Quote:
Originally Posted by Migrant_Coconut
That's what below-market rentals are for; it's pretty hard to flip a unit that's frozen at $2k/month.
By all means, jack up the FBT/SVT/EHT/PTT... but after you get rid of all the scalpers, we're still going to have a supply issue. The CMHC says Vancouver needs half a million more homes to get affordability back.
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This thread is a good illustration of a common confusion in housing debates. What happens is that we are building housing but not building enough housing to meet demand.
So what people see is a) housing being built and b) the consequences of not building enough housing
From there, it is easy for people to confuse these two things and blame the construction of new housing for the consequences of not building enough housing. E.g. People blame new housing for causing prices to rise or for housing getting more crowded and units getting smaller.
Sometimes a thought experiment can help clear away the confusion. For example, imagine if the new development at the bowling alley by Holdom station wasn't going to have 1,000 units in it, but instead was going to have 500,000 units in it - enough to actually come close to meeting the underlying level of demand.
Do we think that, in filling up these 500,000 units, prices would rise, or that people would need to crowd 10 people in per unit? Or is it more likely that prices would have to fall to move that many units, and that units might get bigger as people could afford more space.
Or try another thought experiment. What if, instead of adding 1,000 units around Holdom station, we instead demolished 1,000 units around the station. After all, if new construction creates higher prices and more crowding, the opposite would have to be true - demolishing buildings would mean lower prices and more spacious accommodation for everyone. But if you did demolish 1,000 units and all those people then had to find alternate accommodation - I think you would find that they were bidding up neighbouring places, and crowding more people into existing units to pay the increased prices/rent.
Somehow, when we talk of demolishing units, the consequences are obvious and agreed by all. But when we do the opposite, then there is disagreement, with a number of people arguing that building new units would have the same consequences as demolishing existing units.
It is very strange, and it can be tempting to just assume bad faith on the part of nimbys who protest that building new units just makes prices higher and conditions more crowded and the city more unaffordable, but I think that it is mostly an honest confusion that comes from what I stated up-front. There is building going on, but not enough, so instead of things improving (prices coming down, people having more space to live in) things are instead just getting worse more slowly than they otherwise would (due to ongoing population increase trying to fit into the same housing stock), a counter-factual that can be hard for people to mentally process.
It doesn't help that, because the population of the country as a whole is currently increasing faster than our capacity to build new units, we end up with a game of hot potato, where population moves to any place with more reasonable prices (eg Alberta right now).
In the end, this is just a long-winded way of saying that the econ 101 basics of supply and demand apply to housing, just like they do to any other good like televisions or toasters: Increasing supply reduces prices (vs. what they otherwise would be)
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