Someone Explain This So Called Housing Crisis?

[jx820]

Because shelter is right behind food in the higherarchy of needs demand is incredibly reliable. 100% of consumers want housing.

The supply is finite, and much of it is already spoken for. In the case of Canada most consumers are looking for the same real estate with most of the population living clustered around one of 10-20 major cities (nearly 15% live in Toronto or Montreal). So there's a major issue of value density.

With investment firms now sitting on enormous caches of capital they can out bid any consumer (or 100 consumers) on the market and drive the price up. They don't have to control the market, just what's left on the market. They can constrict supply in the face of nearly unlimited demand creating astronomical pricing.

More importantly, they do this disproportionately to low cost housing, because they can buy more with less resistance. Meaning the people with the power to change anything aren't directly effected by it, and to the extent they are, it's that they're holding stock in the investment firms.

 

[PeterGriffin]

Not really. Its a huge factor. Bringing more people in en masse without infrastructure to support the newcomers = crisis

in our case, its both healthcare and housing.

Take my province for example. Vacancy on apartments and houses are near 0%. houses that go on the market are scooped up near instantly, many without even a viewing of the house. Some are stuck in their apartment because they have no options to go anywhere else. Which is why landlords are now only doing fixed term leases so they can evict and raise the price a year down the road(Rent has gone up 100% in the last 4 years. A 2 Bedroom that cost $1400 in 2019 is now $2400). They can raise the price because housing starts per year is 7100 or so and immigration is near 13000 + 14300 non permanent international students who then get work permits to become permanent citizens.

When you are only making 7100 new units a year in a zero vacancy province and bringing in 27000 newcomers a year, it doesn't take a rocket scientist to know supply and demand is going to get more out of whack. A lot of them are willing to pool together and live 8 people to a 2 bedroom.

The supply of labor is a strange animal. We have thousands of laid off red seal union trades workers whom contractors don't want to use for the whole jobs because union labor is more expensive than apprentice and foreign labor, which is what we are trying to flood the market with.

That's another conversation in itself

As someone from Halifax, I can agree 100%. It's crazy here now. I have a buddy of mine considering selling his second car as a means to mitigate the expected increase in his mortgage rate adjustment.

A large part of Union guys are fucking useless to be honest. And I'm in 1 myself. They get paid fantastic and do the bare minimum with no repercussions. No pride in their community, no loyalty to their teammates . It's all about the $ and doing the least amount possible for the most amount possible.

They are just getting their practice in for when they become politicians.

What in the holy Mountain Dew is that? Actually it looks like a pretty sweet setup... Redneck Hamptons

Reminds me of Fallout Tactics:BoS scenes.

How many immigrants are coming in and bidding against locals for $200k+ homes?

A lot of them are coming here with money. They are not all broke like everyone assumes.

There is a lot of data about how the idea of the "nuclear family" was an economic nightmare over all. Multi-generational households are absolutely going to have numerous distinct advantages. Child care savings, shared cost of mortgage and utilities, etc.

I had two kids move back home, (at my wife and I's suggestion) mainly because it was the smartest thing for them to do. They were making enough to cover housing and bills, but were coming to our house to eat more and more often, and they had zero chance of saving money or upgrading their education to break the cycle. They were literally working to exist and nothing more. So now we have 3 generations in one home (grandkids came with the parents) and strongly considering that one of my other daughters move in here with their brother and sister and my wife and I will move out and get out own place again.

 

[Andy Capp]

Because shelter is right behind food in the higherarchy of needs demand is incredibly reliable. 100% of consumers want housing.

The supply is finite, and much of it is already spoken for. In the case of Canada most consumers are looking for the same real estate with most of the population living clustered around one of 10-20 major cities (nearly 15% live in Toronto or Montreal). So there's a major issue of value density.

With investment firms now sitting on enormous caches of capital they can out bid any consumer (or 100 consumers) on the market and drive the price up. They don't have to control the market, just what's left on the market. They can constrict supply in the face of nearly unlimited demand creating astronomical pricing.

More importantly, they do this disproportionately to low cost housing, because they can buy more with less resistance. Meaning the people with the power to change anything aren't directly effected by it, and to the extent they are, it's that they're holding stock in the investment firms.

