By Terry Galvin : nationalist – excerpt
No easy way to return Canada’s residential real estate markets to ‘normal’
It’s a puzzle. Whatever its answer, its consequences are likely to foment an upheaval in Canada that the coming defeat of Justin Trudeau’s Liberals and the election of a Conservative government should not be expected to forestall.
The puzzle, by the reckoning of urban planner, landscape architect, author and University of British Columbia professor Patrick Condon, can be put this way.
Many, if not most, Canadians under the age of 35 are unlikely to ever own a place of their own. Canadians earn a bit better than $57,000 annually, on average. But you need more than three times that income to afford the mortgage on a typical Toronto condo.
Average house prices in Canada have gone from $435,000 to $794,000 since Trudeau’s Liberals were elected in 2015, and average rents have risen from $966 to $2,187.
Here’s the puzzle, according to Condon: “For leaders across the entire political spectrum to have landed on a response to this critical problem that is essentially the same, and is entirely wrong, is unprecedented. It’s a very unique circumstance, when you think about it.”
The responses to the “housing crisis” from the Liberals, the Conservatives and the New Democrats differ in their polemics and their particulars, but they all land on the same square: Do nothing to undermine the market value of residential real estate, pour everything into boosting supply, and hey presto, housing becomes more affordable.
None of it will work, says Condon, author of Broken City: Land Speculation, Inequality and Urban Crisis…(more)
The housing crisis might be fixed if the government gets out of the way.
In my opinion governments killed the free market when they stepped into the role of planning our futures for us by trying to control the market. Things did not go according to their predictions, but they refuse to accept responsibility for the economy they created and forced on us. Not everyone supported their theories and now there is upheaval around the world because people don’t trust governments to fix what they broke.
We have heard a lot about the problems cities are facing with speculation and rising costs of living that is killing the middle class. Patrick Condon seems to have put his finger on what many are calling out as the major culprit. Every city in the world is doing the same thing. There are no variables left for comparison. No room to experiment with other ways of operating a city. We are caught in a mire of our own making that is turning into an AI nightmare. Government has removed too many options for the market to experiment with different methods for driving down costs by eleviating options.
None of the markets under similar legal constraints have succeeded in bringing down the costs of real estate so far. Perhaps it is time for some new options. If California wants to be the leader they claim to be, perhaps starting to remove the state overloads from the picture to allow new options would be the first step in discovering a more balanced approach. Voters have at least one state bill that could shift the state control mechanism. In voters in California remove the state rent control to allow more flexibility among cities, we might start to see a shift in how people determine where they live and for how long. The bottleneck may be open if some cities choose more control and others choose less. We need variable options to see what works.
Next we might try to remove some other state controls that have created a frozen market, such as the density demands that are plaguing cities world wide and not creating any so far perceived improvements in the market. Once the controls are deregulated, one might start to see some improvement in some areas while others may lag behind. At least there will be more choices and more options and that alone should create a less stale market. – Mari Eliza