6 ms·

>and bringing too many people into the country via immigration. In a functioning economy, more immigration will just result in more housing being built, as lon

>and bringing too many people into the country via immigration. In a functioning economy, more immigration will just result in more housing being built, as long as the immigrants are working. Especially since the cost of housing construction is largely the cost of labor. Immigration is a distraction from the core inability to build more housing.

brailsafe 2y ago
Cost of housing is influenced by much more than labor and raw material.
- thereisnospork 2y ago
  In our current, over-regulated market: yes absolutely. In a healthy market, cost of low-end housing should approach the cost of labor + raw material (plus necessary overhead for e.g. inspections, plus a reasonable risk-adjusted return on construction). Cost of materials/labor simply slides/scales with additional stories / more difficult terrain. Land/space, while not an infinite resource, is hardly limited on the scale necessary to house people outside of extremely small niches. Views of central park are always going to be expensive, but there are a lot of square miles <45minutes to times square where someone would very profitably build and run (e.g.) an SRO if they were allowed to.
  - Ekaros 2y ago
    Also in healthy market bottom end should be housing build decades ago and already fully paid for. Now it would mean large mid-rises. But still, entirely reasonable standard of living when you are not been brainwashed into needing expensive wasteful single family buildings.
mrkstu 2y ago
"In a functioning economy" is doing a lot of work here. Here in reality the parent comment is 100% correct.
- brailsafe 2y ago
  Yep. One might ask what happens if you don't have a functioning economy? Well, this kind of state. A massive failure for anyone but those who don't have theirs.
- Qwertious 2y ago
  My point is that immigration is a distraction from the nonfunctioning economy.
  - cudgy 2y ago
    And yet the non-functioning economy might be a result of the excessive immigration. Which one is easiest to address?
    - Qwertious 2y ago
      >And yet the non-functioning economy might be a result of the excessive immigration. It's not. If you have a narrative for how immigration could explain why there's record-high home prices and yet there isn't a corresponding spike in construction, then please post it. Because this is pretty obviously a problem of suppressed supply.
      - cudgy 2y ago
        I’m not implying that immigration is the only reason for higher housing prices. My opinion is that 0% interest rates and loose credit are the primary reason. However, simple supply/demand would suggest that immigration AND 0% interest rates both affect demand quickly while supply requires securing land, building homes and getting approval to build homes takes significant time. Migrations are happening at a faster rate than housing can be built so it definitely has an impact on prices.
        rhubarbtree 2y ago
        On HN and on tech twitter I often see this statement: “the reason rents are high is because we don’t build enough houses.” But I don’t think that’s really true, I think that’s very simplistic. The missing observation is that housing has become an asset class in a way it wasn’t in the past. Large numbers of people purchase houses to rent seek as landlords, and the only limit to the demand for rent seeking is the ability of those landlords to borrow money. So a major determinant of rent is now the ability to borrow money, the interest rate, and the number of people wanting to be rent seeking landlords. Increasing the housing supply by the amount physically practical in say the course of a decade is probably unlikely to make much difference to rents if the primary driver of rent prices is the ability of rent seekers to borrow to buy the new properties. First time buyers can’t compete on borrowing because they have smaller deposits or less access to capital, so they are forced to rent, which means the rent seekers can continue to buy up properties. In the UK, buy to let mortgages have become a substitute for pensions for the baby boomer generation. Encouraged by the government, housing as a yielding asset has essentially taxed the young to pay for the boomers retirement. Whilst housing can be used as a rent seeking asset, it is very unlikely building new houses is going to lower rents. Landlords will simply always be