8 ms·

There Is No Housing Crisis

25 points by jbm 3y ago

jbm 3y ago
This part particularly surprised me, as it flies in the face of a lot of confident-sounding opinions voiced here. > For example, proponents of the “supply-side” argument frequently point to low vacancy rates as an indication that supply is low, which drives rents higher. During the COVID-19 pandemic, the national vacancy rate went up from 2 percent to 3.2 percent, a 60 percent increase. What happened to rents? They, too, went up, by 3.6 percent. In Toronto, vacancy rates more than doubled between October 2019 (1.5 percent) and October 2020 (3.4 percent). What happened to the average rent in the city? It rose by 4.7 percent. A Canada Mortgage and Housing Corporation report explained that, in hot markets like Toronto and Montreal, landlords chose to wait longer to fill vacancies or offered one-time rent discounts instead of lowering rents. In 2021, a prominent housing expert, Steve Pomeroy, demonstrated that “between 2006 and 2016, Canada added 1.636 million households and built 1.919 million new homes . . . almost 30,000 extra homes were constructed each year compared to the increase in the number of households.” And yet housing prices and rents went up at a breakneck speed during those years. Neither Pomeroy nor I contend that Canada has enough housing or that additional supply would not be beneficial. The point is that supply alone will not solve the problem.
- lotsofpulp 3y ago
  Supply has to be in the desired location, and it has to be brought into the market if empty. If property taxes are too low such that many can afford to have multiple houses, then that will result in in insufficient supply in the market, even though it exists.
  - jbm 3y ago
    WRT the tax point, I've heard this previously, but it doesn't make sense to me yet. For example, a person who owns multiple properties would be in a better place to absorb tax hikes by simply passing them along to renters. It would be the single family that ends up the most affected by this. Moreover, I agree with the person who said "property tax is not a sin tax". The income received would not be invested to help the common person. For example, my municipality would most likely spend the additional money on sports teams, which I firmly oppose, but is something supported by rich interests in the city.
    - lotsofpulp 3y ago
      Other taxed can be reduced if property taxes are increased. And costs do not simply get passed on. If that were true, then no businesses would fail and everyone would enjoy a minimum profit margin. Low property taxes means higher profits for landlords, which means more incentive to hold onto extra properties. Higher property (specifically land value) taxes means the land has to be used more productively to earn a return. Instead of a single family house on a 10k sq ft lot, there would be 3 townhouses, condos, etc. There would also be more incentive for landlords to lower the rent more quickly in response to the market. Right now, lots of “space” sits empty, while income tax from people who work pay for the police and courts to keep that space “secure” for landlords. It is a massive subsidy from workers to non workers.
deleted 3y ago
[deleted]
ggm 3y ago
> Canada’s “housing crisis” is a permanent state of affairs that harms people in, or in need of, rental housing; roughly one-third of the country’s households. and > A housing system that serves all but one group is not in a state of crisis; it is one based on structural inequality and economic exploitation. I think my point here is the lack of common understanding of what "crisis" means and a belief the linguistic narrow interpretation is "this is not a crisis" because its a systemic failure in design and goals. Well, "capitalism is in crisis" has been a catch-cry of the left for 80+ years and remains true, despite a lot of shareholder value being made along the way. There obviously is a massive underlying problem around affordable homes. The article is trying to draw focus to it but I find the "its not a crisis" thing somewhat small as a hook to hang it on. If you're young, or fleeing DV, it's a crisis indeed. The phrase which comes to mind is "permanent crisis" which I went looking for, and indeed it's been a thing for a very long time. So no. I disagree. Housing IS in crisis, it's a permanent persisting crisis, which advantages the investor side at the expense of social well being at large. And if like me you are at the end of your mortgage and working life, you have almost certainly been complicit in this crisis, a fight of the old against the young. We mortgaged the 60s and 70s against the future, and now the future is impoverished.
- semiquaver 3y ago
  Right. The obvious counterpoint is the now commonly used term “climate crisis”. The danger has been obvious for years yet has been largely unaddressed because of structural aspects of the global economy and society. That lack of adequate response doesn’t mean global warming isn’t a crisis!
  - ggm 3y ago
    I am of course guilty of fighting a second or third order issue trench war here because the primary issue is the housing crisis, or whatever we want to call it.
- 6510 3y ago
  English is not my first language but the dictionary states a crisis is: a time of intense difficulty or danger. a time when a difficult or important decision must be made. However, it comes from from Greek krisis ‘decision’, from krinein ‘decide’. It seems you can have your crisis the way you like it :) The housing decision was to have it be unaffordable. But it is only a permanent crisis if it was decided to be that way. I do like the article, the point still stands. I do doubt if it is a road to a solution. I would try a different angle. If rents grow to match income then salaries must grow to match rent. There should be people out there who pay salaries and don't like how expensive that already is. People who spend 1/3 of their income on rent would welcome a 5% pay cut in exchange for 30% lower rent. In the supermarket I ran into the big boss from the firm I rent from. I did a funny monologue: My rent is well below average in this city but I still managed to pay 3 times the 2010 market value of the property, the price at which you offered to sell it to me