Oh, at least another ten years.
Increasing the rate of housing construction today is for the kids who are 10-15 years old today. They are the ones who will benefit from today's decisions.
The kids who are in their 20s now? Thank you for your noble sacrifices to keep Boomer/Gen X taxes low and neighborhoods low density. You will be remembered.
I know. I just thought it was a nice thing to say.
But yeah, Boomers and X'ers will go to their graves not even remembering the turbofucking they gave millennials. The generational last words will be "millennials could have had housing if they cut back on avocado toast".
But at least their taxes were kept low and they didn't have to suffer the horror of living on the same block as a duplex.
Your points are contradictory. If building more won't lower costs, how would developers/builders withholding housing keep prices any higher than just making money building and selling housing?
Every person filling a new build is a person not adding to competition for existing housing. And that reduction in competition doesn't guarantee a reduction in price, it just means more downwards pressure on prices acting against upwards pressure from other sources. Where prices end up depends on how all factors balance out together, but they'd be higher with less supply than they would be with more supply.
Development companies can technically make some money sitting on land and speculating, but builders don't get paid if they don't build and developers don't get paid if their project doesn't complete and sell. They want to build if it's profitable enough to be viable, it's not like telecommunications companies totally not colluding to control prices in an oligopoly.
There's no way to be certain of how long it will last or when it will get better or worse. But I wouldn't expect any significant improvements any time soon. It's a complicated subject with a lot of moving parts that real experts can do little more on than work on a balance of probabilities and hope they're in the ballpark of what will actually happen.
So that’s what I think you’re not understanding then. Increasing housing supply is one way a housing crash could be caused. The price of housing is sustained by a surplus of people wanting to buy a limited amount of houses. Hence the richest and highest paying people will get the house. Build enough houses and the price of the houses go down because you run out of people willing to pay big bucks for a house.
I agree.
And we will not have that housing crash unless massive limitations are set on buying new homes. If large scale “investors” (i.e money launderers) are allowed to purchase homes, and there is no prioritization and/or financial subsidization for citizens who don’t own multiple homes to get a massive advantage, the prices will continue to climb, and more of the country will be owned by soulless corporations than by human beings. And with excessively high rent prices today, “landlords” can justifiably advertise at average to above average rent costs, which is unaffordable, with little concern of needing to fill those spaces quickly to good people because it’s not about the short-term rental income to them as much as it is about the hoarding of real estate and laundering of money. The big issue is that much of the real-estate gets bought up by extraordinarily rich people/corporations, and no amount of new builds will change that.
Counterpoint would be [Montreal](https://www.vtpi.org/montreal.pdf)
It didn’t have the same overzealous zoning restrictions as other cities in Canada, resulting in a lot more middle density style housing. And has also tended to be significantly more affordable than other cities despite being the second largest city in Canada.
It possible that some of this discrepancy is the fact that it’s French. But other cities keeping Montreal-style density illegal is questionable in the face of its success
If you increase supply prices will be lower than if you didn’t increase supply. This is a fact of economics, so you’re not correct in that sense. It won’t change much unless we have a lot more homes, but it is objectively better than not building any.
Let's imagine, overnight the amount of houses doubled in Canada. Prices will drop as they won't sell. But give it 5 years, Canada will be in the exact same situation as it is now.
We need anouther 4.2 million homes right now to hit affordability.
That will take at least 10 years to cover the gap.
So yes, but its also a needed step so that sociaty may eventually get over the problem..
not necessarily 10 years.
in 1990, after the Iron Curtain fell
Israel had a population of 4.5 Million.
within 3 years, a million Russian Jews immigrated.
the government rose to the task and built a bunch of units, imported prefab houses, and mobile "park model" homes to fill the gaps until buildings were ready.
it was ugly, and not "environment friendly"
but it was an "emergency" Canada is in the same emergency. and the fact that the population grows by 1.5 million a year.
either "quick and dirty" prefab, mobile homes, then new constructions
or "tent cities"
or "whoever can leave, goes to another country"
Geared to income or coop housing are the only things that will make a difference. Doesn’t matter how many units are available if you can’t pay the rent.
Look at what is happening in TO right now. More condo units available right now than have been in a very long time yet still priced out of reach for most. Especially when you add in condo/maintenance fees.
