Vancouver isn't trying nearly hard enough. Housing is much more affordable in places where supply is allowed to grow without government interference. Unfortunately there are very few such places, but states that are more free to build in, like Texas, are much more affordable and people have been migrating for the low prices.

Speculative hoarding of the scarce resource of housing can lead to houses sitting empty, but speculation would be pointless if the resource weren't artificially constrained to be scarce.

> Housing is much more affordable in places where supply is allowed to grow without government interference

I just don't believe this. I'm sorry. The difference between texas (which part, for one thing) and vancouver isn't down to real estate regulation. There are plenty of places in BC where you can buy a home for texas prices, and real estate regulation isn't that different city to city.

I don't understand. The world is complicated, but some things are simple. Gravity makes things fall. Increasing supply reduces price. How is this a dubious idea?

If developers are getting rich off building more, that means housing is crazy scarce, so scarce that people will fill the pockets of anyone who builds it. That means you need to build

Way

More

Housing.

Econ 101.

If you give a starving person a carrot and they were still starving after eating it, would you say that feeding has failed? Quantity matters! A lot!

One of the disconnects here is that the demand is not uniform. There is demand on housing from people who live here and want to continue to live here. There is also demand on housing from people who want to invest and make money. I believe that the second category has actually been the major driving force of housing prices. Yes one thing we could do is bulldoze the city and build thousands of condo-towers, and maybe we'd drown the demand from investors and actually succeed in bringing down the prices. Or maybe we could just kneecap housing investors, and not have to terraform our city into a dystopian hellscape to please the market.

You saying that new construction condo towers being a "dystopian hellscape" is quite telling.

"I'm not a NIMBY, I just want to preserve our neighborhood character" - 100% of NIMBYs

I don’t need to defend my non nimby credentials here, but to be clear i said “hellscape” because i lived in condos for about ten years and 500-1200sqft on the 20th floor is just not a place most people can raise a family and build a full life.

Nobody said condos had to be 1200 sqft or walls & floors without sound isolation ;)

You're making the mistake of thinking that home owners and investors are distinct groups of people. The overlap between the two is huge.

I still think supply would help without bulldozing the city, but increasing property taxes would also help. I'm a bit of a Georgian anyway.

If there were 500 million homes in the US and all 500 million were owned by one corporation who rented them out to the population, would you say the solution is:

A. Build more houses (and cross your fingers that the corporation doesn’t snatch those up too)

B. Criminalize renting to some degree

If the corporation is making that much money from its renting monopoly then the developer should just keep the property it builds and rent it out. If five developers do this, you'll start to see price competition and prices will go down. The rich hoarders and speculators will get screwed badly. As they should be.

Except... they will beg the government to do something, tell some heart-rending narrative about those nasty rich developers, the government will do something, and they'll get to stay rich.

I may see a different villain here than you do.

I don’t think you’re wrong that there’s a solution that the free market would provide (maybe not yours but I’m a believer in the invisible hand). However, that’s no good for preventing another situation like this in the long-run and there’s no benefit to allowing renting other than destroying the environment and shifting some bank account numbers. This is all separate from high-efficiency renting (i.e. apartments) because that uses the land well.

What are you talking about? You just described a situation that has never happened. Nothing remotely like it has ever happened in a free market country. And now we need to prevent "another" situation like this in the long run? I'm so confused.

That’s exactly what’s happening now: housing prices have exploded and corporations are choosing to rent inventory out instead, especially via AirBNB because that makes them more money. Chinese foreigners are snapping up properties at high rates. Zillow buys out entire areas now to raise prices.

Meanwhile the American citizenry with humble dreams of one day owning a house feels their dreams drift farther and farther out because some people won’t acknowledge that there’s even a problem. Others want to reward these corporations by building more inventory.

That's quite different from the hypothetical earlier, because you're now describing multiple owners rather than a single monopoly.

If a single corporation owns all homes, they can artificially limit supply by buying up any new properties and leaving them empty.

If multiple companies own all homes, then they can try to artificially limit supply by buying up any new properties and leaving them empty, but there's huge incentive for each one not to: if it rents out every property it buys, it makes even more money than if it left any of them empty. It's the prisoner's dilemma - if all companies collude and limit supply they maximize total profit, but if any individual company "cheats" it stands to gain even more for itself.

It is possible for cartels to collude and pull this off (OPEC etc), but it's not possible when there are thousands and thousands of companies and many of them are too small to "take one for the team" and leave a property empty, or too disinterested in any collusion.

Increasing supply reduces prices, hurts speculators, and makes things more affordable. This is Econ 101. There is no reason to think housing is an exception. But it sure does serve the interests of NIMBYs to pretend as if it is an exception. Are you a NIMBY?

I can see why you might think that but no, I’m not. I don’t think unnecessary housing should be built because it damages the environment and wastes usable space for no gain. Likewise, I don’t like cryptocurrency mining much for the same reason. I find it silly to build more housing simply for rent-seekers to line their pockets at the cost of the environment.

