Someone Explain This So Called Housing Crisis?

[PeterGriffin]

Most cities in America were simply not designed to handle adding enough of those numerous capacities to compensate for high housing costs. Many sewer systems, electrical systems, etc. were built 100+ years ago. And even if you could build and provide every single one of those capacities, the houses will have to compete with the additional massive land, resource and building cost requirements that those would take to build, which would only raise their prices.

Cities are leaps and bounds more expensive than rural areas. Also suburban/rural areas are experiencing faster growth than cities as a result of COVID-19 pandemic and remote work availability, so the same effect of migration is occurring, it's just domestic migration versus international.

Respectully, I disagree the reasons for growth of rural/suburban areas is a result of Covid-19 and being able to work from home. It might have played a small factor, but cities were headed in the direction of the current problem anyways. I would suspect it is because people either can't afford the urban units, or the banks will not go that high on a pre-approval/approval so people more or less have to look outside the cities regardless.

 

[Islam Imamate]

You live in a bubble and you said yourself you've not given the topic 10 minutes' thought.

There are a million adults in this country enrolled as students in college/university. They rent.

Over half a million people received temporary foreign worker permits in 2023. They rent.

In 2022 over 18 million people in this country were counted as single. The population of Canada is only ~40 million. And what percentage of single people are in the market for a house, do you suppose?

Try putting some more thought into something before you decide it's bullshit.

I agree with you but you don't have to be so ornery about it.

 

[Andy Capp]

This will be the norm in the future.

The only properties being owned and sold will be hand-me-downs from deceased parents to siblings, and the vast majority of "homes" will be rentals owned by major companies who will squeeze everything that the tenants have out of them.

Only the elite will be able to purchase. The days of the everyman owning a home will be long gone.

Work, home, eat, sleep, survive. That will be it for most.

Meh. Hard times come and go. Global disasters like pandemics tend to be expensive for everyone so the people with the fewest means usually feel it the worst. There's nothing new under the sun. I think things will get better just as they got worse. Interest rates and inflation were so low for so long it just seems like the end of the world because people either weren't alive then or forgot similar economic disasters in the past.

When I graduated high school we were knee deep in a horrible recession and the unemployment rate here was similar to during the COVID pandemic, except back then they weren't issuing checks to all and sundry to keep afloat. All they really did was ease the requirements to qualify for unemployment insurance. It was fucking shitty. But no one was crying that we were on the way to Armageddon except for TV preachers. The difference now is fearmongering via social media.

As someone else said recently, people really need to calm the fuck down.

 

[Andy Capp]

I agree with you but you don't have to be so ornery about it.

It's a little off-putting to be contradicted by someone who also says they haven't given the topic any thought, don't you think?

 

[PeterGriffin]

I spend a good chunk of time investing -- when I think of diversification, Canada is an area I decided I would stay now away from if looking for growth. They've had some of the most ridiculous real estate appreciation, perhaps the highest of the G7 over the past few decades. Combination of high immigration, not enough new formations, corporate purchases (you hear it's always some small percent, but people tend to frame it in terms of overall market, not vacant market), high money laundering, and a lot of unoccupied investment properties. This turns the pricing for homes toward the monopolistic side. And it seems like there's plenty of plans for massive immigration into Canada for years and years. You take real estate out of the Canadian economy, I am not sure they are even positive in terms of growth. Horrible tech sector, about a decade ago their biggest pharmaceutical company turned out to be a fraudulent bust. Not a robust economy - financials, oil and gas, and real estate is pretty much everything. A crazy high percentage of new jobs from government instead of private sector.

Edit: Chart below is real estate price growth.

Ugghhhhhh.

I was already having a shitty day, didn't need this little bit of logic thrown on top of the pile.

 

[Islam Imamate]

It's a little off-putting to be contradicted by someone who also says they haven't given the topic any thought, don't you think?

I think he was amicable enough that you could assume it was a good faith disagreement. Just my two cents

 

[Andy Capp]

I think he was amicable enough that you could assume it was a good faith disagreement. Just my two cents

Well, with inflation I'm gonna need a dime.

