Discussion about this post

User's avatar
Valerie's avatar

I think some of the finger-pointing obscures that people just... don't all care about the same things. Yes, it was a failure for any number of governments to ignore non-market housing for so long, and this would have led to a ton of accumulated costs and social problems and lost opportunities even if market home prices had stayed normal. But it is also not really honest to blame the explosive rise of costs for market housing on the failure to build 'affordable' housing in the traditional sense. (It probably has some moderating effect on market rate housing at high enough levels, but I also don't see evidence it's an absolute precondition.)

There's a political question about what people want from the housing system that goes beyond technocratic questions about how to get there. Prices are part of that, but so is what we should consider 'good' housing. I am not personally excited about a world where we are talking about non-market housing for people making 180k (like some BCBuilds projects) as an aspiration rather than a deep failure, or one where it's being sold as 'fairness' that the new middle class norm is rental apartments, not just as a stopgap but with no indication that it is not the end goal. I don't see any real economic or policy seriousness from any party, but I also don't think anyone is being 'played' because they like hand-waving about how to achieve the thing they actually want over somewhat more-developed policy that is frankly leading pretty strongly in the direction of just lowering expectations forever.

Expand full comment
Abraham's avatar

Fundamentally the slow iterative approach that the LPC has taken to the recent immigration explosion is probably what's killing them. I think they went this path because

a) it's impossible to remedy the immigration situation without inducing a recession; they are covering up per capita declines in income with human QE.

b)Also, without that QE market prices would drop with a bubble burst, "screwing" over existing owners. No politician will want to piss of 60% of the electorate so the LPC is stuck.

That of course is only about a short term blip in prices; given the number of people here + latent demand from them, we can probably expect prices to not decline too much in the long run. In the long run there is honestly no way for prices to drop by 30-50% relative to wages in less than 2-3 decades if immigration is maintained at current levels.

The housing completes to new-population ratio needs to improves significantly until housing construction vastly outpaces population growth for a decade or so. That in turn requires a tripling of our construction industry and all supplier industries like gravel, timber, cement, steel, equipment, etc.

Not unless we want 100B+ in affordable housing spend by government.

Expand full comment
2 more comments...

No posts