselves. A lot of laws that set a minimum living standard basically make it illegal to live. If you are going to demand that everyone must meet that bar, then you must actually do something to let them achieve it. Instead, we just abandon people under the guise of personal responsibility.
  - chii 5y ago
    > a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. can you give an example of this? I don't believe the current system prevents anyone from working if they have the skill. The closest policy to what you described is segregation and racism, but i don't think that is what you're referring to. > A lot of laws that set a minimum living standard there's no such law. There's minimum wage law, which might cause unintended consequences, if the minimum is inappropriate. But so far, the current minimums don't seem that inappropriate.
- 8note 5y ago
  acting in a way to get rich off your property is very capitalistic, including manipulating policy to raise the value of your property
rank0 5y ago
Speculation isn’t great, but let’s not pretend this is some elaborate scheme orchestrated by all the homeowners. If it’s feasible and profitable to build new homes, then developers will do so. Everyone loves the simple solution of “build more houses”. Very few actually consider the execution of the master plan. What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies. When everyone wants to live in the same areas, housing prices go up. Lifting zoning restrictions isn’t some magic bullet that will alleviate that fact.
- richbell 5y ago
  > What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies. There's also no incentive to build affordable or well-constructed homes. Many builders will try to maximize profit by investing the bare minimum (i.e., cutting corners) and creating the largest number of dwellings possible. Mattamy Homes is infamous for developing large neighborhoods with pretty homes that practically fall apart in a matter of months if you look at them wrong.
  - rank0 5y ago
    > There's also no incentive to build affordable or well-constructed homes. This is sort of my point. Who's going to build the "affordable housing"? Why won't the affordable housing get snatched up by the highest bidder? The federal government already spends way more than it can afford. State/local governments don't have anywhere near enough tax revenue. It would require a multi-trillion dollar operation to increase supply enough to offset shortages.
- slg 5y ago
  I never said it was an "elaborate scheme orchestrated by all the homeowners." It is a natural result of people independently acting purely based on their personal incentives. Homeowners don't need to orchestrate and elaborate scheme, they just vote for the politicians who will prioritize increasing home values because that will help them financially. That politician will enact policies favorable to homeowners because that is what their constituency wants. That will encourage more people to become homeowners because people see homeownership as a financially beneficial endeavor. That will increase the power of homeowners as a constituency which will lead to more politicians courting homeowners with favorable policies making homeownership more attractive. And on and on the cycle goes until it isn't "feasible and profitable to build new homes" because we have made it difficult and expensive through all our pro-homeowner policies.

by slg 5y ago

bennysomething 5y ago

I think the root cause is supply, demand, the salaries of buyers, interest rates and multiple of salary for mortgages permitted by law.

katbyte 5y ago
which are all influenced at every level by the desire (need?) to keep housing prices high and increasing..
slg 5y ago
Those are downstream effects of the problem with housing being an investment. We don't want prices to go down so we don't build enough supply. The policies that make housing a good investment increase demand from speculators and investors above the natural need for housing. There are all sorts of subsidies that exist to give people more money to buy housing instead of trying to make housing actually cheaper. Interest rates are a lever the government uses to support its political goals which includes increasing housing values. It all comes back to the same root cause.
- ipaddr 5y ago
  Where are you building these houses in the protected Oak Ridges Moran? Building requires space to begin with.
  - slg 5y ago
    Canada, famously a country with no free space. Even if the problem was a lack of space, building denser is always an option and none of the big Canadian cities are really overflowing due to population density.
    - JacobThreeThree 5y ago
      You kid, but 90% of land in Canada is crown land. Nobody is allowed to own it.
      - slg 5y ago
        Which would still leave more land than exists in France, Germany, UK, Italy, Japan, and numerous other countries with larger populations.
- bennysomething 5y ago
  I doubt there is a conspiracy to stop house building, there's just planning laws that prevent and slow down development. The public want to two contradictory things, homes their children can afford and banning anything that could reduce their house price. Hence politicians look for scape goats like foreign Investors. Two conservative governments in the uk have tried to simplify planning law , and failed. We try all sorts of hacks like "affordable housing" legislation. The fact is, we make it hard to build where demand is greatest.

