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So the meat of the article is splitting hairs over the fact that housing isn’t an acute problem and thus not a crisis? Is this the kind of “I’m so smart” bullshit the Walrus wants to drop on a society that can’t pluralize collection nouns properly and that also uses “literally” in a figurative sense?
We have people harming women with legislation entitled “protection of women and child act”. We have the environmental protection agency allowing aggressively carcinogenic fuel additives into our lakes and rivers.
We’re not ready for the thinking required to recognize some Walrus author’s obvious intellect, and give him the parade he feels he deserves; or at least some polite applause and a chorus of “hear hear, old chum” around our ornate tobacco pipes in the mahogany-paneled study.
Honestly, Walrus, what the fuck.
Yes, I was going to comment the same thing! By saying “there is no housing crisis“, it implies that there is less of a problem, not more of one. It’s provocative, but misleading. At the very least, the title should’ve been changed to say “It’s not a housing crisis, but a broken housing system“.
But honestly, is that even a useful point to make at length? Everyone knows it’s broken beyond just the short term!
Plus, there actually is a shortage relative to similar economies, which is worth mentioning.
A shortage occurs when an external mechanism, such as government intervention, prevents price from rising.
While we do have such controls in certain areas of the economy – you were probably bitten by one case at the onset of COVID when toilet paper wasn’t legally able to rise in price due to price gouging laws, leaving the shelves bare instead – I’m not aware of any attempts to restrict the price of housing?
Setting a government mandated price limit on housing is oft suggested as a solution, but the so-called problem here is that the prices have been able to rise. Literally the opposite of a shortage.
It’s a “shortage” in the normal colloquial use of the term because the quantity of housing demanded exceeds the quantity supplied relative to some spectrum of desired prices. “There’s no shortage if you have $2 million!” is hardly reassuring. I think you’re misapplying the jargon found in economics textbooks. On that definition, the recent spike in rice prices which will lead to millions of people starving is not a “shortage” because prices were allowed to rise. Sure, but that’s silly. What people normally mean by “rice shortage” is “there’s not enough rice”. It’s not enough precisely because prices are too high.
If you like, call it a “supply-demand imbalance” or an “affordability crisis”, but it doesn’t change anything. The point is, supply is so low that it’s causing a lot of human misery. In normal English, that’s called a “shortage”, because there’s not enough of it.
There’s less houses per capita than this sort of economy should have, and as a result prices are high (low supply, same demand). What word you want to use for that is up to you, I guess; usually people get what I’m saying so I don’t think “shortage” is a bad choice.
Price is what moderates demand. The higher the price, the less demand there is. Maybe you can eke out a million dollar home, but at a billion dollars I’m sure you are tapping out and moving to the forest to live under a pile of branches. Well, I certainly am!
So long as price is able to rise, rise it will, and demand will keep eroding until equilibrium with supply is found. And I think it is fair to say we have found equilibrium. If you are in the market, there is no trouble finding a home. If you have sufficient transactional value in hand, someone out there will sell you their home, guaranteed.
That’s quite unlike the toilet paper situation we saw a few years ago, where even a million dollars in your pocket wouldn’t necessarily secure you a roll, even though the lottery winners were paying dollars at most. That happened because price gouging laws prevented price from rising. That’s a shortage.
If you ignore the price component then everything is in shortage. There is always someone who is happy to take more, more, more. Call it that if you want, but what’s the point? What, exactly, are you communicating when there is nothing not in shortage? There is good reason why the formal definition is more succinct.
The thing about putting real economic situations directly in basic economics terms is that it’s impossible. I’d maintain that such an explanation exists, but we’re so, so far from having all the data needed to do so.
What I’m doing here is using comparable economies as a litmus test. Canada has less houses per capita then them, and higher housing prices. This tells a story that can be framed in economics terms, and that I suspect is correct. Why we have less houses is the interesting question, which I can’t yet answer.
