The” indigenous” people were settlers who came from Asia . If 5,000 migrated to this new world in one year . Does that mean they can claim all the territory for themselves. If a new group of 5000 Asians arrive 2 years later can the first group seriously tell the 2nd group sorry it’s all ours we were here first. The earth belongs to all of us. Indigenousness is an accident no one is here first and why should we carve . A more serious approach would be how can we productively live together or along side each other Indigenousness is a kind of class or racism an artificial grouping to keep the other out . Time to take a step back and ask how we can embrace each other and not totemicly hold on to land . Learn from territorial mammals who after a minor display of of size and strength make room for each others packs
I would disagree with this view. Territoriality is is very deeply embedded in human nature. Even slugs are territorial: when they’re fighting, they move at twice their normal speed.
It's true that society is a large-scale system of cooperation. Of course conflicts still arise. We rely on the courts to resolve conflicts. Unlike most of Canada, there's no treaties for most of BC ceding the land to the Crown, and the Supreme Court ruled in 1997 that Aboriginal title continues to exist. See Timothy Huyer's explanation of the duty to consult: https://morehousing.substack.com/p/timothy-huyer
Your comment doesn't seem to have anything to do with the post.
I appreciate the article. It is nice to see our housing crisis improving. But I do have a nagging worry.
How much of this reduction in price is due to fixing supply constraints and how much is due to less immigration? Immigration is generally good for the economy. On average more immigration makes us all wealthier.
Now surely there is some optimal amount of immigration based on balancing different economic factors and I won't pretend to know what that is. I would love to learn more about how we might come up with such a number and if our recent federal targets are anywhere close (my hunch is that they are much lower than is optimal).
It seemed like the zeitgeist amongst housing advocates a year ago (which seemed true to me too) was that the best solution to high housing costs was reducing supply constraints. But now that we've achieved lower housing costs after dramatically reducing immigration, it's unclear if we should really celebrate that. Do we really want lower rents if it comes at the cost of slower economic growth?
Of course the answer depends on the magnitudes in question, which again I don't know, but evaluating that doesn't seem to be a part of the conversation anywhere. Would love to see a post on it.
"It seemed like the zeitgeist amongst housing advocates a year ago (which seemed true to me too) was that the best solution to high housing costs was reducing supply constraints. But now that we've achieved lower housing costs after dramatically reducing immigration, it's unclear if we should really celebrate that. Do we really want lower rents if it comes at the cost of slower economic growth?"
My take is that population growth in 2022 was basically catching up from 2020, but then population growth in 2023 and 2024 was extremely high - roughly double what the usual numbers are. Basically we had four years of population growth in just two years. So the close-to-zero targets for the next couple years are basically to catch up. https://morehousing.substack.com/p/immigration-cuts
I agree that we *also* need to remove supply constraints and build a lot more housing.
Two sentences jump out at me ... (1) "Reading through the report, it appears to be primarily good news (from the perspective of renters, not landlords!)." and then (2) "We need to keep building, to keep pushing down rents." Where is your logic? If lower rents are not good news from the perspective of landlords WHY on earth would they keep building if that simply pushed down rents and lowered their returns to, presumably, below a comparable market return? Without tax incentives to spur continued growth, what financial motivation is there for investors to allocate funds to rentals? IF, as you suggest, 3% is a balance point, encouraging sufficient growth to maintain a 3%+/- (say within 25 to 50 bps) would provide stability for all. If, as in Kelowna, vacancy rates jump significantly you will most likely see under-investment in the rental market for a number of years thus leading to a future under-supply issue and skyrocketing rents 5 to 10 year forward.
"If lower rents are not good news from the perspective of landlords WHY on earth would they keep building if that simply pushed down rents and lowered their returns to, presumably, below a comparable market return?"
Let's ignore the distinction between developers and landlords. Let's say that whoever wants to build a new rental building is planning to own and operate it.
The value of the new rental building is the value of the future stream of rental revenue (minus operating costs). So when rents are lower, the value of the new building is also lower.
But the key question is, *how much does it cost to build the new building*? If the value of the new building is still significantly greater than the cost of constructing it, then there's still a strong incentive to build.