able to outbid renters, so rent will remain at the height of whatever the renters can afford, I.e. extract the maximum rent possible. There is an endless demand for housing from rent seekers, provided they can rent out that property. Couple this with the fact that the government in the UK at least has used the property market to hide the reality of the economy - that the economy is basically collapsing - there is so much vested interest in maintaining the status quo that no regulation will be introduced that will cause rents to drop, such as limiting the access of rent seekers to capital, or preserving properties for owner buyers etc. Tl;dr - rents are expensive not because there is too little housing, but because we need them to be expensive.
dghlsakjg 2y ago
What's funny is that I would bet money that immigrants to Canada have a higher employment rate than Canadian citizens as a whole. I say that as a member of both groups.
lostlogin 2y ago
The continual drive for growth is a problem though. By definition it isn’t sustainable, yet we keep adding, consuming, growing.
- brailsafe 2y ago
  Why is a drive for growth bad? Seems like the double-speak of saying growth is bad while happily profiting off of and simultaneously restricting it is whats bad. Growing up in a prairie city I heard this sentiment from people who simply don't like other people constantly, and I'm like "When did you try growing, you stagnant deteriorated shithole!?", and sprawl doesn't count. They hate ambition, they hate people, they hate taxes, and have no interesting ideas. They hate traffic, but refuse to do anything but drive. Their healthcare system and infrastructure is failing, there is no new economic activity happening; get busy growing or get busy dying. It doesn't work though if you stop for 70 years and then try to catch up.
  - lostlogin 2y ago
    A lot of what you say here I agree with. I'm not sure that I'd define maintenance of infrastructure as growth though, and I too hate sprawl. Growing the economy is great, but only if done in such a way that it's sustainable. Growth or death is too simplistic, perfectly captured by the grandparent comment. Bringing in immigrants to generate growth when you can't house the current population seems crazy. Things don't have to get bigger to be successful. You could make a business and have zero employees and make a living. Does it need to be a massive company that's growing? There is always a limit, and something will eventually prevent growth, so why does it have to be an external force? Where I am we are trashing the waterways and the land in pursuit of money. You can't swim in most our rivers anymore - the recent numbers look good though, as the government redefined 'swimmable' and now it's 'safe', despite the contaminants. https://www.nzgeo.com/stories/explainer-new-swimmable-water-standards/ https://www.nzgeo.com/stories/explainer-new-swimmable-water-...
- epistasis 2y ago
  Trying to house the people we have is in no way a "drive for growth".
cyberax 2y ago
In a functioning economy, people won't be feeling pressure to move into a handful of population centers. Canada has PLENTY of free space for construction, and modern construction is pretty cheap and efficient. But economic forces are concentrating the growth in a few areas. Well-intentioned efforts to force "affordable housing" and "walkable neighborhoods" make these forces even worse. The root cause fix is to stop the economic forces that pack people into ever smaller areas.
- amanaplanacanal 2y ago
  People have been moving from rural areas to cities since the beginning of the industrial revolution. People want to improve their economic lot, and that is the most likely way to do it. I didn't know of it is even possible to stop that in a capitalist society.
  - BlueTemplar 2y ago
    And even before, but cities used to be much more deadly.
summeroflove20 2y ago
"as long as the immigrants are working" And their family members, and the money they work for stays in-country and is not sent overseas. Not commenting on your stance of the costs of construction, that's ridiculous to be left there on its own. Get more out, to get a reality check.
oezi 2y ago
Housing is an inelastic commodity. Increased demand will take considerable time to lead to additional supply. Over-supply is even harder to reduce because housing is amortized over 20 or more years. Developers are well aware of the cyclic nature of the housing market and thus reluctant to invest in many cases.

