5 ms·

Fifty years ago Montreal was the business centre of Canada, now that’s Toronto. That $800 rate might actually be more affordable in a less business oriented cit

by verelo 2y ago

Fifty years ago Montreal was the business centre of Canada, now that’s Toronto. That $800 rate might actually be more affordable in a less business oriented city, or even Montreal itself since it’s seen a lot of decline in that time. Having said that, there’s zero debate rents are out of control. I own a triplex and every time a unit turns over and i do my research on rent i get a bit shocked. I’ve found myself legitimately concerned how someone can ask for full “market” rate when i know it’s simply not affordable.

wat10000 2y ago
A business center doesn't have to be expensive. That’s made to happen because housing isn’t allowed to be built in sufficient quantity, not a necessary consequence of success.
- SequoiaHope 2y ago
  I think quantity is a valid concern but I also think treating housing as a speculative asset is an issue. Housing serves as a valuable speculative asset precisely because quantity is restricted by a variety of factors, but actually using it as a speculative asset raises prices significantly.
  - friend_Fernando 2y ago
    Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't (there's a bit of slack with relocations, house sharing and spare bedrooms but it's largely inconsequential.) That means that supply (i.e. quantity) is enough. It's true that if it was impossible to speculate on housing, there would be less incentive to create artificial scarcity by e.g. lobbying for restrictive land use policies.
    - SequoiaHope 2y ago
      > Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't This seems like an oversimplification. Speculation affects demand, so the amount of speculation is hidden within “relative scarcity”. If there is no speculation then demand is directly related to the needs and finances of potential occupants. If there is speculation then demand becomes connected to the buying power of the wealthy, and thus demand and prices are likely to be higher. In particular, the wealthy investing class collectively have way, way more money than the renting class, so the finances of the wealthy class distort housing prices upward in ways which dwarf the supply and demand effects from actual renters moving in and out of an area.
      - mlsu 2y ago
        Yes, but this speculation is grounded on the possibility of extracting future rents. Which is an assumption about future relative scarcity. We’ve all decided that it’s totally fine to artificially limit the supply of real estate. Speculation is the market (correctly, in most cases) betting that that will continue.
        deleted 2y ago
        [deleted]
        SequoiaHope 2y ago
        I kept rewriting my reply until I started just looking up research. I should go do something else with my day hah but it seems the affect of speculation on price is unsurprisingly complex. https://www.sciencedirect.com/science/article/abs/pii/S2405851320300258 https://www.sciencedirect.com/science/article/abs/pii/S24058...
      - bobthepanda 2y ago
        While this is true you can’t really speculate on something with ample abundance. Speculation requires scarcity to work.
        wat10000 2y ago
        Which is why it gets such a bad rap. Some of it is deserved: speculation can involve taking a scarce resource and making it even scarcer. But even milder forms can look bad, because they show up alongside scarcity, and that whole correlation/causation thing gets people thinking. M
      - seanmcdirmid 2y ago
        That isn’t quite right. Speculators look for good deals, meaning they look at prices N years from now and try to make money on that. They aren’t pushing prices up just for existing, they are predicting higher prices and acting to take advantage of that. They are looking for second hand property that is undervalued for the horizon they are looking at. But yes, wealthy people have more capital and leverage to participate in time-displaced arbitrage. Gentrification is a bit more productive, since investors work at making their properties more valuable at least.
  - nikitaga 2y ago