but I couldn't afford. Not much was done over the years, a paint job, some plumbing, no real expenses were made. I'm not the first tenant, before me people paid 2-5 times the 2010 value(?) Now the property value has gone up dramatically. This means you've made even more money, much more! Then you send me a letter that argues you are increasing my rent because you've made so much money. Every year you want one more week of my salary because you've made so much money. I also know you have a giant waiting list while you are selling houses rather than building them. I get it, if earnings grow beyond a point you may no longer mix social housing with private housing projects. This will make your job much more complicated and the transition comes with considerable costs you are not looking forwards to. I have great idea, you are not obligated to increase my rent every year. You could sell fewer houses, own more property and have more renters. You see where I'm going with this? >points finger< Then I walked away not waiting for an answer. The next year the standard letter said my rent would go up by 0%.
Bukhmanizer 3y ago
Over many years of using the internet, I’ve found that the most viral ideas only have a maximum of one point to them. Additional points or context only add baggage to the points made, and ensure that the idea either doesn’t spread very far or just get left behind in discourse entirely. It’s easier on Reddit and Twitter and HN (to probably a lesser extent) to communicate and upvote “your side” if an idea is as simple and distinguishable from “the other side” as possible. So we get “build baby build” and “r/fuckcars” and “microservices vs monoliths” and “OOP vs FP” and all the nuance of the argument gets lost. I agree with this article that building new housing is only one of many interventions that government will need to handle to bring down the cost of housing. But I don’t think the idea will ever go as “viral” as the supply and demand arguments that you see everywhere.
- sam0x17 3y ago
  The majority voting (and donating) block, old people, are all becoming ridiculously rich from their $15k houses they built/inherited/bought 30-40 years ago, many of which are now valued over $1m. Nothing will change on this front until millennials are the majority voting block. If anything it's going to get worse before it gets better.
  - fbdab103 3y ago
    Not sure why a new generation would change anything. It seems like it is homeowners vs non. The millisecond someone acquires property, it is in their financial interest to protect it as an investment.
    - sam0x17 3y ago
      Not if their first impulse is to sell it and then build a house. Now we have two houses, which does what to the price? Oh, makes it go down. And if they're building a house, their voting and lobbying at least for a few years will be in line with keeping construction costs down.
    - MattGaiser 3y ago
      And millennials are majority owners now. https://thehill.com/homenews/3939854-half-of-millennials-now-own-homes-new-data-finds/ https://thehill.com/homenews/3939854-half-of-millennials-now...
semiquaver 3y ago
> Unlike most services and commodities, the price tag on rental units has no real relationship to the cost of providing housing. Rents are determined by “what the market will bear,” as economists say. Absent regulation, “what the market will bear” is what sets the price of all things. I’m interested to know why the author thinks that housing is unique here.
- beebmam 3y ago
  It's pretty clear they're arguing their point from a Marxist lens of exploitation and oppressive classes. I don't mean to state that pejoratively, just factually.
- MattGaiser 3y ago
  Yeah, this is true of everything from oil to fruit to toasters. Although I would argue that the price tag of rentals has a strong relationship to what it costs to build/operate additional units of rental space. While one landlord might have had their unit paid for 3x, where would a new entrant to the market be? At least in Toronto, the answer is, losing money. https://www.cbc.ca/news/canada/toronto/gta-condo-investors-losing-money-on-properties-1.6858342 https://www.cbc.ca/news/canada/toronto/gta-condo-investors-l... Same with fruit and oil. When avocado soared in popularity, new people entered the market until there was a price equilibrium.
jdsully 3y ago
If you ever go through the process of buying vacant land you’ll find the biggest risk is whether the city will ever let you build anything on it. Even a house being there once before isn’t a guarantee. It could be the green belt, too close to an airport, or just zoned wrong. At least in Canada land is not that scarce (even in desirable areas like the GTA) you just aren’t allowed to build on most of it. This is why land development is so commonly associated with corruption. The best way to make money is to buy up artificially restricted land and bribe the government into letting you build.
- MostlyStable 3y ago
  No but don't you see? They "have been building for decades" (in the sense that, every year, some small number of new units are built) and prices haven't fallen! So clearly "building more units" can't be the solution. That's just an excuse to line the pockets of developers! And besides, the "build more crowd" wants nothing but to "provide financial and regulatory incentives to developers", there is definitely no movement to remove regulations that prevent building! No, the author, who clearly has a deep understanding of this issue, has never heard of such nonsense.
_vertigo 3y ago
The problem with housing (in the States at least, can’t speak for other countries) is simple. Renters want housing to remain affordable and to increase no faster than inflation. Owners expect (and bank on) the value of their house increasing faster than inflation. Both cannot be occur at the same time, at least not for long. As home prices increase, so too will rents. And if rent stays flat, the price of housing is forced to remain flat as well. Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It makes literally no sense to expect or feel entitled to a return just for owning property. Barring improvements the value of the home should depreciate slightly as the house gets older. That’s not to say that home values should never go up anywhere. As a city improves compared to other areas and brings more jobs and better services, home prices there should reflect the increased value associated with living in an area that is better than other places. Home prices should not being going up everywhere at the same time, which is what Americans expect to happen —- that almost all property should appreciate in value on average.
