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The problem is when your government is in the business of guaranteeing house prices go up a ton - and everyone is leveraged housing - that turns housing into a

The problem is when your government is in the business of guaranteeing house prices go up a ton - and everyone is leveraged housing - that turns housing into a speculative meme stock and not something for people to live in - which turns out to supremely suck for anyone that doesn't own a house and doesn't want to rent progressively shittier apartments for the rest of their lives. Canada is building plenty of housing. It's the entire economy besides oil and gas. Sure, you might be under-building slightly in B.C. and Toronto (mostly due to your gov's immigration policy specifically to prop up your housing bubble) - but that doesn't explain why prices have been going ape-shit literally everywhere in Canada for 30 years...

wubrr 3y ago
Canada is not building enough housing, but you're 100% right about the government propping up the housing prices any way it can.
- pstrateman 3y ago
  Nearly 7% of the entire Canadian work force is building new houses. That's double the next closest industrial country. Canada doesn't have a supply issue, it has a demand issue.
  - selectodude 3y ago
    There’s no such thing as a demand issue. Canada should consider importing immigrants who can work in construction in addition to the billions of dirty Chinese money. Problem solved.
    - onlyrealcuzzo 3y ago
      If your government creates artificial demand - that's a demand problem. The demand isn't real. It's synthesized from unsustainable government policies. Set interest rates to -100% - see what happens to housing demand. Is that a supply problem? Should Canada build 800 trillion houses to fill the appetite for free government money that will eventually implode? Or is it a demand problem because your government is dumb?
      - chis 3y ago
        I don’t understand. This theory implies that a significant percentage of Canadian houses are empty due to speculation. Is there any evidence for that theory? Looking a bit online it feels like this might be a disproven theory https://financialpost.com/real-estate/busting-the-myth-of-canadas-million-or-more-vacant-homes/wcm/432c4af9-3aa5-43c2-bc4d-693da336a276/amp/ https://financialpost.com/real-estate/busting-the-myth-of-ca... Also just on a very fundamental level - outside of luxury housing, why wouldn’t investors rent out the houses they’re sitting on? Sure it’s nice to own an appreciating asset but isn’t it also nice to rent it for 10% of its value yearly?
        wubrr 3y ago
        They didn't say they are empty? Most investors aren't keeping their properties empty. The empty places are generally owned wealthy people as a second/third home, or as means for foreigners to offshore their wealth. And this accounts for a tiny fraction of the housing supply compared to domestic/corporate real estate investors.
      - selectodude 3y ago
        The demand is absolutely real. People are actually buying these properties. The prices are subsidized by government policy. Instead of fixing the supply side of the equation, Canada has decided to give away money so cheaply that normal people can afford the obscene prices for real estate. Interestingly, increasing the number of people that can afford a house without changing the supply makes prices go up. Who knew?!
      - ushtaritk421 3y ago
        Immigration is the natural effect of people moving to where the market price of labor “demands” they move. Doesn’t seem that artificial.
        wubrr 3y ago
        What? The market price of labor always 'demands' that it be lower... literally import millions of 3rd world immigrants into any first-world country and you will see housing shortages, infrastructure shortages, wage decreases/stagnation, and increased corporate profits.
  - infecto 3y ago
    Seems that would mean its a supply issue? I mean sure, Airbnb does suck as in a lot of areas they skirt under the normal hotel rules/taxation but wouldn't building more help this problem?
  - shuckles 3y ago
    50% of the workforce could be involved in construction, but if the product being built is slowly-approved with intensive white collar labor permitting single family spec development, not many new units will come out at the other end. A measure like workforce input needs to consider productivity.
  - wubrr 3y ago
    The point is supply does not match demand. Immigration is unlikely to ever be low enough to counter the housing demand at this point - every single corporate/lobbying group in Canada is pushing for more immigration, and every single relevant political party is very clearly signaling that they will always bow to these demands. And I agree that a lot of our economy and workforce is already dedicated to building housing - increasing this is not a realistic solution. The only realistic way to improve the supply/demand is to disincentivize the investors from gobbling up the majority of our new housing supply.