I'm not sure it's most, though it's certainly a very significant proportion, but prices have soared everywhere. I live in little ol' PEI and the price of houses here doubled in the 5 years prior to the recent interest rate hikes. I'm a half hour drive from town and my next door neighbour is a potato field. But we still paid a lot (relatively) for ours.

I don't find much to disagree with in the last two paragraphs though.

 

[mjfan23]

China and Wall Street are buying up entire blocks by the bulk which is making it impossible for regular people to afford a house anymore

China? There’s a foreign buyers ban in Canada!

 

[Fluffernutter]

China and Wall Street are buying up entire blocks by the bulk which is making it impossible for regular people to afford a house anymore

There is truth to what you are saying.

In our neck of the woods, we are having a bit more variables. For instance, we have an older generation that is hell-bent on allowing any additional homes being built in our town (under the guise of environmental concerns). Therefore, housing costs are artificially high. No young families can afford to buy a home (or rent) in our town. The assumption is that the older generation will wait to sell their homes for an astronomical price to then live off of for retirement.

 

[Fluffernutter]

I live in Vegas and some company legit bought 100 houses in a week recently. And they outbid families. It shouldn’t be allowed. If it’s allowed across the country then many if not most people in their early 20s to 30s will never own a house.

There's an economics youtube channel I listen to when doing yard work. The narrator discussed that phenomenon a couple of months ago.

The corporations are buying huge amounts of properties and then renting them out. But, within their renters' agreements, they are not taking any responsibilities for the property like a traditional landlord.

Therefore, you pay rent, but still have to pay for any and all upkeep of the property.

Seems like a win/win for the corporation and a lose/lose for the tenant

 

[Fluffernutter]

So glad I got into my house prior to the COVID-19 madness.

No way I could afford my house at the current rates, even under the old prices. Combine the 2, high rates and massive price increases and there is less than zero chance I can buy.

That said I’m absolutely stuck in my house for the next 10 plus years until my kid is 18 and I can bounce out of state.

I'm thinking the same thing.

Wait until the kids get into college (a nice instate tuition place) and then downsize.

Use the money we make from the sale to pay for the kids's tuition, so they are not riddled with debt.

 

[Islam Imamate]

I have literally no idea how mortgages or rates or house payments work. Housing in Canada is crazy pricey right now. I thought everything would be at a fixed rate and can only be increased annually to a certain percent? Is it like this all over?

My cousin has a bad gambling problem and she spent all of her money on that, and giving money to help out her kids and grandkids. Then She ended up having to live in a trailer after money ran out. Even places like Hamilton, Ontario which imo IS pretty shitty is crazy pricey it seems. What gives?

In North America a big part of it is a critical lack of supply because of artificial restrictions supported by NIMBYs like this guy

The solution is to move this to the WR and hear how living in people’s backyards in shacks is the answer

We have a lack of supply and people like this will do everything in their power to stop further supply from being built near them that isn't incredibly low density. The thing is low density developments are all around less efficient and bad for the city. Not only do they cap the supply of housing but because they are low density you pay more per person for city services like roads, electricity, water, and sewage because you need more length for all those things to service the same number of people. They are often a net loss for the city in terms of tax revenue because to increase property taxes for low density areas enough to cover their costs would mean astronomical raises that are politically impossible and so they have to be subsidized by the surplus tax revenue of the denser parts of the metro area

Right now in North America with a few exceptions(mostly places built before these laws came into effect) you have mainly two different housing types; single family homes and big apartment buildings. Most of the residential land is zoned only for single family homes with the apartment buildings being squeezed into the remainder. There's even a name for it; Vancouverism.

Its failed though. The obvious answer is to loosen housing restrictions to allow for more dense housing types across the city so you can have more supply over a given area. Many parts of North America have what's called the "Missing Middle" problem where medium density developments are absent, things like multiplexes and ADUs and walk up apartment buildings with only a few floors. Places that have these in their inner ring suburbs tend to have lower housing prices.

There's an economics youtube channel I listen to when doing yard work. The narrator discussed that phenomenon a couple of months ago.

The corporations are buying huge amounts of properties and then renting them out. But, within their renters' agreements, they are not taking any responsibilities for the property like a traditional landlord.

Therefore, you pay rent, but still have to pay for any and all upkeep of the property.

