Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[theman23]

Originally Posted by MonkeyRonin

This is something I've been saying for years, so this certainly brings me some vindication (and at least a little bit of schadenfreude). But this is the result of investor-driving housing development where homes aren't actually designed with the end user in mind - we've done a really poor job at building livable, high-quality housing that people actually want to live in. It's particularly problematic with the phenomenon of "inboard bedrooms" in Ontario - ie. bedrooms without an exterior-facing window. So you get 1-bedroom, or even 2-bedroom condos where the bedrooms have no windows. At least in BC, by code a bedroom requires an external window. This is where some level of regulation is needed to ensure that decent housing is being built.

There's of course a place for smaller, studio apartments within the wider housing stock; but half a million dollars for a hallway with a kitchen ain't it. And studios can still be well designed with efficient layouts - which most of these are not. Either way, in the context of a housing shortage it makes the problem even worse than it seems at first glance: it means that a significant share of the ~250,000 housing units we do build each year (if not the majority in places like Toronto) aren't actually meeting people's needs. It also creates a bit of a caveat in the supposed price drops we've heard about it in the market, as the biggest drops are in the worst units. Anecdotally, of the houses, townhomes, and larger/better-designed condo units I've looked at, prices still seem to ticking slowly upwards.

On the bright side, there's probably about to be a whole bunch of relatively affordable homes on the market in the not-too-distant future. Zero sympathy for the investors who lose their shirt in the process. I do feel bad for the buyers who were duped into thinking these were a smart investment, but from the sounds of it they're probably in the minority at least.

That realtor.ca link you posted has a Murphy bed in the kitchen as it’s only sleep space and literally no living space. That would be slumming it for a short term stay, but maybe acceptable for a couple of hot bedding international students. Even then, I doubt it. You’re probably right that the majority of housing starts get gobbled up by crap like this, which makes the fact that we’re building 3 to 4 slower than we should even more depressing.

[MolsonExport]

floor-to-ceiling windows

That ad is lying. There is but one window, in the narrow tunnel that does triple duty as a kitchen, bedroom, and living room.

[Changing City]

Originally Posted by MonkeyRonin

This is something I've been saying for years, so this certainly brings me some vindication (and at least a little bit of schadenfreude). But this is the result of investor-driving housing development where homes aren't actually designed with the end user in mind - we've done a really poor job at building livable, high-quality housing that people actually want to live in. It's particularly problematic with the phenomenon of "inboard bedrooms" in Ontario - ie. bedrooms without an exterior-facing window. So you get 1-bedroom, or even 2-bedroom condos where the bedrooms have no windows. At least in BC, by code a bedroom requires an external window. This is where some level of regulation is needed to ensure that decent housing is being built.

There's of course a place for smaller, studio apartments within the wider housing stock; but half a million dollars for a hallway with a kitchen ain't it. And studios can still be well designed with efficient layouts - which most of these are not. Either way, in the context of a housing shortage it makes the problem even worse than it seems at first glance: it means that a significant share of the ~250,000 housing units we do build each year (if not the majority in places like Toronto) aren't actually meeting people's needs. It also creates a bit of a caveat in the supposed price drops we've heard about it in the market, as the biggest drops are in the worst units. Anecdotally, of the houses, townhomes, and larger/better-designed condo units I've looked at, prices still seem to ticking slowly upwards.

On the bright side, there's probably about to be a whole bunch of relatively affordable homes on the market in the not-too-distant future. Zero sympathy for the investors who lose their shirt in the process. I do feel bad for the buyers who were duped into thinking these were a smart investment, but from the sounds of it they're probably in the minority at least.

There's no difference in the BC Building Code, which also allows windowless bedrooms. Here's a statement by Burnaby's general manager of planning and development, Ed Kozak. "The bedrooms have the opportunity for receiving borrowed light from the window that is also within the unit, he said, noting windows do not make a bedroom and are not a requirement in the building code."

The floor plates of older towers tended to be smaller, with a greater proportion of exterior wall which meant that bedrooms could, and would, have a window. Larger floor plate towers like The Amazing Brentwood in Burnaby have 10 or 12 units per floor, so there have to be some 'shotgun' apartments with windowless bedrooms. Here's an honest ad for one where you can 'immerse yourself in the epitome of luxurious minimalism. What sets this condo apart is its versatility with an office space thoughtfully converted from one of the windowless bedrooms.' The City of Vancouver has also allowed windowless bedrooms in 'affordable' rental projects.