  - bwanab 3y ago
    I hope not to come across as condescending, but in normal usage a demand issue is one in which there's not enough demand (think: the global financial crisis in 2008/9). When there is too much demand and not enough supply as clearly seems the case here, irrespective of why that's true, that's a supply issue.
  - unshavedyak 3y ago
    What does that mean? Sorry for being dense, but are the two not related? Furthermore, what solutions are there? People advocate building to allow for natural supply<->demand relationships to curb the absurd home price increases. Isn't more supply simply one of the biggest factors to lowering the prices? Of course, purchasing homes via speculation is also a huge issue - but that affects supply too, no? So does AirBnB, Renters, etcetc. All things which reduce supply of owner avail homes, driving up the price of homes and furthering the cycle. My understanding of all this is absurdly minimal, though. I just own a home (in the US), and that's about it. So please correct me if i'm wrong. Thoughts?
    - pstrateman 3y ago
      Demand in Canada in entirely from immigration, there's an obvious solution.
      - unshavedyak 3y ago
        Ah, so is this tied to your previous comment? Ie you're saying ~"not a supply issue, it's a demand issue" and you mean that there is an artificial demand causing the supply to be insufficient. That the supply would be otherwise sufficient, if not for the external sources of demand. I'm not familiar with the immigration issue in Canada, i'll have to peek at that. Appreciate your clarity
  - pcthrowaway 3y ago
    > Nearly 7% of the entire Canadian work force is building new houses. Source? No really. This is shocking to me. 3% of Canadians work in construction and I suspect the majority of them are not working on housing. Do you mean 7% of the workforce participates in housing development and maintenance tangentially? Like, including lawyers, lobbyists, politicians, the portion of construction workers who aren't building roads and film sets, other craftsmen, people doing renovations, plumbers, hvac, insurance, inspection, etc. Canada also has a lot of red tape around new builds that draws out the development process significantly, a lot of which necessitates all the other labor going into building too little housing for the population growth.
    - pstrateman 3y ago
      I cant find the source of that, but here's some information on the new construction lagging immigration. https://www.fraserinstitute.org/studies/canadas-growing-housing-gap-1972-2022#:~:text=Throughout%20most%20of%20this%20period,than%20at%20any%20other%20time https://www.fraserinstitute.org/studies/canadas-growing-hous....
- ozmodiar 3y ago
  My city is popping up condos at a rate I haven't seen since I was in China in the 2000s.
  - wubrr 3y ago
    I bet 80%+ of that is bought by investors before construction completes.
    - ozmodiar 3y ago
      They openly advertise on the side of the buildings that x% of units are already sold while there's barely a frame up.
    - polski-g 3y ago
      If enough housing was being built, then the expected return on houses would be negative and investors wouldn't be buying them.
      - wubrr 3y ago
        You're ignoring the fact that most of the new supply being purchased by investors means they have more power to increase rents, re-leverage their existing real-estate and buy up more. Continuously increasing real-estate prices and rents until the bubble bursts. If everything worked based on the most basic econ101 principles, we wouldn't have any bubbles in the first place.
  - catskul2 3y ago
    Which city, and how long has that been the case? There's likely quite a bit of backed up demand. Typically when supply doesn't meet demand, the price goes up, the supply responds, and only after that does the price level off (or come down).
mattmaroon 3y ago
If Canada is building plenty of housing, why the multi-decade crisis? Governments that wish to keep housing prices rising do so almost exclusively by limiting building housing. I've read a lot by economists on this over the years and they all agree lack of new housing is the problem in the Canadian home market so if you've got an alternative take I'd love to hear it.
- onlyrealcuzzo 3y ago
  > Governments that wish to keep housing prices rising do so almost exclusively by limiting building housing. This is the case in the US - not Canada. China peaked at ~25% of GDP coming from Real Estate Development. Canada has been in the high teens for the last decade. The US and most non-housing bubble countries are around ~5%.
  - betaby 3y ago
    > Canada has been in the high teens for the last decade. No. Canada in 'in the high teens' is mostly reselling the same stock over and over.
  - mattmaroon 3y ago
