6 ms·

In the end, isn't the answer relatively simple when phrased in terms of supply and demand? In by far the majority of these cities, the number of new units built

In the end, isn't the answer relatively simple when phrased in terms of supply and demand? In by far the majority of these cities, the number of new units built pales in comparison to the number of new people moving to these cities, and as such you have a larger number of people competing for the same number of units, thus driving up prices. Cities like Montreal, Canada have a much larger housing stock due to middle density housing (multiplexes of 6-10 apts), and this is reflected in these cities having much lower average rent compared to other cities in North America.

woah 4y ago
No. Landlords became greedier. In contrast to the kind, generous landlords of just a few years ago, landlords are now greedy. Building more units won't help. Supply and demand is a capitalist myth.
- diob 4y ago
  Late game monopoly. Lots of wealth in the hands of a few, the rest meant to be content to go around the board paying them for the privilege of working for them.
  - NavinF 4y ago
    You’re responding to a joke comment that’s satirizing your views lol
    - diob 4y ago
      Certainly a joke, but I don't see how it aligns with what I wrote. We're def in the late stages of a monopoly game, provided we don't magically find another board (aka leave Earth).
- skrtskrt 4y ago
  OK I'm not a landlord/capitalist apologist but it sure does make sense to me that rents rise in part because there are way more people that want to live in an area than available units. For example Downtown LA and Koreatown are putting up large apartment buildings like crazy, because the zoning allows them to, and rents have not increased nearly as much as other popular LA areas that are mostly single-family zoned, such as Santa Monica. This is why Minnesota and now recently California basically upzoned the entire state, because upzoning with local ordinances neighborhood by neighborhood is almost always defeated by NIMBYs, which are generally a combination of of local homeowners and local small-time landlords. Don't forget that a huge portion of US landlords are "mom and pop" landlords, which have a massive portion of their net worth wrapped up a handful of rental units and don't have the capital to build net new units. These people are more economically opposed to new housing than a large developer who can stomach the capital outlay for a new building. When they are allowed to developers can profitably build dense housing, which produces net new units into the market, which helps combat rising rent.
  - olalonde 4y ago
    I believe woah was being sarcastic... Greed is pretty constant over time and isn't really responsible for rising prices.
- boc 4y ago
  Just like how gas stations got really greedy earlier this summer - thankfully Biden told them to knock it off and now prices are falling. Don’t let those economists tell you lies about how goods with inelastic demand will dramatically rise in price when supply can’t keep pace… they’re just covering for the greedy people.
- osigurdson 4y ago
  Not a landlord but doesn’t it make sense to be kind but still charge as much as your can? Everything else is priced that way.
  - Jochim 4y ago
    I mean this depends on the context. In our current market that's how a lot of people operate but it isn't a requirement. See any kind of pro bono work, To be honest it feels like a really convenient excuse that people use when they're aware, on some level, that they should feel bad about their actions. From a purely practical point of view, as a landlord your tenants can cause a lot of financial damage. If you force out a good tenant by raising rents then you're gambling that the next one isn't going to be a nightmare.
    - onionisafruit 4y ago
      You need to be careful when doing this. The IRS requires you to file a gift tax form if you charge below market rents.
    - osigurdson 4y ago
      Let’s say you have a leasable asset, your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else. The best thing you can do for someone else is to give them all of your assets and attempt to live in a manner that does not compete for resources with others (live in some kind of zero energy homeostasis until reaching an old age for example). Obviously, these represent two extremes of selfishness and selflessness. So, what is a rule of thumb for an asset owner to not be considered greedy? Price 10% below market for example or allow 3 missed payments per year? Greed is an easy label to assign until until you have to get concrete about it.
      - Jochim 4y ago
        Like many things in society it's not entirely objective. It depends on the situations of the parties involved. Take two hypothetical tenants. One is a young software developer earning $15k/mo, the other a retired widow on a fixed pension of $3k/mo. The social reaction to either party's rent being raised from $1k/mo to $2.5k/mo is going to be very different. > your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else This leaves out the fact that in the majority of cases the lessor is benefiting either way. It's purely the extent to which they benefit that changes. > Greed is an easy label to assign until until you have to get concrete about it. All sorts of labels are difficult to assign objectively. What matters is personal opinion and societal consensus. Both of those are fluid and have changed throughout history.
baron816 4y ago
Yes, the population continued to grow, but the housing stock did not keep pace.
- upupandup 4y ago
  huge problem in Vancouver, a single bedroom/studio 500sqft in Vancouver is asking ~$3000 CAD / month or $2300 USD / month. 10 years ago I lived in a 600sq ft for half that rent including utilities and internet. Wages has not changed here since the 80s and tech also underpays people for the same role. Meanwhile condo sales sees no sign of slowing down, everywhere real estate is on the decline, here it seems to continue. I wonder if this is sustainable, there is a large number of multi bedroom condo units asking well above $5000 CAD / month
  - monkeywork 4y ago
    Canada has one of (if not the) lowest housing stocks per population in the developed world. BC and Ontario are on the lower end of all the provinces in this regard as well, which is a major problem when you count how much our population is growing and the fact that the majority of that growth ends up in the VAN/TOR greater metros. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note--january-12-2022-.html https://www.scotiabank.com/ca/en/about/economics/economics-p... Canada's biggest problem is that we didn't lock out immigration policies to our infrastructure and housing policies. Bringing up that fact though often spirals into someone trying to claim that being concerned about the policies makes you a racist or anti-immigration which is nonsense.
    - upupandup 4y ago
      yet the people flipping homes and own multiple properties are local canadians, so are immigrants to be blamed for wanting to buy a home? why is there no focus on corporations purchasing multiple units in bulk to flip it? I feel like this blame the immigration policy is an old trope that I been hearing since the 80s. and this just highlights the issue in Canada: we can't even agree as to what the underlying issues are, instead we scapegoat minority groups because it has worked since the 80s.
Jenk 4y ago
This is certainly a factor, but there are additional factors, too, that mean demand has been increased. In the UK mortgage application controls were increased after 2008. This meant it became particularly difficult for first-time buyers to get a mortgage, locking them into rental properties for longer, and further increasing demand. In London and most cities in the UK we have an extraordinary amount of foreign investment in property. Entire blocks owned by foreign faceless corporations (many of which are probably offshore shell companies for wealthy entities in the UK) who are happy to let their properties remain empty in order to maintain the average price(s) and sit on the capital gains with little to no maintenance requirement because they just don't have any tenants. For decades now, "buying to let" has been promoted as the easypath for those fortunate enough to invest for their future. Ultra low interest rates, coupled with ever increasing property prices, and charging rent that covers your mortgage repayments, and maintenance, _and_ some extra passive income on top, means it's certainly an attractive option for those who can afford it, and by God has it been taken. News articles of landlords with _hundreds_ of properties in their portfolio is not uncommon. Entire towns owned by a single landlord in some cases. And our political parties treat "house price" like a hot potatoe through fear of being the ones to pop the bubble, cause lots of defaults, and ultimately lose the homeowner vote. In fact most MPs are landlords themselves.
batmansmk 4y ago
If you ever played Monopoly; you know that available housing is limited by physics, conglomerates and local laws, therefore supply is capped. Global housing demand cannot adjust because people need a place to stay. Supply and demand (elasticity) works great for certain goods, housing is just not one of them.