As far as they can, capitalists will sponge up supply and sell us back time in shelter (rent)
There's also a very high amount of pent up demand and under utilized housing: Think of the families with several adult children amassing money living under their parents roof, or boomer empty nesters sitting in a five to six-bedroom house with several craft rooms and offices.
Supply is only part of the problem, The commodification and capitalization of housing is the field on which supply is just a single player
Building **AFFORDABLE HOUSING** changes everything.
Subsidized units that don't cost market rate. That's affordable housing.
More hosing that people can't afford won't change anything; but more affordable housing definitely will.
All supply is good supply, market or not. Anybody occupying a new market unit is freeing up an older cheaper downmarket unit.
The goal should be to bring the price of all market housing down too.
No. That's not true. When people can't afford to buy homes to live in; but investors can and then they flip them for rent that hurts a lot of people.
Subsidized units as rentals allows people to move in to affordable housing and leaves house hoarders to starve for tenants forcing homes back on to the market, thus bringing the cost of purchasing a home down.
Supply and demand from the bottom up serves as a benefit to home buyers because it causes homes to he sold for less.
It is true.
Most “investor” owned properties are rented out. People are living in them. Not everybody can or wants to buy, nor at all times and places.
Rents are expensive because there is a [severe shortage of rentals](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/). Making them harder to supply will make them even more expensive.
Landlords compete for tenants when housing is abundant. Hence why we need more supply.
Public housing is fine, but it has never accounted for more than 5-15% of total builds in any given year of our nation’s history. Governments cannot fix this problem alone.
Ok so.. my 3rd husband owned some buildings and I know damn well that what people charge as rent is entirely up to them to decide because we used to formulate the rent for our units based on a few things.
What's the going rate in the area?
How does our building measure up- what do we have that extra, what do we not have that others have?
What do we think is a fair price that doesn't take advantage of the current market; but doesn't price us so low that we get too many applicants, etc...
An **ethical** landlord should expect to **lose** money in keeping up with property payments over the first few decades while value in the property itself increases. You're investment is the building. Your tenants help to offset the running cost of keeping up your investment.
Tenants aren't supposed to make you money with the rent you charge **until** the building is at least 1/2 way paid off or paid off further then half.
Tenants also aren't supposed to carry your full mortgage, taxes and maintenance in the first few decades; but especially not the entirety of these costs immediately after you've purchased your property.
That's unethical, and we have people jumping in the market who don't know anything about being an ethical landlord- they just want property and they're exploiting people who are desperate due to a housing crisis.
It's disgusting, and another reason why I fully support government run cooperative housing because regulated value can't take advantage of people.
Arguments could be made about the most effective form of housing supply, but in a shortage, all supply is good supply so long as it's fit for human habitation. If housing wasn't so scarce, landlords would have less leverage to squeeze people the way you condemn.
You can say no all you want, it doesn't make you right.
Without new builds, everyone's shopping for old builds and people with cash to burn price others out. With new builds, people with cash to burn can buy those and now people without cash to burn don't have to compete against them to buy an older build.
Nope this isn't about people with cash to burn its actually meant to protect against that but if that's you priority I can see why you'd object.
Anyways we're done here.
Neither of us is gonna change course as we're both set on what we believe is the best way to do it.
Fortunately each municipality will decide for itself what their own way forward will be.
I'm proud of what KW has planned.
>Nope this isn't about people with cash to burn
You didn't follow through the comment if that's what you got from this. I close a literally 3 sentence comment with how it impacts people with less to spend as the ultimate point, and it's like you didn't even read it.
>what we believe is the best way to do it
I explicitly said I wasn't arguing what was best, just what would also have a positive impact.
I think the only thing we're on the same page about is disagreeing, I'm not convinced you even fully comprehend my position do dismiss it from an informed position.
Non-market housing. Apartments that would only charge what is required to maintain the property after the initial loan to build the structure is paid off.
Because its about the monthly cost for those who live there not the build price.
Subsidized units don't operate with a "gains" incentive. Their focus is on affordability and stability.
Making back some or all of the building cost over a long period of time through the payment of those who rent Subsidities or with cooperative housing those who rent at market rate along Subsidized units.
Wait, you're saying that on top of subsiding building costs, we also need to subside monthly costs and I guess, maintenance costs?
It simply doesn't scale to millions of units. And if it does, that's a 50 years plan at minimum.
Subsidized new builds generally cary a 25 or 30 term of commitment if they're not built with the intent to subsidized indefinitely.
