this post was submitted on 21 Aug 2023
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I mean it shouldn't be that hard to understand. Housing prices skyrocketed when interest rates dropped during the pandemic. Add the effects of inflation, increases municipal evaluations leading to higher taxes, and you get more costs passed on to renters. This started before all the news of "HuGe SuRgE ImMiGrAnTs".
That being said there is still plenty of truth to the argument that if we do indeed want to welcome more people here, we better make sure there are affordable places to live. So the article addresses that better regulations are needed to ensure an adequate supply of affordable housing. BUT, if people already in Canada are really struggling to get affordable housing, and the number of people who need affordable housing is increasing, you can see why this might be a problem.
The human brain is bad at noticing the fact that one of those numbers is really huge and the other comparatively very small, and tends to equate the two or put them at the same order of magnitude.
It's like the distance to the moon vs mars. Given we need foreign workers to shore up the shortfall we're expecting to see, as our own population declines below what's needed to support an ageing and increasingly long-lived population, all calculations need to take into account that expected increase. At least until we tax the rich like we used to.
No we don't. You're buying the capitalist dogma that says infinite growth at any cost. Canada could shrink to 8 million people, like Austria. There would be no problem with that whatsoever.
The issue is that shrinking the population over a short period of time (and I mean more than 10% a generation) means that you have a lack of young people to take care of older people. And that's ignoring all the capitalism issues that come with all this.
Not every young person is willing to spend the majority of their free time taking care of their parents. Hell, most people aren't willing to do that more than once or twice a week, yet once you get past 70, a lot people need constant care. That's the original point of elderly homes. Of course, those homes are just plain shit and closer to cruel and unusual torture than actually a form of care (especially here in Ontario). And that's not to mention that occupancy is so tight that there's a wait list on them.
Then there's the fact that if our population drops too quickly, we'll have massive holes in essential services as well. There's already a massive hole in all blue-collar work as it stands as people would rather go into the service industry than skilled labour. And while pay is an issue, this is a problem in the States as well, where pay is far better. It's to the point that they've legalized child labour in several places just to make up for the shortfall.
Population decline is an easy way to destroy society, even ignoring capitalist needs.
But it's paradoxical. You need population increase to support increasing costs, yet increasing population creates a strain on the finite resources of the planet.
I acknowledge you said this ignoring the capitalism issues, but if you didn't ignore it then it wouldn't really be an issue. We have the wealth to handle this if we had the political courage to force an equitable society.
Believe it or not, Canada was once a population much lower than 40 million people and we managed just fine. The idea that populations cannot contract is a harmful concept because it forces acceptance of the paradox that we can infinitely grow in a finite world. And this always relies on the use of technology to overcome this. So, instead of reducing the population to the point where automobiles wouldn't need to be electric, we increase the population and try and find green solutions.
I feel that it's more complex than just the interest rates... That only explains part of the demand.
Then there's the supply. New housing construction in the US bottomed out after the 2008 recession and has never returned to where it needed to be since. At least here in the PNW we have a major shortage of housing (both affordable housing, and just new home/unit construction in general) that has been more than a decade in the making and is not trivial to overcome. It would likely take a huge investment in new/affordable housing construction incentives to get us anywhere close to where we need to be.
On top of that, immigrants are not a problem, but institutional investors (both foreign and domestic) are. There are many American homes being bought by people and firms merely as investments, which means they wind up expensive and empty. I've seen this happen in Vancouver BC, Seattle and Portland, and I wouldn't be surprised in the slightest if it's happening elsewhere. We really need laws and tax benefits that help put regular people in homes that they will actually live in. Homes are one of the few kinds of assets that have really appreciated in value over the last couple of years, and because of that regular people who simply want a place to live or raise a family are being priced out of the market by rent-seekers or investors would would be perfectly happy to leave a house empty.
Housing prices skyrocketed here in Ontario when people escaped the big cities, and rushed to buy houses in smaller cities and towns. This caused a huge supply problem, as there weren’t enough houses for sale to meet demand, so bidding wars erupted.
It was a period of utter lunacy and mania for both buyers and sellers. I think we reached almost 100% price increase over pre Covid.
Once everyone had bought that wanted to buy, the market slowed down and houses went for under asking or sat on the market unsold. I don’t think anyone cared about the interest rate.