- TheRealSteel 3y ago
  Agreed. Being a landlord isn't a job. You aren't doing work, and don't deserve to be paid for doing nothing. Houses are for people to live in, not an investment.
  - deleted 3y ago
    [deleted]
  - jandrewrogers 3y ago
    Being a landlord is an enormous amount of work. I know a few and the amount of work is not worth it, it is why I would never be one.
  - soligern 3y ago
    Being a landlord is a full time job. You’re essentially on call 24/7 or you have to pay someone else to do it out of your relatively thin margins.
DoreenMichele 3y ago
This is an article about Canada, which I'm not qualified to really critique. In the US, we there is a housing crisis, though I think the phrase "lack of affordable housing" gives people the wrong idea. We especially need more of a certain kind of housing, housing we used to build and don't anymore. Housing aimed at renters with entry level jobs who may not have a car. We've underbuilt for decades, so it seems to also be negatively impacting more middle class Americans, but I haven't studied that anywhere near as much as I have studied what is causing chronic homelessness for many Americans, something we didn't see at this scale in the past.
alex_young 3y ago
Dupe: https://news.ycombinator.com/item?id=37039926 https://news.ycombinator.com/item?id=37039926
7e 3y ago
Humans will breed to fill all available habitat. Building housing increases the supply of humans, just like building more roads increases traffic. Don't fall for it. The world doesn't need more humans. It needs a non-boiling atmosphere.
VancouverMan 3y ago
This article seems to completely avoid considering an integral aspect of this situation: Canada's extremely high immigration rate. I'm not seeing words like "immigration", "immigrant", or "foreign" at all within the article. I don't think that this topic can be seriously discussed without factoring in the impact of immigration. The cost of housing is just one of many significant economic distortions caused by bringing in a relatively huge number of people each year.
- igor47 3y ago
  Fact check: Canada does indeed have one of the highest immigration rates, accepting 4x more migrants per capita than the US. 26.4% of Canada's population are first-generation immigrants. This is followed by 17.6% who are second-generation and 56.9% who are third-generation or more.
ttonkytonk 3y ago
May also find this article interesting (even if you don't necessarily agree with the identity politics): https://hoodcommunist.org/2022/04/21/the-jackson-kush-plan-the-struggle-for-land/ https://hoodcommunist.org/2022/04/21/the-jackson-kush-plan-t...
vages 3y ago
If you’re interested in why housing is so expensive when there is so much land – and what to do about it –, you should read about Land Value Tax/Georgism. I recommend the writings of Lars Doucet: http://gameofrent.com/ http://gameofrent.com/
deanCommie 3y ago
> Housing increases in value over time; someone holding on to an empty apartment in Vancouver is making lots of money in absolute terms, even if comparatively less money than if the apartment were rented. When a new tenant agrees to pay a higher rent for years to come, the waiting pays itself off in a few months, and the rest is profit. This doesn't hold up to basic scrutiny. According to https://www.zumper.com/rent-research/vancouver-bc https://www.zumper.com/rent-research/vancouver-bc, "As of August 2023, the average rent for a 1-bedroom apartment in Vancouver, BC is $2,800" So let's pick a median apartment but an owner who thinks they can wait out a higher rent. What extra revenue do we believe is reasonable for them to hold out for? Let's be EXTREMELY generous and say they want to hold out to get $3200. The maximum legal rent increase in BC is 2%/year. On a 5 year timeline, the baseline is 2800+2856+2913+2971+3030=14,570. If they somehow get $3,200, that's instead 3464+3396+3329+3264+3200=$16,653. A difference of 2083$! Wow, 2 thousand dollars, that's a lot of......wait, no that's literally less than ONE month of rent revenue. Holding out for even ONE month and having the unit unoccupied erases ANY possible benefits from the extra rent. I really really liked everything else about this article. But this super fundamental mistake makes me question the credibility of the author :/
- eesmith 3y ago
  You calculated gross. You should calculate net. It's a non-zero cost to have a tenant. For demonstration purposes, if it costs $2700/month then the difference is $1,070 in profit vs. $3,153 over 5 years, corresponding to about 2.5 years. If the market rate increases by 10%/year than if you wait a year you can charge an additional 8% over having a tenant.
  - deanCommie 3y ago
    The vast majority of the cost of having a tenant is the MORTGAGE you're paying. Which you have to pay regardless of whether the unit is occupied or not. So the actual situation is FAR worse than what I estimated.
    - eesmith 3y ago
beebmam 3y ago
I find the argument that we shouldn't increase housing supply to make housing more affordable laughable.
seryoiupfurds 3y ago
Tiresome. Left-wingers will continue to make up wilder and wilder economic conspiracy theories to explain away the "so-called housing crisis" because the obvious solution -- building more homes for more people -- admits the possibility that someone might make money building homes and selling them, which they find ideologically distasteful. "Building more homes won't solve the housing crisis, because [ landlords, immigrants, greedy developers ] will buy them all up!" is a popular rallying cry against even attempting to build more homes. But a more honest statement of their complaint, "building more homes won't solve the housing crisis in its entirety without additional measures to help the most vulnerable" would admit that building more homes is absolutely part of the solution, not part of the problem.