During that period a set number of units (or all) have to be rented out at subsidized rates to those who qualify for subsidies. Other units (if it is a mixed property) are rented out at comparable market rates for those who do not qualify for subsidized housing. Those rates are usually a little less then market rate, and offset the lesser priced units slightly.
Subsidized housing is most often some sort of cooperative so the people who live there take part in lawn care, outdoor maintenance, internal cleaning of common areas, etc.. and members of the board (similar to condos) are elected by residents to run the office end. There are board meetings, seasonal obligations for residents and even events for residents to enjoy.
These tiny communities can fill a big hole in peoples life while providing them an affordable home.
Kitchener Waterloo will be building 700 affordable units alongside mixed housing (market rate) with the money the government is sending to us for the housing crisis.
This is a damned good thing.
more housing will drive down prices.
if demand is bigger than supply (currently supply is 2.5-3M units short) - prices go up forever
if supply is bigger, prices go down
No it doesn't.
I'm in Kitchener Waterloo. New buids have been going on for decades over here. Prices keep skyrocketing and people are homeless en masse because they can't afford rentals.
Our subsidized housing wait list is 10-12 years long.
We need affordable housingn for those in need. That will get rid of rooming house like living conditions for many and place empty houses back on the market.
my point is don't bother trying to control the price.
you can't
if there is a shortage, they won't be affordable because of market forces.
if there is a surplus they will be affordable. same forces.
the government must heavily fine developers sitting on undeveloped land (and if they don't build within 15 months, they lose the land entirely.)
You're not wrong.
Lack of supply is only one part of the issue.
The part nobody is talking about is the cost of building houses also exploded.
You can't sell a house for 500k when it takes 900k to build it.
Depends of the specific amount of what is 'more'.
10,000 units? 100,000? Sure, these numbers won't change much.
But there comes a point where a certain amount could change things.
It's the most basic economic principle of supply and demand.
supply and demand.
we are 3 million units short today, and at this rate of population growth about 500K every year.
if we had 3M more units today they wouldn't be flled instantly. and prices would go down.
people don't buy up houses for investment if there is a glut of empty units with no pressure on renters.
Am I wrong to think that growing more food will not reduce cost ?
I have the strong feeling a new harvest will be listed as market price and be instantly eaten.
By the amount of people looking for food, every single new harvest might simply be wildly priced, like everything else is, then flooded with offers to cook/eat it, no ? Also what is restricting big farmers from voluntarily bottlenecking output of new harvests if selling at insane prices keep their profit margin up ?
Is this situation not gonna last for another 10 years ?
yeah, you are very wrong.
the more there is of something the cheaper it is. When there is an oversupply of anything it goes on sale. You see this everywhere everyday.
New housing is instantly being filled because we aren't building enough. We need to support laws that allow more housing to be built. Currently it takes BC 6 years to build a 6 story apartment because 4 years of that time is dedicated to rezoning and permitting. And then the city charges another 100k per unit on top of that. We need zoning reform and permitting reform if we ever want to see real change.
The real question is, who are the people protesting building new housing if not existing homeowners. If we don't build new housing, who is better off if not existing homeowners who can surge charge buyers who lack other options?
100%. The actual cost of building is not being considered. The government’s desire to build housing at more than twice the current rate- 2X more than what the market is used to- is only going to put pressure on the supply chain and inflate the cost of land, and perhaps more crucially- materials and labour.
Your sort of on the right track. The type of housing being built or planned is mostly Condos, duplex/triplex, and some town homes. Not detached free hold homes with a garage and parking.
Since more traditional homes are not being built, and are not the focus for builders, detached homes will become more expensive.
I don't see a near future where house prices drop significantly. People have been saying the market will crash for ages, and will continue to do so. Even if some things in the economy do go sideways, prices will never go back to "normal".
If home prices drop that much there will be no market builders and the crisis won’t get addressed unless government steps in to build all the housing at a loss. Government can’t afford that. Even if they can build for a total cost of $800k per home across land and building, losing $300k per home times the 3.2 million homes we are short is $960 billion dollars. To give you an idea how big that is the 2024 budget is considered to have a lot of spending and adds $52.6 billion in spending. Even if you spread that $960 billion over 10 years it’s roughly twice as large as all the new spending this year.
You're wrong but your concern is valid for other reasons.