Seems like a win/win for the corporation and a lose/lose for the tenant

The corporate landlord is an overrated problem. The majority of housing investors are so called "mom and pop" landlords who only own 1-9 units. But people want a corporate boogeyman to blame so they point to corporate investors. The thing is these houses are only as attractive an investment to corporations because of the artificial restrictions on supply which inflate their value and allow corporations, who have more cash than the average prospective home buyer, to swoop in and buy them.

 

[Fluffernutter]

China? There’s a foreign buyers ban in Canada!

Are there any Canadians that have created a boutique business of "buying" a home (putting your name on the deed) with money given by a non-Canadian...and then tack on a fee/commission for their services?

 

[avenue94]

The supply of labor is a strange animal. We have thousands of laid off red seal union trades workers whom contractors don't want to use for the whole jobs because union labor is more expensive than apprentice and foreign labor, which is what we are trying to flood the market with.

That's another conversation in itself

So it sounds like increased supply of labor would help here...aka immigrants would probably boost this.

The housing crises you see today aren't a random stroke of bad luck, they are complex problems with longstanding issues (like I said, usually policies meant to gate homeownership and benefit existing homeowners at the expense of new ones), but they are also known and very solvable.

TLDR: Immigration isn't the problem here, and if anything it will help. The core problem is just a failure of government policy to address a politically touchy problem.

 

[Islam Imamate]

So it sounds like increased supply of labor would help here...aka immigrants would probably boost this.

The housing crises you see today aren't a random stroke of bad luck, they are complex problems with longstanding issues (like I said, usually policies meant to gate homeownership and benefit existing homeowners at the expense of new ones), but they are also known and very solvable.

TLDR: Immigration isn't the problem here, and if anything it will help. The core problem is just a failure of government policy to address a politically touchy problem.

In America even if you loosen zoning laws and theoretically allow new, more dense developments NIMBYs can exploit other laws like environmental review to stall. That makes new developments more expensive and creates a long lag between the time a development is planned and finished because its subject to continuous community oversight whose purpose is purely to stall and hopefully kill the development.

This means its hard for small developers to be viable because they can't survive the delays as well as large ones and even big developers have to compensate for the lag by selling/renting the units at a higher price point or focusing on luxury developments.

 

[Andy Capp]

China? There’s a foreign buyers ban in Canada!

I don't think it's a full on ban-but whatever; what legislation has been passed is quite recent. I think it's no surprise the first signs of rapid inflation in housing prices was in Vancouver, BC and more or less spread west to east. PEI was likely last to be affected because of our strict laws on out of province ownership, there being so little land to begin with.

I believe it just took longer for people to figure out how to game the system here and then away we went, just like every other province.

Check this out,

Consider the difference between the period from 2014-2018 and 2019-2023. The mean house price in the US is not even as high as $400,000 FFS. But yeah, that's all on account of immigrants coming in and living 10 to a domicile. Riiiiiight, got it.

 

[avenue94]

Country of 30M accepting 1M immigrants a year. Officially it's listed at something like 500K, but there are an extra 500K non-permanent residents adding up as well, who will also be getting citizen status eventually. That would be like if the US took in 10M new legal immigrants a year. Obviously there aren't 1M new apartments being built a year.

Why can't a country build this many homes? We can build nukes, go to space, but we can't build homes?

Also, it would be like a third of that number of units given families.

In America even if you loosen zoning laws and theoretically allow new, more dense developments NIMBYs can exploit other laws like environmental review to stall. That makes new developments more expensive and creates a long lag between the time a development is planned and finished because its subject to continuous community oversight whose purpose is purely to stall and hopefully kill the development.

This means its hard for small developers to be viable because they can't survive the delays as well as large ones and even big developers have to compensate for the lag by selling/renting the units at a higher price point or focusing on luxury developments.

Yeah, as much as I hate agreeing with libertarians, there are a lot of public review tools that can be exploited/abused by residents who don't want a new apartment complex.

 

[terrapin]

The solution is to move this to the WR and hear how living in people’s backyards in shacks is the answer

And also being told this is the best time ever to live in America and there really is no problem and it's just feels.