tamimio 3y ago
The only way to solve the obvious crisis is to follow Japan model, make the real estate a depreciated asset rather than appreciated, especially when most North American houses are also made out of wood similar to Japanese ones (unlike other countries where it’s made of cement and concrete). Additionally, fix the zoning stupid laws, prevent foreigners from buying, limit property ownership to be maximum of two properties. Those for a starter.
eesmith 3y ago
> The word crisis suggests something that is infrequent, surprising, and widely undesirable—something that leads to dire consequences unless it is brought under control. ... In contrast, Canada’s “housing crisis” is a permanent state of affairs that harms people in, or in need of, rental housing That sounds like a high school debate method - "Webster's Dictionary defines 'crisis' as ... This does not meet that definition. Therefore this is not a crisis." As a counter-example, people have been using the term "climate crisis" since at least the 1980s. Does decades of use make the underlying situation a permanent state of affairs that we should accept? Furthermore, the idea of "crisis" used in this structural fashion has been around for even longer. A quick Google Scholar search found Holton (1987) "The Idea of Crisis in Modern Society" in The British Journal of Sociology: ] In the contemporary world we are told that 'crisis' threatens us on all sides ... I want to examine the analytical utility of the crisis metaphor for an understanding of the contemporary western world. ... ] The metaphoricality of the language of social crisis draws of course on older aesthetic and medical usages. In the aesthetic structure of drama, for example, crisis is manifest through a key moment or moments in a narrative wherein the dilemmas of human life and the fate of human actors are dramatised. This structure presupposes that crisis is an abnormal and discontinuous feature of narrative rather than a permanent fixture. ... ] The crisis metaphor has of course been translated into social enquiry as a means of dramatising perceptions of social pathology, social breakdown and disorganisation, and to give full vent to feelings as to the intolerability of the present. Its use is thus embedded in discourses about social change and debates about appropriate forms of political action. The assumption is that crises are unacceptable, and that they can and ought, sooner or later, to be resolved. The phrase "housing crisis" is based in this latter, metaphorical use. Tranjan appears to require it only fit the former and older definition. Holton goes on to write: ] While the use of the crisis metaphor in social criticism is not without pronounced disadvantages, it does retain a considerable degree of utility. In the first place it underscores the refusal to accept all features of social life as necessarily 'given' and 'unproblematic'. In so doing any notion of 'normality' is itself brought into question. The social pathologies identified by crisis theory pre-empt the 'normal' functioning of social life, while yet leaving space for successful recovery, if the appropriate social changes eventuate. The term "housing crisis" is used for exactly that purpose - to refuse to accept the current situation as necessarily given and unproblematic. Ricardo Tranjan's essay rejects the term "crisis" precisely to normalize the long-term structural issues which the crisis-ist consider unacceptable and "ought, sooner or later, to be resolved." > Rents are determined by “what the market will bear,” as economists say. No? I mean, they can be that way, but the author clearly knows about rent controls, which determine rates in a different way than simply what the market will bear. > The purpose of the rental market is not to ensure the highest possible number of families is securely housed. The purpose of the rental market is to extract income from tenants, and as far as this goal is concerned, it works like a charm! The purpose of a produce market is to extract money from selling produce, not to ensure the highest quality of nutrition. That doesn't mean the government can't regulate produce sales to set minimum quality levels. Nor does it mean that the government can't regulate the rental market, even if doing so reduces profits. The government could also build its own housing projects, without financial incentives to outside developers, with the goal of providing secure housing to many people, and without the goal of extracting profit (or even break-even) from the tenant. Just like it builds streets and parks which aren't funded by user fees.
snapplebobapple 3y ago
It's so painful reading this marxist leaning stuff because they say really dumb things really intelligently. If you didn't have a moderately decent understanding of reality before reading this you would think they were making good points. Where this goes wrong: The market has no purpose other than to facilitate exchange. People buying property are buying because they correctly believe the price will go up because the supply/demand characteristics of the market indicate that will happen. Yes, we did produce more houses than we created additional households for the last several years, however, at least as of 2021 Canada had the lowest housing stock per capita of any G7 nation, so the market is still extremely tight so prices should and did rise. If you don't like that the correct answer is still to push for policies that increase supply (despite what this marxist crap says). The nuance is that we have structural issues in Canada (and many other places) that limit the speed at which we can build housing supply that people actually want and that incentivizes knocking down the low end cheaper rental units and building luxury units instead because of scarcity in high density zone residential land. So the policies we need to push for are things like getting rid of minimum parking requirements, rezoning vast swaths of single family home zoned land to at least allow multi family medium to high density, especially around the core, and supporting this newly rezoned land with better transit, better walkways, better bike paths to get more people out of cars and into transportation better suited to higher density.