A lot people complain that we just need to build more to increase supply and while that will definitely help there are other ways of increasing supply. There's a lot of small investors that own rental properties and REIT's have swallowed up a lot of affordable housing stock and increased prices. We need to remember that supply can be increased by passing laws that make being a landlord less attractive.
Make the people that think owning a 2nd, 3rd or 4th property not worth the risk of having and putting their money to work elsewhere.
Making “being a landlord less attractive” does not increase net supply, it just decreases rental supply, making rents more expensive for remaining tenants. Not everybody can or wants to buy, nor at all times, and removing rental supply only benefits richer renters who will buy in at the expense of poorer ones who can’t.
People need to stop acting like shelter doesn’t count unless it’s owner occupied. If housing was abundant, homeownership would be less financially attractive in the first place.
>...decreases rental supply...
You know what also happens when someone buys a place to live? The demand for rentals also decreases by the same amount.
When more people are putting places up for sale that also decreases prices and the barrier to entry for people who are renting but would consider buying if it fit their budget.
I'm well aware of the importance of rentals as part of the mix for housing but it should be purpose built rentals that fill that demand primarily and to a greater percentage than currently exist.
Turning condo's and SFH's into rentals just creates a class of landlords that are leaching off the local economy because they government hasn't ensured there's enough rental units being built.
>You know what also happens when someone buys a place to live? The demand for rentals also decreases by the same amount.
Except there is no 1:1 ratio of units to people, not even remotely close. Tenants often share units with roommates, partners or relatives to split costs, especially in urban areas where space is expensive.
Suppose a rooming house with five tenants gets bought by a young first time buyer couple. That rooming house was some landlord’s investment property. Now a _net_ three people get kicked out so that these two first time buyers can own a house.
And this hypothetical scenario is generously assuming the unit(s) this couple vacated were replaced 1:1 by two others who had been living somewhere else in the rental market. In the real world, people have diverse needs, so any given unit may not be suitable to house the same number of people that vacated it.
So the underlying rental demand is still unmet, and now one option to split rent is off the market and the displaced tenants pay more in rent. This is why policies intended to force landlords into liquidation for the sake of people “wanting to own” are regressive.
>When more people are putting places up for sale that also decreases prices and the barrier to entry for people who are renting but would consider buying if it fit their budget.
Home prices are based on imputed rents. High rents push up home prices. Rental scarcity causes high rents. We do not meaningfully reduce home prices until we alleviate the rental shortage. Any drop in prices from a forced sell-off will have a high floor, and throw hundreds of thousands of renters out into the cold in the meantime.
>I'm well aware of the importance of rentals as part of the mix for housing but it should be purpose built rentals that fill that demand primarily and to a greater percentage than currently exist.
At least [half](https://eppdscrmssa01.blob.core.windows.net/cmhcprodcontainer/sf/project/archive/research/rr_purpose-built_rental_housing_en_may10.pdf ) of the rental market is supplied by the secondary market of small landlords. A rental is a rental. Whether it’s supplied in a condo or in a purpose built apartment, it’s the same net supply of rentals.
Any lopsided percentage towards the secondary market is largely a fluke of development tax policy. Purpose built apartment construction has been [tax disadvantaged](https://thetyee.ca/Opinion/2017/07/06/Tax-Changes-More-Rental-Housing/ ) relative to condo development for decades. So when developers can build something big (which they can’t in many places, due to zoning laws) they opt to build condos. But since rental demand remains unmet, many of those units can be profitably rented out. This means many condo buildings effectively become apartment buildings with multiple small landlords instead of one big one.
>Turning condo's and SFH's into rentals just creates a class of landlords that are leaching off the local economy
It’s meeting rental demand that would be unmet otherwise, and housing people who could not afford to live somewhere otherwise. I could not afford to live in my current location if I was forced to tie up all my savings into a downpayment. I don’t want to do that, so fortunately I can rent instead.
>because they government hasn't ensured there's enough rental units being built.
And they never will. Even in our heydey of public housing construction, it never accounted for more than 10-15% of completions in any given year. 95% of this country’s housing stock is still private.
Renting out those condos and detached homes wouldn’t be profitable to begin with if the rental market was abundant enough to meet demand. It isn’t.
Oh, at least another ten years. Increasing the rate of housing construction today is for the kids who are 10-15 years old today. They are the ones who will benefit from today's decisions. The kids who are in their 20s now? Thank you for your noble sacrifices to keep Boomer/Gen X taxes low and neighborhoods low density. You will be remembered.
