Housing “affordability” is in the news a lot these days and as someone who’s exacerbating the issue I wanted to give my $0.02 about it.  For me when I look at housing prices, it is only a symptom of a larger problem, the fact that people are not making as much as they use to & our social safety nets have gone to garbage.  The decoupling of wages and productivity started in the mid 70s (thank you Trudeau senior), corporations started to offload the responsibility of retirement onto individuals and the government allowed this all to happen thanks to neoliberalism.  Oh and the government also stopped actively supporting the rental market and downloaded that onto the private marketplace.

That’s why people nearing or who are retired need their houses to be worth a lot, if it falls their retirement will go down the toilet and these people head out to vote disproportionately to their population size so you can bet politicians will do their best to preserve their housing value.

Toronto Community Housing Corporation has a lot of public housing but because it’s not funded properly, their large scale properties have basically become ghettoes. Next there simply isn’t enough capacity to handle rental demand though with the state of their housing, most people would rather avoid that if they can which leads to the private rental market where owners and landlords will look out after their own interests, not the tenants.  Like it or not, that’s the system that we have, governments play with regulations and such, some of that I support, others that I don’t but what I will say is, life for renters would be even more difficult if private landlords pull out as there will be even less supply.

Perhaps some will be able to buy a home but not everyone who wants a house will be able to afford one, I see a lot of posts about how rent is XXX and a mortgage payment is less but there’s more to owning a home than a mortgage payment.  There’s the down and maintenance which often aren’t factored…

I want to be clear, the housing issue started 50 years ago and it’s going to take 50 years of good planning to get out of, there is simply no magic solution.  As someone who plays in the market, my personal opinion is that there’s not enough supply and the supply that’s coming is not the right type of home (too many bachelor & 1 bedroom condos, not enough stuff for people to raise families). Or on the opposite end huge luxury homes so think about this if developers can’t even meet the demand of those with money, why would they bother making anything that’s cheaper?

I laugh at the people who feel houses are too expensive, I have a friend who’s a developer who says it costs ~$250k per floor to build and for detached homes there is $149k in local fees to pay before you can even get a shovel into the ground so that’s $650k right there in costs before we factor in land prices.  Houses will never be $300k again and what’s funny is, those who call for a crash so they can get in don’t realize that if the housing market does crash hard, lol buying a home will be far from their worry, they’ll lose their jobs…

The word “affordability” also means whatever the hell you want it to mean, for someone who’s young and makes decent money, it means lower house prices, for someone who’s in poverty lower rent, etc. Politicians that promise to make things affordable are simply lying to you, there’s absolutely nothing they can do in the short term and anything they do only ever affects the demand side of the equation.  The government created this mess and as always it’s a multifaceted issue that requires we address multiple issues but it’s easier for them to blame “the others”.  Foreign buyers, investors, anyone but them who created this mess in the first place.

LOL this is exactly like a government’s plan on gun control and I’ve ranted about that a lot already. 😉