25 points by jbm 3y ago

jbm 3y ago

This part particularly surprised me, as it flies in the face of a lot of confident-sounding opinions voiced here. > For example, proponents of the “supply-side” argument frequently point to low vacancy rates as an indication that supply is low, which drives rents higher. During the COVID-19 pandemic, the national vacancy rate went up from 2 percent to 3.2 percent, a 60 percent increase. What happened to rents? They, too, went up, by 3.6 percent. In Toronto, vacancy rates more than doubled between October 2019 (1.5 percent) and October 2020 (3.4 percent). What happened to the average rent in the city? It rose by 4.7 percent. A Canada Mortgage and Housing Corporation report explained that, in hot markets like Toronto and Montreal, landlords chose to wait longer to fill vacancies or offered one-time rent discounts instead of lowering rents. In 2021, a prominent housing expert, Steve Pomeroy, demonstrated that “between 2006 and 2016, Canada added 1.636 million households and built 1.919 million new homes . . . almost 30,000 extra homes were constructed each year compared to the increase in the number of households.” And yet housing prices and rents went up at a breakneck speed during those years. Neither Pomeroy nor I contend that Canada has enough housing or that additional supply would not be beneficial. The point is that supply alone will not solve the problem.

lotsofpulp 3y ago
Supply has to be in the desired location, and it has to be brought into the market if empty. If property taxes are too low such that many can afford to have multiple houses, then that will result in in insufficient supply in the market, even though it exists.
- jbm 3y ago
  WRT the tax point, I've heard this previously, but it doesn't make sense to me yet. For example, a person who owns multiple properties would be in a better place to absorb tax hikes by simply passing them along to renters. It would be the single family that ends up the most affected by this. Moreover, I agree with the person who said "property tax is not a sin tax". The income received would not be invested to help the common person. For example, my municipality would most likely spend the additional money on sports teams, which I firmly oppose, but is something supported by rich interests in the city.
  - lotsofpulp 3y ago
    Other taxed can be reduced if property taxes are increased. And costs do not simply get passed on. If that were true, then no businesses would fail and everyone would enjoy a minimum profit margin. Low property taxes means higher profits for landlords, which means more incentive to hold onto extra properties. Higher property (specifically land value) taxes means the land has to be used more productively to earn a return. Instead of a single family house on a 10k sq ft lot, there would be 3 townhouses, condos, etc. There would also be more incentive for landlords to lower the rent more quickly in response to the market. Right now, lots of “space” sits empty, while income tax from people who work pay for the police and courts to keep that space “secure” for landlords. It is a massive subsidy from workers to non workers.

deleted 3y ago

[deleted]

ggm 3y ago

> Canada’s “housing crisis” is a permanent state of affairs that harms people in, or in need of, rental housing; roughly one-third of the country’s households. and > A housing system that serves all but one group is not in a state of crisis; it is one based on structural inequality and economic exploitation. I think my point here is the lack of common understanding of what "crisis" means and a belief the linguistic narrow interpretation is "this is not a crisis" because its a systemic failure in design and goals. Well, "capitalism is in crisis" has been a catch-cry of the left for 80+ years and remains true, despite a lot of shareholder value being made along the way. There obviously is a massive underlying problem around affordable homes. The article is trying to draw focus to it but I find the "its not a crisis" thing somewhat small as a hook to hang it on. If you're young, or fleeing DV, it's a crisis indeed. The phrase which comes to mind is "permanent crisis" which I went looking for, and indeed it's been a thing for a very long time. So no. I disagree. Housing IS in crisis, it's a permanent persisting crisis, which advantages the investor side at the expense of social well being at large. And if like me you are at the end of your mortgage and working life, you have almost certainly been complicit in this crisis, a fight of the old against the young. We mortgaged the 60s and 70s against the future, and now the future is impoverished.

semiquaver 3y ago
Right. The obvious counterpoint is the now commonly used term “climate crisis”. The danger has been obvious for years yet has been largely unaddressed because of structural aspects of the global economy and society. That lack of adequate response doesn’t mean global warming isn’t a crisis!
- ggm 3y ago
  I am of course guilty of fighting a second or third order issue trench war here because the primary issue is the housing crisis, or whatever we want to call it.
6510 3y ago
English is not my first language but the dictionary states a crisis is: a time of intense difficulty or danger. a time when a difficult or important decision must be made. However, it comes from from Greek krisis ‘decision’, from krinein ‘decide’. It seems you can have your crisis the way you like it :) The housing decision was to have it be unaffordable. But it is only a permanent crisis if it was decided to be that way. I do like the article, the point still stands. I do doubt if it is a road to a solution. I would try a different angle. If rents grow to match income then salaries must grow to match rent. There should be people out there who pay salaries and don't like how expensive that already is. People who spend 1/3 of their income on rent would welcome a 5% pay cut in exchange for 30% lower rent. In the supermarket I ran into the big boss from the firm I rent from. I did a funny monologue: My rent is well below average in this city but I still managed to pay 3 times the 2010 market value of the property, the price at which you offered to sell it to me but I couldn't afford. Not much was done over the years, a paint job, some plumbing, no real expenses were made. I'm not the first tenant, before me people paid 2-5 times the 2010 value(?) Now the property value has gone up dramatically. This means you've made even more money, much more! Then you send me a letter that argues you are increasing my rent because you've made so much money. Every year you want one more week of my salary because you've made so much money. I also know you have a giant waiting list while you are selling houses rather than building them. I get it, if earnings grow beyond a point you may no longer mix social housing with private housing projects. This will make your job much more complicated and the transition comes with considerable costs you are not looking forwards to. I have great idea, you are not obligated to increase my rent every year. You could sell fewer houses, own more property and have more renters. You see where I'm going with this? >points finger< Then I walked away not waiting for an answer. The next year the standard letter said my rent would go up by 0%.

