As a liberal, I agree.
One problem, foreign money. It is mentioned in passing in the article but Vancouver (even with more sensible building laws) is still getting screwed because foreign money keeps pouring in.
One problem, foreign money. It is mentioned in passing in the article but Vancouver (even with more sensible building laws) is still getting screwed because foreign money keeps pouring in.
And the reason for that is precisely the very restrictive policies designed to maximize real estate value.
So if you legalize housing construction, the foreign money problem will disappear as well.
And you've hit on one of the reasons: the investors who want in want into a market where real estate commands the prices it does.
Auckland itself is growing quickly, and the price of houses is (like in many other places) outrageous. Apartment rents are still relatively sane, though.
Philadelphia, additional housing, plus market crash. It doesn’t say that prices on existing housing went down, but the new “luxury” housing did not sell for close to the expected luxury prices.
https://news.ycombinator.com/item?id=10370964
http://grist.org/cities/urban-activists-set-out-to-sue-san-f...
Other cities are not such a sure investment, a spike in supply could destroy your capital overnight.
My worry is that this investment is "flight-y" (they are not actually residents) if we double up supply and this investment leaves, SF becomes a Detroit that looks like Manhattan?
P.S: Obviously, increasing supply to meet actual renters'/new residents' demand is a no-brainer.
I hear that Vancouver looks well-built, with lots of huge buildings, but come evening, and a whole lot of the windows in those high-rises remain stubbornly dark.
In other words, I can’t afford to couch-surf until all the foreign capital has been exhausted buying luxury condos. I need housing right now.
Besides restrictions on supply so that it doesn’t match demand, I think the problem here is the whole idea of your house as your major investment. It seemed nice to the earlier generations, who could buy a house with 1 year of earnings and sell it for 10 years of earnings, and they in turn could sell it for 40 years of earnings, but this pyramid scheme eventually has to collapse. When only the bank can own a house, then housing prices have to go down, and the poor people who put all their investment into home equity will be the ones who suffer from losing their money.
I don't get the impression these people would be as worried if the foreign investors were of French or Irish parentage.
If I've misunderstood the issue, people correct me.
The by-product is that the demand side is doubled up! Protectionism doesn't work, so what do we do? I'm firmly in the 'Build More' category but this one problem, I'm not sure how to solve.
First I've heard of some sort of racial friendship between Chinese and Indians. I can assure you it's not reciprocated by the Chinese.
I'm not sure, but I get the impression that the concern is partly about non-resident populations. Non-residents buying homes as investments or as a hedge against corruption driving them out of their home countries uncaps demand. More demand might end up causing wealth transfer from the renter class to the owner class.
It doesn't help that many of those are not "regular" Chinese but people with money and connected, the Chinese .1%ers, so to speak, who are buying properties as a pied de terre in the event things go bad in the homeland and they need to hightail it as well as a place to park their connected money.
In most studies the Chinese investors are counted by their foreign names. There is no public data on nationality of real estate owners.
It's pretty much any major world city oligarchs have decided to throw their ill gotten gains at. In London it's Russians and Arabs with oil wealth. In Vancouver and SF it's Chinese.
These oligarch investments physically occupy a massive amount of premium space, pushing the poorer residents further and further out of the city.
In a lot of cases these people are pretty much criminals. It's rare to earn a lot of money in Russia, China or the Middle East honestly. Hence the desire for a foreign bolthole and an investment the host country can't touch.
But sure. Racist glint or whatever.
The same thing is happening in other attractive pacific rim cities. In Auckland, they are experiencing the same problem as SF and Vancouver but the government is very active in encouraging new housing development. Because of the foreign investment, it's not enough.