Rents in Metro Vancouver may be lower than before, but they're still very high. CMHC did a study a while ago which found that in Vancouver and in Toronto, there's a giant wedge between how much it costs to build an additional floor, and the expected selling price. (There's no such wedge in Montreal, where it's much easier to add new housing in the form of low-rise apartment buildings.) https://morehousing.ca/cmhc-wedge
The two major levers in the hands of municipal governments are approvals and development charges. How long does it take to get approvals? (Delays are costly.) And how much do they tax new housing?
Fair comment Russil BUT speaking as someone in the investment field AND someone who has access to private investment pools that work in this "space", capital is allocated based on profit hurdles. Even in our little town of Tsawwasen, the previously proposed developement had to, we were told, be of certain sizing to be "financially feasible". This financial feasibility had as much or more to do maximizing profitability for allocated capital and resources as it did to simply not losing money. When purpose built rentals are under consideration, the proponent is not always just looking the one proposal; they are looking at a number of options - not all in the same city or province - and determining where they will maximize their return. I am not saying this is good or bad - it is just the way it is. Given the high cost of dirt in Metro Vancouver that, I would argue, is in a large part due to speculative land acquisition, flipping, and assembly, that results from upzoning (potential and realized), developers already have a high hurdle rate to meet.
Return on investment is based on the value of the building minus the cost to build it. If values are declining (due to declining rents), pushing projects underwater, we can bring them back above water by lowering costs. As Deny Sullivan points out, while housing starts in Toronto are cratering, Moncton is in the middle of a housing boom. One big factor: "Toronto wants $134,000 per unit in fees and taxes for the pleasure of building homes. In Moncton? It’s only $1,600. Near zero municipal fees on housing make many more projects viable - and those projects are happening." https://morehousing.substack.com/p/moncton-permits
Land in Metro Vancouver is scarce (because of the ocean and the mountains), so I doubt it'll ever be cheap. But there's no physical reason that *floor space* has to be as scarce and expensive as it is.
The” indigenous” people were settlers who came from Asia . If 5,000 migrated to this new world in one year . Does that mean they can claim all the territory for themselves. If a new group of 5000 Asians arrive 2 years later can the first group seriously tell the 2nd group sorry it’s all ours we were here first. The earth belongs to all of us. Indigenousness is an accident no one is here first and why should we carve . A more serious approach would be how can we productively live together or along side each other Indigenousness is a kind of class or racism an artificial grouping to keep the other out . Time to take a step back and ask how we can embrace each other and not totemicly hold on to land . Learn from territorial mammals who after a minor display of of size and strength make room for each others packs
"The earth belongs to all of us."
I would disagree with this view. Territoriality is is very deeply embedded in human nature. Even slugs are territorial: when they’re fighting, they move at twice their normal speed.
It's true that society is a large-scale system of cooperation. Of course conflicts still arise. We rely on the courts to resolve conflicts. Unlike most of Canada, there's no treaties for most of BC ceding the land to the Crown, and the Supreme Court ruled in 1997 that Aboriginal title continues to exist. See Timothy Huyer's explanation of the duty to consult: https://morehousing.substack.com/p/timothy-huyer
Your comment doesn't seem to have anything to do with the post.
I appreciate the article. It is nice to see our housing crisis improving. But I do have a nagging worry.
How much of this reduction in price is due to fixing supply constraints and how much is due to less immigration? Immigration is generally good for the economy. On average more immigration makes us all wealthier.
Now surely there is some optimal amount of immigration based on balancing different economic factors and I won't pretend to know what that is. I would love to learn more about how we might come up with such a number and if our recent federal targets are anywhere close (my hunch is that they are much lower than is optimal).
It seemed like the zeitgeist amongst housing advocates a year ago (which seemed true to me too) was that the best solution to high housing costs was reducing supply constraints. But now that we've achieved lower housing costs after dramatically reducing immigration, it's unclear if we should really celebrate that. Do we really want lower rents if it comes at the cost of slower economic growth?
Of course the answer depends on the magnitudes in question, which again I don't know, but evaluating that doesn't seem to be a part of the conversation anywhere. Would love to see a post on it.
