Tiny Homes Won’t Fix the Housing Crisis(thewalrus.ca)
thewalrus.ca
Tiny Homes Won’t Fix the Housing Crisis
https://thewalrus.ca/livingrooms-tiny-homes-wont-fix-the-housing-crisis/
106 comments
In the United States, a common refrain is that the housing crisis is caused by a failure to build, in particular a failure to build up. That failure to build is usually blamed on regulation.
That's a harder argument to make in Toronto. Toronto is a sea of construction cranes, almost all building apartment or condo towers, and it has been like this for at least a decade. Toronto has a third of all construction cranes in North America: https://www.blogto.com/real-estate-toronto/2020/10/toronto-c...
And despite the narrative that people are moving away from downtown apartments during COVID, prices on downtown Toronto condos are still rising. Volume has dropped dramatically so I suppose it is possible that it will still crash, but I won't believe it until I see it.
That's a harder argument to make in Toronto. Toronto is a sea of construction cranes, almost all building apartment or condo towers, and it has been like this for at least a decade. Toronto has a third of all construction cranes in North America: https://www.blogto.com/real-estate-toronto/2020/10/toronto-c...
And despite the narrative that people are moving away from downtown apartments during COVID, prices on downtown Toronto condos are still rising. Volume has dropped dramatically so I suppose it is possible that it will still crash, but I won't believe it until I see it.
Failure to build is definitely not the issue, and that's why I posted here because people were talking about how this article was missing the mark, based on their Silicon Valley etc. experiences.
The reality is that western countries are making on the whole fairly terrible macroeconomic decisions for the long run. They are putting primacy on real estate assets for the upper middle class, and undermining their own long run primary industry capacity by making housing for working class people unaffordable. It's all short term decision making made by a minority of moderately wealthy people whose own interests run contrary to the needs of the majority.
The reality is that western countries are making on the whole fairly terrible macroeconomic decisions for the long run. They are putting primacy on real estate assets for the upper middle class, and undermining their own long run primary industry capacity by making housing for working class people unaffordable. It's all short term decision making made by a minority of moderately wealthy people whose own interests run contrary to the needs of the majority.
>Toronto has a third of all construction cranes in North America
Toronto can have all the cranes in the world and it won't really matter because construction industry cannot keep up.
I think the city(not GTA) has grown 500k in the past 20 years (2.5M -> 3M), condo units only increased 200k (100k -> 300k), other new housing marginal.
The fundamental problem isn't even that there's too much demand, but the west are incapable of building. If we're going to outsource manufacturing abroad, domestic agriculture to migrant farmers, might as well import some Chinese construction who can build a million unit ghost city in a few years.
E: post too fast
@dghlsakjg
The only saving grace in Toronto condo construction is many of them maybe as shoddy as Chinese construction and hopefully will fall into disrepair and replaced before their life spans.
>Chinese building practices assume a certain disposability
That's Japanese residential construction. Chinese construction meme is lack of quality control which implies durability problems. But it's a meme, housing stock too new to really generalize on. My personal experience (worked adjacent industry in both markets) is some of the Toronto new constructs are experiencing much quality issues sooner than Chinese developments. Chinese build so much that they can build well if incentivized too. In terms of cheap, fast, good... Canadian developers simply don't have a fast mode... nor a cheap mode... and frequently not even good. China can at least get you fast & cheap or fast & good.
Toronto can have all the cranes in the world and it won't really matter because construction industry cannot keep up.
I think the city(not GTA) has grown 500k in the past 20 years (2.5M -> 3M), condo units only increased 200k (100k -> 300k), other new housing marginal.
The fundamental problem isn't even that there's too much demand, but the west are incapable of building. If we're going to outsource manufacturing abroad, domestic agriculture to migrant farmers, might as well import some Chinese construction who can build a million unit ghost city in a few years.
E: post too fast
@dghlsakjg
The only saving grace in Toronto condo construction is many of them maybe as shoddy as Chinese construction and hopefully will fall into disrepair and replaced before their life spans.
>Chinese building practices assume a certain disposability
That's Japanese residential construction. Chinese construction meme is lack of quality control which implies durability problems. But it's a meme, housing stock too new to really generalize on. My personal experience (worked adjacent industry in both markets) is some of the Toronto new constructs are experiencing much quality issues sooner than Chinese developments. Chinese build so much that they can build well if incentivized too. In terms of cheap, fast, good... Canadian developers simply don't have a fast mode... nor a cheap mode... and frequently not even good. China can at least get you fast & cheap or fast & good.
Chinese building practices assume a certain disposability that we haven't accepted in Canada. Apartment buildings are built with an assumed lifespan of around 30 years.
I have no idea if that is a good thing or a bad thing.
That kind of throwaway mentality for housing might seem crazy, but keep in mind that housing is one of the only goods that we expect to last for a lifetime in the west.
I have no idea if that is a good thing or a bad thing.
That kind of throwaway mentality for housing might seem crazy, but keep in mind that housing is one of the only goods that we expect to last for a lifetime in the west.
I'm not sure most NA houses are so different. For instance, cheap floor treatments, drywall + stickbuilt, multipane windows that leak after a decade or two.
What are the "cheap floor treatments" and why would drywall or a house made of wood mean that a house won't last more than 30 years? There are plenty of houses built in the 90s with wood that are not just fine, but look practically new and modern.
Questionable proposition considering the suburban GTA has grown an insane amount as well, even with greenbelting in place.
Growth is relative, my friend from Mississauga grew up around farms now surrounded by suburbs, but from 80s-20s , dwellings "only" increased from 120k to 240k. Population 350k to 650k.
Building 120k dwellings in 40 years / 3000 per year is pathetic. Export some Chinese construction over capacity. The residential district I lived in China housed 80,000 (condos). It was built in less than 5 years, every unit was larger and nicer than Toronto new constructions.
Regulations, NIMBYims plays a part, but at western construction also simply isn't competitive enough to address changes in immigration patterns.
Building 120k dwellings in 40 years / 3000 per year is pathetic. Export some Chinese construction over capacity. The residential district I lived in China housed 80,000 (condos). It was built in less than 5 years, every unit was larger and nicer than Toronto new constructions.
Regulations, NIMBYims plays a part, but at western construction also simply isn't competitive enough to address changes in immigration patterns.
> The 2008 bubble-pop never happened here.
I live in the Netherlands and that seems to be roughly what happened here too. ~~I mean, yes the prices have dropped a tiny bit around 2008, but in 2009 they were at an all time high again and have not come down.~~
EDIT: This was a lie, turns out they bottomed out around 2013 at ~25% below the 2008 peak.
I live in a 'provincial' city, where prices are ~40-50% of what you might see in the big cities (i.e Amsterdam). With my income, which is well above median, only about 20-30% (2 to 3 % at median income according to the news iirc) of the homes that go on sale are within my mortgage limit. And to solve the on going housing shortages they are building a few new neighborhoods where, surprise, surprise, all houses start at 2 or 3 times that limit...
I have read that one of the reasons this happens, is that _everyone_ expect the buyer is better of if prices are higher. Thus brokers, appraiser and sellers all keep driving up the prices. As long as there are more buyers than houses this will keep driving up prices. And the big building companies, that do entire neighborhoods, are quite happy to keep the market scarce.
I live in the Netherlands and that seems to be roughly what happened here too. ~~I mean, yes the prices have dropped a tiny bit around 2008, but in 2009 they were at an all time high again and have not come down.~~
EDIT: This was a lie, turns out they bottomed out around 2013 at ~25% below the 2008 peak.
I live in a 'provincial' city, where prices are ~40-50% of what you might see in the big cities (i.e Amsterdam). With my income, which is well above median, only about 20-30% (2 to 3 % at median income according to the news iirc) of the homes that go on sale are within my mortgage limit. And to solve the on going housing shortages they are building a few new neighborhoods where, surprise, surprise, all houses start at 2 or 3 times that limit...