 

[SammyPops]

According to my friends that still live in Canada, it's all immigrants' fault.

lol not fault but when you have a million + immigrants every 3-4 years, houses done run out. The federal Libs had a report on this in 2018 and buried and ignored it.

 

[Andy Capp]

I spend a good chunk of time investing -- when I think of diversification, Canada is an area I decided I would stay now away from if looking for growth. They've had some of the most ridiculous real estate appreciation, perhaps the highest of the G7 over the past few decades. Combination of high immigration, not enough new formations, corporate purchases (you hear it's always some small percent, but people tend to frame it in terms of overall market, not vacant market), high money laundering, and a lot of unoccupied investment properties. This turns the pricing for homes toward the monopolistic side. And it seems like there's plenty of plans for massive immigration into Canada for years and years. You take real estate out of the Canadian economy, I am not sure they are even positive in terms of growth. Horrible tech sector, about a decade ago their biggest pharmaceutical company turned out to be a fraudulent bust. Not a robust economy - financials, oil and gas, and real estate is pretty much everything. A crazy high percentage of new jobs from government instead of private sector.

Edit: Chart below is real estate price growth.

That only goes to Q1 2020 though. A lot happens in 4 years. But yeah, in terms of growth generally, everything I've heard says it will be another year or more before growth is significantly positive. People just aren't spending money; that's a huge part of the problem.

Edit: To wit,

https://www.cbc.ca/news/canada/calgary/pandemic-savings-canada-recession-1.7118020

"After the pandemic hit in 2020, some business owners and households were hard hit financially as a result of lockdown measures. But at the same time, many Canadians saw their bank accounts grow because of their reduced spending.

Those savings ballooned to over $300 billion and became so large that economists expected there would be a big boost to the economy when all that money was eventually spent.

But today, that sizeable stimulus still hasn't happened. Experts aren't sure exactly why.

The savings did help the economy, but not nearly as much as envisioned, and the bulk of the money is still sitting in bank accounts.

To this day, total household savings are still about $350 billion more compared to before the pandemic began, according to Statistics Canada. Lower and middle income households spent much of what they saved during the pandemic, while higher-income households have actually saved up more money, experts say.

That amount has stayed relatively consistent over the last year or two with little indication of a big spending splurge to come.

"There's still a lot of excess savings that's been accumulated during the pandemic that is still in the system. We haven't seen a drawdown of that," said Charles St-Arnaud, an economist with Alberta Central credit union. "The question at this moment is why?"

[Edit too:] That's precisely the difference between here and in the US, which has outperformed pretty much every other developed economy coming out of the pandemic--and it's not even close, as some here like to say. They aren't hording their money like we are and I put the blame squarely on the shoulders of right wing fearmongering for the difference.

 

[RoastBeast]

No I do think homeowner should be able to put rentals on there property and I personally have one and I'm actually even benefiting from that since I have half an acre in a very dense city. My daughter is going to a high quality private school and I use that rental to pay her tuition and am grateful for it.

But building a bunch of rental properties seems terribly short-sided and cruel and can't really be a long-term answer to housing ownership which I think ought to be the real goal.

I haven't given this more than 10 minutes thought so I just want to preface that before I state what I think. But I think zoning laws do need to be changed and duplexes triplexes and small condos... all that kind of thing ought to be allowed within normal neighborhoods. I would much prefer condos over apartments and I think that legislators have to write laws that allow people to own things instead of just rent them. And I also think that tiny homes should be allowed on tiny plots so that we can use up less space. And I also think construction styles like aircreet should be allowed through zoning because you can build a home for a fraction of the cost of a normal home that way and make housing more affordable for the poor.

It's just that when people say we should just allow people to rent on their property and then I go out to every new development in my city and it's the exact same kind of housing development as we've always seen it sounds like b******* to me.

Do you own a house in a normal neighborhood? If you did, you probably wouldn't be good with having low income and high density housing built in your neighborhood.