Mine’s an environmental concern. NIMBYs are just trying to protect their housing investments.

Maybe more housing seems like an "unnecessary" environmental problem to you because you have what you need? Many lower-income people would benefit from affordable housing.

Your concern is actually pretty common among the affluent homeowners who prevent development. Probably the second most common concern behind "neighborhood character", which is really just another type of environmental concern (city environment). Very few NIMBYs are purely after money.

"Housing defies economic laws and is terrible for the natural and/or city environment" is the prevailing opinion of NIMBYs today, based on the discussions I've been in.

You know what else lower-income people would benefit from? Increased housing supply by banning house renting. You know what lower-income people wouldn’t benefit from? Preserving the status quo solely so that rent-seeking landlords can keep their investments.

It seems like you’re on the side of the upper-class trying to trade the environment to prop up their investments. This is just like BTC scammers trying to trade the environment for their investments.

That would make sense if BTC investors made money by increasing supply. But they don't. The entire value proposition of BTC is its absolutely fixed, limited maximum supply. Again, Econ 101.

So no, if one side of this is more like BTC scammers, it isn't mine. It is the guarantee of scarcity that underwrites the entire BTC enterprise, even for the miners who are today wasting electricity on generating more of them.

Renting has absolutely nothing with our housing problems. There are majority-renter housing markets that have nowhere near the affordability problems we have. Supply is far more important than who has the deed.

If you want rich developers to make less money, unleashing supply is the way to do that. Automakers and grocery stores have relatively low profit margins because there are no government-imposed supply constraints on them.

Frankly, though, I think it's more admirable to help the poor than merely make a doomed attempt to punish the rich.

Alright, let’s agree to disagree on whether or not supply should be increased.

Would you at least agree in a hypothetical US in which it is not possible to build further supply that banning renters would be the next logical step? Again, this is not to say or not say that supply should not be further built.

I don't see the argument? Some people like renting. Landlord profit margins mostly depend on supply and demand, just like home prices do. Enough supply will bring their margins down to grocery store levels, and renters won't be at much of a disadvantage compared to owners.

Owning means saving a lot of money and accepting a lot of price risk and transaction costs. I own a house and like it, but I know for a fact that it's not for everyone.

If there was one monopolist landlord who charged through the nose, that could be a problem, but I don't know of any housing markets like that. Landlords keep raising their prices because demand outpaces supply and they can get away with it.

Monopolies have never happened in the US? Tell that to Standard Oil.

So because there was an oil monopoly around 1900, we need to prevent a "similar" housing monopoly in 2021? No, I stand by my post. Nothing remotely like the situation you describe has ever happened.

It is not the case that, because an oil monopoly happened in 1900, we need to be hypervigilant to hypothetical monopolies in other industries where nothing remotely like that has ever happened.

Before the rise of the Chicago school approach to antitrust, government regularly took action to prevent monopolization. Oddly enough, the size of the world's largest corporations has been skyrocketing in that same period. So yes - we should be hypervigilant to hypothetical monopolies in every industry - especially when we have governments decidedly uninterested in preventing them.

https://en.wikipedia.org/wiki/United_States_antitrust_law#Ri...

Okay, you want to talk about monopoly. You don't want to talk about housing. Fine, whatever. But don't pretend your ideas have anything to do with actually helping the cause of affordable housing.

>B. Criminalize renting to some degree

You mean anti monopoly laws? Let them pay monopoly taxes if their market share is bigger than 50% in any given city.

The vacancy rate there is 2.6%, according to the CMHC, which is quite low. That rate is generally considered a housing crisis.

Assuming that's metro vancouver (not greater vancouver), with a population of 631k, 2.6% would be 16,000 empty homes. The "we just need to let developers build more houses" people should take a long think on what 16k vacant homes is doing to the market.

That’s just not how housing works. A unit of housing has to be vacant between residents to be repaired, and periodically updated. Leasing a full building often takes a full year. People have existing leases and mortgages. At time you may have a mismatch between types and locations of units and what people looking for housing need. There are all kinds of reasons a unit can be temporarily empty.

The 16k units you’re citing won’t stay empty for long, but other units in the system will go temporarily unfilled. This is necessary for a functional housing market. In order for prices to decline you need a vacancy rate of more than 5%. Prices will continue to rise even at 4% vacancy.

The economics here are well studied and well established. Housing economists broadly agree.

If there’s anything that markers are great at doing, it’s producing lots of stuff at decreasing marginal cost. Housing is no different.

Yep, there's a natural rate of unemployment and a natural rate of housing vacancy. No surprises here. No One Weird Tricks to make housing affordable. Just good old supply and demand.

Your math is wrong. It’s 2.6% of total properties, not 2.6% of total population.

How many vacant homes is the right number? If there are very few vacant homes, then every time someone needs to move homes, they have to be shuffling homes with someone else. That's not efficient or tenable.

I remember reading that basically people were paying 500 / month to live in mansions as a way for homeowners to avoid paying the vacancy tax