Windowless bedrooms also a phenomenon that can be seen across the US too.

[whatnext]

Originally Posted by Changing City

There's no difference in the BC Building Code, which also allows windowless bedrooms. Here's a statement by Burnaby's general manager of planning and development, Ed Kozak. "The bedrooms have the opportunity for receiving borrowed light from the window that is also within the unit, he said, noting windows do not make a bedroom and are not a requirement in the building code."

The floor plates of older towers tended to be smaller, with a greater proportion of exterior wall which meant that bedrooms could, and would, have a window. Larger floor plate towers like The Amazing Brentwood in Burnaby have 10 or 12 units per floor, so there have to be some 'shotgun' apartments with windowless bedrooms. Here's an honest ad for one where you can 'immerse yourself in the epitome of luxurious minimalism. What sets this condo apart is its versatility with an office space thoughtfully converted from one of the windowless bedrooms.' The City of Vancouver has also allowed windowless bedrooms in 'affordable' rental projects.

Windowless bedrooms also a phenomenon that can be seen across the US too.

You have to love planning-speak like "borrowed light". These are the tenaments of tomorrow.

[lio45]

Originally Posted by MonkeyRonin

On the bright side, there's probably about to be a whole bunch of relatively affordable homes on the market in the not-too-distant future. Zero sympathy for the investors who lose their shirt in the process. I do feel bad for the buyers who were duped into thinking these were a smart investment, but from the sounds of it they're probably in the minority at least.

Curious why you’d say this? Interest rates are dropping, and we still import way more FNSs per year than what normally fits inside the new housing we manage to build per year, which leads me to forecast that the “housing crisis” is going to get worse, and that current real estate prices are low compared to what they’ll be in the future.

I don’t see PM PP being able to do much about stopping JT’s pet Scheme; the consequences would be too dire. Our economy is now addicted to that influx of Indentured Servants — and they happen to all prefer a roof over their heads.

[Changing City]

Originally Posted by whatnext

You have to love planning-speak like "borrowed light". These are the tenaments of tomorrow.

It's not planning-speak, it's been around as a description for centuries.

Borrowed light is a term that refers to the light that enters a room or a building through a window or an opening in a wall. This light is called “borrowed” because it is not produced by the room or building itself, but rather by an external source. The term is also used to describe the light that is reflected or diffused from one surface to another, such as a mirror or a shiny object.

According to the Oxford English Dictionary, borrowed light is “light admitted to a building from an external source, as through a window or skylight.” Merriam-Webster defines it as “light that enters a room through a window or other opening in a wall.” The Cambridge Dictionary defines it as “the light that comes into a room from outside through a window.”

[Words-wiki]

[whatnext]

Some international coverage, from the Guardian, on more symptoms of the Liberals failure on the housing front.

Toronto residents flood city lotteries amid ‘impossibly unaffordable’ housing
Demand far outstripped supply for six lotteries amid rising rents in city with scarcity of affordable options
Campbell MacDiarmid in Ottawa
Wed 26 Jun 2024 17.35 BST

Toronto inhabitants fed up with rising rents are flooding city-run lotteries for affordable housing in new developments, but the chance of being selected for a subsidized unit is often less than 1%.

One new development in the city’s West End recently offered a random public draw to allocate 135 units with rents pegged to income ceilings that would cost hundreds of dollars less than market rates. Nearly 12,500 people entered the draw for the homes aimed at middle-income earners in the Galleria on the Park development.

A new analysis by the Toronto Star has shown that demand far outstripped supply for six lotteries to allocate lower-cost rentals in six new developments since the start of 2023, part of a city scheme offering developers incentives in return for including moderately affordable units in their plans. One development’s lottery gave applicants a 4% chance of winning, while the odds of success in another ballot were just 0.4%....

... Only the cost of living and concerns with the healthcare system outstripped concerns over high housing prices among respondents leaning against supporting the Liberal government, according to the Angus Reid poll.

https://www.theguardian.com/world/ar...ousing-lottery

[MonkeyRonin]

Originally Posted by Changing City

There's no difference in the BC Building Code, which also allows windowless bedrooms.