Bukhmanizer 3y ago

Over many years of using the internet, I’ve found that the most viral ideas only have a maximum of one point to them. Additional points or context only add baggage to the points made, and ensure that the idea either doesn’t spread very far or just get left behind in discourse entirely. It’s easier on Reddit and Twitter and HN (to probably a lesser extent) to communicate and upvote “your side” if an idea is as simple and distinguishable from “the other side” as possible. So we get “build baby build” and “r/fuckcars” and “microservices vs monoliths” and “OOP vs FP” and all the nuance of the argument gets lost. I agree with this article that building new housing is only one of many interventions that government will need to handle to bring down the cost of housing. But I don’t think the idea will ever go as “viral” as the supply and demand arguments that you see everywhere.

sam0x17 3y ago
The majority voting (and donating) block, old people, are all becoming ridiculously rich from their $15k houses they built/inherited/bought 30-40 years ago, many of which are now valued over $1m. Nothing will change on this front until millennials are the majority voting block. If anything it's going to get worse before it gets better.
- fbdab103 3y ago
  Not sure why a new generation would change anything. It seems like it is homeowners vs non. The millisecond someone acquires property, it is in their financial interest to protect it as an investment.
  - sam0x17 3y ago
    Not if their first impulse is to sell it and then build a house. Now we have two houses, which does what to the price? Oh, makes it go down. And if they're building a house, their voting and lobbying at least for a few years will be in line with keeping construction costs down.
  - MattGaiser 3y ago
    And millennials are majority owners now. https://thehill.com/homenews/3939854-half-of-millennials-now-own-homes-new-data-finds/ https://thehill.com/homenews/3939854-half-of-millennials-now...

semiquaver 3y ago

> Unlike most services and commodities, the price tag on rental units has no real relationship to the cost of providing housing. Rents are determined by “what the market will bear,” as economists say. Absent regulation, “what the market will bear” is what sets the price of all things. I’m interested to know why the author thinks that housing is unique here.

beebmam 3y ago
It's pretty clear they're arguing their point from a Marxist lens of exploitation and oppressive classes. I don't mean to state that pejoratively, just factually.
MattGaiser 3y ago
Yeah, this is true of everything from oil to fruit to toasters. Although I would argue that the price tag of rentals has a strong relationship to what it costs to build/operate additional units of rental space. While one landlord might have had their unit paid for 3x, where would a new entrant to the market be? At least in Toronto, the answer is, losing money. https://www.cbc.ca/news/canada/toronto/gta-condo-investors-losing-money-on-properties-1.6858342 https://www.cbc.ca/news/canada/toronto/gta-condo-investors-l... Same with fruit and oil. When avocado soared in popularity, new people entered the market until there was a price equilibrium.

jdsully 3y ago

If you ever go through the process of buying vacant land you’ll find the biggest risk is whether the city will ever let you build anything on it. Even a house being there once before isn’t a guarantee. It could be the green belt, too close to an airport, or just zoned wrong. At least in Canada land is not that scarce (even in desirable areas like the GTA) you just aren’t allowed to build on most of it. This is why land development is so commonly associated with corruption. The best way to make money is to buy up artificially restricted land and bribe the government into letting you build.

MostlyStable 3y ago
No but don't you see? They "have been building for decades" (in the sense that, every year, some small number of new units are built) and prices haven't fallen! So clearly "building more units" can't be the solution. That's just an excuse to line the pockets of developers! And besides, the "build more crowd" wants nothing but to "provide financial and regulatory incentives to developers", there is definitely no movement to remove regulations that prevent building! No, the author, who clearly has a deep understanding of this issue, has never heard of such nonsense.

_vertigo 3y ago

The problem with housing (in the States at least, can’t speak for other countries) is simple. Renters want housing to remain affordable and to increase no faster than inflation. Owners expect (and bank on) the value of their house increasing faster than inflation. Both cannot be occur at the same time, at least not for long. As home prices increase, so too will rents. And if rent stays flat, the price of housing is forced to remain flat as well. Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It makes literally no sense to expect or feel entitled to a return just for owning property. Barring improvements the value of the home should depreciate slightly as the house gets older. That’s not to say that home values should never go up anywhere. As a city improves compared to other areas and brings more jobs and better services, home prices there should reflect the increased value associated with living in an area that is better than other places. Home prices should not being going up everywhere at the same time, which is what Americans expect to happen —- that almost all property should appreciate in value on average.

