Hacker News Reader

Comment by huevosabio | Hacker News Reader

These are boogieman policies that have zero influence on the root cause.

Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth.

But that is not the root cause.

The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

Until we liberalize zoning, legalize building, and reject the idea that houses have to be appreciating assets, the issue will continue.

As it is often the case, politicians go for the headline with the highest electoral ROI, rather than tackle the real issues.

View on HN

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and dealing with all of the in-place bureaucracies and regulations and all of the hard stuff that comes along with constructing new neighborhoods and large residential buildings.

A key point is that people buying for investment are less sensitive to driving the prices up-- so long as they're sustained. If you have enough wealth that you would be buying multiple properties anyways, buying fewer more expensive places just lowers your transaction costs. As such, they likely have an outsized effect on driving up prices.

I'm dubious that Canada's policy will achieve that, as I understand it they exempt purchases by foreign students which is already a major avenue for foreign investment property purchases. If they limited resident aliens to a single piece of property which they also lived in, that would be something but my understanding is that they don't.

In theory BC at least has a residency tax on vacant homes - but that just increases the cost of making the investment and shifts the numbers... it doesn't necessarily make the investment a losing strategy unless you're right on the border.

> incentivizing developers to build affordable housing

But that's unnecessary. If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

That (first) either assumes demand remains constant, or requires measuring actual cost vs theoretical cost instead of simply actual; and second, assumes that there aren't complex interdependencies - ie, more luxury housing can make an area more desirable and increase demand more than it increases supply - arguably that's the goal, since otherwise you're literally building places people want to live in less than what's already available.

> more luxury housing can make an area more desirable

Depends how big the "area" is that you're thinking about. The effect of increasing housing supply is well-studied. Demand can only grow as fast as the population does. If one area experiences increasing demand, then another area will have decreasing demand, comparatively.

That relationship doesn't hold in ski resort areas. Wealthy people have increasingly bought up vacation homes even as the population remains flat. Those vacation homes are vacant much of the year. There are usually geographic and infrastructure constraints which make it impossible to build significant amounts of new housing within practical commuting distance. So long time local residents are effectively being forced out.

I have little sympathy for people that are "forced" to sell their homes for a large capital gain. They can move to where it's cheap and live large. Maybe my perspective as an immigrant is unusual, but I'm a big fan of the freedom to migrate. That includes the freedom to buy housing at market price.

Most of the people being forced out are renters.

Then it's even easier to move. If the polity doesn't want to zone for more housing, they've chosen to expel people who can't pay more than $X for rent. They'll feel the pain when there's no one around to make their coffee anymore.

There's no such thing as unlimited demand for luxury housing. Build enough and the rent will fall for the existing housing stock.

I’m starting to feel we may be nearing a local maximum on housing, as more and more arguments seem to take for granted that it can never go down …

> Then it's even easier to move.

Moving requires finding a home somewhere that they can afford. The fact that they’ve been subjected to rising rents rather than a financial windfall like nearby homeowners… makes that far more difficult for them

They could have bought. Instead they took advantage of the optionality afforded to a renter that can up stakes and move at will, without being tied to a mortgage.

If they couldn’t afford to buy then they got to take advantage of a locale they desired at a lower price, another benefit of renting.

(While it would be nice if anyone could live — and own — anywhere they like without worrying about price or competing demand from the billions of other humans around, that’s so far away from reality it’s not worth discussing.)

Hmm. I guess that makes sense if you're looking comparatively within an area. I'm talking about an area as a whole; in particularly, I'm thinking of Venice CA and the DTLA arts district, as two distinct areas.

(AFAIK) Venice is pretty much entirely shit house -> excellent house development, with some multi-unit (townhouses). DTLA is shit building -> modern condos / luxury apts.

AFAIK in both places a secondary effect of all development is that each area becomes more desirable. I guess, sure, if one stopped becoming more desirable the pull from the other would change demand between the two, but, a) they're not, they're both developing, b) (anecdotally) that's a drop in the bucket compared to the overall demand, and c) they have sufficiently different appeals that the demand isn't coming from the same people.

What's causing the increased demand: births, immigration, or increased wealth? The pair of Venice and Downtown LA are not closed system. If people are immigrating to those places, then they've left somewhere else, which experiences a declining demand for housing.

There's a path dependency problem. In principle, had you just been building housing like that all along, investing in housing is not appealing as you shouldn't see significant gains in general. However, now that it is appealing, the investment itself pushes up demand, which pushes up the appeal of investing because now prices are going up, which pushes up demand, etc.

Again, in principle, if you just keep building, the market would eventually sort this out. Of course, in the process, you'll overbuild housing proportionally to the investment demand. Once the investment demand leaves, the market will crash, which isn't necessarily a great plan either. And we are talking about a lot of finite resources being misallocated in the meantime, while the market forces figure this out.

If you'd like to resolve this problem faster than the market would naturally sort it out, and harness market forces to do so rather than naively fighting them, it makes sense to cut out the excess, artificial investment demand in the meantime. Sure, it would be better to have not created that problem in the first place, but, here we are.