I have read that one of the reasons this happens, is that _everyone_ expect the buyer is better of if prices are higher. Thus brokers, appraiser and sellers all keep driving up the prices. As long as there are more buyers than houses this will keep driving up prices. And the big building companies, that do entire neighborhoods, are quite happy to keep the market scarce.
Prices in the Netherlands bottomed out in 2013, at 20 to 30% below the peak of 2008.
You are right! I was sure that that is what I saw last time I looked it up.. That's what I get for relying on my memory ;)
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I also live in the Netherlands. I am starting to believe there is something a bit more nefarious at play here.
Anyone who is in power owns a house. Anyone who owns a house profits from house prices increasing. Who benefits if house prices go down? A select few, who are currently unable to buy a house. There is little incentive to actually start building affordable housing. Actually, most people who already own house(s) are probably very happy with the way the market is currently working.
Anyone who is in power owns a house. Anyone who owns a house profits from house prices increasing. Who benefits if house prices go down? A select few, who are currently unable to buy a house. There is little incentive to actually start building affordable housing. Actually, most people who already own house(s) are probably very happy with the way the market is currently working.
As a house owner in the NL, yes, it is comfortable to know that if I ever need to, I have room to increase my mortgage or sell my house at the considerable win.
But then what? I still need to live somewhere, and the rest of the houses are also getting more expensive. And in any case, some of my taxes are based on the value of my house - meaning, they are increasing every year.
The only people really benefiting from this are people owning multiple houses with the purpose of renting them.
But then what? I still need to live somewhere, and the rest of the houses are also getting more expensive. And in any case, some of my taxes are based on the value of my house - meaning, they are increasing every year.
The only people really benefiting from this are people owning multiple houses with the purpose of renting them.
The nefarious thing is that nobody wants currency, markets are over priced and investors need collateral. So, they go to the banks who in turn sell outrageous mortgages to home owners.
Housing pressure in the few "tier1" Canadian cities like Toronto will only rise, especially with immigration and presumably inflation from covid debt. Simply too many transnational millionaires and too few cities in Canada with opportunities.
[deleted]
> where will my kids live
In all likelihood, they will either need your help to buy a house, or be content with renting.
If you think real estate prices have ballooned in Canada, wait until you see what rental appreciation was like in tier 1 cities in China — easily 10x - 20x price appreciation over a few decades.
Price per square foot in Beijing is 'competitive' with world cities like Toronto, NYC, London, etc., but average wages in China are maybe ~1000-1500 USD per month equivalent.
So yes, parents help their kids in China. If the government is unable to effective do wealth redistribution, then families have to do it.
In all likelihood, they will either need your help to buy a house, or be content with renting.
If you think real estate prices have ballooned in Canada, wait until you see what rental appreciation was like in tier 1 cities in China — easily 10x - 20x price appreciation over a few decades.
Price per square foot in Beijing is 'competitive' with world cities like Toronto, NYC, London, etc., but average wages in China are maybe ~1000-1500 USD per month equivalent.
So yes, parents help their kids in China. If the government is unable to effective do wealth redistribution, then families have to do it.
I have no problem helping my kids but the reality is even with my Googler income I will probably have to sell this place and move somewhere cheaper/remoter in order to have the retirement lifestyle I want. And if my kids are living with me, that will in all likelihood reduce their income potential. And if they're not living with me, I'll be having to fund them living in a more expensive area.
As a recent immigrant to Canada it sort of terrifies me how irrational the market is. That said, I'm buying a house. I moved from Seattle and it is utterly bizarre to me that housing in Vancouver is more expensive than Seattle, while also offering significantly lower pay.
My hot take is that most of the rulemakers (politicians), are property owners, and are unwilling to take the drastic steps needed to put the brakes on.
My solution is to take drastic steps to increase supply. The empty homes tax in Vancouver was a good step for rentals, but I think it should be punishingly high since I suspect that cheating is rampant. I also think that the permitting and building process should be inverted; any project that follows zoning rules should allowed by default, and it shouldn't take months or years to get permitting approved.
If I'm allowed to go hog-wild I also think that anyone that supports historic 'character' neighborhoods should have to live the full historic lifestyle. If you fight density on 'historic' grounds you should also be forced to sell your price for the 'historic' price, use 'historic' appliances, and earn 'historic' pay.
My hot take is that most of the rulemakers (politicians), are property owners, and are unwilling to take the drastic steps needed to put the brakes on.
My solution is to take drastic steps to increase supply. The empty homes tax in Vancouver was a good step for rentals, but I think it should be punishingly high since I suspect that cheating is rampant. I also think that the permitting and building process should be inverted; any project that follows zoning rules should allowed by default, and it shouldn't take months or years to get permitting approved.
If I'm allowed to go hog-wild I also think that anyone that supports historic 'character' neighborhoods should have to live the full historic lifestyle. If you fight density on 'historic' grounds you should also be forced to sell your price for the 'historic' price, use 'historic' appliances, and earn 'historic' pay.
On the supply front, both Toronto and Vancouver have densified _significantly_ over the last 10-20 years, with condo construction in Vancouver completely off the charts. It seems to have done little to alleviate issues.
Immigration combined with net migration into the city is a big part of it, I guess. But I am not convinced this is entirely an issue of supply constraints, as high pricing is no longer confined to the largest metro zones.
Immigration combined with net migration into the city is a big part of it, I guess. But I am not convinced this is entirely an issue of supply constraints, as high pricing is no longer confined to the largest metro zones.
There are a lot of issues, and densification is certainly happening in the downtown cores, but I don't believe it is enough to keep up with the demands put on it by population increases. More anecdata: I live walking distance to Downtown Vancouver, and within a block of 4 bus routes. There is an empty lot next to me that has been in the permitting process for more than two years for a lowrise mixed-use building. I wouldn't be surprised if the cost imposed by the permitting process is close to $1mm when you factor in interest, salaries to hire the people who know people at city hall, the cost of the actual permits, etc.
Other things that factor heavily are cheap money (interest rates are lower than inflation on mortgages right now, around 1.7%), cultural normalization (buying a home for 10x your yearly income is considered normal), lack of opportunity outside of cities.
Other things that factor heavily are cheap money (interest rates are lower than inflation on mortgages right now, around 1.7%), cultural normalization (buying a home for 10x your yearly income is considered normal), lack of opportunity outside of cities.
Low rates/cheap money is insane. We are on a variable rate mortgage, and our interest rate is 1.4%!! But it's actually the second time I've had a rate this low, we had a similar phenomenon after 2008 at some point.
I live in the exurbs, over an hour from Toronto, but a 3 bedroom home near my daughter's school in the small town / 905 suburb nearby just sold almost $100k over list, at over $1.5M. Absolutely insane.
I live in the exurbs, over an hour from Toronto, but a 3 bedroom home near my daughter's school in the small town / 905 suburb nearby just sold almost $100k over list, at over $1.5M. Absolutely insane.
This is a problem that will solve itself. Sure, it will be a painful few decades, but we've already seen that shift. Toronto used to be the cluster of high prices homes, now it's spread all the way down to Hamilton. That process will continue - people will purchase homes in lower cost areas and businesses won't have much choice but to hire closer to those locations as well.
That's of course ignoring the potential for some major housing correction in Canada which resets the clock somewhat. It's not like it hasn't before. I had family buy a home in a Toronto suburb in the 1980's. They sold at the peak in 1990 and the housing market crashed hard. Prices didn't recover until the mid-2000's.
That's of course ignoring the potential for some major housing correction in Canada which resets the clock somewhat. It's not like it hasn't before. I had family buy a home in a Toronto suburb in the 1980's. They sold at the peak in 1990 and the housing market crashed hard. Prices didn't recover until the mid-2000's.
It has spread far beyond Hamilton. You have to get as far as St Catharines/Niagara before prices start looking closer to affordable for middle class incomes. And forget about going north, my father in law is in Barrie, and fairly modest homes on his street are going well over $700k. That's almost as much as I paid for this 6 acre "estate" 8 years ago, and by my calculation with a 25 year amortization and with a very low interest rate and following the "housing not over 30% of pre-tax earnings" that works out to a required household income of $130k.