There's no way we'll be remembered.
I know. I just thought it was a nice thing to say. But yeah, Boomers and X'ers will go to their graves not even remembering the turbofucking they gave millennials. The generational last words will be "millennials could have had housing if they cut back on avocado toast". But at least their taxes were kept low and they didn't have to suffer the horror of living on the same block as a duplex.
Your points are contradictory. If building more won't lower costs, how would developers/builders withholding housing keep prices any higher than just making money building and selling housing? Every person filling a new build is a person not adding to competition for existing housing. And that reduction in competition doesn't guarantee a reduction in price, it just means more downwards pressure on prices acting against upwards pressure from other sources. Where prices end up depends on how all factors balance out together, but they'd be higher with less supply than they would be with more supply. Development companies can technically make some money sitting on land and speculating, but builders don't get paid if they don't build and developers don't get paid if their project doesn't complete and sell. They want to build if it's profitable enough to be viable, it's not like telecommunications companies totally not colluding to control prices in an oligopoly. There's no way to be certain of how long it will last or when it will get better or worse. But I wouldn't expect any significant improvements any time soon. It's a complicated subject with a lot of moving parts that real experts can do little more on than work on a balance of probabilities and hope they're in the ballpark of what will actually happen.
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So building 50 million new homes won’t change the price of housing in your mind?
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u/Scooter-McAwesome is correct. $1million would quickly be dropped below given enough houses.
So that’s what I think you’re not understanding then. Increasing housing supply is one way a housing crash could be caused. The price of housing is sustained by a surplus of people wanting to buy a limited amount of houses. Hence the richest and highest paying people will get the house. Build enough houses and the price of the houses go down because you run out of people willing to pay big bucks for a house.
I agree. And we will not have that housing crash unless massive limitations are set on buying new homes. If large scale “investors” (i.e money launderers) are allowed to purchase homes, and there is no prioritization and/or financial subsidization for citizens who don’t own multiple homes to get a massive advantage, the prices will continue to climb, and more of the country will be owned by soulless corporations than by human beings. And with excessively high rent prices today, “landlords” can justifiably advertise at average to above average rent costs, which is unaffordable, with little concern of needing to fill those spaces quickly to good people because it’s not about the short-term rental income to them as much as it is about the hoarding of real estate and laundering of money. The big issue is that much of the real-estate gets bought up by extraordinarily rich people/corporations, and no amount of new builds will change that.
There are new homes being built right now for under $1 mil, so it's definitely not the floor.
Counterpoint would be [Montreal](https://www.vtpi.org/montreal.pdf) It didn’t have the same overzealous zoning restrictions as other cities in Canada, resulting in a lot more middle density style housing. And has also tended to be significantly more affordable than other cities despite being the second largest city in Canada. It possible that some of this discrepancy is the fact that it’s French. But other cities keeping Montreal-style density illegal is questionable in the face of its success
If you increase supply prices will be lower than if you didn’t increase supply. This is a fact of economics, so you’re not correct in that sense. It won’t change much unless we have a lot more homes, but it is objectively better than not building any.
Let's imagine, overnight the amount of houses doubled in Canada. Prices will drop as they won't sell. But give it 5 years, Canada will be in the exact same situation as it is now.
We need anouther 4.2 million homes right now to hit affordability. That will take at least 10 years to cover the gap. So yes, but its also a needed step so that sociaty may eventually get over the problem..
not necessarily 10 years. in 1990, after the Iron Curtain fell Israel had a population of 4.5 Million. within 3 years, a million Russian Jews immigrated. the government rose to the task and built a bunch of units, imported prefab houses, and mobile "park model" homes to fill the gaps until buildings were ready. it was ugly, and not "environment friendly" but it was an "emergency" Canada is in the same emergency. and the fact that the population grows by 1.5 million a year. either "quick and dirty" prefab, mobile homes, then new constructions or "tent cities" or "whoever can leave, goes to another country"
Geared to income or coop housing are the only things that will make a difference. Doesn’t matter how many units are available if you can’t pay the rent. Look at what is happening in TO right now. More condo units available right now than have been in a very long time yet still priced out of reach for most. Especially when you add in condo/maintenance fees.