    I don't think these rates are new housing. You're looking at the real estate market as a whole. There's no way 25% of China's GDP is new housing, or Canada high teens. As real estate as a whole climbs as a percent of GDP you expect to see more NIMBYism because it means people have even more of their wealth tied into their homes, and more reason to not want competition. Which, economists seem to agree, is exactly what has happened in Canada. Canada is only a country of 38 million and they are expected to take in 1 million migrants this year, all of whom don't bring a home with them. They took in half that last year. Their population is growing much faster than ours, but new housing starts are only around a quarter million per year. I don't assume they are correct just because they are in wide agreement which is why I'm asking what you know that I (or they) don't. The total percent of GDP from the real estate market doesn't indicate much other than that houses are unsustainably expensive.
- mikerg87 3y ago
pcthrowaway 3y ago
> Canada is building plenty of housing. Canada is adding less housing stock than new residents (births plus immigrants minus deaths) every year, and the housing stock was already inadequate for the population 5 years ago. I love that Canada is known as a welcoming country to people from diverse backgrounds, but the fact that the government treats housing and immigration policies separately is absolutely unhinged.
- throwaway5752 3y ago
  absolutely unhinged It seems less than ideal, or maybe even illogical, but calling it "absolutlely unhinged" feels a bit dramatic. I'm not from Canada - how does Canada currently relate housing and immigration policy, and how would you propose they change it?
  - mitthrowaway2 3y ago
    As I understand it, the government sets targets / limits for immigration, and sets goals for housing. While the latter may be somewhat informed by the former, these two goals are not mathematically linked, and if housing construction falls short of the goal, that's just treated as an "oh well, we'll try again next year" scenario. I agree that "unhinged" is dramatic, but I would say this is not very coordinated or effective. A more direct method would be to apply hard caps to the following year's immigration numbers based on the previous year's actual measured housing completions. I think this would much more powerfully align pro-immigration interest groups with pro-housing-construction interest groups, resulting in much more home construction, whereas presently there is substantial conflict between the two (especially landowners who benefit from rising demand for scarce housing).
    - throwaway5752 3y ago
      That's a reasonable idea. I wonder how units that are operating as AirBNB rentals would or could be accounted for under that policy, though.
      - 3y ago
derefr 3y ago
Canada is building plenty of homes; but homes are not housing, per se. "Housing" is usually used in these policy conversations as an abbreviation for "affordable housing" — and Canada is very much not building that. At least not in the large numbers needed. The majority of Canadian property developers — at least, the majority of the ones who can afford to buy up lots for redevelopment in this market — seem to have an overt, almost monomaniacal focus on developing only top-of-market properties. Municipalities have to essentially force them at gunpoint to take any consideration for creating any housing stock to sell to the rest of the market. • When you look at any new condo development in a Canadian city (without government affordable-housing involvement), there end up being no bachelor, 1bd, or even 2bd units in the development; it's all 3bd+. Picture a condo tower where every floor is the penthouse. Many Canadian property developers only build this type of condo building. • Likewise, when you look at any new SFH development in a Canadian city (without government affordable-housing involvement), there end up being no small-lot developments; instead, contiguous previously reasonably-sized lots are almost always bought up and merged, to create space to plop down a McMansion. Again, many Canadian property developers only build McMansions. Letting these kinds of developers loose on a city, results in a sort of "second-wave gentrification", where neighbourhoods previously affordable to the middle class, get rebuilt to be only affordable by the upper class (for whom this is mostly not their primary residence, but rather a rental property/airbnb, investment property, vacation home, property to lend to friends/family visiting them, etc.) Classical "first wave" gentrification pushes the working class out of the city — creating a situation where the service economy of the city becomes driven by those commuting from outside the city, and low-margin service-economy businesses struggle to retain talent. (Which in turn forces the city to look into the creation/expansion of high-speed regional transit — because suddenly all the service-worker commuters are clogging the highways to get to work from the cheap exurbs.) "Second wave" gentrification, in the places it happens, pushes the professional class outside the city as well. Now, even people like