That's not anywhere close to average household income in Canada, which is more like $90k, and there are certainly very few high paying jobs in Barrie itself and it is only marginally commutable to Toronto.
That's not anywhere close to average household income in Canada, which is more like $90k, and there are certainly very few high paying jobs in Barrie itself and it is only marginally commutable to Toronto.
That sounds incredibly similar to all "large" cities in Norway.
Simple, more immigration means people need more homes. That's why the term house crisis doesn't make any sense. It's all artificial and made up by the government.
I work as a structural engineer and write a newsletter about, among other things, technology for lowering construction costs.
A tiny house will be cheaper than conventional housing by virtue of being a lot smaller (building costs are usually expressed per square foot or square meter). But as the article points out, these are usually built with fairly high end finishes (wood paneling, granite counters, etc) - their cost per unit area is actually somewhat high. Actual low-cost construction, like the sort used on mobile homes, eliminates most of these expensive finishes, because they’re a major cost driver.
And in the US at least, a house not permanently attached to land has to be financed as property, like a car, rather than real estate, which means the tiny houses attached to trailers will be financed at a much higher interest rate than a traditional mortgage.
Generally I think these are more of a niche lifestyle product, a mobile home for people who don’t want to buy a mobile home, more than any sort of affordable housing solution.
A tiny house will be cheaper than conventional housing by virtue of being a lot smaller (building costs are usually expressed per square foot or square meter). But as the article points out, these are usually built with fairly high end finishes (wood paneling, granite counters, etc) - their cost per unit area is actually somewhat high. Actual low-cost construction, like the sort used on mobile homes, eliminates most of these expensive finishes, because they’re a major cost driver.
And in the US at least, a house not permanently attached to land has to be financed as property, like a car, rather than real estate, which means the tiny houses attached to trailers will be financed at a much higher interest rate than a traditional mortgage.
Generally I think these are more of a niche lifestyle product, a mobile home for people who don’t want to buy a mobile home, more than any sort of affordable housing solution.
The idea that tiny homes are the solution to the housing crisis ignores the fact that the housing crisis is really a land-in-desirable-places crisis, and a result of a natural pyramid scheme which has emerged due to population growth and increasing popularity of cities (amplified by low interest rates). Tiny houses don't fix that problem.
One of the things with both tiny houses and micro-apartments--leaving aside precise definitions--is that by the time you account for some minimal set of amenities such as bathroom, a kitchenette even, corridors/stairwell in the case of apartments, etc. cutting space to the bone doesn't really save you all that much in absolute terms while forcing a lot of compromises.
Indeed. The only thing the current "tiny house" concept is a solution to is bad building laws. Clever design and engineering allow people to live in an alternative way that lawmakers forgot to outlaw, but there's nothing ideal in the tiny trailer dimensions.
If we want to get an idea of a minimal humane living space, look at the cheap houses people build for themselves in countries without oppressive real-estate investment protection laws. They are rarely as small, or rely heavily on outdoor/shared spaces.
If we want to get an idea of a minimal humane living space, look at the cheap houses people build for themselves in countries without oppressive real-estate investment protection laws. They are rarely as small, or rely heavily on outdoor/shared spaces.
While I imagine a stacked parking structure of tiny homes is less efficient than dense condos, tiny homes can probably double units available via urban infilling, like laneway homes in not very dense but desirable cities in Canada.
>land-in-desirable-places crisis
Pretty much. Solution is pretty simple (not easy), sideline NIMBYs and start converting every parking lot and park into homes until supply/demand/desirability resets to something reasonable.
>land-in-desirable-places crisis
Pretty much. Solution is pretty simple (not easy), sideline NIMBYs and start converting every parking lot and park into homes until supply/demand/desirability resets to something reasonable.
> land-in-desirable-places crisis
If that were true construction costs would be the primary driver of housing prices, increasing as more exotic and expensive methods (steel skyscrapers vs mid-rise podium, for instance) are employed to fit more housing on less land.
If that were true construction costs would be the primary driver of housing prices, increasing as more exotic and expensive methods (steel skyscrapers vs mid-rise podium, for instance) are employed to fit more housing on less land.
Canadians have a strong aversion to living in anything but a detached house after 30ish. Most people were would have grown up sharing fences with their neighbors, not walls. So tiny houses allow for more efficient detached housing.
The housing crisis is really a people refuse to leave Toronto and Vancouver crisis, no matter how little they make. It is also a refusal to live in anything without a lawn.
Imagine if San Francisco had wages which were often lower than Cleveland for many jobs, but had the same housing prices. That is the state of Toronto and Vancouver. Incomes there are lower than other Canadian cities.
The other issue is that Canadians are very used to lots and lots of space. 500 sqft per person kind of space. Lots of lawn for the kids to run around on kind of space.
Combine a refusal of people to leave those two cities and the desire for detached spread out housing, and you get this.
Wages can't rise either as there are tons of people who are willing to stay in Toronto no matter how relatively poorer they are as a result. In an economically rational market, people would leave Toronto over the costs and salaries would rise (like they have in San Francisco, where people have left to Seattle and Denver and remote work over pay not going very far). That is not happening in any meaningful quantity.
Imagine if San Francisco had wages which were often lower than Cleveland for many jobs, but had the same housing prices. That is the state of Toronto and Vancouver. Incomes there are lower than other Canadian cities.
The other issue is that Canadians are very used to lots and lots of space. 500 sqft per person kind of space. Lots of lawn for the kids to run around on kind of space.
Combine a refusal of people to leave those two cities and the desire for detached spread out housing, and you get this.
Wages can't rise either as there are tons of people who are willing to stay in Toronto no matter how relatively poorer they are as a result. In an economically rational market, people would leave Toronto over the costs and salaries would rise (like they have in San Francisco, where people have left to Seattle and Denver and remote work over pay not going very far). That is not happening in any meaningful quantity.
> The housing crisis is really a people refuse to leave Toronto and Vancouver crisis, no matter how little they make.
This is because there are two working adults in most families nowadays and not just one.
So, if you move, your salary increase must account for the time your partner doesn't have salary or has decreased salary. In addition, your salary increase needs to account for the fact that you will have to move back to the city when, not if, your job disappears.
That means that your salary has to go up a LOT in order to leave the city area.
A 25% salary increase isn't enough incentive--your salary effectively needs to double. And the way you make that happen? You hook up with a FAANG and move to one of the overcrowded, overpriced cities.
A lot of our current economic ills are because you need two salaries in order to survive in this economy, and it freezes the migration of labor.
This is because there are two working adults in most families nowadays and not just one.
So, if you move, your salary increase must account for the time your partner doesn't have salary or has decreased salary. In addition, your salary increase needs to account for the fact that you will have to move back to the city when, not if, your job disappears.
That means that your salary has to go up a LOT in order to leave the city area.
A 25% salary increase isn't enough incentive--your salary effectively needs to double. And the way you make that happen? You hook up with a FAANG and move to one of the overcrowded, overpriced cities.
A lot of our current economic ills are because you need two salaries in order to survive in this economy, and it freezes the migration of labor.
> Wages can't rise either as there are tons of people who are willing to stay in Toronto no matter how relatively poorer they are as a result. In an economically rational market, people would leave Toronto over the costs and salaries would rise (like they have in San Francisco, where people have left to Seattle and Denver and remote work over pay not going very far). That is not happening in any meaningful quantity.
That's because of the out of control immigration quotas.
It's still a better deal to live in Toronto than in their home country for a lot of people around the world. Combine this with an extremely conservative investment landscape and that's what you get, over speculation on "safe" assets and a lack of funding for other businesses.
That's because of the out of control immigration quotas.
It's still a better deal to live in Toronto than in their home country for a lot of people around the world. Combine this with an extremely conservative investment landscape and that's what you get, over speculation on "safe" assets and a lack of funding for other businesses.