FpUser 5y ago

>"The prices need to go up. I don't understand why no one is willing to admit this." No, rather somebody at the top needs to go down.

BurningFrog 5y ago

I almost agree, but I think you've got the causality backwards. > The end result is we have collectively refused to build enough housing to keep prices stable or decreasing This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up. I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.

slg 5y ago
>This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.
- BurningFrog 5y ago
  Sure. The question is why they didn't do that until ~1970, which is when I think that era started. It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.
  - seanmcdirmid 5y ago
    That isn't true. The housing projects of Lyndon Johnson's Great Society poverty reduction efforts didn't start until mid decade. Before that, you could infer that there was an actual need for it (even though it ultimately failed).
    - BurningFrog 5y ago
      I don't think the people who moved to the housing projects were typically sleeping on the streets. I think it was more a case of upgrading to modern sanitation standards etc. That said, I have no real detailed knowledge, and would be happy to learn how wrong I am about this :)

orangecat 5y ago

Policies that forbid landowners from building housing are central planning and the opposite of capitalism. That aside, this is absolutely correct. It's constantly irritating to hear politicians praise "strong housing markets" when "strong" means "unaffordable if you're not already wealthy".

imtringued 5y ago
> Policies that forbid landowners from building housing are central planning and the opposite of capitalism. You mean opposite of a free market. Property rights, aka the exclusion of other people, is actually an inherent part of capitalism. When you think about it, capitalism isn't actually about physical capital. It's actually about having the rights to be allowed to do things and restricting other people's rights while boosting your own rights is considered perfectly okay under the guise of private property. When you think about it. We have built a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. It's like a brain cage that tells people they are powerless when they really aren't, they just aren't allowed to help themselves. A lot of laws that set a minimum living standard basically make it illegal to live. If you are going to demand that everyone must meet that bar, then you must actually do something to let them achieve it. Instead, we just abandon people under the guise of personal responsibility.
- chii 5y ago
  > a system that tells you whether you get to work or not. This is completely independent of your ability to work or gain skills. can you give an example of this? I don't believe the current system prevents anyone from working if they have the skill. The closest policy to what you described is segregation and racism, but i don't think that is what you're referring to. > A lot of laws that set a minimum living standard there's no such law. There's minimum wage law, which might cause unintended consequences, if the minimum is inappropriate. But so far, the current minimums don't seem that inappropriate.
8note 5y ago
acting in a way to get rich off your property is very capitalistic, including manipulating policy to raise the value of your property

rank0 5y ago

Speculation isn’t great, but let’s not pretend this is some elaborate scheme orchestrated by all the homeowners. If it’s feasible and profitable to build new homes, then developers will do so. Everyone loves the simple solution of “build more houses”. Very few actually consider the execution of the master plan. What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies. When everyone wants to live in the same areas, housing prices go up. Lifting zoning restrictions isn’t some magic bullet that will alleviate that fact.

richbell 5y ago
> What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies. There's also no incentive to build affordable or well-constructed homes. Many builders will try to maximize profit by investing the bare minimum (i.e., cutting corners) and creating the largest number of dwellings possible. Mattamy Homes is infamous for developing large neighborhoods with pretty homes that practically fall apart in a matter of months if you look at them wrong.
- rank0 5y ago
  > There's also no incentive to build affordable or well-constructed homes. This is sort of my point. Who's going to build the "affordable housing"? Why won't the affordable housing get snatched up by the highest bidder? The federal government already spends way more than it can afford. State/local governments don't have anywhere near enough tax revenue. It would require a multi-trillion dollar operation to increase supply enough to offset shortages.
slg 5y ago
I never said it was an "elaborate scheme orchestrated by all the homeowners." It is a natural result of people independently acting purely based on their personal incentives. Homeowners don't need to orchestrate and elaborate scheme, they just vote for the politicians who will prioritize increasing home values because that will help them financially. That politician will enact policies favorable to homeowners because that is what their constituency wants. That will encourage more people to become homeowners because people see homeownership as a financially beneficial endeavor. That will increase the power of homeowners as a constituency which will lead to more politicians courting homeowners with favorable policies making homeownership more attractive. And on and on the cycle goes until it isn't "feasible and profitable to build new homes" because we have made it difficult and expensive through all our pro-homeowner policies.