Interesting, didn't realize that was the case. In Ontario, the code was updated in the early 2000s to specifically allow bedrooms without direct exterior windows (previously not permitted), which I had assumed was not the case in BC - particularly as those "inboard bedrooms" seem to be incredibly rare here, even on newer developments. In contrast, I wouldn't be surprised if the majority of post-2000 condo units in Toronto had them.

Originally Posted by lio45

Curious why you’d say this? Interest rates are dropping, and we still import way more FNSs per year than what normally fits inside the new housing we manage to build per year, which leads me to forecast that the “housing crisis” is going to get worse, and that current real estate prices are low compared to what they’ll be in the future.

I don’t see PM PP being able to do much about stopping JT’s pet Scheme; the consequences would be too dire. Our economy is now addicted to that influx of Indentured Servants — and they happen to all prefer a roof over their heads.

Well, as noted in the CBC piece, they aren't selling at the current asking prices. The cap rates don't work out for rentals, they can't (legally) be used for Airbnb, and no one wants to spend half a million dollars to actually live in a glorified closet. They exist for the purpose of investment, but the math isn't pencilling out anymore.

Now, demand for a simple roof over one's head will temper them from falling too much; and it's possible that if the current growth rates continue that even the micro studios will eventually be able to fetch $3000+ per month in rent - but I'd place my bets on prices falling quite a bit further before that happens.

[MonkeyRonin]

Originally Posted by MolsonExport

That ad is lying. There is but one window, in the narrow tunnel that does triple duty as a kitchen, bedroom, and living room.

Don't forget "luxury living".


My annoying realisation of the day is that this isn't too far away from my parent's place - a detached single-family house on decent sized lot - which they bought for about $100,000 in the 80s (the equivalent of around $200,000 today). They could've bought two houses for the equivalent price of this single 9 ft wide micro apartment!

[kwoldtimer]

Unfortunate news in today's market.

https://kitchener.ctvnews.ca/company...tion-1.6942348

[theman23]

Originally Posted by kwoldtimer

Unfortunate news in today's market.

https://kitchener.ctvnews.ca/company...tion-1.6942348

Their press release really doesn’t hold back, throwing shade on everything from the burdensome regulatory process to inflationary government overspending.

https://www.z-modular.com/news/z-mod...hener-ontario/

[GeneralLeeTPHLS]

That's really unfortunate, and perfectly encapsulates the problems facing our housing market across the nation.

[MonkeyRonin]

Some basic math to explain why we won't be solving our housing crisis any time soon:

FIRST READING: New population projections show a housing crisis with no end in sight

At current homebuilding rates, Millennials wouldn't have access to affordable housing before they're in their 80s

Tristin Hopper
Published Jun 27, 2024 • Last updated 2 days ago • 4 minute read

According to new population projections released by Statistics Canada, even the most optimistic Trudeau government homebuilding targets risk being swamped by newcomers before they have a chance to restore affordability.

On Monday, the statistics agency projected that Canada was on course to have 63 million people by 2072 — almost all of it due to immigration. Given that the Canadian population just passed the 41 million mark, this represents a yearly gain of 440,000 newcomers — or, 1,200 new Canadians per day for the next 50 years.

As per the 2021 census, the average Canadian household comprises 2.4 people. At that rate, it would take an estimated 183,000 new homes per year just to handle the influx.

Canada’s current rate of homebuilding was last pegged by the Canada Mortgage and Housing Corporation at 247,830 housing starts per year.

With 183,000 needed each year just to break even, this leaves only 63,000 homes per year (about 27 per cent of the total) to build down the country’s existing housing shortage.

The Canadian housing shortage has been estimated as high as 3.5 million units. In a 2023 report, the Canada Mortgage and Housing Corporation pegged 3.5 million as the number of additional housing units that would need to be built in order to restore Canada to a level of affordability last seen in 2004.

In a situation where all but 63,000 new homes per year are being accounted for by immigrant demand, it would take 55 years to build down a housing gap of 3.5 million.

In other words, at current homebuilding rates even the youngest Canadian Millennial would be 83 years old before they could enjoy a housing market with the same affordability as when they were in high school.

...