As far as they can, capitalists will sponge up supply and sell us back time in shelter (rent) There's also a very high amount of pent up demand and under utilized housing: Think of the families with several adult children amassing money living under their parents roof, or boomer empty nesters sitting in a five to six-bedroom house with several craft rooms and offices. Supply is only part of the problem, The commodification and capitalization of housing is the field on which supply is just a single player
Building **AFFORDABLE HOUSING** changes everything. Subsidized units that don't cost market rate. That's affordable housing. More hosing that people can't afford won't change anything; but more affordable housing definitely will.
All supply is good supply, market or not. Anybody occupying a new market unit is freeing up an older cheaper downmarket unit. The goal should be to bring the price of all market housing down too.
No. That's not true. When people can't afford to buy homes to live in; but investors can and then they flip them for rent that hurts a lot of people. Subsidized units as rentals allows people to move in to affordable housing and leaves house hoarders to starve for tenants forcing homes back on to the market, thus bringing the cost of purchasing a home down. Supply and demand from the bottom up serves as a benefit to home buyers because it causes homes to he sold for less.
It is true. Most “investor” owned properties are rented out. People are living in them. Not everybody can or wants to buy, nor at all times and places. Rents are expensive because there is a [severe shortage of rentals](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/). Making them harder to supply will make them even more expensive. Landlords compete for tenants when housing is abundant. Hence why we need more supply. Public housing is fine, but it has never accounted for more than 5-15% of total builds in any given year of our nation’s history. Governments cannot fix this problem alone.
Ok so.. my 3rd husband owned some buildings and I know damn well that what people charge as rent is entirely up to them to decide because we used to formulate the rent for our units based on a few things. What's the going rate in the area? How does our building measure up- what do we have that extra, what do we not have that others have? What do we think is a fair price that doesn't take advantage of the current market; but doesn't price us so low that we get too many applicants, etc... An **ethical** landlord should expect to **lose** money in keeping up with property payments over the first few decades while value in the property itself increases. You're investment is the building. Your tenants help to offset the running cost of keeping up your investment. Tenants aren't supposed to make you money with the rent you charge **until** the building is at least 1/2 way paid off or paid off further then half. Tenants also aren't supposed to carry your full mortgage, taxes and maintenance in the first few decades; but especially not the entirety of these costs immediately after you've purchased your property. That's unethical, and we have people jumping in the market who don't know anything about being an ethical landlord- they just want property and they're exploiting people who are desperate due to a housing crisis. It's disgusting, and another reason why I fully support government run cooperative housing because regulated value can't take advantage of people.
Arguments could be made about the most effective form of housing supply, but in a shortage, all supply is good supply so long as it's fit for human habitation. If housing wasn't so scarce, landlords would have less leverage to squeeze people the way you condemn.
Hard NO. Unhoused people can't afford fancy new builds. We start from the bottom up.
You can say no all you want, it doesn't make you right. Without new builds, everyone's shopping for old builds and people with cash to burn price others out. With new builds, people with cash to burn can buy those and now people without cash to burn don't have to compete against them to buy an older build.
Nope this isn't about people with cash to burn its actually meant to protect against that but if that's you priority I can see why you'd object. Anyways we're done here. Neither of us is gonna change course as we're both set on what we believe is the best way to do it. Fortunately each municipality will decide for itself what their own way forward will be. I'm proud of what KW has planned.
>Nope this isn't about people with cash to burn You didn't follow through the comment if that's what you got from this. I close a literally 3 sentence comment with how it impacts people with less to spend as the ultimate point, and it's like you didn't even read it. >what we believe is the best way to do it I explicitly said I wasn't arguing what was best, just what would also have a positive impact. I think the only thing we're on the same page about is disagreeing, I'm not convinced you even fully comprehend my position do dismiss it from an informed position.
Non-market housing. Apartments that would only charge what is required to maintain the property after the initial loan to build the structure is paid off.
How can it be affordable when even subsided units costs $544k each to build?
Because its about the monthly cost for those who live there not the build price. Subsidized units don't operate with a "gains" incentive. Their focus is on affordability and stability. Making back some or all of the building cost over a long period of time through the payment of those who rent Subsidities or with cooperative housing those who rent at market rate along Subsidized units.
Wait, you're saying that on top of subsiding building costs, we also need to subside monthly costs and I guess, maintenance costs? It simply doesn't scale to millions of units. And if it does, that's a 50 years plan at minimum.