There's plenty of land out there to build high density housing that wouldn't turn a good neighborhood into a bad neighborhood.

 

[avenue94]

Do you own a house in a normal neighborhood? If you did, you probably wouldn't be good with having low income and high density housing built in your neighborhood.

There's plenty of land out there to build high density housing that wouldn't turn a good neighborhood into a bad neighborhood.

So you want to create a stratified and segregated society based on income? Aka you want to the do same thing that led to the current hosting crisis. Brilliant.

Where would you build high density, more affordable housing?

 

[Andy Capp]

@Unknown Pleasures please forgive me, but I edited the post yet again after you "liked" it. Please see the update if you would be so kind.

 

[jx820]

I'm not sure it's most, though it's certainly a very significant proportion, but prices have soared everywhere. I live in little ol' PEI and the price of houses here doubled in the 5 years prior to the recent interest rate hikes. I'm a half hour drive from town and my next door neighbour is a potato field. But we still paid a lot (relatively) for ours.

I don't find much to disagree with in the last two paragraphs though.

It's definitely crazy all over. It's worse in Canada than I even realized and my family in Quebec was complaining about it 5 years ago. It was crazy before it went crazy.

Before I made my last post I checked Yellowknife in the Northern Territory and that was shocking. Who's paying a million dollars to live in the Northern Territory?

But the population density claim is accurate. You can check a population map. The think you end up with is a few other factors that effect other areas. Everyone priced out of the city goes to the suburbs. Everyone priced out of the suburbs goes to the country. And presumably everyone who is priced out of the country goes to the northern territory.

But also rural residential development is often slower. It's often single unit housing. The land is often tied up in non-residential applications. And the people who already own property are hodling like it's GME stock because either they're concerned about interest rates or they think it'll keep going up.

Lastly prices are kind of inflated everywhere because everyone agrees they are. If I buy a real estate investment for 500k, I expect to sell it for 600k, and I don't want to see housing prices come down. The price for my house can never come down because I can't afford to be upside down on a mortgage so either I make a profit or I just keep the house.

Think about how many people have thier biggest financial holding in their house. How much wealth would be lost if suddenly 1/3 of the population was upside down in a mortgage. So they're just going to hold.

 

[RoastBeast]

So you want to create a stratified and segregated society based on income? Aka you want to the do same thing that led to the current hosting crisis. Brilliant.

Where would you build high density, more affordable housing?

Yes as a homeowner, I wouldn't want my home devalued by high density housing. I wouldn't want to deal with higher rates of crime, auto theft and home burglaries either.

They can build high density housing on empty lots of property that aren't in good neighborhoods.

 

[Beechwood]

From what I've read here in the US there is about a shortage of 1 million homes. that has created a housing shortage crisis. Home builders are reportedly not building as many new homes due to increased regulations written 10 years ago, making it more difficult and more expensive to create a house. To buy a new home in the US you need an income of over $100,000 it was announced last month.

Hope regulations are eased so some new homes can be made. I have my doubts that will happen while Biden is in office though.

 

[Unknown Pleasures]

That only goes to Q1 2020 though. A lot happens in 4 years. But yeah, in terms of growth generally, everything I've heard says it will be another year or more before growth is significantly positive. People just aren't spending money; that's a huge part of the problem.

Edit: To wit,

https://www.cbc.ca/news/canada/calgary/pandemic-savings-canada-recession-1.7118020

"After the pandemic hit in 2020, some business owners and households were hard hit financially as a result of lockdown measures. But at the same time, many Canadians saw their bank accounts grow because of their reduced spending.

Those savings ballooned to over $300 billion and became so large that economists expected there would be a big boost to the economy when all that money was eventually spent.

But today, that sizeable stimulus still hasn't happened. Experts aren't sure exactly why.

The savings did help the economy, but not nearly as much as envisioned, and the bulk of the money is still sitting in bank accounts.

To this day, total household savings are still about $350 billion more compared to before the pandemic began, according to Statistics Canada. Lower and middle income households spent much of what they saved during the pandemic, while higher-income households have actually saved up more money, experts say.

