The Housing Crisis Isn’t Going Anywhere Until We Tackle Property Wealth Inequality
The Housing Crisis Isn’t Going Anywhere Until We Tackle Property Wealth Inequality
The housing crisis will never end without levying forceful taxes against real estate speculators and investors. A recent report outlines the necessary actions to impose taxes that can actually narrow the wealth gap and alleviate the housing emergency.
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The solution is to build more housing.
So BlackRock can buy it and rent it out to people for $3,000 a month? What use is more housing if rich people who own 1,000 houses are just going to buy it? The solution is more complicated.
The solution is complicated because people can't agree on the problem.
As with your comment and subject of the article there is plenty of people that are perfectly happy with the housing crisis as long as the remain to the favourable side of it.
Partly because it varies regionally, but there are definitely some consistent threads woven across the country that could be pulled.
If there is too much inventory the price for rent will go down.
I don't think that will happen. The empty houses problem is probably much exaggerated, since it gives less returns then renting them out.
That would require making more land and increasing the capacity of existing high-use, aging infrastructure for water, sewage, power, and trash. I can find you a cheap place to live out in the sticks. Hell, the town down the road from me has brand new, 3BR 2.5BA 1900SF homes with garage for $270k (USD). You only need 2BR/1BA and 1100SF? $150k. Thing is, it's a 30-40 minute drive to the center of my 200,000 person MSA. But this isn't a fun, entertaining city with excellent walkability, public transit, a major airport, and multiple concert venues and public spaces so people aren't flocking to move out here.
That is part of the solution, the othee part is not letting a foreign owner buy a place and leave it vacant.
Why do people always specify "foreign" owners? I don't see how being born in Canada should enable one to hoard housing.
Because the people who are the actual problem love that Canadians are looking abroad for the source of the problem instead of a wee tad closer to home.
House Hoarding is also an issue, but at least a Canadian is going to rent it to make cash and provide housing. Foreign owners often sit on empty prooerties to move money from China (or elsewhere) and so you have a full house vacant. This creates a lot of housing supply issues thus driiving prices artificially. If we had enough units available for anybody looking, even canadian house horders woyld see rental price drop, and make it not so lucrative to rent
If we had enough units available for anybody looking
That's literally what price is for. The higher the price, the fewer people actually looking. Eventually equilibrium is found where what is for sale matches those serious about buying.
If you think there are more people looking than there are units, expect prices to climb a whole lot more.
It is actually the more demand drives higher price. high price doesn't stop people needing housing, it just means everyone pays more and affordable housing for low income gets bought up by middle income because the higher prices in their old home range. i'm in BC it has not stopped climbing, even though they are building everwhere. The 5 year old house across the street from me is empty with weeds growing up through the porch, because it got sold and the new owner did not occupy it.
It is actually the more demand drives higher price.
An increase in demand at a given price will see the price climb, but in doing so demand will decline in kind. That is why the price rises – to allow those who demand something more to "win", pushing other parties who were interested at the lower price out of the market. "I would like to have something" isn't what defines demand.
high price doesn’t stop people needing housing
Housing is more inelastic than a lot of things, but there is always a bowing out point. The average person might be able to eke out a million dollar home, but they'd never be able to buy a billion dollar home. They'd go find a tent to pitch in the forest, or something.
i’m in BC it has not stopped climbing
The data clearly shows that early 2022 was the top of the market. Maybe it will climb again, but for now that is not true.
People don't move to a tent when they have a family, they still buy a home or rent at high rates and do less living as a result. i have been iin BC 13 years it has increased every year, and new developments are constant. it is going to keep going up until there are more units in the supply than the demand. it is simple economics 101 with a fair market system.
People don’t move to a tent when they have a family
They do when they can't afford a house. Like, actually can't afford a house, not just saying they can't afford a house on an internet forum while occupying one just fine behind the anonymous internet username.
it is going to keep going up until there are more units in the supply than the demand.
Indeed, although BC prices peaked in 2022, so we're already there. The higher cost of housing on the backs of higher interest rates has no doubt quashed some demand. A higher cost sees a decline in demand. Imagine that.
Its a slow in sales, not that housing demand got less. people are just forced into higher rent situations instead.
Sales have slowed and people have found alternative options, but demand hasn't declined...?
Formally, demand requires desire to purchase a good or service – which I imagine is still there when it comes to housing, but also willingness to pay the price – which has clearly eroded, by your own admission.
In reality, the cost got too high and demand backed away. That's how it works. That's literally why we put a price on things which do not have an infinite supply – to scare excess demand away. Outside of a shortage, which is a situation where some external factor prevents price from rising, price will rise until enough demand is sacred away that the supply can meet what demand remains.