doctors, corporate managers, etc. struggle to afford to live near their place of work. Unlike the service workers being pushed out — which is mostly a "silent" problem observable only to the service workers themselves, those trying to hire them, and city infrastructure planners — the professional class being pushed out is a problem observable by the public. The professional class often includes small-business owners, who previously operated some retail/office/clinic/etc in the city, out of street-fronted commercial rental space close to where they live. Having had their living space pushed out of the city, rather than commuting, these business owners will often choose to simply move their business, so that they can continue to live close to work. This "empties out" the city of amenities, as anything run by this class relocates to the cheaper exurbs. Big corporate offices do remain in the city, as big corporate executives — the ones who decide where to put their office — are exactly the kind of upper-class who can still afford to live in the city. So you now get "suits" commuting into the city. And big chain businesses still manage to exist in the city to cater to these workers' needs (though even some of these do start to shutter their unaffordable urban-core locations.) But all the independent restaurants and other nice after-work things that made these bigcorp workers want to take a job in that city, are gone. So these workers start heading straight home after work. And that causes the revenue of even chain businesses within the city begins to crumble. The city becomes "sleepy." Things start closing at 10PM or earlier, because the revenue past that hour isn't worth staffing a graveyard shift. The city stops being known for its "vibrant nightlife." (See also: Manhattan, one of the earliest victims of property-development-driven second-wave gentrification ~40 years ago. All the amenities shifted to the other boroughs of NYC, and now there's nothing for locals "in" Manhattan any more — save for a few family businesses that have fully owned their properties for decades, and who could be overnight millionaires by selling, but keep holding off.) --- Mind you, I do understand why the housing developers have this focus. As profit-driven companies, property developers aim to increase margins; and if you're in a market where there is high demand from the every "level" of the market, then you're going to gravitate toward building for the top-of-market bidders, as the accepted cost-plus-percentage pricing model of for real estate translates into higher absolute profits when building more expensive properties. As well, there's less bureaucratic overhead (both in terms of labor dealing with bureaucracy, and in terms of government fees) involved in building + selling fewer, larger lots, vs. more, smaller lots. And there's the fact that the most in-demand lots, if you luck into developing one, can be fought over by buyers, resulting in bids skyrocketing, and you the developer pocketing most of that first-sale surplus. But these factors are exactly why governments in Canada, at all levels, must step in (and lately, increasingly are stepping in) to regulate property development. Developers aren't gonna just stop obeying market forces on their own. Governments either have to tweak the market forces themselves (e.g. by blocking foreign purchase of investment properties for speculation, as has been done in BC), or require the building of at least some lots/units designed to be affordable as part of larger developments. Of course, a property developer that wasn't driven by a profit motive, would be able to just build entirely affordable housing. No level of Canadian government has gone so far as to propose setting one of these up as a Crown corporation... just yet. But that might be where things end up. Because, as you say, the only other lever the government has — decreasing the value of existing housing — isn't one any government is ever going to pull.
J_Shelby_J 3y ago
> when your government is in the business of guaranteeing house prices go up This is why people blame airbnb and PE. It makes them uncomfortable to blame the government, and by extension their parents, for creating this situation. It's much easier to blame a faceless other.
snapplebobapple 3y ago
We are not building plenty of housing. We started the most houses we have since 1973 in 2021, but we aren't setting any records (Canada's population in 1973 was ~23 million vs ~40 million today). (for reference: https://www.statista.com/statistics/198040/total-number-of-canadian-housing-starts-since-1995/ https://www.statista.com/statistics/198040/total-number-of-c...) We probably need to double or triple our output for a decade to bring housing per capita back into line with a balanced market. What we are doing is massively overpaying for land and massively overpaying for government ineptitude on each of those units, which is why housing is such a large part of the GDP when it is embarrassing on an actual production basis.