I guess I never realized that tiny homes were supposed to fix the housing crisis? I'm not sure this article really said that they were either. Anyways, I think this is the main idea of the article:
"The imagined owners of tiny homes, in other words, are likely childless and able-bodied, and they likely have at least ten grand to spare (plus, perhaps, the time or resources to build a home) and minimal familial responsibilities. If housing justice is truly our goal, then tiny living leaves a large contingent of people behind."
"The imagined owners of tiny homes, in other words, are likely childless and able-bodied, and they likely have at least ten grand to spare (plus, perhaps, the time or resources to build a home) and minimal familial responsibilities. If housing justice is truly our goal, then tiny living leaves a large contingent of people behind."
I always thought that tiny homes was a rejection of materialism, or a way to live cheaply? Or basically a fancy alternative to a trailer park?
I know two people I’d consider sorta materialistic (camera and tech gadget budget in the 10,000 a year territory), that are just ok living in a small space as long as it is the cheapest option. They don’t talk about the footprint of tiny home living, they talk about the cost savings.
We need to start building tiny soviet style apartments: https://www.youtube.com/watch?v=CQgaCwrQQy8
Add to that some "coffin" motels. Once people have a place to sleep near a place they can work they can start moving upwards.
My mom grew up in one, and I stayed with my grandma in one every time I visited. Sure, I slept on the kitchen floor, but it's not that bad.
Add to that some "coffin" motels. Once people have a place to sleep near a place they can work they can start moving upwards.
My mom grew up in one, and I stayed with my grandma in one every time I visited. Sure, I slept on the kitchen floor, but it's not that bad.
Or we could stop putting everyone’s jobs in the same 10 towns and use a bit more space
When Obama asked Steve Jobs about those manufacturing jobs coming back to the US Jobs said it ain't gonna happen. The benefits of centralizing and critical mass are just too important. Being able to lunch with people and get into the same space to innovate, to read body language. It's to big of an advantage. Just like independent rural homestead living collapsed into small town and cities, small towns are cities are collapsing into metropolises. It is inevitable. Geographic centralisation gives you so much more efficiency it's undeniable.
> and use a bit more space
Have you looked at a satellite map of the US? So little of it remains natural. The last thing we need is even more sprawl.
> and use a bit more space
Have you looked at a satellite map of the US? So little of it remains natural. The last thing we need is even more sprawl.
[deleted]
There's ample unused built space, infill opportunity, or brownfields development (assuming the brown isn't overly toxic, and much is).
Perhaps we could use more cities instead of more suburbs.
That's about the same size as my first apartment here in the US. It looks like a pretty normal studio apartment. There's plenty of apartments like that in major US cities.
Ah, the difference between Europe and America.
Here, a 300-400sqft single-bedroom apartmant would be considered standard and suitable for a single or 2-person household with median income. A two-bedroom 500-600 sqft apt would be considered just fine for most families with 1 or two kids (esp. if those kids are same gender or while they're small). Anything above that gets you into upper-middle class or above. Alternatively, a 4-member family with two minimum incomes could get by with 400sqft (it'd be cramped but wouldn't be considered outrageously small).
The difference is also that these are almost exclusively in an apartment building, where your neighbours help insulate you from the elements, resulting in lower heating/cooling costs.
I'm amazed whenever I read an article mentioning home sizes in the States (or in this case Canada) and have to double-check whether my sqft<->m2 conversion is okay because I can't believe how much more room is considered "normal" over there.
Tiny homes wouldn't solve the housing crises, but looking across the pond, I'm thinking it'd still be a boon for low-wage earners. I know I'd rather be in my own 200sqft than have to pay off huge mortgage or rent a 600sqft of "wasted" space.
Even if I prefer or have to rent, smaller units would be cheaper, while still more expensive per sqft, in theory netting the landlord more profit for the same apt. complex. Sounds like a win/win, what am I missing?
Here, a 300-400sqft single-bedroom apartmant would be considered standard and suitable for a single or 2-person household with median income. A two-bedroom 500-600 sqft apt would be considered just fine for most families with 1 or two kids (esp. if those kids are same gender or while they're small). Anything above that gets you into upper-middle class or above. Alternatively, a 4-member family with two minimum incomes could get by with 400sqft (it'd be cramped but wouldn't be considered outrageously small).
The difference is also that these are almost exclusively in an apartment building, where your neighbours help insulate you from the elements, resulting in lower heating/cooling costs.
I'm amazed whenever I read an article mentioning home sizes in the States (or in this case Canada) and have to double-check whether my sqft<->m2 conversion is okay because I can't believe how much more room is considered "normal" over there.
Tiny homes wouldn't solve the housing crises, but looking across the pond, I'm thinking it'd still be a boon for low-wage earners. I know I'd rather be in my own 200sqft than have to pay off huge mortgage or rent a 600sqft of "wasted" space.
Even if I prefer or have to rent, smaller units would be cheaper, while still more expensive per sqft, in theory netting the landlord more profit for the same apt. complex. Sounds like a win/win, what am I missing?
> Here, a 300-400sqft single-bedroom apartmant would be considered standard and suitable for a single or 2-person household with median income. A two-bedroom 500-600 sqft apt would be considered just fine for most families with 1 or two kids (esp. if those kids). Anything above that gets you into upper-middle class or above. Alternatively, a 4-member family with two minimum incomes could get by with 400sqft (it'd be cramped but wouldn't be considered outrageously small).
As a Canadian, that seems like so little space. In university, I rented a condo with my brother and it was 900 sqft for two. I have considered what kind of property I would want for my first and 1100 sqft is probably what I would buy and my family might convince me to buy a full fledged detached (1900 sqft). Keep in mind that neither sqft figure counts any basement space. My parents have 1900 sqft and find that cramped with work from home.
As a Canadian, that seems like so little space. In university, I rented a condo with my brother and it was 900 sqft for two. I have considered what kind of property I would want for my first and 1100 sqft is probably what I would buy and my family might convince me to buy a full fledged detached (1900 sqft). Keep in mind that neither sqft figure counts any basement space. My parents have 1900 sqft and find that cramped with work from home.
Many new build US apartments though large in floor area seem to be really poorly designed. When I first moved to the US I lived in an ~800 sqft 1 bedroom apartment. A deep dark cave with windows on only one smaller side.
It was so much worse than the 1970s ~600 sqft 2 bedroom apartment I had previously lived in in England. While smaller, the two bed apartment felt larger since it had separate rooms, not just a bedrooom, bathroom and a single large open plan area.
It was so much worse than the 1970s ~600 sqft 2 bedroom apartment I had previously lived in in England. While smaller, the two bed apartment felt larger since it had separate rooms, not just a bedrooom, bathroom and a single large open plan area.
600? Ha! The average new home sale last year in the US was over 2,300 square feet.
https://www.census.gov/construction/chars/highlights.html
My current place is 650 square feet and I’m looking to downsize. The problem is, the prices tend to stay static, even if you want a smaller place.
https://www.census.gov/construction/chars/highlights.html
My current place is 650 square feet and I’m looking to downsize. The problem is, the prices tend to stay static, even if you want a smaller place.
Are you exaggerating or is it really normal for a family of 4 to live in a 500 sqft apartment? This seems impossibly tiny to me.
Depends on the floor plan: 500 would be on the "cramped" side for 4, 600 should be just fine.
The "trick" here is that all the rooms (& bathroom, kitchen, etc) are small and well though out so you really use up most of the space - basically the "empty" space would only be there if neccesary for movement.
Here's a quick example (~430sqft not counting the balcony): https://www.njuskalo.hr/image-w920x690/nekretnine/rudes-jabl... This would be okay while the kids are small, and having an extra ~100sqft would add another room for the other kid, or have larger kids' room.
So yeah - fascinating to compare the expectations on both sides of the pond.
The "trick" here is that all the rooms (& bathroom, kitchen, etc) are small and well though out so you really use up most of the space - basically the "empty" space would only be there if neccesary for movement.
