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Comment by amilios | Hacker News Reader

In the end, isn't the answer relatively simple when phrased in terms of supply and demand? In by far the majority of these cities, the number of new units built pales in comparison to the number of new people moving to these cities, and as such you have a larger number of people competing for the same number of units, thus driving up prices. Cities like Montreal, Canada have a much larger housing stock due to middle density housing (multiplexes of 6-10 apts), and this is reflected in these cities having much lower average rent compared to other cities in North America.

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This is certainly a factor, but there are additional factors, too, that mean demand has been increased.

In the UK mortgage application controls were increased after 2008. This meant it became particularly difficult for first-time buyers to get a mortgage, locking them into rental properties for longer, and further increasing demand.

In London and most cities in the UK we have an extraordinary amount of foreign investment in property. Entire blocks owned by foreign faceless corporations (many of which are probably offshore shell companies for wealthy entities in the UK) who are happy to let their properties remain empty in order to maintain the average price(s) and sit on the capital gains with little to no maintenance requirement because they just don't have any tenants.

For decades now, "buying to let" has been promoted as the easypath for those fortunate enough to invest for their future. Ultra low interest rates, coupled with ever increasing property prices, and charging rent that covers your mortgage repayments, and maintenance, _and_ some extra passive income on top, means it's certainly an attractive option for those who can afford it, and by God has it been taken. News articles of landlords with _hundreds_ of properties in their portfolio is not uncommon. Entire towns owned by a single landlord in some cases.

And our political parties treat "house price" like a hot potatoe through fear of being the ones to pop the bubble, cause lots of defaults, and ultimately lose the homeowner vote. In fact most MPs are landlords themselves.

Yes, the population continued to grow, but the housing stock did not keep pace.

huge problem in Vancouver, a single bedroom/studio 500sqft in Vancouver is asking ~$3000 CAD / month or $2300 USD / month. 10 years ago I lived in a 600sq ft for half that rent including utilities and internet.

Wages has not changed here since the 80s and tech also underpays people for the same role. Meanwhile condo sales sees no sign of slowing down, everywhere real estate is on the decline, here it seems to continue.

I wonder if this is sustainable, there is a large number of multi bedroom condo units asking well above $5000 CAD / month

Canada has one of (if not the) lowest housing stocks per population in the developed world. BC and Ontario are on the lower end of all the provinces in this regard as well, which is a major problem when you count how much our population is growing and the fact that the majority of that growth ends up in the VAN/TOR greater metros.

https://www.scotiabank.com/ca/en/about/economics/economics-p...

Canada's biggest problem is that we didn't lock out immigration policies to our infrastructure and housing policies. Bringing up that fact though often spirals into someone trying to claim that being concerned about the policies makes you a racist or anti-immigration which is nonsense.

yet the people flipping homes and own multiple properties are local canadians, so are immigrants to be blamed for wanting to buy a home? why is there no focus on corporations purchasing multiple units in bulk to flip it? I feel like this blame the immigration policy is an old trope that I been hearing since the 80s.

and this just highlights the issue in Canada: we can't even agree as to what the underlying issues are, instead we scapegoat minority groups because it has worked since the 80s.

see you're doing exactly what I described.. you saw someone mention the word immigration and went off like a dog on a steak without reading.

I'm not "blaming immigrants" - I'm blaming immigration policies that have Canada leading most of the developed world in net immigration while also being in last place for it's housing stock.

That situation causes a supply and demand loop that makes it profitable for corporations to flip units (the corps doing this is a SYMPTOM not the CAUSE of the problem).

I have no issue with immigration and I'm not scapegoating minority groups (seriously read next time please), what I'm saying is the policy that allows one needs to be directly influenced by the policy of the other or you get knock on effects like we are seeing now.

You are correct that we can't agree on the underlying issue, but not because anyone is scapegoating but because so many people want to concern troll and try to avoid having a discussion for fear of being labeled as insensitive.

but you are literally blaming immigration for the housing situation which is what a lot of trump supporting conservatives are pushing

<monkeywork> we didn't lock out immigration policies to our infrastructure and housing policies

*lock out -> lock our(?)