wubrr 3y ago

Canada is not building enough housing, but you're 100% right about the government propping up the housing prices any way it can.

pstrateman 3y ago
Nearly 7% of the entire Canadian work force is building new houses. That's double the next closest industrial country. Canada doesn't have a supply issue, it has a demand issue.
- selectodude 3y ago
  There’s no such thing as a demand issue. Canada should consider importing immigrants who can work in construction in addition to the billions of dirty Chinese money. Problem solved.
  - onlyrealcuzzo 3y ago
    If your government creates artificial demand - that's a demand problem. The demand isn't real. It's synthesized from unsustainable government policies. Set interest rates to -100% - see what happens to housing demand. Is that a supply problem? Should Canada build 800 trillion houses to fill the appetite for free government money that will eventually implode? Or is it a demand problem because your government is dumb?
    - chis 3y ago
      I don’t understand. This theory implies that a significant percentage of Canadian houses are empty due to speculation. Is there any evidence for that theory? Looking a bit online it feels like this might be a disproven theory https://financialpost.com/real-estate/busting-the-myth-of-canadas-million-or-more-vacant-homes/wcm/432c4af9-3aa5-43c2-bc4d-693da336a276/amp/ https://financialpost.com/real-estate/busting-the-myth-of-ca... Also just on a very fundamental level - outside of luxury housing, why wouldn’t investors rent out the houses they’re sitting on? Sure it’s nice to own an appreciating asset but isn’t it also nice to rent it for 10% of its value yearly?
      - wubrr 3y ago
        They didn't say they are empty? Most investors aren't keeping their properties empty. The empty places are generally owned wealthy people as a second/third home, or as means for foreigners to offshore their wealth. And this accounts for a tiny fraction of the housing supply compared to domestic/corporate real estate investors.
    - selectodude 3y ago
      The demand is absolutely real. People are actually buying these properties. The prices are subsidized by government policy. Instead of fixing the supply side of the equation, Canada has decided to give away money so cheaply that normal people can afford the obscene prices for real estate. Interestingly, increasing the number of people that can afford a house without changing the supply makes prices go up. Who knew?!
    - ushtaritk421 3y ago
      Immigration is the natural effect of people moving to where the market price of labor “demands” they move. Doesn’t seem that artificial.
      - wubrr 3y ago
        What? The market price of labor always 'demands' that it be lower... literally import millions of 3rd world immigrants into any first-world country and you will see housing shortages, infrastructure shortages, wage decreases/stagnation, and increased corporate profits.
- infecto 3y ago
  Seems that would mean its a supply issue? I mean sure, Airbnb does suck as in a lot of areas they skirt under the normal hotel rules/taxation but wouldn't building more help this problem?
- shuckles 3y ago
  50% of the workforce could be involved in construction, but if the product being built is slowly-approved with intensive white collar labor permitting single family spec development, not many new units will come out at the other end. A measure like workforce input needs to consider productivity.
- wubrr 3y ago
  The point is supply does not match demand. Immigration is unlikely to ever be low enough to counter the housing demand at this point - every single corporate/lobbying group in Canada is pushing for more immigration, and every single relevant political party is very clearly signaling that they will always bow to these demands. And I agree that a lot of our economy and workforce is already dedicated to building housing - increasing this is not a realistic solution. The only realistic way to improve the supply/demand is to disincentivize the investors from gobbling up the majority of our new housing supply.