That amount has stayed relatively consistent over the last year or two with little indication of a big spending splurge to come.

"There's still a lot of excess savings that's been accumulated during the pandemic that is still in the system. We haven't seen a drawdown of that," said Charles St-Arnaud, an economist with Alberta Central credit union. "The question at this moment is why?"

[Edit too:] That's precisely the difference between here and in the US, which has outperformed pretty much every other developed economy coming out of the pandemic--and it's not even close, as some here like to say. They aren't hording their money like we are and I put the blame squarely on the shoulders of right wing fearmongering for the difference.

Interesting, I don't know details but suspect Trudeau is the type to give out money like candy so maybe a significant sum of it wound up in the pockets of people who don't need it and just added it to savings. It's funny because I think that's the technically the savvy thing to do if you don't need the money for your bare necessities. Printing and handing so much out is really meant to spread pain out, not eliminate it.

 

[Andy Capp]

It's definitely crazy all over. It's worse in Canada than I even realized and my family in Quebec was complaining about it 5 years ago. It was crazy before it went crazy.

Before I made my last post I checked Yellowknife in the Northern Territory and that was shocking. Who's paying a million dollars to live in the Northern Territory?

But the population density claim is accurate. You can check a population map. The think you end up with is a few other factors that effect other areas. Everyone priced out of the city goes to the suburbs. Everyone priced out of the suburbs goes to the country. And presumably everyone who is priced out of the country goes to the northern territory.

But also rural residential development is often slower. It's often single unit housing. The land is often tied up in non-residential applications. And the people who already own property are hodling like it's GME stock because either they're concerned about interest rates or they think it'll keep going up.

Lastly prices are kind of inflated everywhere because everyone agrees they are. If I buy a real estate investment for 500k, I expect to sell it for 600k, and I don't want to see housing prices come down. The price for my house can never come down because I can't afford to be upside down on a mortgage so either I make a profit or I just keep the house.

Think about how many people have thier biggest financial holding in their house. How much wealth would be lost if suddenly 1/3 of the population was upside down in a mortgage. So they're just going to hold.

Taking this together with what I was saying to @Unknown Pleasures leads me to also mention how angry I am with the Bank of Canada.

The reason people are clenching their anuses so tightly here is the BoC won't cut interest rates until at least June, the fucking motherfuckers. I'm no expert but it's still really clear they have this situation ass-backwards and their refusal to start lowering rates sooner is the cause of this mass puckering. It's plain as fucking day.

Inflation on food prices is nearly in line with the goal rate, last measured at 2.4% so now it's mainly the high cost of home ownership that makes things seem so bad to people.

 

[UFCUCF]

China and Wall Street are buying up entire blocks by the bulk which is making it impossible for regular people to afford a house anymore

I don’t think the math supports that. The % of owner occupied homes in the US and Canada have been very stable over time. Homeownership in the US and Canada are, and have been in the upper 60% range steadily.

 

[Fedor>Cain]

Or just move to the Deep South

This looks like a real life town from borderlands lmao

 

[Unknown Pleasures]

Taking this together with what I was saying to @Unknown Pleasures leads me to also mention how angry I am with the Bank of Canada.

The reason people are clenching their anuses so tightly here is the BoC won't cut interest rates until at least June, the fucking motherfuckers. I'm no expert but it's still really clear they have this situation ass-backwards and their refusal to start lowering rates sooner is the cause of this mass puckering. It's plain as fucking day.

Inflation on food prices is nearly in line with the goal rate, last measured at 2.4% so now it's mainly the high cost of home ownership that makes things seem so bad to people.

I think the mortgage market is different too. In the u.s. people can refinance after every rate cut with no penalty. And people can walk away from mortgages without banks being able to go after other assets. With prices so high, I bet a lot of people who got like 2% rates with little money down are now facing like triple that if they want to lock in. Probably puts a lot of people facing their first renewals completely underwater on affordability metrics and unable to negotiate a good rate.