<upupandup> but you are literally blaming immigration for the housing situation

No, monkeywork is saying that housing policy and immigration need to be tied together. If we have slow housing growth, immigration must be restricted. If we want high immigration, we must allow fast housing growth.

There's significantly higher prices in areas of West Virginia with decreasing population (over the last few years and projected going forward)

So while it's one factor, it's far from the only factor.

If you ever played Monopoly; you know that available housing is limited by physics, conglomerates and local laws, therefore supply is capped. Global housing demand cannot adjust because people need a place to stay. Supply and demand (elasticity) works great for certain goods, housing is just not one of them.

No. Landlords became greedier. In contrast to the kind, generous landlords of just a few years ago, landlords are now greedy. Building more units won't help. Supply and demand is a capitalist myth.

Late game monopoly. Lots of wealth in the hands of a few, the rest meant to be content to go around the board paying them for the privilege of working for them.

You’re responding to a joke comment that’s satirizing your views lol

Certainly a joke, but I don't see how it aligns with what I wrote. We're def in the late stages of a monopoly game, provided we don't magically find another board (aka leave Earth).

OK I'm not a landlord/capitalist apologist but it sure does make sense to me that rents rise in part because there are way more people that want to live in an area than available units.

For example Downtown LA and Koreatown are putting up large apartment buildings like crazy, because the zoning allows them to, and rents have not increased nearly as much as other popular LA areas that are mostly single-family zoned, such as Santa Monica.

This is why Minnesota and now recently California basically upzoned the entire state, because upzoning with local ordinances neighborhood by neighborhood is almost always defeated by NIMBYs, which are generally a combination of of local homeowners and local small-time landlords.

Don't forget that a huge portion of US landlords are "mom and pop" landlords, which have a massive portion of their net worth wrapped up a handful of rental units and don't have the capital to build net new units. These people are more economically opposed to new housing than a large developer who can stomach the capital outlay for a new building.

When they are allowed to developers can profitably build dense housing, which produces net new units into the market, which helps combat rising rent.

I believe woah was being sarcastic... Greed is pretty constant over time and isn't really responsible for rising prices.

Not a landlord but doesn’t it make sense to be kind but still charge as much as your can? Everything else is priced that way.

I mean this depends on the context. In our current market that's how a lot of people operate but it isn't a requirement. See any kind of pro bono work, To be honest it feels like a really convenient excuse that people use when they're aware, on some level, that they should feel bad about their actions.

From a purely practical point of view, as a landlord your tenants can cause a lot of financial damage. If you force out a good tenant by raising rents then you're gambling that the next one isn't going to be a nightmare.

Let’s say you have a leasable asset, your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else. The best thing you can do for someone else is to give them all of your assets and attempt to live in a manner that does not compete for resources with others (live in some kind of zero energy homeostasis until reaching an old age for example).

Obviously, these represent two extremes of selfishness and selflessness. So, what is a rule of thumb for an asset owner to not be considered greedy? Price 10% below market for example or allow 3 missed payments per year?

Greed is an easy label to assign until until you have to get concrete about it.

Like many things in society it's not entirely objective. It depends on the situations of the parties involved.

Take two hypothetical tenants. One is a young software developer earning $15k/mo, the other a retired widow on a fixed pension of $3k/mo. The social reaction to either party's rent being raised from $1k/mo to $2.5k/mo is going to be very different.

> your choices are to maximize its net present value or to price the lease under the market in order to benefit someone else

This leaves out the fact that in the majority of cases the lessor is benefiting either way. It's purely the extent to which they benefit that changes.

> Greed is an easy label to assign until until you have to get concrete about it.

All sorts of labels are difficult to assign objectively. What matters is personal opinion and societal consensus. Both of those are fluid and have changed throughout history.

You need to be careful when doing this. The IRS requires you to file a gift tax form if you charge below market rents.

Just like how gas stations got really greedy earlier this summer - thankfully Biden told them to knock it off and now prices are falling.

Don’t let those economists tell you lies about how goods with inelastic demand will dramatically rise in price when supply can’t keep pace… they’re just covering for the greedy people.

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