TheRealSteel 3y ago
Agreed. Being a landlord isn't a job. You aren't doing work, and don't deserve to be paid for doing nothing. Houses are for people to live in, not an investment.
- deleted 3y ago
  [deleted]
- jandrewrogers 3y ago
  Being a landlord is an enormous amount of work. I know a few and the amount of work is not worth it, it is why I would never be one.
- soligern 3y ago
  Being a landlord is a full time job. You’re essentially on call 24/7 or you have to pay someone else to do it out of your relatively thin margins.

DoreenMichele 3y ago

This is an article about Canada, which I'm not qualified to really critique. In the US, we there is a housing crisis, though I think the phrase "lack of affordable housing" gives people the wrong idea. We especially need more of a certain kind of housing, housing we used to build and don't anymore. Housing aimed at renters with entry level jobs who may not have a car. We've underbuilt for decades, so it seems to also be negatively impacting more middle class Americans, but I haven't studied that anywhere near as much as I have studied what is causing chronic homelessness for many Americans, something we didn't see at this scale in the past.

alex_young 3y ago

Dupe: https://news.ycombinator.com/item?id=37039926 https://news.ycombinator.com/item?id=37039926

7e 3y ago

Humans will breed to fill all available habitat. Building housing increases the supply of humans, just like building more roads increases traffic. Don't fall for it. The world doesn't need more humans. It needs a non-boiling atmosphere.

VancouverMan 3y ago

This article seems to completely avoid considering an integral aspect of this situation: Canada's extremely high immigration rate. I'm not seeing words like "immigration", "immigrant", or "foreign" at all within the article. I don't think that this topic can be seriously discussed without factoring in the impact of immigration. The cost of housing is just one of many significant economic distortions caused by bringing in a relatively huge number of people each year.

igor47 3y ago
Fact check: Canada does indeed have one of the highest immigration rates, accepting 4x more migrants per capita than the US. 26.4% of Canada's population are first-generation immigrants. This is followed by 17.6% who are second-generation and 56.9% who are third-generation or more.

ttonkytonk 3y ago

May also find this article interesting (even if you don't necessarily agree with the identity politics): https://hoodcommunist.org/2022/04/21/the-jackson-kush-plan-the-struggle-for-land/ https://hoodcommunist.org/2022/04/21/the-jackson-kush-plan-t...

vages 3y ago

If you’re interested in why housing is so expensive when there is so much land – and what to do about it –, you should read about Land Value Tax/Georgism. I recommend the writings of Lars Doucet: http://gameofrent.com/ http://gameofrent.com/

deanCommie 3y ago

> Housing increases in value over time; someone holding on to an empty apartment in Vancouver is making lots of money in absolute terms, even if comparatively less money than if the apartment were rented. When a new tenant agrees to pay a higher rent for years to come, the waiting pays itself off in a few months, and the rest is profit. This doesn't hold up to basic scrutiny. According to https://www.zumper.com/rent-research/vancouver-bc https://www.zumper.com/rent-research/vancouver-bc, "As of August 2023, the average rent for a 1-bedroom apartment in Vancouver, BC is $2,800" So let's pick a median apartment but an owner who thinks they can wait out a higher rent. What extra revenue do we believe is reasonable for them to hold out for? Let's be EXTREMELY generous and say they want to hold out to get $3200. The maximum legal rent increase in BC is 2%/year. On a 5 year timeline, the baseline is 2800+2856+2913+2971+3030=14,570. If they somehow get $3,200, that's instead 3464+3396+3329+3264+3200=$16,653. A difference of 2083$! Wow, 2 thousand dollars, that's a lot of......wait, no that's literally less than ONE month of rent revenue. Holding out for even ONE month and having the unit unoccupied erases ANY possible benefits from the extra rent. I really really liked everything else about this article. But this super fundamental mistake makes me question the credibility of the author :/

eesmith 3y ago
You calculated gross. You should calculate net. It's a non-zero cost to have a tenant. For demonstration purposes, if it costs $2700/month then the difference is $1,070 in profit vs. $3,153 over 5 years, corresponding to about 2.5 years. If the market rate increases by 10%/year than if you wait a year you can charge an additional 8% over having a tenant.
- deanCommie 3y ago
  The vast majority of the cost of having a tenant is the MORTGAGE you're paying. Which you have to pay regardless of whether the unit is occupied or not. So the actual situation is FAR worse than what I estimated.
  - eesmith 3y ago

beebmam 3y ago

I find the argument that we shouldn't increase housing supply to make housing more affordable laughable.