woah 4y ago

No. Landlords became greedier. In contrast to the kind, generous landlords of just a few years ago, landlords are now greedy. Building more units won't help. Supply and demand is a capitalist myth.

diob 4y ago
Late game monopoly. Lots of wealth in the hands of a few, the rest meant to be content to go around the board paying them for the privilege of working for them.
- NavinF 4y ago
  You’re responding to a joke comment that’s satirizing your views lol
  - diob 4y ago
    Certainly a joke, but I don't see how it aligns with what I wrote. We're def in the late stages of a monopoly game, provided we don't magically find another board (aka leave Earth).
skrtskrt 4y ago
OK I'm not a landlord/capitalist apologist but it sure does make sense to me that rents rise in part because there are way more people that want to live in an area than available units. For example Downtown LA and Koreatown are putting up large apartment buildings like crazy, because the zoning allows them to, and rents have not increased nearly as much as other popular LA areas that are mostly single-family zoned, such as Santa Monica. This is why Minnesota and now recently California basically upzoned the entire state, because upzoning with local ordinances neighborhood by neighborhood is almost always defeated by NIMBYs, which are generally a combination of of local homeowners and local small-time landlords. Don't forget that a huge portion of US landlords are "mom and pop" landlords, which have a massive portion of their net worth wrapped up a handful of rental units and don't have the capital to build net new units. These people are more economically opposed to new housing than a large developer who can stomach the capital outlay for a new building. When they are allowed to developers can profitably build dense housing, which produces net new units into the market, which helps combat rising rent.
- olalonde 4y ago
  I believe woah was being sarcastic... Greed is pretty constant over time and isn't really responsible for rising prices.
boc 4y ago
Just like how gas stations got really greedy earlier this summer - thankfully Biden told them to knock it off and now prices are falling. Don’t let those economists tell you lies about how goods with inelastic demand will dramatically rise in price when supply can’t keep pace… they’re just covering for the greedy people.
osigurdson 4y ago
Not a landlord but doesn’t it make sense to be kind but still charge as much as your can? Everything else is priced that way.
- Jochim 4y ago
  I mean this depends on the context. In our current market that's how a lot of people operate but it isn't a requirement. See any kind of pro bono work, To be honest it feels like a really convenient excuse that people use when they're aware, on some level, that they should feel bad about their actions. From a purely practical point of view, as a landlord your tenants can cause a lot of financial damage. If you force out a good tenant by raising rents then you're gambling that the next one isn't going to be a nightmare.
  - onionisafruit 4y ago
    You need to be careful when doing this. The IRS requires you to file a gift tax form if you charge below market rents.
  - osigurdson 4y ago
    Let’s say you have a leasable asset, your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else. The best thing you can do for someone else is to give them all of your assets and attempt to live in a manner that does not compete for resources with others (live in some kind of zero energy homeostasis until reaching an old age for example). Obviously, these represent two extremes of selfishness and selflessness. So, what is a rule of thumb for an asset owner to not be considered greedy? Price 10% below market for example or allow 3 missed payments per year? Greed is an easy label to assign until until you have to get concrete about it.
    - Jochim 4y ago
      Like many things in society it's not entirely objective. It depends on the situations of the parties involved. Take two hypothetical tenants. One is a young software developer earning $15k/mo, the other a retired widow on a fixed pension of $3k/mo. The social reaction to either party's rent being raised from $1k/mo to $2.5k/mo is going to be very different. > your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else This leaves out the fact that in the majority of cases the lessor is benefiting either way. It's purely the extent to which they benefit that changes. > Greed is an easy label to assign until until you have to get concrete about it. All sorts of labels are difficult to assign objectively. What matters is personal opinion and societal consensus. Both of those are fluid and have changed throughout history.