Maybe you can eke out a million dollar home, but at a billion dollars I’m sure you are tapping out and moving to the forest to live under a pile of branches. Well, I certainly am!
An interesting digression about this: it would be illegal. The building of permanent structures is very regulated in Canada. It also might be hard to commute to work from crown land, and hunting or foraging is a challenging skill that’s also very regulated.
What actually happens when you’re priced out of housing is you become either a couch surfer, or a homeless person that’s periodically harassed by the police. Our laws basically assume everyone can afford a house.
Why we have less houses is the interesting question, which I can’t yet answer.
That’s easy to answer: There is nobody to build them.
Anyone who is willing to build homes is already building as many as they possibly can, and are booked up years in advance. If you want to hire someone to build a new home for you tomorrow – you can’t – the people don’t exist. –– Well, yes, technically, offer an exceptionally large sum to those committed to other projects and they’ll drop everything they have going on and will wait on you hand and foot. Everyone has a price. But that does nothing to help with the cost of housing. Those wishing to build offering more and more money to people building houses to get their spot in line is what is driving the costs upward.
Realistically, the only real solution is high unemployment, forcing people currently doing pointless office jobs to start swinging hammers. More labourers in the labour pool means lower labour costs (drives wages down), which means less cost to build new homes and allows more homes to be built, which means used homes come down in price in kind.
The BoC is working on it, to be fair. They have made it clear that they plan to push this shift in the economy. It takes time, though. If you want to see results sooner, take up work in the home construction industry (if not already). Be the change you want to see, as they say.
housing isn’t an acute problem and thus not a crisis
Who’s to say that is the one true definition of crisis anyway? People call “crisis” anything they feel highly impacting, no matter the acuteness.
I hope people are reading the whole article because it makes some really good points but it really takes too long to make those points
It’s excerpted from a book, apparently. That may explain its wordiness.
I asked ChatGPT to summarize it:
The article challenges the notion of a “housing crisis” in Canada and argues that the problem is not a crisis but rather a systemic issue of inequality and exploitation in the rental housing market. The author points out that the term “crisis” implies a temporary and unexpected situation, whereas the housing problem has been a recurring and longstanding issue.
The article highlights that the rental housing market operates to extract income from tenants, benefiting landlords and real estate investors, rather than ensuring secure housing for families. The author argues that the market is not a fair representation of supply and demand dynamics due to fixed land resources and the nature of housing as a long-term investment.
The “supply-side” argument, which claims that increasing housing supply will solve affordability issues, is criticized for serving the interests of developers and landlords. The author provides examples that challenge this argument, showing that even when vacancy rates increased, rents did not decrease significantly.
The article suggests that the term “housing crisis” perpetuates a narrative that the housing system was once functional and has now deviated due to unforeseen circumstances. Instead, the author contends that the housing system has always been skewed towards benefiting a privileged group, and the debate should focus on addressing the underlying power dynamics rather than seeking technical solutions.
In conclusion, the article emphasizes that the housing issue is not a crisis but a deeply rooted problem of inequality and exploitation. It calls for a shift in perspective to address the systemic issues and power dynamics within the housing market.
I gave up because the author is a windbag, tldr for me?
From the above poster
In conclusion, the article emphasizes that the housing issue is not a crisis but a deeply rooted problem of inequality and exploitation. It calls for a shift in perspective to address the systemic issues and power dynamics within the housing market.
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 regulation, so the cure for high prices being high prices isn’t able to exercised.
Is that a market failure, or is it that it is not truly a market, but rather a government program?
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
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.”
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.
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.
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Mostly agree, and I’m not even a communist. Whoever controls the land a society is built on essentially has a license to skim off any excess value added by others. David Ricardo figured this out over 200 years ago. The solution is to tax land, not labor or capital, and capture this excess for public use.
I keep telling people baffled at the apparent inaction that two thirds of Canadian households own properties. If such a large majority of voters own properties, is it any surprise that no significant action that would hurt them is taken? Rather, things work as intended and non-owners are squeezed more than they used to be several years ago.