Market forces are not magic, nor the only method of economic planning.

When markets work they are very good at finding prices. But when they fail you get this sort of thing.

There needs to be a lot of planned intervention in the housing sector. Entities with a lot of capital need to build the houses that people need to live in where they need to live in them and then let them live in them.

The market will not do that.

The market ("people who would stand to earn a lot of money") would be happy to do that, but it's not allowed to (zoning: height limits, parking requirements, lot coverage, maximum floor area...)

I live in Los Angeles and am lucky enough to rent on a street that is single family houses. It is illegal to build a duplex here, or a structure above 2 stories, even though each house must be 2500 sqft still.

People who are pro-market forces (such as myself) believe strongly that if you were allowed to build apartment buildings in neighborhoods like this that enough capital absolutely would be raised to raise supply. After all, you could take the current house I rent now and put in two walls for under 50k and start renting it out as a duplex two families but that is currently illegal. Hard to blame the market forces for this.

SB 9 pasted in Sept of last year that allows for duplexes on single unit lots. Here is the info for LA County https://planning.lacounty.gov/view/sb_9

I am very happy about SB9!

Though as a maximalist on this I'm still upset this is the best compromise we can get since the lot of this house is definitely big enough for more than just 2/4 units.

The house I live in is rented which means it actually wouldnt be eligible since the owner must live in the house for 3 years after turning it into a duplex.

Maybe this will incentivize owners of houses like this to sell to people who are willing to divide it in two? I hope so! But not sure.

I agree. I lived in Houston and their are a lot of infill Townhomes. I think LA would be great for townhomes vs high rises or those terrible downtown DaVinci Apartments between the 101 and 110.

Ha, did not know about the three year ownership requirement, classic CA NIMBYism. Still progress.

Vancouver and Toronto isn’t a housing market in any real sense of the word. Supply is fixed by government, interest rates are fixed by government, etc.

If you took government control out of the market prices would plummet. Any plank will do, supply, financial backing or interest rates and the whole thing comes crashing down. That’s the real problem, how to cause a 20% “correction” and not 80%.

My house is 8 hours from Vancouver, 8 hours from Calgary, 5 hours from Banff, it’s a town of 10,000 people, it was built in 1904 and is 2500 sqft. It’s been modestly renovated and is worth $950,000. The market is insane.

Everybody blaming zoning.

What is happening in Dallas which has no zoning rules? (Or am I thinking of Austin Texas?)

I do not know, but it would be useful for this debate

Houston is usually the one they point to, but is the equivalent of zoning in other ways such as covenants, etc.

Houston is booming I hear.

Right, cities in Texas aren't cheaper because they don't have zoning (they either explicitly do, as well as HOAs in new developments and all sorts of other NIMBYism, or they do in indirect ways like you mention).

They're cheaper because they can still expand outward more than SF, LA, NY, etc before hitting inconvenient geography. Lots of other places that benefit from this too, of course, not just Texas.

The housing crisis 15 years ago shrank the building industry and it hasn't recovered, yet. Further, construction has historically used a significant amount of immigrant labor, and immigration has shrank recently, increasing costs.

You're probably thinking of Houston and Austin.

In any case, all three have rampant HOAs which serve the same purpose as zoning.

I have coworkers in Dallas, and they bought for relatively cheap (about 1/3 of what is being mentioned for other places in the USA in this thread).

So I guess it works.

Revelstoke?

If so, revelstoke like Vancouver is actually pretty hemmed in by water and mountains. There isn’t an infinite amount of easy to build on land like the on the prairies.

Quality of life in revelstoke is probably amazing! Small town, ski hill, mountains, biking, snowmobiling, fishing, lakes, rivers, airport, and lots of jobs

Demand will always exceed supply in desirable locations, that is part of what makes them desirable. Would you spend 30% of you and your wife’s income to secure a plot in such a paradise? 40%? 50%? Lots of people will take the bet and risk. If you lose and go bankrupt well then you move to the easily affordable town in the equivalent of the fly over states. Odds are the million dollar mortgage will get inflated away you just have to tread water while interest rates are historically low until you can juice your income or hourly rate up enough to make the million dollars you are in debt seem trivial.

Better than revvy :)

Oh it’s already inflated away 30% in less than a year. It was 30% of my income.

I feel like you saw the word "market" and just knee-jerked a standard anti-market cant, instead of reading what I actually said.

I was defending a "planned intervention".

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

Not really: Say there's one free acre of land in town. You could build one mansion on it, or a highrise with 100 apartments.

Building the mansion isn't going to move the needle on any existing housing at all, as it's just one unit.

That isn't a matter of incentives but zoning laws.

I wonder why NYC has so few mansions, and so many high-rises.

The high rises in NYC are mansions.

Occupied by one extended family?

As long as land prices are high, a highrise should net a lot more profit though, would it not?

Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law.

