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Comment by tick_tock_tick | Hacker News Reader

> build affordable housing

Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

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Affordable doesn't mean shit, it means not optimised to gouge as much cash as possible from the buyer, and also probably means coming with a price control covenant. Many council houses in the UK were historically built to very high spec.

> Affordable housing is and will always be a horrible idea.

This is like saying food banks are a horrible idea, and we should just focus on job growth so everyone can afford to buy their own food. It comes across as really tone deaf to ignore that some people need help now and that even though it isn’t a complete solution, feeding one person today or getting one person off the street into newly constructed affordable housing makes a real difference to them.

"Affordable housing" is one of the most expensive, bureaucratic forms of construction, not a way to build faster.

Faster than what? It takes a handful of years for a non-profit or government housing agency to build new affordable housing. At the current pace of market rate construction, it’ll take many many decades before newly built “luxury” housing filters down enough for low income households to afford it. Even if there was a massive YIMBY housing boom we’re still probably looking at 10-20 years before market rents fall enough to be affordable to low income folks

Ignoring the problem is not a solution, as we've seen. Nor are bureaucratic bandaids over a mortal wound. Yes, we need to increase the rate of construction 10x and things will get better after a decade or so.

I agree with this, minus the "shitty buildings" part. The way to create more affordable housing is to create more housing period. I do feel that they should be homes they people want to live in, though!

Luxury and affordable buildings only differ by the rent they charge.

The quality of the building is determined by building codes

The size and shape of rooms, hallways, stairways, elevators (if we're talking about high-rises), the quality of installed windows, quality and presence of a centralized HVAC, etc, certainly depend on the "luxury level" of a building.

Building codes set the lower bounds of acceptable quality of a building, which is good but not all-encompassing (and for a good reason).

Plenty of people in Hong Kong and Japan live comfortably and happily in apartmetns as small as 300-400 sqft where as in many cities in the west such small apartments are not allowed. That's a building code issue. You can't build cheaper housing because of the code. Similarly in many areas house require garages or parking space and front yards of a certain size by law. Again, housing codes dicate whether you can make something cheaper or not.

This may be a healthy long term outcome but a lot of people have a good portion of their value parked in their home - if there is a sudden oversupply how will you cousin the economic and social shock as millions of middle-class folks suddenly lose their wealth while upper class folks mainly invested in the stock market come out the far side with even more wealth?

This is not an easy problem - and as soon as you try and alert people to the fact that you're going to fix it the market will respond and the problem will occur.

So why bother cutting off foreigners if you want your real estate to keep appreciating in value?

To slow the value gain - I think ideally the government would like to sort of stabilize housing prices in BC & ON for a few years then re-start a slower more reliable growth pace... exploding the housing market fully could cause a value loss - so this is like opening one pressure release valve to slow the build up a bit.

Liberalizing the housing market is a slow process that will be heavily contested politically and in courts, so it won't lead to an instant explosion of the housing market. The political will to continue liberalizing the housing market will evaporate as soon as housing prices become reasonable as a result of it.

The market can generally move faster than politics - as soon as it becomes common knowledge that the housing market will be opened up you'll see a modest drop in prices, when some legislation is passed you'll see a larger drop in prices... if and when that legislation survives the court you'll see even more of a drop.

This issue isn't that the laws will move too quickly but that the open intent to pass those laws will spook the market and cause a panic - which is actually a lot worse if you want to deflate the market because any aide or support you'd want to provide is going to come in well after the market has already responded.

And, to return to my main point above... when that happens people with a lot of free capital sitting around are going to be able to game the system and make a bunch of money off of it. So wealth inequality will increase and it's likely a lot of folks will be in an absolutely terrible spot.

Making it easy to construct new buildings - let's call it liberalization - isn't a binary thing. You can do it a little bit, a lot, or anywhere in-between. If you want home prices to go down, you do it a lot. If you want to stabilize things just a little bit, you do it a little. For this reason, "we don't want the prices to fall too much" doesn't work as a reason to choose banning foreigners over liberalization.

People dont lose anything until they sell.

Most people aren’t selling. So they haven’t lost.

And how would you limit the effect if housing dropped for the many other reasons prices drop?? You don’t.

> People dont lose anything until they sell.

Not quite true. It would be truer if they have no debt.

But having a large debt, and negative equity, makes a family very vulnerable economically.

What percentage of pensions and 401ks are tied up in mortgage backed securities, etc?

Many people would be forced to sell though if there was a price drop, because the high prices necessitated having a very high borrowing rate (95% borrowed), and commonly at renewal (typically 5 years in Canada) mortgage terms require the borrower to pay the difference between the market value and the borrowed amount to ensure they are not more than 95% leveraged still.

This is the big problem the government has: it is very difficult to unwind this mess through policy without triggering a cascade. Likely it will come eventually, they just want to ensure it’s not their party in office when the shoe finally drops.

thats a view of an owner who wants to get as rich as his property will allow him, and hopefully even more. fuck everybody else. exactly how we get into this situation.

folks who gamble with money have to accept the risk part of the equation, whatever vessel that may be. if somebody invested in tech stocks few months ago they are now probably crying in the corner.

The majority of Canadians are in this situation - you can be extremely unsympathetic towards them and tell them that their investment was unwise - that's perfectly fair... but do realize that the vast majority of Canadians will suddenly find themselves either worth a lot less than they thought they would be or underwater in debt and homeless.

And also don't forget that whenever "everybody loses some money" the people at the top are in a great position to grab an even bigger slice of the pie.

Whether or not you feel for the pain these people would go through, you're going to feel pain when it ripples out the rest of the economy.

The difference between 'luxury' housing and affordable housing is the facade, marketing and price, not quality.

Yeah, let the building plague begin.

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