Here's a quick example (~430sqft not counting the balcony): https://www.njuskalo.hr/image-w920x690/nekretnine/rudes-jabl... This would be okay while the kids are small, and having an extra ~100sqft would add another room for the other kid, or have larger kids' room.
So yeah - fascinating to compare the expectations on both sides of the pond.
European cities are much denser. A small apartment doesn't sound so bad when there's exceptional public transit right at the door and well maintained and safe public parks.
I lived in a Tiny House in Florida while I was on contract work. The rent was free and came with the job, and at first it was pretty cool, but then it quickly was not. The main issue is that to live and work with any level of efficiency requires you pal everything. Vacuum? Need a plan. Cooking dinner, need a plan. It’s like trying to find a charger for a Tesla Roadster in the first few years - everything required careful planning. After the contract, I moved into a hotel and it was instantly better.
This seems to be Canada focus, but the US seems very similar with affordability issues in major cities. Everything I am seeing an hearing about housing cost in the US related to land, labor and lumber. Cost per sqft is crazy high and getting higher, builders would be able to build more but there just isn't enough highly qualified labor in the US, and the shutdown is preventing lumber from being milled. We cannot do anything about Covid lumber shortage or the land shortage but we can do something about the Labor shortage. When I was in high school, there were shop classes, and home building classes that focused on the building trades. These classes were in the processed of being phased out to focus on students going to college and STEM. The US education system needs to focus on being an on ramp for College and Trade-schools and stop selling on students short.
The labor shortage exists because labor doesn't pay, it's that simple.
Trades are not mass labor needed to drive costs down, and it's unlikely costs will be driven down further there because of foreign competition.
Trades are not mass labor needed to drive costs down, and it's unlikely costs will be driven down further there because of foreign competition.
The best solution to the housing crisis ever discovered thus far is widespread remote work. This allows people who don’t want to live in major cities the ability to live anywhere, reducing the cost for those that do want to live in a city.
I don't think this will help much at all. Maybe for a few, but I doubt it will reduce costs for city-dwellers.
If you have any ambition, your networking is severely limited. If you have any desire to find a mate, your pool has decreased rapidly. If you want to see a concert or go to a new restaurant, you have far less options.
If you have any ambition, your networking is severely limited. If you have any desire to find a mate, your pool has decreased rapidly. If you want to see a concert or go to a new restaurant, you have far less options.
Some cities make it really hard to reasonably commute (for business or pleasure) from more moderately-priced properties. For many other cities though, a 60-90 minute drive--or sometimes train--does, which is generally reasonable for a sometimes commute or a night on the town. (And remember that many of the tech and other good jobs aren't even in the city; they're out in the suburbs somewhere.)
I am surprised no one has a website that compares internet quality to land price when searching for lots to purchase.
this might actually solve the problem with robot waitstaff. Mechanical turk them, allowing the actual service people to work remotely!
The fact that a country as large and sparse as Canada has to contemplate tiny homes to address housing is ridiculous. Never mind that the speculative construction market has been churning out tiny condo equivalents.
I lived in _much_ denser cities with their own speculative real estate market, but the developers haven't resorted to "optimizing" units as aggressively as the micro-condos I've seen in Toronto. The one bedrooms / studios are about as large as apartments in Beijing / Shanghai. But 2-3 bedrooms new constructions feel dramatically smaller. Being Canada, these units will negatively impact generations.
I lived in _much_ denser cities with their own speculative real estate market, but the developers haven't resorted to "optimizing" units as aggressively as the micro-condos I've seen in Toronto. The one bedrooms / studios are about as large as apartments in Beijing / Shanghai. But 2-3 bedrooms new constructions feel dramatically smaller. Being Canada, these units will negatively impact generations.
Nobody is willing to live outside of a few major cities and everyone here demands a detached house. There is a very strong stigma about living in anything without a lawn after 30ish.
[deleted]
Imo, the fix for the housing crisis is for governments to invest in the economies of small towns and cities with lots of land that can be built on or property that is vacant. Everybody wants to live in sf, new york, seattle, etc. because they are where the jobs are and that also attracts culture. If state governments could give grants or tax credits for companies to start or expand out to other parts of states that are under utilized, this could cause people to move to those areas and relieve pressure on the overpopulated areas.
Which basically boils down to internet at this point. Many small towns just have no or slow internet.
Water - Drill Well. Sewer - Build Septic Tank Power Problems - Generator / Battery Backup Education - Home School Internet - No Solution??
Water - Drill Well. Sewer - Build Septic Tank Power Problems - Generator / Battery Backup Education - Home School Internet - No Solution??
It's definitely a problem, but it's solvable. It's just a function of political will and funding for local internet... Or just hoping starlink brings internet to everybody. But I also think the government needs to give people/companies straight up money to move there or give them some other incentive. It's not enough just to have schools and remote workers in houses. We need to incentivize artists, entertainers, service workers, chefs, etc. to want to work in these places. Otherwise these locations won't last long term.
Exactly, a tech job would fire me after realizing how inconsistent and slow the internet is at the house I grew up at in rural Wisconsin.
Even my cell phone hardly works if it rains or snows. I can’t even port my number to Verizon because they apparently won’t service 715 prefixed numbers.
Even my cell phone hardly works if it rains or snows. I can’t even port my number to Verizon because they apparently won’t service 715 prefixed numbers.
I don't have a clue what any solution looks like or even what problem is trying to be solved.
Growing up in the USA home "ownership" is always touted as an investment but for example in Japan, it's often more like buying a car. The moment you buy it it's a used house and the price goes down just like a car would. The point being home ownership is viewed differently.
Also, the recent episode of the Flash Forward podcast pondered the idea of guaranteed housing. They complained that 60% of people on minimum wage can't afford a 2 bedroom apartment in the USA but coming from Tokyo my first thought was "why is the standard a 2 bedroom apartment?" There are 100s of thousands of studio apartments all around Tokyo and it's normal to live in one. From $400 a month and up. I'm sure Hong Kong it's even more normal.
Growing up in the USA home "ownership" is always touted as an investment but for example in Japan, it's often more like buying a car. The moment you buy it it's a used house and the price goes down just like a car would. The point being home ownership is viewed differently.
Also, the recent episode of the Flash Forward podcast pondered the idea of guaranteed housing. They complained that 60% of people on minimum wage can't afford a 2 bedroom apartment in the USA but coming from Tokyo my first thought was "why is the standard a 2 bedroom apartment?" There are 100s of thousands of studio apartments all around Tokyo and it's normal to live in one. From $400 a month and up. I'm sure Hong Kong it's even more normal.
One important difference to note in your Japan comparison is that Japan is experiencing population decline, which would explain weak demand and decreasing prices. Home ownership as an investment in North America has been driven by demand exceeding supply, among other factors, which make a difference from an investment perspective.
This is incorrect.
Many of the factors that make the Japan real estate market what it is are codified into law. Furthermore the qualities attested to by the grandparent post are invariant with the current demographic trends, and have existed for a very long time. Long story short, Japan real estate is weird and unique, not a good subject for off the cuff generalizations.
I would agree with you that real estate is inherently local, with a myriad factors to consider. I would also agree with you about the limitations of generalizations. However, in a conversation about the price of housing, discussing supply and demand seems like a good place to start.
Japans housing regulations are also made at the national level rather than the local level which reduces Nimbyism.
Real estate is the new pension.
With the virtual elimination of defined-benefit pesions, and inadequacy of Social Security, it's the combination of asset-based securities --- 401k (or equivalent) defined-contribution plans, and real estate, which most middle-class Americans rely on for retirement. (Those below this level are simply out of luck.)
So long as assets continue inflating, this works --- as an investment. But housing cannot be both aa good investment and affordable.
https://cityobservatory.org/housing-cant-be-affordable_and_b...
With the virtual elimination of defined-benefit pesions, and inadequacy of Social Security, it's the combination of asset-based securities --- 401k (or equivalent) defined-contribution plans, and real estate, which most middle-class Americans rely on for retirement. (Those below this level are simply out of luck.)