"It seemed like the zeitgeist amongst housing advocates a year ago (which seemed true to me too) was that the best solution to high housing costs was reducing supply constraints. But now that we've achieved lower housing costs after dramatically reducing immigration, it's unclear if we should really celebrate that. Do we really want lower rents if it comes at the cost of slower economic growth?"
My take is that population growth in 2022 was basically catching up from 2020, but then population growth in 2023 and 2024 was extremely high - roughly double what the usual numbers are. Basically we had four years of population growth in just two years. So the close-to-zero targets for the next couple years are basically to catch up. https://morehousing.substack.com/p/immigration-cuts
I agree that we *also* need to remove supply constraints and build a lot more housing.
Two sentences jump out at me ... (1) "Reading through the report, it appears to be primarily good news (from the perspective of renters, not landlords!)." and then (2) "We need to keep building, to keep pushing down rents." Where is your logic? If lower rents are not good news from the perspective of landlords WHY on earth would they keep building if that simply pushed down rents and lowered their returns to, presumably, below a comparable market return? Without tax incentives to spur continued growth, what financial motivation is there for investors to allocate funds to rentals? IF, as you suggest, 3% is a balance point, encouraging sufficient growth to maintain a 3%+/- (say within 25 to 50 bps) would provide stability for all. If, as in Kelowna, vacancy rates jump significantly you will most likely see under-investment in the rental market for a number of years thus leading to a future under-supply issue and skyrocketing rents 5 to 10 year forward.
"If lower rents are not good news from the perspective of landlords WHY on earth would they keep building if that simply pushed down rents and lowered their returns to, presumably, below a comparable market return?"
Let's ignore the distinction between developers and landlords. Let's say that whoever wants to build a new rental building is planning to own and operate it.
The value of the new rental building is the value of the future stream of rental revenue (minus operating costs). So when rents are lower, the value of the new building is also lower.
But the key question is, *how much does it cost to build the new building*? If the value of the new building is still significantly greater than the cost of constructing it, then there's still a strong incentive to build.
Rents in Metro Vancouver may be lower than before, but they're still very high. CMHC did a study a while ago which found that in Vancouver and in Toronto, there's a giant wedge between how much it costs to build an additional floor, and the expected selling price. (There's no such wedge in Montreal, where it's much easier to add new housing in the form of low-rise apartment buildings.) https://morehousing.ca/cmhc-wedge
The two major levers in the hands of municipal governments are approvals and development charges. How long does it take to get approvals? (Delays are costly.) And how much do they tax new housing?
Fair comment Russil BUT speaking as someone in the investment field AND someone who has access to private investment pools that work in this "space", capital is allocated based on profit hurdles. Even in our little town of Tsawwasen, the previously proposed developement had to, we were told, be of certain sizing to be "financially feasible". This financial feasibility had as much or more to do maximizing profitability for allocated capital and resources as it did to simply not losing money. When purpose built rentals are under consideration, the proponent is not always just looking the one proposal; they are looking at a number of options - not all in the same city or province - and determining where they will maximize their return. I am not saying this is good or bad - it is just the way it is. Given the high cost of dirt in Metro Vancouver that, I would argue, is in a large part due to speculative land acquisition, flipping, and assembly, that results from upzoning (potential and realized), developers already have a high hurdle rate to meet.
"Capital is allocated based on profit hurdles."
Of course. As a layperson I always think of Stephen Gordon's explanation: https://worthwhileblog.ca/2009/08/18/economic-policy-advice-for-the-ndp-part-iii-the-gst/
Return on investment is based on the value of the building minus the cost to build it. If values are declining (due to declining rents), pushing projects underwater, we can bring them back above water by lowering costs. As Deny Sullivan points out, while housing starts in Toronto are cratering, Moncton is in the middle of a housing boom. One big factor: "Toronto wants $134,000 per unit in fees and taxes for the pleasure of building homes. In Moncton? It’s only $1,600. Near zero municipal fees on housing make many more projects viable - and those projects are happening." https://morehousing.substack.com/p/moncton-permits
Land in Metro Vancouver is scarce (because of the ocean and the mountains), so I doubt it'll ever be cheap. But there's no physical reason that *floor space* has to be as scarce and expensive as it is.