- bwanab 3y ago
  I hope not to come across as condescending, but in normal usage a demand issue is one in which there's not enough demand (think: the global financial crisis in 2008/9). When there is too much demand and not enough supply as clearly seems the case here, irrespective of why that's true, that's a supply issue.
- unshavedyak 3y ago
  What does that mean? Sorry for being dense, but are the two not related? Furthermore, what solutions are there? People advocate building to allow for natural supply<->demand relationships to curb the absurd home price increases. Isn't more supply simply one of the biggest factors to lowering the prices? Of course, purchasing homes via speculation is also a huge issue - but that affects supply too, no? So does AirBnB, Renters, etcetc. All things which reduce supply of owner avail homes, driving up the price of homes and furthering the cycle. My understanding of all this is absurdly minimal, though. I just own a home (in the US), and that's about it. So please correct me if i'm wrong. Thoughts?
  - pstrateman 3y ago
    Demand in Canada in entirely from immigration, there's an obvious solution.
    - unshavedyak 3y ago
      Ah, so is this tied to your previous comment? Ie you're saying ~"not a supply issue, it's a demand issue" and you mean that there is an artificial demand causing the supply to be insufficient. That the supply would be otherwise sufficient, if not for the external sources of demand. I'm not familiar with the immigration issue in Canada, i'll have to peek at that. Appreciate your clarity
- pcthrowaway 3y ago
  > Nearly 7% of the entire Canadian work force is building new houses. Source? No really. This is shocking to me. 3% of Canadians work in construction and I suspect the majority of them are not working on housing. Do you mean 7% of the workforce participates in housing development and maintenance tangentially? Like, including lawyers, lobbyists, politicians, the portion of construction workers who aren't building roads and film sets, other craftsmen, people doing renovations, plumbers, hvac, insurance, inspection, etc. Canada also has a lot of red tape around new builds that draws out the development process significantly, a lot of which necessitates all the other labor going into building too little housing for the population growth.
  - pstrateman 3y ago
    I cant find the source of that, but here's some information on the new construction lagging immigration. https://www.fraserinstitute.org/studies/canadas-growing-housing-gap-1972-2022#:~:text=Throughout%20most%20of%20this%20period,than%20at%20any%20other%20time https://www.fraserinstitute.org/studies/canadas-growing-hous....
ozmodiar 3y ago
My city is popping up condos at a rate I haven't seen since I was in China in the 2000s.
- wubrr 3y ago
  I bet 80%+ of that is bought by investors before construction completes.
  - ozmodiar 3y ago
    They openly advertise on the side of the buildings that x% of units are already sold while there's barely a frame up.
  - polski-g 3y ago
    If enough housing was being built, then the expected return on houses would be negative and investors wouldn't be buying them.
    - wubrr 3y ago
      You're ignoring the fact that most of the new supply being purchased by investors means they have more power to increase rents, re-leverage their existing real-estate and buy up more. Continuously increasing real-estate prices and rents until the bubble bursts. If everything worked based on the most basic econ101 principles, we wouldn't have any bubbles in the first place.
- catskul2 3y ago
  Which city, and how long has that been the case? There's likely quite a bit of backed up demand. Typically when supply doesn't meet demand, the price goes up, the supply responds, and only after that does the price level off (or come down).