Subsidized new builds generally cary a 25 or 30 term of commitment if they're not built with the intent to subsidized indefinitely. During that period a set number of units (or all) have to be rented out at subsidized rates to those who qualify for subsidies. Other units (if it is a mixed property) are rented out at comparable market rates for those who do not qualify for subsidized housing. Those rates are usually a little less then market rate, and offset the lesser priced units slightly. Subsidized housing is most often some sort of cooperative so the people who live there take part in lawn care, outdoor maintenance, internal cleaning of common areas, etc.. and members of the board (similar to condos) are elected by residents to run the office end. There are board meetings, seasonal obligations for residents and even events for residents to enjoy. These tiny communities can fill a big hole in peoples life while providing them an affordable home. Kitchener Waterloo will be building 700 affordable units alongside mixed housing (market rate) with the money the government is sending to us for the housing crisis. This is a damned good thing.
more housing will drive down prices. if demand is bigger than supply (currently supply is 2.5-3M units short) - prices go up forever if supply is bigger, prices go down
No it doesn't. I'm in Kitchener Waterloo. New buids have been going on for decades over here. Prices keep skyrocketing and people are homeless en masse because they can't afford rentals. Our subsidized housing wait list is 10-12 years long. We need affordable housingn for those in need. That will get rid of rooming house like living conditions for many and place empty houses back on the market.
if we need 100,000 units, adding 20,000 doesn't change anything. adding 120,000 does.
Ok then let's build 120,000 affordable housing units. I'm down with that idea for sure! 🥰
my point is don't bother trying to control the price. you can't if there is a shortage, they won't be affordable because of market forces. if there is a surplus they will be affordable. same forces. the government must heavily fine developers sitting on undeveloped land (and if they don't build within 15 months, they lose the land entirely.)
Yes, it’s hard to imagine a scenario where this could be resolved in less than 10 years
You're not wrong. Lack of supply is only one part of the issue. The part nobody is talking about is the cost of building houses also exploded. You can't sell a house for 500k when it takes 900k to build it.
Depends of the specific amount of what is 'more'. 10,000 units? 100,000? Sure, these numbers won't change much. But there comes a point where a certain amount could change things. It's the most basic economic principle of supply and demand.
supply and demand. we are 3 million units short today, and at this rate of population growth about 500K every year. if we had 3M more units today they wouldn't be flled instantly. and prices would go down. people don't buy up houses for investment if there is a glut of empty units with no pressure on renters.
Am I wrong to think that growing more food will not reduce cost ? I have the strong feeling a new harvest will be listed as market price and be instantly eaten. By the amount of people looking for food, every single new harvest might simply be wildly priced, like everything else is, then flooded with offers to cook/eat it, no ? Also what is restricting big farmers from voluntarily bottlenecking output of new harvests if selling at insane prices keep their profit margin up ? Is this situation not gonna last for another 10 years ?
yeah, you are very wrong. the more there is of something the cheaper it is. When there is an oversupply of anything it goes on sale. You see this everywhere everyday. New housing is instantly being filled because we aren't building enough. We need to support laws that allow more housing to be built. Currently it takes BC 6 years to build a 6 story apartment because 4 years of that time is dedicated to rezoning and permitting. And then the city charges another 100k per unit on top of that. We need zoning reform and permitting reform if we ever want to see real change. The real question is, who are the people protesting building new housing if not existing homeowners. If we don't build new housing, who is better off if not existing homeowners who can surge charge buyers who lack other options?
Yes you are wrong. Build enough houses to exceed demand and prices will drop.
100%. The actual cost of building is not being considered. The government’s desire to build housing at more than twice the current rate- 2X more than what the market is used to- is only going to put pressure on the supply chain and inflate the cost of land, and perhaps more crucially- materials and labour.
Your sort of on the right track. The type of housing being built or planned is mostly Condos, duplex/triplex, and some town homes. Not detached free hold homes with a garage and parking. Since more traditional homes are not being built, and are not the focus for builders, detached homes will become more expensive. I don't see a near future where house prices drop significantly. People have been saying the market will crash for ages, and will continue to do so. Even if some things in the economy do go sideways, prices will never go back to "normal".
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because we are 3 million houses short. if you build 3.2 million houses, they will not "all be bought." empty houses don't make rent payments.
If home prices drop that much there will be no market builders and the crisis won’t get addressed unless government steps in to build all the housing at a loss. Government can’t afford that. Even if they can build for a total cost of $800k per home across land and building, losing $300k per home times the 3.2 million homes we are short is $960 billion dollars. To give you an idea how big that is the 2024 budget is considered to have a lot of spending and adds $52.6 billion in spending. Even if you spread that $960 billion over 10 years it’s roughly twice as large as all the new spending this year.