    Just saying "speculation" doesn't really paint the picture of what's going on. In 2010-s everyone here blamed foreign speculators hiding in the shadows, but we live in a different, worse, world now. This country's housing and immigration & temp. resident policies are absolutely out of sync, intentionally. In 2021 they've changed the rules to add hundreds of thousands of people overnight, but did not build anywhere close to the corresponding amount of housing. Then they did it next year again, and again, and again, and they're still doing it, and the next government plans to continue doing it. This isn't mere speculation. This is deliberate policy to manufacture a housing crisis. To not only keep the pre-existing crisis going, but to deliberately and methodically escalate it. Politicians profit both from their own investment properties and from bribes (ahem campaign contributions, speaking fees, board positions, ...) paid to them by all kinds of businesses who profit from oversupply of labour and undersupply of housing. "Speculation" implies taking significant risk, often in an under-regulated market. But the current situation is nothing like that – there is barely any risk, when both the supply (zoning & construction) and demand (population growth) sides of the market are heavily regulated with the intent to raise prices. Capital is all you need to reap the profits, pretty much.
    - gottorf 2y ago
      > the next government plans to continue doing it Asking as someone not that familiar with Canadian politics, is this "the next government" as in the Liberal one that would replace Trudeau after his resignation, or the (likely) Conservative one that would be in power after the general election?
      - willhslade 2y ago
        Conservative. What is likely to happen is that the Liberal party picks a new leader and that leader calls an election.
      - nikitaga 2y ago
        The latter. Conservatives have shown no serious interest in reducing immigration. Their politicians get all the same profits from the crisis, plus the votes of socially conservative immigrants on top. Canadian politics is full of weird alliances.
- cudgy 2y ago
  And yet most large cities have sections of it that are in total blight with abandoned homes, with windows blown out or plywood covering access holes to prevent intruders. Much of the problem is that the bourgeois class wants to live in the popular neighborhood, bidding up rents and values in isolated sections of large cities. Meanwhile, large chunks of cities have relatively affordable, but not as attractive neighborhoods with homes that could be converted to house the homeless for a fraction of what it would cost to build new housing. Just the other day, I heard a news report in my area where they allocated money for homeless at $100,000 per bed in order to add more beds to an existing shelter in the downtown area. Yet this city has neighborhoods with cheap and unoccupied homes that could be bought to house these homeless for much less than 100,000 per bed.
  - andirk 2y ago
    Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year. As a proponent, I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit. Housing as a speculative asset has some pretty terrible consequences. [0] https://www.berkeleyside.org/2022/10/23/election-2022-measure-m-berkeleys-vacancy-tax https://www.berkeleyside.org/2022/10/23/election-2022-measur... [1] https://rentboard.berkeleyca.gov/sites/default/files/documents/Empty%20Homes%20Tax%20Guide.pdf https://rentboard.berkeleyca.gov/sites/default/files/documen...
    - cudgy 2y ago
      I don’t disagree that speculation on a critical resource like housing is a really harmful phenomena. Another concern is when people use housing as a store of value for diversity in their portfolio. These long term “investors” are less likely to care whether their houses are rented or occupied as they have enough wealth to weather the loss of revenue or even fluctuations of the asset prices. The empty home tax is a great idea, but my guess is the tax/fee is not significant enough to change investor behavior. Or possibly it’s not being enforced at the level it should be?
    - 2y ago
squigz 2y ago
I'd be shocked if you could find $800 rent in any city in Ontario, business-oriented or not.
- seanmcdirmid 2y ago
  Windsor? As a nicer Detroit, I thought they might at least benefit from weaker rents considering what’s available across the border. But that’s just a guess, I haven’t lived in that area since the 80s. Here is one source that says a 1 bedroom will set you back $1400: https://www.zumper.com/apartments-for-rent/windsor-on https://www.zumper.com/apartments-for-rent/windsor-on
  - squigz 2y ago
    Ha, I wish.