mattmaroon 3y ago

If Canada is building plenty of housing, why the multi-decade crisis? Governments that wish to keep housing prices rising do so almost exclusively by limiting building housing. I've read a lot by economists on this over the years and they all agree lack of new housing is the problem in the Canadian home market so if you've got an alternative take I'd love to hear it.

onlyrealcuzzo 3y ago
> Governments that wish to keep housing prices rising do so almost exclusively by limiting building housing. This is the case in the US - not Canada. China peaked at ~25% of GDP coming from Real Estate Development. Canada has been in the high teens for the last decade. The US and most non-housing bubble countries are around ~5%.
- betaby 3y ago
  > Canada has been in the high teens for the last decade. No. Canada in 'in the high teens' is mostly reselling the same stock over and over.
- mattmaroon 3y ago
  I don't think these rates are new housing. You're looking at the real estate market as a whole. There's no way 25% of China's GDP is new housing, or Canada high teens. As real estate as a whole climbs as a percent of GDP you expect to see more NIMBYism because it means people have even more of their wealth tied into their homes, and more reason to not want competition. Which, economists seem to agree, is exactly what has happened in Canada. Canada is only a country of 38 million and they are expected to take in 1 million migrants this year, all of whom don't bring a home with them. They took in half that last year. Their population is growing much faster than ours, but new housing starts are only around a quarter million per year. I don't assume they are correct just because they are in wide agreement which is why I'm asking what you know that I (or they) don't. The total percent of GDP from the real estate market doesn't indicate much other than that houses are unsustainably expensive.
mikerg87 3y ago

pcthrowaway 3y ago

> Canada is building plenty of housing. Canada is adding less housing stock than new residents (births plus immigrants minus deaths) every year, and the housing stock was already inadequate for the population 5 years ago. I love that Canada is known as a welcoming country to people from diverse backgrounds, but the fact that the government treats housing and immigration policies separately is absolutely unhinged.

throwaway5752 3y ago
absolutely unhinged It seems less than ideal, or maybe even illogical, but calling it "absolutlely unhinged" feels a bit dramatic. I'm not from Canada - how does Canada currently relate housing and immigration policy, and how would you propose they change it?
- mitthrowaway2 3y ago
  As I understand it, the government sets targets / limits for immigration, and sets goals for housing. While the latter may be somewhat informed by the former, these two goals are not mathematically linked, and if housing construction falls short of the goal, that's just treated as an "oh well, we'll try again next year" scenario. I agree that "unhinged" is dramatic, but I would say this is not very coordinated or effective. A more direct method would be to apply hard caps to the following year's immigration numbers based on the previous year's actual measured housing completions. I think this would much more powerfully align pro-immigration interest groups with pro-housing-construction interest groups, resulting in much more home construction, whereas presently there is substantial conflict between the two (especially landowners who benefit from rising demand for scarce housing).
  - throwaway5752 3y ago
    That's a reasonable idea. I wonder how units that are operating as AirBNB rentals would or could be accounted for under that policy, though.
    - 3y ago