So long as assets continue inflating, this works --- as an investment. But housing cannot be both aa good investment and affordable.
https://cityobservatory.org/housing-cant-be-affordable_and_b...
What is going on is the implied idea that minimum wage is normal, or that minimum wage supports a family. It's neither. When minimum wage is low, it is how teenagers get some spending money and some employment references. When minimum wage is high, it's the cause of hidden lower-wage illegal employment that ignores worker safety regulations.
The traditional norm for the USA is a 3-bedroom house. This provides a room for parents, a room for boys, and a room for girls. It isn't expected to be affordable on the minimum wage, and people would promptly bid the prices up if it were.
The traditional norm for the USA is a 3-bedroom house. This provides a room for parents, a room for boys, and a room for girls. It isn't expected to be affordable on the minimum wage, and people would promptly bid the prices up if it were.
Wait, so does that mean it's relatively cheap to rent or buy in Japan? I know Japan is not a cheap country, but I was wondering relative to other Western countries.
I might want to research if I'd want to live in Japan for a couple of years then, and simply become a remote worker.
I might want to research if I'd want to live in Japan for a couple of years then, and simply become a remote worker.
I would highly recommend watching the youtube channel "life where I'm from". He's a Canadian from Vancouver who lives in Japan with his family and makes some of the best documentary style films on topics about Japan anywhere. He has quite a few videos on housing at various levels, and a great series on homelessness in Japan (including cheap housing alternatives).
Sharehouses are also relatively common in Tokyo and tend to attract young single people and expats. They're basically dorms with a central kitchen and bathroom and quality varies tremendously. But you can live for hundreds of dollars per month ($500-700) pretty easily (once you learn about all the weird fees that sorta only exist in the Tokyo housing market) and be about 35 minutes from a downtown hub area.
Seoul also has similar cheap housing options. An entire market exists for ultra tiny "study rooms" (goshiwons) that are not much more than a bed, desk and bathroom and might run around $250/mo. Seoul also has Share houses and very small single room apartments that can be amazingly cheap per month if you don't mind paying a large (refundable) deposit up front -- for example, a $10k deposit might find you a decent sizes 2 bedroom 30 minutes from downtown on the subway for $500-600/mo.
Both cities of course have Airbnbs which can be surprisingly reasonable and long-term stays are available.
1 - https://www.youtube.com/c/LifeWhereImFrom/videos
Sharehouses are also relatively common in Tokyo and tend to attract young single people and expats. They're basically dorms with a central kitchen and bathroom and quality varies tremendously. But you can live for hundreds of dollars per month ($500-700) pretty easily (once you learn about all the weird fees that sorta only exist in the Tokyo housing market) and be about 35 minutes from a downtown hub area.
Seoul also has similar cheap housing options. An entire market exists for ultra tiny "study rooms" (goshiwons) that are not much more than a bed, desk and bathroom and might run around $250/mo. Seoul also has Share houses and very small single room apartments that can be amazingly cheap per month if you don't mind paying a large (refundable) deposit up front -- for example, a $10k deposit might find you a decent sizes 2 bedroom 30 minutes from downtown on the subway for $500-600/mo.
Both cities of course have Airbnbs which can be surprisingly reasonable and long-term stays are available.
1 - https://www.youtube.com/c/LifeWhereImFrom/videos
Japan can be extremely cheap. (Well, it's all relative)
Downtown Tokyo, like Aoyama or Roppongi are expensive, just like Upper West Side Manhattan is expensive. Move out to Saitama/Chiba/Kanagawa (20-30 minute commute to downtown tokyo) and it gets cheap (3bed room apartment for $1000)
Even in Tokyo just shortly out it can get cheap quick. I have friends living in Sangenjaya (2 train stops from Shibuya) and paying $1500 for 3bedroom apartment.
Friends living in Kyoto have huge places for the price but again it depends on where. Popular areas are expensive.
So, I'm pretty sure Japan and Tokyo in particular are cheaper than NYC, LA, SF, Paris, and London. Still, likely your place will be smaller than you're used to.
What makes it expensive for most foreigners is they don't speak the language and they don't know the area so their options are super limited to the expensive options targeting foreigners.
You'll likely want to live downtown, and close to a station, both of which will jack up the cost.
Downtown Tokyo, like Aoyama or Roppongi are expensive, just like Upper West Side Manhattan is expensive. Move out to Saitama/Chiba/Kanagawa (20-30 minute commute to downtown tokyo) and it gets cheap (3bed room apartment for $1000)
Even in Tokyo just shortly out it can get cheap quick. I have friends living in Sangenjaya (2 train stops from Shibuya) and paying $1500 for 3bedroom apartment.
Friends living in Kyoto have huge places for the price but again it depends on where. Popular areas are expensive.
So, I'm pretty sure Japan and Tokyo in particular are cheaper than NYC, LA, SF, Paris, and London. Still, likely your place will be smaller than you're used to.
What makes it expensive for most foreigners is they don't speak the language and they don't know the area so their options are super limited to the expensive options targeting foreigners.
You'll likely want to live downtown, and close to a station, both of which will jack up the cost.
Although Tokyo ranks among the most expensive real estate markets, I’d argue it’s comparable to many mid-size American cities, and deals can often be found on the cheap side, whereas the US has seen the floor on rental prices skyrocket in the last decade. Places tend to be much smaller in Tokyo, but you can still find a studio for well under $1,000/month, which is not really possible where I live (Portland, OR). A studio in Shinjuku, one of the most central and popular wards, can be had for ~$1,000/month.
https://blog.gaijinpot.com/how-much-is-the-average-rent-in-t...
https://blog.gaijinpot.com/how-much-is-the-average-rent-in-t...
no it means that the fortune you pay is almost all for the land and the house is thought of as disposable
> They complained that 60% of people on minimum wage can't afford a 2 bedroom apartment in the USA but coming from Tokyo my first thought was "why is the standard a 2 bedroom apartment?"
Perhabs to have a second bedroom for kids?
Perhabs to have a second bedroom for kids?
I don't think the person you are replying to is actually confused about what someone would do with more space, but instead, making a point about cultural standards.
Even leaving aside kids, even decades ago when I rented, I really liked having a separate office. Also guest bedroom, hobby room, etc. Even as a single person I appreciated having a two bedroom apartment.
If everyone, minimum wage and white collar alike, is bidding for housing in the same, limited market, it hardy seems surprising that “housing with more/extra rooms” might be bid out of reach of those least able to pay.
I don’t see people arguing why you shouldn’t want extra bedrooms so much as lamenting that some can’t afford two of them.
I don’t see people arguing why you shouldn’t want extra bedrooms so much as lamenting that some can’t afford two of them.
I admittedly read the upthread comment as "Why on earth do people want/feel they need two bedroom apartments?" in the same vein as I am sometimes tempted to go "Why?" with respect to huge mansions.
Is there any significant number of professionals who think tiny homes are a solution to anything? I am more under the impression that the people touting these were mainly arm-chair urban planners, more motivated by pinterest than safe and efficient resource allocation. Apartments are safer, cheaper, more efficient, easier to build, etc.
Ultimate solution is a mind machine unification and living on a server farm travelling through the cosmos
Tiny houses might not, but a wholesale decommodification of housing could.
We shouldn't be trying to price housing on the market, we should be pricing housing and land based on how well it houses people.
If we started taxing the land rather than the land plus improvements and gave a credit for every housing unit I guarantee you we'd see parking lots turned into housing.
Other approaches include: removing minimum parking requirements, rent control, strong tenants unions, stronger eviction protections, publishing landlord statistics on eviction rates, low rise distributed public housing with protected operating budgets, right to buy laws, prohibitions or increased regulations around short term rentals, support for community land trusts, up zoning, tax incentives for increasing the affordable housing supply, and yes, mother in law apartments, cottages, and other permissive zoning for additional housing can help too.
There are very tractable ways we can chip away at this problem at a local and regional way. We shouldn't be speculating on housing as an asset, we should be ensuring everyone has a place to live.
