Isn't it inevitable that rents will rise to match costs of owned housing, as new builds become a bigger proportion of the rental stock?
On another note, see Brian Palmquist's interesting piece (brianpalmquist@substack.com) on the new building at 2nd and Spruce, which was approved as 'affordable housing' 2.5 years ago, with $31.8 million in provincial funding, and where the cheapest STUDIO is $2499/mo. Affordable for a household income of about $100k/yr.
We seem to be in housing cloud cuckoo land... will any conventional calculations on the effect on cost of rentals of addition of new housing stock hold up in this environment?
Really heads should roll over the debacle on Spruce Street...
I remember the 1805 Larch rezoning, in December 2019 - that was the first public hearing I spoke at. This was a project with zero displacement (it was a former church property), and the reason I spoke was that nearly 100 people signed up to speak, mostly against. "You're dropping the ghetto in Kitsilano." https://morehousing.ca/1805-larch
Brian's post is a bit garbled. 80% of the apartments (including the $2600/month studio) are at middle-income rates - basically market. 20% of the apartments are below-market. He's looking at the rates for the 80% market apartments, not the below-market apartments. And the $31.8M in provincial financing is a loan through a program called HousingHub, not a grant.
Kennedy Stewart observed back in 2019 that even if you ignore the effect of more supply, the city needs more apartment buildings: renting in a secure apartment building is much less expensive than owning a half-duplex or a townhouse. Renting at $2600/month requires a household income of $94,000/year to be affordable. Owning a $1.5M half-duplex requires a household income of about $330,000 to be affordable, on top of a $300,000 down payment.
Oops, sorry Russil, I have just posted comments on Brian's substack summarizing what you've said in your comment above (and crediting you for the information.) As for Spruce in place of Larch - I don't know where that came from:-)
Have economists ever modelled how much downward pressure you'd get on rents from an actor willing to take even a small loss on building and renting? I think there's a lot of reluctance to build when there's no clear high profits to be had. (The "actor" I have in mind is government, of course, I don't believe in fairies.)
In Metro Vancouver, the basic model is that housing costs have to rise about 2% in order to reduce demand by about 1%, i.e. forcing 1% of people to give up and move away. Equivalently, if you could snap your fingers and build 1% more housing, housing costs would fall by about 2%.
Isn't it inevitable that rents will rise to match costs of owned housing, as new builds become a bigger proportion of the rental stock?
On another note, see Brian Palmquist's interesting piece (brianpalmquist@substack.com) on the new building at 2nd and Spruce, which was approved as 'affordable housing' 2.5 years ago, with $31.8 million in provincial funding, and where the cheapest STUDIO is $2499/mo. Affordable for a household income of about $100k/yr.
We seem to be in housing cloud cuckoo land... will any conventional calculations on the effect on cost of rentals of addition of new housing stock hold up in this environment?
Really heads should roll over the debacle on Spruce Street...
I remember the 1805 Larch rezoning, in December 2019 - that was the first public hearing I spoke at. This was a project with zero displacement (it was a former church property), and the reason I spoke was that nearly 100 people signed up to speak, mostly against. "You're dropping the ghetto in Kitsilano." https://morehousing.ca/1805-larch
Brian's post is a bit garbled. 80% of the apartments (including the $2600/month studio) are at middle-income rates - basically market. 20% of the apartments are below-market. He's looking at the rates for the 80% market apartments, not the below-market apartments. And the $31.8M in provincial financing is a loan through a program called HousingHub, not a grant.
Kennedy Stewart observed back in 2019 that even if you ignore the effect of more supply, the city needs more apartment buildings: renting in a secure apartment building is much less expensive than owning a half-duplex or a townhouse. Renting at $2600/month requires a household income of $94,000/year to be affordable. Owning a $1.5M half-duplex requires a household income of about $330,000 to be affordable, on top of a $300,000 down payment.
Oops, sorry Russil, I have just posted comments on Brian's substack summarizing what you've said in your comment above (and crediting you for the information.) As for Spruce in place of Larch - I don't know where that came from:-)
Have economists ever modelled how much downward pressure you'd get on rents from an actor willing to take even a small loss on building and renting? I think there's a lot of reluctance to build when there's no clear high profits to be had. (The "actor" I have in mind is government, of course, I don't believe in fairies.)
In Metro Vancouver, the basic model is that housing costs have to rise about 2% in order to reduce demand by about 1%, i.e. forcing 1% of people to give up and move away. Equivalently, if you could snap your fingers and build 1% more housing, housing costs would fall by about 2%.