this post was submitted on 18 Nov 2024
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They won't be able to address the cost of living issue.
They can't. The policy changes required are too painful for voters to accept.
The easy fix to make cost of living cheaper is to crash the price of homes. Cheaper homes means cheaper labour (since people don't need to make as much to rent/own) which in turn translates to cheaper everything produced by labour in this country. It makes our country more competitive globally too, though certain imports would be more expensive relative to percentage of income than they are now.
The government could crash home prices in a half dozen different ways, but it means that existing home owners would lose almost all the value of their home, which they've been told their entire life is an investment. Some people would literally end up with no retirement funds because they were banking on their house getting them through the last few years. Almost everyone who bought in the last 10 years would end up with mortgages which are greater than the value of their home that they would still have to pay legally.
We aren't talking about a few thousand dollars here either, a single condo owner would lose multiple hundreds of thousands of dollars and some families would lose more than a million dollars on single family home. It would bankrupt almost every single landlord, even those people who just rent a suite and rely on it to pay the mortgage.
I don't think voters are willing to do that, given that close to 65% of Canadian homes are owned by the family that live in them, and home owners tend to vote more than non-owners.
We've built a pyramid scheme on real estate, and far too many Canadians are invested in their home to want to let the system crumble. So we're just fucking the next generation harder and harder until eventually we won't have a choice.
Well said. I think bringing the house price down will hurt not just owner as you said. It will hurt the government quite a bit. I remember a good chunk of Vancouver government revenue (to lazy to check the exact amount) is coming from property tax. And that is a percentage of the house price. They would have to cut lots of expenses if housing prices do go down. Which most voters won't enjoy either.
Ideally however, the government could work to hold the price of homes relatively constant, and let inflation slowly bring them back into affordability. This would piss off everyone, but it would safely deflate the bubble without damaging people’s retirement too much.
That wouldn't really work well, I did the math a couple years back, and waiting for inflation to correct housing prices back to "affordable" based on the standard definition in Vancouver or Toronto would take almost a century.
It's better than nothing, but it wouldn't significantly help anyone who's struggling now, or really anyone who's already been born. A new baby born tomorrow is looking for housing in 20ish years... And if rents stayed the same as they are today and wage inflation was fairly normal during thay period, minimum wage would be around $30 an hour or around $4000 a month full time and a one bedroom apartment in Vancouver or Toronto would still cost well over half their gross income.
Hence why it’s important to build more public housing. My suggestion was just to keep the economic and rural housing problem from deteriorating, but if you want to house minimum wage workers in an dense urban area like like downtown Vancouver or Toronto, there is no viable alternative to government owned and operated apartments excepting maybe building new greenfield dense development connected to the urban cores by frequent rail.
Can you show me a single place where buldinng public housing has kept prices affordable?
Even Vienna and Singapore, the kings of public housing, still have expensive private housing and decade long waitlists.
I'm not sure why people keep pushing public housing as sort of fix. Public housing is just a lottery for poor people, paid for by government taxes on everyone else. It doesn't fix the problem at all.
Council housing in Britain between the 50s and privatization, not only did the price of the entire market remain affordable because of the competition but the quality vastly improved given the need for any private developer to do better than the government with its massive economies of scale, near free land, and effectively no taxes on itself.
If you have long waitlists, you by definition do not have enough public housing to meet demand, and need to make more. We wouldn’t say schools didn’t work because look, our town only has enough space in its public school to admit half the towns children, guess it’s just a lottery and we should shut it down.
Real estate, building apartments, this is an immensely profitable industry, and its absurd to assume that it suddenly not only becomes unprofitable but is a massive tax burden just because the government is developing the land and not a billionaire doing near the same thing but walking away with an absurd profit skimmed off the top.
At least not unless the government is so obsessed with the free market that it is just renting existing apartments instead of the normal method of developing a new complex with a bunch of apartments, using most as cheap public housing for people who need assistance and renting the rest out at market rate to cover the cost of the project.
Vienna has something like 40% of all units as public housing, and decade waitlists where you have to already live in the city to be eligible to be on the lists. Singapore is closer to 90% and still has waitlists, requiring you to get married to get priority and even that can take a couple years.
How exactly does your proposal somehow fix that situation?
I've seen no situation in which building public housing of any amount becomes anything but a lottery for the poor, and here especially with all the land already privately owned it would be prohibitively expensive to get to even 10% public housing, let alone the larger amounts seen in some of these other places.
No, the real answer lies with crashing house prices directly. It's just a Band-Aid we're going to have to rip off at some point, and it's going to fucking hurt.
Note again that my example of it working pretty effectively was for a decently sized nation and not just a small highly desirable city that wants to grow. The percentage of public to private housing in a city is meaningless to demand of people who want to live there.
I’m also not sure that Vienna counts as some massive failure of public housing, as the city is famed for its average rent being so far below comparable cities.
I also don’t see the problem with the government owning most of the apartments in a city, and indeed the more well to do citizens you can get to pay rent to the housing agency the less in taxes everyone else needs to pay.
Eventually if you build enough housing for everyone who wants to live in a place to live there, people will stop competing with each other for the limited spots. Prices are so high in dense urban areas because so many people want to live there, and so price goes up until enough people are pushed out that there are enough apartments to satisfy demand.
If you want to crash prices as you put it, you demonstrably need massively more housing than people who want housing, either by building more housing or by reducing the number of people who want to live there. If you don’t, people will just fight over the limited slots, and in a private market that means the slots universally go to the richest.
Given private developers will never willingly build enough housing to satisfy demand and therefore drop the price their units self for, it falls to an entity that is not seeking maximum profit from a given development to do so.
Around both outlying Vancouver skytrain and Toronto regional areas there is a lot of single family residential within a few blocks of stations that could be redeveloped for higher density, even neglecting that massive portion of the Toronto dock lands near the size of downtown that the government just sold off for private development. The government can absolutely get its hands on lots of land to develop, especially as industrial activity continues to move away from city centers.
The government also uniquely has the ability to build more metro lines that bridge areas to downtown, and could thusly drive density in currently cheap areas.
First of all, I agree with almost everything you have said. Trudeau has stated that he wants to keep the price of housing "flat". I'm sure the NDP can also implement policies to do that if they wanted. Do you think that this is a way to get out of the pyramid scheme? I feel like just because we've built the scheme up a lot, it doesn't mean all hope is lost
The fix either has to be so slow "flat" that it takes longer than I have left to live, or it will be seriously damaging to the average family who owns their home.
That's more just about picking which generations to fuck over, than it is about anything else.
Unfortunately voters tend to be selfish, so it's most likely they choose to fuck over the future generations rather than themselves.