We shouldn't be trying to price housing on the market, we should be pricing housing and land based on how well it houses people.
If we started taxing the land rather than the land plus improvements and gave a credit for every housing unit I guarantee you we'd see parking lots turned into housing.
Other approaches include: removing minimum parking requirements, rent control, strong tenants unions, stronger eviction protections, publishing landlord statistics on eviction rates, low rise distributed public housing with protected operating budgets, right to buy laws, prohibitions or increased regulations around short term rentals, support for community land trusts, up zoning, tax incentives for increasing the affordable housing supply, and yes, mother in law apartments, cottages, and other permissive zoning for additional housing can help too.
There are very tractable ways we can chip away at this problem at a local and regional way. We shouldn't be speculating on housing as an asset, we should be ensuring everyone has a place to live.
I was actually hoping for some actual production of tiny homes to bring the price down for a mass buy of single and couples housing. Instead we have extended family living in the same home during a pandemic with predictable results.
The article is about "Tiny Homes ALONE Won't fix the Housing Crisis".
Of course, trivialized solutions don't fix any realworld problems, so this article doesn't provide much light...
Of course, trivialized solutions don't fix any realworld problems, so this article doesn't provide much light...
When you have a city, where every surface is built, can you still say that there is a housing crisis? Maybe now, it is time to talk about real problems ?
I don’t believe that there is a shortage of homes. The demand we are seeing is driven by investment. There are many more empty and low-use properties out there than most would suspect.
Hear me out.
Reported vacancy rates (the ones you’ll hear quoted in the media) are usually discovered by asking real estate agencies how many of the properties on their books are currently available to rent.
Actual empty residences are harder to quantify. There are two studies I’m aware of that attempt to do this. In Melbourne, Australia (one of the ‘anglo’ places that suffers from this rampant property investment problem) there is the Speculative Vacancies Report[0] published each year by Prosper Australia. They determine which properties are empty using data from the water utilities companies. In the UK there is this study[1] where council data is used to determine the number of ‘Low Use Properties’ (LUP’s) in various jurisdictions.
From the first study (Melbourne), I remember one interesting finding was that the higher the capital gains in an area, the higher the vacancy rate tended to be. And the vacancy rates were sometimes very high. I remember them being over 25% in Docklands (Melbourne’s Canary Wharf) and around 10% in many other areas maybe five years ago. Completely unintuitive. Surely those places should have a relatively low rate of empty properties if they are such desirable places to live (as the rapidly rising prices suggest).
From the second study (UK), it’s clear that the higher the value of properties in an area, the higher the number of LUP’s.
Curious about what the case might be in New Zealand (where the property market is similar - if not worse - than places like Canada, the UK, and Australia) I went looking for statistics. I found two that are relevant. The number of households and the number of private dwellings. Obviously every household must have a dwelling, so the difference should give an indication of the situation. This data goes back to the mid 90s. Turns out that back then (when house prices were sane) the difference was around 3.5%. Today it is more like 7%. Those are national averages. From the studies mentioned above I expect that the percentage of empty and low use properties would be highest in the major cities (where prices and capital gains are highest). I wouldn’t be surprised if 10% of properties in the cities are empty or getting very little use.
I used to work as a postie (mailman). I saw firsthand how many houses were empty. The wealthiest streets always had the most (owners were away on holiday for 6 months or a year at a time, living elsewhere while renovating or planning to ‘flip’, the property was on the market, it was a second home, etc). In one particularly nice street, over 25% of the houses didn’t have residents at any one time.
This housing affordability issue doesn’t need a supply side solution. A speculative boom creates extra demand. The solution is to make property a less attractive investment.
[0] https://www.prosper.org.au/wp-content/uploads/2019/04/Specul... [1] https://theodi.org/event/friday-lunchtime-lecture-empty-home...
Edit: A holiday home used to be an expense. Now it's an investment. That's a problem.
Hear me out.
Reported vacancy rates (the ones you’ll hear quoted in the media) are usually discovered by asking real estate agencies how many of the properties on their books are currently available to rent.
Actual empty residences are harder to quantify. There are two studies I’m aware of that attempt to do this. In Melbourne, Australia (one of the ‘anglo’ places that suffers from this rampant property investment problem) there is the Speculative Vacancies Report[0] published each year by Prosper Australia. They determine which properties are empty using data from the water utilities companies. In the UK there is this study[1] where council data is used to determine the number of ‘Low Use Properties’ (LUP’s) in various jurisdictions.
From the first study (Melbourne), I remember one interesting finding was that the higher the capital gains in an area, the higher the vacancy rate tended to be. And the vacancy rates were sometimes very high. I remember them being over 25% in Docklands (Melbourne’s Canary Wharf) and around 10% in many other areas maybe five years ago. Completely unintuitive. Surely those places should have a relatively low rate of empty properties if they are such desirable places to live (as the rapidly rising prices suggest).
From the second study (UK), it’s clear that the higher the value of properties in an area, the higher the number of LUP’s.
Curious about what the case might be in New Zealand (where the property market is similar - if not worse - than places like Canada, the UK, and Australia) I went looking for statistics. I found two that are relevant. The number of households and the number of private dwellings. Obviously every household must have a dwelling, so the difference should give an indication of the situation. This data goes back to the mid 90s. Turns out that back then (when house prices were sane) the difference was around 3.5%. Today it is more like 7%. Those are national averages. From the studies mentioned above I expect that the percentage of empty and low use properties would be highest in the major cities (where prices and capital gains are highest). I wouldn’t be surprised if 10% of properties in the cities are empty or getting very little use.
I used to work as a postie (mailman). I saw firsthand how many houses were empty. The wealthiest streets always had the most (owners were away on holiday for 6 months or a year at a time, living elsewhere while renovating or planning to ‘flip’, the property was on the market, it was a second home, etc). In one particularly nice street, over 25% of the houses didn’t have residents at any one time.
This housing affordability issue doesn’t need a supply side solution. A speculative boom creates extra demand. The solution is to make property a less attractive investment.
[0] https://www.prosper.org.au/wp-content/uploads/2019/04/Specul... [1] https://theodi.org/event/friday-lunchtime-lecture-empty-home...
Edit: A holiday home used to be an expense. Now it's an investment. That's a problem.
> Curious about what the case might be in New Zealand
Bad. It's a system trap, where everyone wrings their hands but no-one actually wants to do anything about the problem - in fact, the reverse.[1]
I worry about Stein's Law: "If it cannot go on, it will stop." I.e., there will be a correction some day. The question is, do we want a slow, controlled correction, or an uncontrolled one?
Edit: The linked opinion piece doesn't speak directly to vacancy rates, but there's a lot of that. As you say, it's due to the fact that real estate was favoured over every other kind of investment for the last 50 years at least, and successive governments resolutely turning a blind eye to the obstacles that local authorities put in the way of new development. Oh, and not requiring business migrants to build new.
1. https://www.stuff.co.nz/business/opinion-analysis/300168640/...
Bad. It's a system trap, where everyone wrings their hands but no-one actually wants to do anything about the problem - in fact, the reverse.[1]
I worry about Stein's Law: "If it cannot go on, it will stop." I.e., there will be a correction some day. The question is, do we want a slow, controlled correction, or an uncontrolled one?
Edit: The linked opinion piece doesn't speak directly to vacancy rates, but there's a lot of that. As you say, it's due to the fact that real estate was favoured over every other kind of investment for the last 50 years at least, and successive governments resolutely turning a blind eye to the obstacles that local authorities put in the way of new development. Oh, and not requiring business migrants to build new.
1. https://www.stuff.co.nz/business/opinion-analysis/300168640/...
There is no housing crisis. U.S. has more than plenty of good quality, large, and more than affordable houses (many of them are probably beyond repair but this is a consequence of their abundance and lack of demand).
Housing crisis is only about the very few already overpopulated spots being hyper-attractive for people to move in because that's where opportunities are. There is no way to "fix" this because even if housing is by some magic affordable, so many people will flock there that commute times will increase beyond survivability and people will pay with their time instead of money (that works in exactly the same way as home prices rise when mortgage fall: this is a free market).