This is part of why, in April, the Trudeau government promised a wildly optimistic plan to build an extra two million units of housing by 2031.

That’s still well short of the 3.5 million needed to get Canada to 2004-era affordability. However, it would at least give Canada a rate of homes-per-residents on par with the rest of the G7.

Pitched as a plan to “solve the housing crisis,” it does seem to accommodate a rate of immigration on par with the latest Statistics Canada projections.

The plan pledges to build 3.87 million new homes over the next seven years. Or, about 552,857 per year.

If 183,000 of those homes are needed each year just to meet immigration growth, that leaves 370,000 per year to build down the housing shortage.

Over seven years, that’s just enough to meet the 2 million threshold.

The only problem is that the housing plan is probably impossible.

It requires Canadian homebuilding rates to more than double overnight, and then sustain that rate for the rest of the decade.

...

CMHC’s own projections are already predicting that Canada won’t come close to meeting the Trudeau government pledge, and that housing starts are actually set to go down for the foreseeable future.

In their latest Housing Market Outlook, the CMHC’s most optimistic projection was that just 241,659 homes would be built in 2026.

https://nationalpost.com/opinion/new...o-end-in-sight

[lio45]

A good chunk of current housing unit starts are bitcoin-style studio condos designed for investor owners, no? It’s stupid to think those are suitable for the average ~2.4 people household. (Which is what the article assumes.)

[whatnext]

Originally Posted by MonkeyRonin

Some basic math to explain why we won't be solving our housing crisis any time soon:
url]

Unbelievable how the Trudeau government’s incompetence brought us to this.

WTF were the bureaucrats in the Ministry of Housing, Infrastructure & Communities doing over the last ten years? Or the drones labouring in the CMHC on our dime?

[lio45]

To elaborate on my point above, a better metric than “number of housing units constructed per year” would be “number of bedrooms constructed per year”, with the generally correct approximation that 1 bedroom = 1-2 housed person(s). (We can use the % of the population that’s single and the % that’s in a relationship to get a nice final figure that’s between 1 and 2. Kids would count as needing a bedroom each.)

(Studios and 1br units would all count as “1”.)

The housing starts data would then look like “we built 385,531 new bedrooms this year”, rather than the current format “we built 247,830 “homes”, whatever that means, this year”.

[theman23]

Originally Posted by MonkeyRonin

Some basic math to explain why we won't be solving our housing crisis any time soon:




https://nationalpost.com/opinion/new...o-end-in-sight

Probably time we’re honest with young Canadians about the future we’ve set up for them. Maybe the Libs need to run a PR campaign extolling the benefits of living at home with mom and dad forever while saving in an expanded TFSA.

[casper]

Originally Posted by whatnext

Unbelievable how the Trudeau government’s incompetence brought us to this.

WTF were the bureaucrats in the Ministry of Housing, Infrastructure & Communities doing over the last ten years? Or the drones labouring in the CMHC on our dime?

They were expecting the private sector to solve the problem. Clearly it is not up to the task. When that became clear, they started to become active in co-op and other federally financed forms of housing.

I think we a good year or practice federal government involvement in housing become we go back to assuming the free market will solve the problem on its own.

Thankfully the provinces are starting to step in and fix the zoning issues created by the municipal governments they have oversight over.

[theman23]

Originally Posted by casper

They were expecting the private sector to solve the problem. Clearly it is not up to the task. When that became clear, they started to become active in co-op and other federally financed forms of housing.

Any idiot could have told the Liberals that the private sector was not up to the task before they juiced demand by 4x. The federal participation in co ops and financing programs is a drop in the bucket of housing demand and isn’t even worth discussing. It’s pretty damning that even the most fervent defence of the Liberals most significant policy change is that they were too stupid to realize how badly they were fucking up.

I think we a good year or practice federal government involvement in housing become we go back to assuming the free market will solve the problem on its own.

Huh?

[Hecate]

Who the fuck blames the citizens for not building enough homes. It is the most bullshit excuse. It’s like victim blaming. Why did you make me hit you.

I Can see trudeau sitting there crying… “I didn’t bring in too many immigrants… those lazy Canadian citizens didnt build enough homes. It’s all their fault wahhhh” it’s all the citizens of Canadas fault not the incompetent government and its mentally disabled enabling followers.