brailsafe 2y ago

Cost of housing is influenced by much more than labor and raw material.

thereisnospork 2y ago
In our current, over-regulated market: yes absolutely. In a healthy market, cost of low-end housing should approach the cost of labor + raw material (plus necessary overhead for e.g. inspections, plus a reasonable risk-adjusted return on construction). Cost of materials/labor simply slides/scales with additional stories / more difficult terrain. Land/space, while not an infinite resource, is hardly limited on the scale necessary to house people outside of extremely small niches. Views of central park are always going to be expensive, but there are a lot of square miles <45minutes to times square where someone would very profitably build and run (e.g.) an SRO if they were allowed to.
- Ekaros 2y ago
  Also in healthy market bottom end should be housing build decades ago and already fully paid for. Now it would mean large mid-rises. But still, entirely reasonable standard of living when you are not been brainwashed into needing expensive wasteful single family buildings.

mrkstu 2y ago

"In a functioning economy" is doing a lot of work here. Here in reality the parent comment is 100% correct.

brailsafe 2y ago
Yep. One might ask what happens if you don't have a functioning economy? Well, this kind of state. A massive failure for anyone but those who don't have theirs.
Qwertious 2y ago
My point is that immigration is a distraction from the nonfunctioning economy.
- cudgy 2y ago
  And yet the non-functioning economy might be a result of the excessive immigration. Which one is easiest to address?
  - Qwertious 2y ago
    >And yet the non-functioning economy might be a result of the excessive immigration. It's not. If you have a narrative for how immigration could explain why there's record-high home prices and yet there isn't a corresponding spike in construction, then please post it. Because this is pretty obviously a problem of suppressed supply.
    - cudgy 2y ago
      I’m not implying that immigration is the only reason for higher housing prices. My opinion is that 0% interest rates and loose credit are the primary reason. However, simple supply/demand would suggest that immigration AND 0% interest rates both affect demand quickly while supply requires securing land, building homes and getting approval to build homes takes significant time. Migrations are happening at a faster rate than housing can be built so it definitely has an impact on prices.
      - rhubarbtree 2y ago
        On HN and on tech twitter I often see this statement: “the reason rents are high is because we don’t build enough houses.” But I don’t think that’s really true, I think that’s very simplistic. The missing observation is that housing has become an asset class in a way it wasn’t in the past. Large numbers of people purchase houses to rent seek as landlords, and the only limit to the demand for rent seeking is the ability of those landlords to borrow money. So a major determinant of rent is now the ability to borrow money, the interest rate, and the number of people wanting to be rent seeking landlords. Increasing the housing supply by the amount physically practical in say the course of a decade is probably unlikely to make much difference to rents if the primary driver of rent prices is the ability of rent seekers to borrow to buy the new properties. First time buyers can’t compete on borrowing because they have smaller deposits or less access to capital, so they are forced to rent, which means the rent seekers can continue to buy up properties. In the UK, buy to let mortgages have become a substitute for pensions for the baby boomer generation. Encouraged by the government, housing as a yielding asset has essentially taxed the young to pay for the boomers retirement. Whilst housing can be used as a rent seeking asset, it is very unlikely building new houses is going to lower rents. Landlords will simply always be able to outbid renters, so rent will remain at the height of whatever the renters can afford, I.e. extract the maximum rent possible. There is an endless demand for housing from rent seekers, provided they can rent out that property. Couple this with the fact that the government in the UK at least has used the property market to hide the reality of the economy - that the economy is basically collapsing - there is so much vested interest in maintaining the status quo that no regulation will be introduced that will cause rents to drop, such as limiting the access of rent seekers to capital, or preserving properties for owner buyers etc. Tl;dr - rents are expensive not because there is too little housing, but because we need them to be expensive.

dghlsakjg 2y ago

What's funny is that I would bet money that immigrants to Canada have a higher employment rate than Canadian citizens as a whole. I say that as a member of both groups.

lostlogin 2y ago

The continual drive for growth is a problem though. By definition it isn’t sustainable, yet we keep adding, consuming, growing.

brailsafe 2y ago
Why is a drive for growth bad? Seems like the double-speak of saying growth is bad while happily profiting off of and simultaneously restricting it is whats bad. Growing up in a prairie city I heard this sentiment from people who simply don't like other people constantly, and I'm like "When did you try growing, you stagnant deteriorated shithole!?", and sprawl doesn't count. They hate ambition, they hate people, they hate taxes, and have no interesting ideas. They hate traffic, but refuse to do anything but drive. Their healthcare system and infrastructure is failing, there is no new economic activity happening; get busy growing or get busy dying. It doesn't work though if you stop for 70 years and then try to catch up.
- lostlogin 2y ago
  A lot of what you say here I agree with. I'm not sure that I'd define maintenance of infrastructure as growth though, and I too hate sprawl. Growing the economy is great, but only if done in such a way that it's sustainable. Growth or death is too simplistic, perfectly captured by the grandparent comment. Bringing in immigrants to generate growth when you can't house the current population seems crazy. Things don't have to get bigger to be successful. You could make a business and have zero employees and make a living. Does it need to be a massive company that's growing? There is always a limit, and something will eventually prevent growth, so why does it have to be an external force? Where I am we are trashing the waterways and the land in pursuit of money. You can't swim in most our rivers anymore - the recent numbers look good though, as the government redefined 'swimmable' and now it's 'safe', despite the contaminants. https://www.nzgeo.com/stories/explainer-new-swimmable-water-standards/ https://www.nzgeo.com/stories/explainer-new-swimmable-water-...
epistasis 2y ago
Trying to house the people we have is in no way a "drive for growth".

cyberax 2y ago

In a functioning economy, people won't be feeling pressure to move into a handful of population centers. Canada has PLENTY of free space for construction, and modern construction is pretty cheap and efficient. But economic forces are concentrating the growth in a few areas. Well-intentioned efforts to force "affordable housing" and "walkable neighborhoods" make these forces even worse. The root cause fix is to stop the economic forces that pack people into ever smaller areas.

amanaplanacanal 2y ago
People have been moving from rural areas to cities since the beginning of the industrial revolution. People want to improve their economic lot, and that is the most likely way to do it. I didn't know of it is even possible to stop that in a capitalist society.
- BlueTemplar 2y ago
  And even before, but cities used to be much more deadly.

summeroflove20 2y ago

"as long as the immigrants are working" And their family members, and the money they work for stays in-country and is not sent overseas. Not commenting on your stance of the costs of construction, that's ridiculous to be left there on its own. Get more out, to get a reality check.

oezi 2y ago

Housing is an inelastic commodity. Increased demand will take considerable time to lead to additional supply. Over-supply is even harder to reduce because housing is amortized over 20 or more years. Developers are well aware of the cyclic nature of the housing market and thus reluctant to invest in many cases.