by verelo 2y ago

wat10000 2y ago

A business center doesn't have to be expensive. That’s made to happen because housing isn’t allowed to be built in sufficient quantity, not a necessary consequence of success.

SequoiaHope 2y ago
I think quantity is a valid concern but I also think treating housing as a speculative asset is an issue. Housing serves as a valuable speculative asset precisely because quantity is restricted by a variety of factors, but actually using it as a speculative asset raises prices significantly.
- friend_Fernando 2y ago
  Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't (there's a bit of slack with relocations, house sharing and spare bedrooms but it's largely inconsequential.) That means that supply (i.e. quantity) is enough. It's true that if it was impossible to speculate on housing, there would be less incentive to create artificial scarcity by e.g. lobbying for restrictive land use policies.
  - SequoiaHope 2y ago
    > Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't This seems like an oversimplification. Speculation affects demand, so the amount of speculation is hidden within “relative scarcity”. If there is no speculation then demand is directly related to the needs and finances of potential occupants. If there is speculation then demand becomes connected to the buying power of the wealthy, and thus demand and prices are likely to be higher. In particular, the wealthy investing class collectively have way, way more money than the renting class, so the finances of the wealthy class distort housing prices upward in ways which dwarf the supply and demand effects from actual renters moving in and out of an area.
    - mlsu 2y ago
      Yes, but this speculation is grounded on the possibility of extracting future rents. Which is an assumption about future relative scarcity. We’ve all decided that it’s totally fine to artificially limit the supply of real estate. Speculation is the market (correctly, in most cases) betting that that will continue.
      - deleted 2y ago
        [deleted]
      - SequoiaHope 2y ago
        I kept rewriting my reply until I started just looking up research. I should go do something else with my day hah but it seems the affect of speculation on price is unsurprisingly complex. https://www.sciencedirect.com/science/article/abs/pii/S2405851320300258 https://www.sciencedirect.com/science/article/abs/pii/S24058...
    - bobthepanda 2y ago
      While this is true you can’t really speculate on something with ample abundance. Speculation requires scarcity to work.
      - wat10000 2y ago
        Which is why it gets such a bad rap. Some of it is deserved: speculation can involve taking a scarce resource and making it even scarcer. But even milder forms can look bad, because they show up alongside scarcity, and that whole correlation/causation thing gets people thinking. M
    - seanmcdirmid 2y ago
      That isn’t quite right. Speculators look for good deals, meaning they look at prices N years from now and try to make money on that. They aren’t pushing prices up just for existing, they are predicting higher prices and acting to take advantage of that. They are looking for second hand property that is undervalued for the horizon they are looking at. But yes, wealthy people have more capital and leverage to participate in time-displaced arbitrage. Gentrification is a bit more productive, since investors work at making their properties more valuable at least.
- nikitaga 2y ago
  Just saying "speculation" doesn't really paint the picture of what's going on. In 2010-s everyone here blamed foreign speculators hiding in the shadows, but we live in a different, worse, world now. This country's housing and immigration & temp. resident policies are absolutely out of sync, intentionally. In 2021 they've changed the rules to add hundreds of thousands of people overnight, but did not build anywhere close to the corresponding amount of housing. Then they did it next year again, and again, and again, and they're still doing it, and the next government plans to continue doing it. This isn't mere speculation. This is deliberate policy to manufacture a housing crisis. To not only keep the pre-existing crisis going, but to deliberately and methodically escalate it. Politicians profit both from their own investment properties and from bribes (ahem campaign contributions, speaking fees, board positions, ...) paid to them by all kinds of businesses who profit from oversupply of labour and undersupply of housing. "Speculation" implies taking significant risk, often in an under-regulated market. But the current situation is nothing like that – there is barely any risk, when both the supply (zoning & construction) and demand (population growth) sides of the market are heavily regulated with the intent to raise prices. Capital is all you need to reap the profits, pretty much.
  - gottorf 2y ago
    > the next government plans to continue doing it Asking as someone not that familiar with Canadian politics, is this "the next government" as in the Liberal one that would replace Trudeau after his resignation, or the (likely) Conservative one that would be in power after the general election?
    - willhslade 2y ago
      Conservative. What is likely to happen is that the Liberal party picks a new leader and that leader calls an election.
    - nikitaga 2y ago
      The latter. Conservatives have shown no serious interest in reducing immigration. Their politicians get all the same profits from the crisis, plus the votes of socially conservative immigrants on top. Canadian politics is full of weird alliances.
cudgy 2y ago
And yet most large cities have sections of it that are in total blight with abandoned homes, with windows blown out or plywood covering access holes to prevent intruders. Much of the problem is that the bourgeois class wants to live in the popular neighborhood, bidding up rents and values in isolated sections of large cities. Meanwhile, large chunks of cities have relatively affordable, but not as attractive neighborhoods with homes that could be converted to house the homeless for a fraction of what it would cost to build new housing. Just the other day, I heard a news report in my area where they allocated money for homeless at $100,000 per bed in order to add more beds to an existing shelter in the downtown area. Yet this city has neighborhoods with cheap and unoccupied homes that could be bought to house these homeless for much less than 100,000 per bed.
- andirk 2y ago
  Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year. As a proponent, I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit. Housing as a speculative asset has some pretty terrible consequences. [0] https://www.berkeleyside.org/2022/10/23/election-2022-measure-m-berkeleys-vacancy-tax https://www.berkeleyside.org/2022/10/23/election-2022-measur... [1] https://rentboard.berkeleyca.gov/sites/default/files/documents/Empty%20Homes%20Tax%20Guide.pdf https://rentboard.berkeleyca.gov/sites/default/files/documen...
  - cudgy 2y ago
    I don’t disagree that speculation on a critical resource like housing is a really harmful phenomena. Another concern is when people use housing as a store of value for diversity in their portfolio. These long term “investors” are less likely to care whether their houses are rented or occupied as they have enough wealth to weather the loss of revenue or even fluctuations of the asset prices. The empty home tax is a great idea, but my guess is the tax/fee is not significant enough to change investor behavior. Or possibly it’s not being enforced at the level it should be?
  - 2y ago

squigz 2y ago

I'd be shocked if you could find $800 rent in any city in Ontario, business-oriented or not.

seanmcdirmid 2y ago
Windsor? As a nicer Detroit, I thought they might at least benefit from weaker rents considering what’s available across the border. But that’s just a guess, I haven’t lived in that area since the 80s. Here is one source that says a 1 bedroom will set you back $1400: https://www.zumper.com/apartments-for-rent/windsor-on https://www.zumper.com/apartments-for-rent/windsor-on
- squigz 2y ago
  Ha, I wish.