derefr 3y ago

Canada is building plenty of homes; but homes are not housing, per se. "Housing" is usually used in these policy conversations as an abbreviation for "affordable housing" — and Canada is very much not building that. At least not in the large numbers needed. The majority of Canadian property developers — at least, the majority of the ones who can afford to buy up lots for redevelopment in this market — seem to have an overt, almost monomaniacal focus on developing only top-of-market properties. Municipalities have to essentially force them at gunpoint to take any consideration for creating any housing stock to sell to the rest of the market. • When you look at any new condo development in a Canadian city (without government affordable-housing involvement), there end up being no bachelor, 1bd, or even 2bd units in the development; it's all 3bd+. Picture a condo tower where every floor is the penthouse. Many Canadian property developers only build this type of condo building. • Likewise, when you look at any new SFH development in a Canadian city (without government affordable-housing involvement), there end up being no small-lot developments; instead, contiguous previously reasonably-sized lots are almost always bought up and merged, to create space to plop down a McMansion. Again, many Canadian property developers only build McMansions. Letting these kinds of developers loose on a city, results in a sort of "second-wave gentrification", where neighbourhoods previously affordable to the middle class, get rebuilt to be only affordable by the upper class (for whom this is mostly not their primary residence, but rather a rental property/airbnb, investment property, vacation home, property to lend to friends/family visiting them, etc.) Classical "first wave" gentrification pushes the working class out of the city — creating a situation where the service economy of the city becomes driven by those commuting from outside the city, and low-margin service-economy businesses struggle to retain talent. (Which in turn forces the city to look into the creation/expansion of high-speed regional transit — because suddenly all the service-worker commuters are clogging the highways to get to work from the cheap exurbs.) "Second wave" gentrification, in the places it happens, pushes the professional class outside the city as well. Now, even people like doctors, corporate managers, etc. struggle to afford to live near their place of work. Unlike the service workers being pushed out — which is mostly a "silent" problem observable only to the service workers themselves, those trying to hire them, and city infrastructure planners — the professional class being pushed out is a problem observable by the public. The professional class often includes small-business owners, who previously operated some retail/office/clinic/etc in the city, out of street-fronted commercial rental space close to where they live. Having had their living space pushed out of the city, rather than commuting, these business owners will often choose to simply move their business, so that they can continue to live close to work. This "empties out" the city of amenities, as anything run by this class relocates to the cheaper exurbs. Big corporate offices do remain in the city, as big corporate executives — the ones who decide where to put their office — are exactly the kind of upper-class who can still afford to live in the city. So you now get "suits" commuting into the city. And big chain businesses still manage to exist in the city to cater to these workers' needs (though even some of these do start to shutter their unaffordable urban-core locations.) But all the independent restaurants and other nice after-work things that made these bigcorp workers want to take a job in that city, are gone. So these workers start heading straight home after work. And that causes the revenue of even chain businesses within the city begins to crumble. The city becomes "sleepy." Things start closing at 10PM or earlier, because the revenue past that hour isn't worth staffing a graveyard shift. The city stops being known for its "vibrant nightlife." (See also: Manhattan, one of the earliest victims of property-development-driven second-wave gentrification ~40 years ago. All the amenities shifted to the other boroughs of NYC, and now there's nothing for locals "in" Manhattan any more — save for a few family businesses that have fully owned their properties for decades, and who could be overnight millionaires by selling, but keep holding off.) --- Mind you, I do understand why the housing developers have this focus. As profit-driven companies, property developers aim to increase margins; and if you're in a market where there is high demand from the every "level" of the market, then you're going to gravitate toward building for the top-of-market bidders, as the accepted cost-plus-percentage pricing model of for real estate translates into higher absolute profits when building more expensive properties. As well, there's less bureaucratic overhead (both in terms of labor dealing with bureaucracy, and in terms of government fees) involved in building + selling fewer, larger lots, vs. more, smaller lots. And there's the fact that the most in-demand lots, if you luck into developing one, can be fought over by buyers, resulting in bids skyrocketing, and you the developer pocketing most of that first-sale surplus. But these factors are exactly why governments in Canada, at all levels, must step in (and lately, increasingly are stepping in) to regulate property development. Developers aren't gonna just stop obeying market forces on their own. Governments either have to tweak the market forces themselves (e.g. by blocking foreign purchase of investment properties for speculation, as has been done in BC), or require the building of at least some lots/units designed to be affordable as part of larger developments. Of course, a property developer that wasn't driven by a profit motive, would be able to just build entirely affordable housing. No level of Canadian government has gone so far as to propose setting one of these up as a Crown corporation... just yet. But that might be where things end up. Because, as you say, the only other lever the government has — decreasing the value of existing housing — isn't one any government is ever going to pull.

J_Shelby_J 3y ago

> when your government is in the business of guaranteeing house prices go up This is why people blame airbnb and PE. It makes them uncomfortable to blame the government, and by extension their parents, for creating this situation. It's much easier to blame a faceless other.

snapplebobapple 3y ago

We are not building plenty of housing. We started the most houses we have since 1973 in 2021, but we aren't setting any records (Canada's population in 1973 was ~23 million vs ~40 million today). (for reference: https://www.statista.com/statistics/198040/total-number-of-canadian-housing-starts-since-1995/ https://www.statista.com/statistics/198040/total-number-of-c...) We probably need to double or triple our output for a decade to bring housing per capita back into line with a balanced market. What we are doing is massively overpaying for land and massively overpaying for government ineptitude on each of those units, which is why housing is such a large part of the GDP when it is embarrassing on an actual production basis.