 

[Rob Battisti]

In North America a big part of it is a critical lack of supply because of artificial restrictions supported by NIMBYs like this guy

We have a lack of supply and people like this will do everything in their power to stop further supply from being built near them that isn't incredibly low density. The thing is low density developments are all around less efficient and bad for the city. Not only do they cap the supply of housing but because they are low density you pay more per person for city services like roads, electricity, water, and sewage because you need more length for all those things to service the same number of people. They are often a net loss for the city in terms of tax revenue because to increase property taxes for low density areas enough to cover their costs would mean astronomical raises that are politically impossible and so they have to be subsidized by the surplus tax revenue of the denser parts of the metro area

Right now in North America with a few exceptions(mostly places built before these laws came into effect) you have mainly two different housing types; single family homes and big apartment buildings. Most of the residential land is zoned only for single family homes with the apartment buildings being squeezed into the remainder. There's even a name for it; Vancouverism.

Its failed though. The obvious answer is to loosen housing restrictions to allow for more dense housing types across the city so you can have more supply over a given area. Many parts of North America have what's called the "Missing Middle" problem where medium density developments are absent, things like multiplexes and ADUs and walk up apartment buildings with only a few floors. Places that have these in their inner ring suburbs tend to have lower housing prices.

The corporate landlord is an overrated problem. The majority of housing investors are so called "mom and pop" landlords who only own 1-9 units. But people want a corporate boogeyman to blame so they point to corporate investors. The thing is these houses are only as attractive an investment to corporations because of the artificial restrictions on supply which inflate their value and allow corporations, who have more cash than the average prospective home buyer, to swoop in and buy them.

Told ya!

 

[terrapin]

A large part of Union guys are fucking useless to be honest. And I'm in 1 myself. They get paid fantastic and do the bare minimum with no repercussions. No pride in their community, no loyalty to their teammates . It's all about the $ and doing the least amount possible for the most amount possible.

I've been around a lot of union workers my whole life and I've never met a single person like that. I'm sure it exists, but it's strange how often I hear it compared to the ones I meet.

 

[Islam Imamate]

And also being told this is the best time ever to live in America and there really is no problem and it's just feels.

You agree with his take there? You don't think homeowners should be allowed to build accessory dwelling units on their own property?

Told ya!

Yes I believe when there's low supply in the market you should be allowed to build more supply, shocking I know.

Since you're obsessed with the idea of only allowing SFH let's talk about that. In Japan there are many neighborhoods that are generally SFH but they can acheive more density because they lack setback and parking requirements and have lower minimum lot size requirements.

In the United States and Canada single-detached homes typically require large setbacks for off-street car parking and yards/gardens; while single detached homes in Japan are in many cases similarly large single detached houses but on small plots taking-up virtually the entirety of the plot fronting directly on to the street with no requirement for off street car parking; instead assuming a reliance on public transport rather than cars to meet daily needs. Roads in these areas are slow and drivers are aware they must legally share responsibility for mutual safety with all the other types of road users equally.

This type of single detached house can achieve medium housing density while fostering a sense of community, municipal fiscal viability, and good residential amenity. This is achieved while maintaining privacy and access to sunlight by regulating the direction of windows, the use of very small setbacks, much higher maximum building coverage ratios, higher Floor area ratios, and other considerations discussed in the previous paragraph.

Would you be okay with this? Or is this also "living in the pod"?

 

[Rob Battisti]

Since you're obsessed with the idea of only allowing SFH let's talk about that.

That’s a total misrepresentation of my position.

 

[Islam Imamate]

That’s a total misrepresentation of my position.

This started out because you misrepresented the opposing position, you realize that right?

Now, how about the point I made in regards to Japanese style SFHs? Is that also "living in the pod"?

 

[Scheme]

Yeeeaaahhhh, we should absolutely NOT develop a Country into places with more of all those awesome things listed in the 2nd paragraph. Nor should we revitalize all of the disinvested infrastructure that already exists. We should just focus on kicking people the f*ck out and building walls.

Sounds amazing.

Most cities in America were simply not designed to handle adding enough of those numerous capacities to compensate for high housing costs. Many sewer systems, electrical systems, etc. were built 100+ years ago. And even if you could build and provide every single one of those capacities, the houses will have to compete with the additional massive land, resource and building cost requirements that those would take to build, which would only raise their prices.

Oh fuck off, it is not.

Also, LMAO @ your logic, they're all cramming into certain cities according to you--then why is housing so expensive all over the country?

Cities are leaps and bounds more expensive than rural areas. Also suburban/rural areas are experiencing faster growth than cities as a result of COVID-19 pandemic and remote work availability, so the same effect of migration is occurring, it's just domestic migration versus international.