baron816 4y ago

Yes, the population continued to grow, but the housing stock did not keep pace.

upupandup 4y ago
huge problem in Vancouver, a single bedroom/studio 500sqft in Vancouver is asking ~$3000 CAD / month or $2300 USD / month. 10 years ago I lived in a 600sq ft for half that rent including utilities and internet. Wages has not changed here since the 80s and tech also underpays people for the same role. Meanwhile condo sales sees no sign of slowing down, everywhere real estate is on the decline, here it seems to continue. I wonder if this is sustainable, there is a large number of multi bedroom condo units asking well above $5000 CAD / month
- monkeywork 4y ago
  Canada has one of (if not the) lowest housing stocks per population in the developed world. BC and Ontario are on the lower end of all the provinces in this regard as well, which is a major problem when you count how much our population is growing and the fact that the majority of that growth ends up in the VAN/TOR greater metros. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note--january-12-2022-.html https://www.scotiabank.com/ca/en/about/economics/economics-p... Canada's biggest problem is that we didn't lock out immigration policies to our infrastructure and housing policies. Bringing up that fact though often spirals into someone trying to claim that being concerned about the policies makes you a racist or anti-immigration which is nonsense.
  - upupandup 4y ago
    yet the people flipping homes and own multiple properties are local canadians, so are immigrants to be blamed for wanting to buy a home? why is there no focus on corporations purchasing multiple units in bulk to flip it? I feel like this blame the immigration policy is an old trope that I been hearing since the 80s. and this just highlights the issue in Canada: we can't even agree as to what the underlying issues are, instead we scapegoat minority groups because it has worked since the 80s.

Jenk 4y ago

This is certainly a factor, but there are additional factors, too, that mean demand has been increased. In the UK mortgage application controls were increased after 2008. This meant it became particularly difficult for first-time buyers to get a mortgage, locking them into rental properties for longer, and further increasing demand. In London and most cities in the UK we have an extraordinary amount of foreign investment in property. Entire blocks owned by foreign faceless corporations (many of which are probably offshore shell companies for wealthy entities in the UK) who are happy to let their properties remain empty in order to maintain the average price(s) and sit on the capital gains with little to no maintenance requirement because they just don't have any tenants. For decades now, "buying to let" has been promoted as the easypath for those fortunate enough to invest for their future. Ultra low interest rates, coupled with ever increasing property prices, and charging rent that covers your mortgage repayments, and maintenance, _and_ some extra passive income on top, means it's certainly an attractive option for those who can afford it, and by God has it been taken. News articles of landlords with _hundreds_ of properties in their portfolio is not uncommon. Entire towns owned by a single landlord in some cases. And our political parties treat "house price" like a hot potatoe through fear of being the ones to pop the bubble, cause lots of defaults, and ultimately lose the homeowner vote. In fact most MPs are landlords themselves.

batmansmk 4y ago

If you ever played Monopoly; you know that available housing is limited by physics, conglomerates and local laws, therefore supply is capped. Global housing demand cannot adjust because people need a place to stay. Supply and demand (elasticity) works great for certain goods, housing is just not one of them.