seryoiupfurds 3y ago

Tiresome. Left-wingers will continue to make up wilder and wilder economic conspiracy theories to explain away the "so-called housing crisis" because the obvious solution -- building more homes for more people -- admits the possibility that someone might make money building homes and selling them, which they find ideologically distasteful. "Building more homes won't solve the housing crisis, because [ landlords, immigrants, greedy developers ] will buy them all up!" is a popular rallying cry against even attempting to build more homes. But a more honest statement of their complaint, "building more homes won't solve the housing crisis in its entirety without additional measures to help the most vulnerable" would admit that building more homes is absolutely part of the solution, not part of the problem.

tamimio 3y ago

The only way to solve the obvious crisis is to follow Japan model, make the real estate a depreciated asset rather than appreciated, especially when most North American houses are also made out of wood similar to Japanese ones (unlike other countries where it’s made of cement and concrete). Additionally, fix the zoning stupid laws, prevent foreigners from buying, limit property ownership to be maximum of two properties. Those for a starter.

eesmith 3y ago

> The word crisis suggests something that is infrequent, surprising, and widely undesirable—something that leads to dire consequences unless it is brought under control. ... In contrast, Canada’s “housing crisis” is a permanent state of affairs that harms people in, or in need of, rental housing That sounds like a high school debate method - "Webster's Dictionary defines 'crisis' as ... This does not meet that definition. Therefore this is not a crisis." As a counter-example, people have been using the term "climate crisis" since at least the 1980s. Does decades of use make the underlying situation a permanent state of affairs that we should accept? Furthermore, the idea of "crisis" used in this structural fashion has been around for even longer. A quick Google Scholar search found Holton (1987) "The Idea of Crisis in Modern Society" in The British Journal of Sociology: ] In the contemporary world we are told that 'crisis' threatens us on all sides ... I want to examine the analytical utility of the crisis metaphor for an understanding of the contemporary western world. ... ] The metaphoricality of the language of social crisis draws of course on older aesthetic and medical usages. In the aesthetic structure of drama, for example, crisis is manifest through a key moment or moments in a narrative wherein the dilemmas of human life and the fate of human actors are dramatised. This structure presupposes that crisis is an abnormal and discontinuous feature of narrative rather than a permanent fixture. ... ] The crisis metaphor has of course been translated into social enquiry as a means of dramatising perceptions of social pathology, social breakdown and disorganisation, and to give full vent to feelings as to the intolerability of the present. Its use is thus embedded in discourses about social change and debates about appropriate forms of political action. The assumption is that crises are unacceptable, and that they can and ought, sooner or later, to be resolved. The phrase "housing crisis" is based in this latter, metaphorical use. Tranjan appears to require it only fit the former and older definition. Holton goes on to write: ] While the use of the crisis metaphor in social criticism is not without pronounced disadvantages, it does retain a considerable degree of utility. In the first place it underscores the refusal to accept all features of social life as necessarily 'given' and 'unproblematic'. In so doing any notion of 'normality' is itself brought into question. The social pathologies identified by crisis theory pre-empt the 'normal' functioning of social life, while yet leaving space for successful recovery, if the appropriate social changes eventuate. The term "housing crisis" is used for exactly that purpose - to refuse to accept the current situation as necessarily given and unproblematic. Ricardo Tranjan's essay rejects the term "crisis" precisely to normalize the long-term structural issues which the crisis-ist consider unacceptable and "ought, sooner or later, to be resolved." > Rents are determined by “what the market will bear,” as economists say. No? I mean, they can be that way, but the author clearly knows about rent controls, which determine rates in a different way than simply what the market will bear. > The purpose of the rental market is not to ensure the highest possible number of families is securely housed. The purpose of the rental market is to extract income from tenants, and as far as this goal is concerned, it works like a charm! The purpose of a produce market is to extract money from selling produce, not to ensure the highest quality of nutrition. That doesn't mean the government can't regulate produce sales to set minimum quality levels. Nor does it mean that the government can't regulate the rental market, even if doing so reduces profits. The government could also build its own housing projects, without financial incentives to outside developers, with the goal of providing secure housing to many people, and without the goal of extracting profit (or even break-even) from the tenant. Just like it builds streets and parks which aren't funded by user fees.

snapplebobapple 3y ago

It's so painful reading this marxist leaning stuff because they say really dumb things really intelligently. If you didn't have a moderately decent understanding of reality before reading this you would think they were making good points. Where this goes wrong: The market has no purpose other than to facilitate exchange. People buying property are buying because they correctly believe the price will go up because the supply/demand characteristics of the market indicate that will happen. Yes, we did produce more houses than we created additional households for the last several years, however, at least as of 2021 Canada had the lowest housing stock per capita of any G7 nation, so the market is still extremely tight so prices should and did rise. If you don't like that the correct answer is still to push for policies that increase supply (despite what this marxist crap says). The nuance is that we have structural issues in Canada (and many other places) that limit the speed at which we can build housing supply that people actually want and that incentivizes knocking down the low end cheaper rental units and building luxury units instead because of scarcity in high density zone residential land. So the policies we need to push for are things like getting rid of minimum parking requirements, rezoning vast swaths of single family home zoned land to at least allow multi family medium to high density, especially around the core, and supporting this newly rezoned land with better transit, better walkways, better bike paths to get more people out of cars and into transportation better suited to higher density.