this post was submitted on 13 Jan 2024
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There's simple answers, but no one wants to hear them because they're politically complicated:
Housing, like healthcare, is a market failure, and our governments are still looking for market-based solutions which won't work as long as the market can make money off the problem's continued existence.
The "no simple answer" part gets worse every day, because the longer governments wait to intervene, the more of our economy gets tied to real estate. This could have been fixed in 2000 without too much pain, but now you'd be tanking the only retirement savings many Boomers and elder Xers have, so actions need to be gradual: a gradual clamp-down on investment, and a gradual ramp-up of direct building of housing.
Of course, what we're going to do is "more nothing" because even gradual moves will be fought tooth and nail by the rich. So they kick it down the curb another four years every time.
We also aren't willing to admit that the majority of the housing we build is economically unsustainable. Most suburban developmemts cost more to maintain than they generate in tax revenue. Once the developer's initial payments are spent, suburbs just start bleeding money on infrastructure maintaince.
This is of course amplified by the housing as an investment problem as higher density projects could lower property values in the short term and NIMBYism flourishes when we treat housing as an investment.
Ah, another easy solution: raise taxes to pay for stuff.
It's amazing how that works for just about everything that's broken in our society: Doctors and nurses quitting in a droves? Raise taxes to pay for them. Education system failing? Raise taxes. Housing unaffordable? Raise taxes.
You'd think we'd just raise taxes to pay for stuff, especially since cutting taxes since 1980 is why we can't afford to pay for stuff. I thought right-wingers were "good with money", but they don't seem to understand that "you need money to pay for stuff".
Maybe if I talked about it like a family budget, the way right-wing politicians do: you make $100K a year, and have $90K in expenses. Do you try to get a raise, or do you decide to take a $30K pay cut so that your boss can buy an extra yatcht and...trickle down..mumble..mumble.
As simple as that sounds, some of these SFH neighborhoods cost as much or more to maintain than their owners bring in annually. You can't just tax someone their entire income. There is no simple solution to this as the problem has been slowly brewing since the initial development of the suburbs 70 years ago. Raising SFH taxes is a good idea but that alone will not dig the suburbs out of the hole they dug.
Oh, I agree, and I should have been clearer: this is why the tax rates should have gone up in general, not just property taxes on SFHs.
Of course, what we actually did--at least in Ontario--was eliminate the fees developers pay. Sounds great, right? It would mean markets would make low-density housing unprofitable, right? Nope, because it didn't come with any incentive to build higher-density housing at all, just a stick to beat municipalities with in hopes that they'd cut other services to make up the budget shortfall required to service these lands.
Again, this is a market failure, and we're continuing to look for market solutions for it.
We stopped building cities the way they were built for centuries in favor of rural style living with city amenities while simultaneously promoting car centric design to service that development. We started building cities for cars and not for people while ignoring the overall costs of that. There is no one single or simple solution to such a complex problem. Removing or reducing housing as a market force would be a step in the right direction. Housing isn't some luxury service someone can stop using if they can't afford it.
Those are answers that don't factor in immigration at all. And are still deceptively complicated.
Housing is an investment, just as much as the foundry that makes the front doorknob. Both are critical to our standard of living, but both also cost a lot of money to put in place. Somebody will have to pay to build more. That could be the government, like you're saying, or it could be developers who are looking to cache in on the high prices and therefor bring them down. Which one should do it is complicated.
Not intractable, though.