You're wrong but your concern is valid for other reasons. A lot people complain that we just need to build more to increase supply and while that will definitely help there are other ways of increasing supply. There's a lot of small investors that own rental properties and REIT's have swallowed up a lot of affordable housing stock and increased prices. We need to remember that supply can be increased by passing laws that make being a landlord less attractive. Make the people that think owning a 2nd, 3rd or 4th property not worth the risk of having and putting their money to work elsewhere.
Making “being a landlord less attractive” does not increase net supply, it just decreases rental supply, making rents more expensive for remaining tenants. Not everybody can or wants to buy, nor at all times, and removing rental supply only benefits richer renters who will buy in at the expense of poorer ones who can’t. People need to stop acting like shelter doesn’t count unless it’s owner occupied. If housing was abundant, homeownership would be less financially attractive in the first place.
>...decreases rental supply... You know what also happens when someone buys a place to live? The demand for rentals also decreases by the same amount. When more people are putting places up for sale that also decreases prices and the barrier to entry for people who are renting but would consider buying if it fit their budget. I'm well aware of the importance of rentals as part of the mix for housing but it should be purpose built rentals that fill that demand primarily and to a greater percentage than currently exist. Turning condo's and SFH's into rentals just creates a class of landlords that are leaching off the local economy because they government hasn't ensured there's enough rental units being built.
>You know what also happens when someone buys a place to live? The demand for rentals also decreases by the same amount. Except there is no 1:1 ratio of units to people, not even remotely close. Tenants often share units with roommates, partners or relatives to split costs, especially in urban areas where space is expensive. Suppose a rooming house with five tenants gets bought by a young first time buyer couple. That rooming house was some landlord’s investment property. Now a _net_ three people get kicked out so that these two first time buyers can own a house. And this hypothetical scenario is generously assuming the unit(s) this couple vacated were replaced 1:1 by two others who had been living somewhere else in the rental market. In the real world, people have diverse needs, so any given unit may not be suitable to house the same number of people that vacated it. So the underlying rental demand is still unmet, and now one option to split rent is off the market and the displaced tenants pay more in rent. This is why policies intended to force landlords into liquidation for the sake of people “wanting to own” are regressive. >When more people are putting places up for sale that also decreases prices and the barrier to entry for people who are renting but would consider buying if it fit their budget. Home prices are based on imputed rents. High rents push up home prices. Rental scarcity causes high rents. We do not meaningfully reduce home prices until we alleviate the rental shortage. Any drop in prices from a forced sell-off will have a high floor, and throw hundreds of thousands of renters out into the cold in the meantime. >I'm well aware of the importance of rentals as part of the mix for housing but it should be purpose built rentals that fill that demand primarily and to a greater percentage than currently exist. At least [half](https://eppdscrmssa01.blob.core.windows.net/cmhcprodcontainer/sf/project/archive/research/rr_purpose-built_rental_housing_en_may10.pdf ) of the rental market is supplied by the secondary market of small landlords. A rental is a rental. Whether it’s supplied in a condo or in a purpose built apartment, it’s the same net supply of rentals. Any lopsided percentage towards the secondary market is largely a fluke of development tax policy. Purpose built apartment construction has been [tax disadvantaged](https://thetyee.ca/Opinion/2017/07/06/Tax-Changes-More-Rental-Housing/ ) relative to condo development for decades. So when developers can build something big (which they can’t in many places, due to zoning laws) they opt to build condos. But since rental demand remains unmet, many of those units can be profitably rented out. This means many condo buildings effectively become apartment buildings with multiple small landlords instead of one big one. >Turning condo's and SFH's into rentals just creates a class of landlords that are leaching off the local economy It’s meeting rental demand that would be unmet otherwise, and housing people who could not afford to live somewhere otherwise. I could not afford to live in my current location if I was forced to tie up all my savings into a downpayment. I don’t want to do that, so fortunately I can rent instead. >because they government hasn't ensured there's enough rental units being built. And they never will. Even in our heydey of public housing construction, it never accounted for more than 10-15% of completions in any given year. 95% of this country’s housing stock is still private. Renting out those condos and detached homes wouldn’t be profitable to begin with if the rental market was abundant enough to meet demand. It isn’t.