There Is No Housing Crisis | The Walrus
There Is No Housing Crisis | The Walrus
Supply alone will not solve a problem that large sections of the population don’t want to fix
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This article goes in circles and repeatedly contradicts itself. Basically saying that it's not a failure of the markets, but one of exploitation.
Except, it is exactly a failure of the markets. It states that the exploitation comes from the ability of landowners to charge whatever they want, but they don't address the fact that they can only charge high prices because of the lack of those who are willing to charge low prices. And nobody should be expected to charge a low price if they can charge a high price and still sell/rent easily.
It's an issue of people treating homes as an investment, and that can only happen because the price of homes skyrocket far faster than inflation and wages. And that happens because of a lack of supply.
Sure, treating homes as an investment is fine for apartments and condos, but if the land itself ends up being worth a million for a single lot, there's no way anybody can afford it without both a high wage and putting themselves into debt for a half century. And if that happen, the entire spectrum of housing goes up in price as there is a lack of competition to lower prices.
The only real way to lower home prices (from houses to apartments and condos) is to significantly increase competition, and that can only happen if supply actually comes close to demand, not falling so far behind that people share a single place, even to the point that they bribe the local authorities to look the other way that they have too many people in a single unit.
Except, it is exactly a failure of the markets.
Well, the market is acting rationally given the circumstances. The trouble is that the market is heavily encumbered by outside forces (i.e. regulation), so the cure for high prices being high prices isn't able to exercised.
Is that a market failure, or is not truly a market?
Could you name the unnecessary regulations specifically?
The trick is they're all "guidelines" that planners will use to arbitrarily foot-drag on approvals. None of them are formally "regs" but just tools for a kangaroo court to dither.
Don’t take my word for it, see this video of deposition by Mark Richardson of Housing Now TO (an affordable housing builder):
https://mastodon.social/@Pxtl/110300343308877005
I loathe the Poilievre conservatives, but they’re right about this. First step to stopping the housing crisis is to kick some municipal government ass. Trudeau is trying to do it with carrots through the Housing Accelerator Fund, but it’s long-since time for sticks and not carrots.
He specifically calls out "guidelines which are treated like they're cast in stone". An example of such a "guideline" would be angular plane rules, which result in Toronto's wierd stepped buildings, resulting in this complaint:
"You want green buildings? Green buildings are big chonky boxes made outta wood. They're not Mayan pyramids, which is what the urban design guidelines require."
Or even vaguer height limits that seem to be complaint-based:
"$20 billion dollar intersection in Forest Hill; somebody said that should be a 7-storey and 70-unit building in 2018. How...where did that number come from? Somebody picked that number. Because it "conformed to the current planning policy for Forest Hill" and somebody adjacent to the site had a backyard swimming pool. That can't be our priority in 2023."
No, obviously not. That would be unanswerable and has nothing to do with the discussion. Best to read the comments before replying.
The market has exactly zero rationality in it. The market doesn't think or do anything. It's simply economists anthropomorphising a thing that makes money for rich people.