If you want to fix it, you need to stop these places from being attractive, or prevent people from moving. Both sound like a Soviet Union-style dystopia.
It's better to just concede to the fact that housing in attractive areas is a scarce resource for which there is always a competition and most people who are there, simply shouldn't be there, them being there is just a result of their Dunning-Kruger effect.
There is a middle ground of "regulated rental" but this is precisely a compromise, a middle ground between buying and market renting. Buying a place in attractive location is winning a lottery: if place is ALREADY attractive, the rental yield there is low because price to buy is sky high due to countless trillions of printed money sloshing around, so it makes no sense buying, it only makes sense buying before it gets attractive, but it can't be predicted. Regulated rental gives you same opportunity: rent now and if in 30 years the place became attractive, you are renting at a small fraction of real cost, you won. This is not a solution, it is just a step halfway to the Soviet Union where the Party decided where you should live.
Housing crisis is only about the very few already overpopulated spots being hyper-attractive for people to move in because that's where opportunities are. There is no way to "fix" this because even if housing is by some magic affordable, so many people will flock there that commute times will increase beyond survivability and people will pay with their time instead of money (that works in exactly the same way as home prices rise when mortgage fall: this is a free market).
If you want to fix it, you need to stop these places from being attractive, or prevent people from moving. Both sound like a Soviet Union-style dystopia.
It's better to just concede to the fact that housing in attractive areas is a scarce resource for which there is always a competition and most people who are there, simply shouldn't be there, them being there is just a result of their Dunning-Kruger effect.
There is a middle ground of "regulated rental" but this is precisely a compromise, a middle ground between buying and market renting. Buying a place in attractive location is winning a lottery: if place is ALREADY attractive, the rental yield there is low because price to buy is sky high due to countless trillions of printed money sloshing around, so it makes no sense buying, it only makes sense buying before it gets attractive, but it can't be predicted. Regulated rental gives you same opportunity: rent now and if in 30 years the place became attractive, you are renting at a small fraction of real cost, you won. This is not a solution, it is just a step halfway to the Soviet Union where the Party decided where you should live.
> Housing crisis is only about the very few already overpopulated spots being hyper-attractive for people to move in because that's where opportunities are.
Why not build hyper-dense housing? If you have functional public spaces you don't need as much private space. We used to have boarding houses etc. I don't need my own bathroom, I need a bathroom. I rarely use my kitchen, I just need access to one.
Why not build hyper-dense housing? If you have functional public spaces you don't need as much private space. We used to have boarding houses etc. I don't need my own bathroom, I need a bathroom. I rarely use my kitchen, I just need access to one.
I hear what you’re saying and maybe you’re right, but I would prefer not to live like this
In addition to the normal pressures against boarding houses, COVID has dramatically increased the undesirable nature of that housing.
How about commuting? Pollution? School, hospital and other public services capacity? Crime arising from simply the rich place being affordable, inviting undesirables?
Those come from the savings from not having to maintain as much less power grids, less roads to maintain, less roads to plow, less helicopter ambulance rides to pick up injured remote people. Sure you need more city busses now.
Giving the "undesirables" a decent place and means to live reduces crime.
Giving the "undesirables" a decent place and means to live reduces crime.
Don't you think that in general, the drive to push as many people as possible into places as tight as possible, like high density urban areas, is abnormal? People by nature love to enjoy space, and this is what U.S. has in abundance.
Work on making geographic location less important, on decreasing the value of being in a particular place. Embrace remote work. It will solve the "housing crisis". Forcing millions of adults into dorms, won't.
Work on making geographic location less important, on decreasing the value of being in a particular place. Embrace remote work. It will solve the "housing crisis". Forcing millions of adults into dorms, won't.
Do you think dorms are less ugly than suburban sprawl or endless exapanse of ranches? I mean how many places in the US can you find a 5mi x 5mi square of land unmolested?
Depending on what you mean by "unmolested", a 5mi x 5mi square of land is really easy to get in most of the USA. (probably weeds, not pristine old-growth forest) It's pretty cheap, and there won't be any utility bills to pay. You can use it to graze cattle or something like that.
The Scarlet E: Unmasking America’s Eviction Crisis
Two years ago, the Federal Reserve found that 44 percent of us couldn't cover a sudden 400 dollar expense without borrowing or selling something. And so if you don't have family or friends you can tap, anything unexpected–health issues, accidents, car trouble, reduced work hours–can trigger calamity cascades....
When we first got these national data and we mapped it on the United States, I don't really know what I was expecting. But I spent a lot of time in Milwaukee, I thought evictions were incredibly high there. One in 14 renter homes in the inner city of Milwaukee's evicted every year formerly. Right? Huge amount you walk down any inner city block, look on your left look on your right, one of those families is not gonna be there by the end of the year. You crunch the numbers and you look and Milwaukee isn't even in the top 50 highest evicting cities in the country. You see South Carolina exploding, North Carolina exploding, Georgia–up the Mississippi to Detroit. Tulsa, Oklahoma is in the top 20. Albuquerque, New Mexico, I think one in twenty-one renter homes is evicted.
https://www.wnycstudios.org/podcasts/otm/scarlet-e-unmasking...
Evicted: Poverty and Profit in the American City
Evicted transforms our understanding of poverty and economic exploitation while providing fresh ideas for solving one of twenty-first-century America’s most devastating problems. Its unforgettable scenes of hope and loss remind us of the centrality of home, without which nothing else is possible.
https://www.evictedbook.com/books/evicted-tr
Two years ago, the Federal Reserve found that 44 percent of us couldn't cover a sudden 400 dollar expense without borrowing or selling something. And so if you don't have family or friends you can tap, anything unexpected–health issues, accidents, car trouble, reduced work hours–can trigger calamity cascades....
When we first got these national data and we mapped it on the United States, I don't really know what I was expecting. But I spent a lot of time in Milwaukee, I thought evictions were incredibly high there. One in 14 renter homes in the inner city of Milwaukee's evicted every year formerly. Right? Huge amount you walk down any inner city block, look on your left look on your right, one of those families is not gonna be there by the end of the year. You crunch the numbers and you look and Milwaukee isn't even in the top 50 highest evicting cities in the country. You see South Carolina exploding, North Carolina exploding, Georgia–up the Mississippi to Detroit. Tulsa, Oklahoma is in the top 20. Albuquerque, New Mexico, I think one in twenty-one renter homes is evicted.
https://www.wnycstudios.org/podcasts/otm/scarlet-e-unmasking...
Evicted: Poverty and Profit in the American City
Evicted transforms our understanding of poverty and economic exploitation while providing fresh ideas for solving one of twenty-first-century America’s most devastating problems. Its unforgettable scenes of hope and loss remind us of the centrality of home, without which nothing else is possible.
https://www.evictedbook.com/books/evicted-tr
When someone claims many reasons why a thing is good or bad, the actual reason is often unstated.
“Tiny homes are bad because I like the idea of socialist communes and people won’t give them a try if they can have their own house”
“Tiny homes are bad because I like the idea of socialist communes and people won’t give them a try if they can have their own house”
My little hobby farm has probably "doubled" in the 8.5 years I've owned it, but I don't feel great about it -- where will my kids live? Where will I retire to? When will this all blow up in our faces? My 70 year old father in law would love to retire, and sell his place and somehow reduce his costs and move closer to us... but my area has become completely unaffordable as Toronto money is suddenly blowing up the market out here with bidding wars and no-conditions offers and the like, stuff we never saw before.
So yeah in that context I can't even imagine being working class and trying to make a go of it. It was bad before, but it is only getting worse. Rents are absolutely mental even in outlying areas that should be cheap.
And most importantly given that these outlying areas around Toronto (Hamilton, Oshawa, London, Cambridge, Woodstock etc.) are often where the few remaining manufacturing sector jobs are, what happens to the manufacturing sector when their employees can no longer afford housing near the factory?