Locally, when I see people complain about luxury housing being built, it's because the developer is building high-spec townhomes and selling them for $800k+. Instead of lower-spec townhomes at $500k. The developer can't fit appreciably more homes in the same footprint (they're all 3-4 stories tall here - reducing size likely means one fewer stories). And the market will bear $800k+, so that's what we get.

The real answer is build even more homes. Or allow high-rises on the same lots.

In theory, the family that buys the $800k townhome came from somewhere. The smaller house they vacated is now open for somebody else (who in turn moved out of a studio flat that's now open, and on down).

> The smaller house they vacated is now open for somebody else

Or, they didn’t sell it and are just seeking rent on it, now. For this effect to really work, the number of home-owners should equal the number of homes.

Right now, there are many, many fewer home-owners than homes.

> Or, they didn’t sell it and are just seeking rent on it, now.

That's fine, it still provides housing for someone. And there are people who actually prefer to rent, so it's good to have rental units available.

Problematic is when they hold on to it and keep it empty, thus occupying space but providing housing for no one.

No, the number of homes has to be slighter higher than the number of residents. If a renter is living in a home then it isn’t going to waste!

(Slightly higher because it is mathematically impossible for anyone to move if there are no empty homes, and they sometimes have to sit vacant while being renovated or are in the process of being sold)

> Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law.

A developer will, indeed. More profit. But an acre is small enough that it could just as well be a rich individual buyer, in which case they'll build what they like.

There's a half-acre plot for sale nearby for nearly $2M, I'm curious if it ends up being bought by an IPO millionaire to build a small mansion or by some developer to put up two-story apartments. Could go either way.

In many markets there’s no choice - it has to be a single family home.

I mean, it could; rich people do what they like. But would it statistical aggregate? I really doubt it.

And do they want to live in that mansion surrounded by multi-unit buildings built by developers buying the nearby acres? Also seems unlikely.

That’s fair.

Local to me, redevelopment of a lot with an existing SFH tends to be another SFH because of zoning (unfortunately - many of the lots would be perfect for a nice duplex or very small apartment block).

Larger lots tend to be bought by corporate developers, both because they have the resources to develop it fully and also because they frequently have to battle NIMBYs for a while to get re-zoning approved (I tend to side with the developers, except when they buy parkland to develop, but that’s a whole other discussion).

Are there any places that have these kinds of housing pressure where there are a significant number of free acres of land in town?

(I say this sitting in the middle of the LA metropolis between two almost undeveloped hillsides of ~10 acres each, haha; and a thousand more people in this neighborhood would be significant for us (maybe? dunno the actual pop count) but nothing to LA as a whole, AFAIK)

Alternatively you end up with more empty housing poor to middling people can't afford while a bigger portion of society has the life sucked out of them by housing costs work 2nd jobs spend less time with their kids or on self improvement. Save less. Crash harder during down turns etc.

Speculators will eventually mark to market and sell or rent their empty houses. It might take a while, but it's a big country. Housing is illiquid on a small scale, but is a fairly efficient market on the national level. Except for the zoning rules, of course. That's the nice thing about living in the US or a Schengen country. It's easy to move to where the economy is better.

Up to a point, this is true when the affordable housing has had it's cost bid up by high end customers because of a scarcity of high end housing.

However, once that high end market pressure has been abated, then there a real and hard limits to the amount of high end housing that can/will be available to low income customers. Instead of being available cheaply, this high-end housing stock will end up being used as a vacation house or a short the rental, neither of which actually help reduce local demand for housing.

Suppliers will build more until the market clears. If prices are rising, that's a signal to suppliers to keep building. They won't stop until prices fall.

We’re not anywhere close to this in any of the high cost markets. But once we do get to that point another thing will happen: the lower demand for high end housing (there’s only so many vacation homes and short term rentals you can sell) will make it economical to build new mid-range housing

> there’s only so many vacation homes and short term rentals you can sell)

There are many markets the the number you can sell far exceeds the available land to build.

I fail to see how lower demand for high end housing makes it more economical to build mid-range housing? The price for that housing will be lower and land to buiody it on will be taken up by lower density high end housing.

High end housing construction is better than no construction, but please don't pretend it is sufficient to solve the need for other types of construction.

The amount to housing you can fit in a given metro absent zoning is basically unlimited. Manhattan has a population density of 75,000 people/square mile, and could be much higher without “air rights” limiting construction or the abnormally high percentage of commercial real estate. Many of the cities that are supposedly out of land have population densities an order of magnitude lower.

Developers today build low density single family homes often due to zoning. If the law says you can build 3000 sqft on a given lot, the most profitable thing to build is probably single family. But if they were allowed 30,000 sqft or 300,000 sqft then you’re almost surely going to get multi family instead. At that point high end and mid range condos will likely both be profitable, but developer returns would be better for the former (if they can find buyers). So as high end buyers become more scarce, more developers will transition to mid range

There are housing insecure people who need housing now and not some nebulous time in the future when the market could, theoretically, correct itself. Markets are notorious for remaining irrational in the face of obvious market forces that should, theoretically, influence them. While we wait for housing to trickle down, people will go without homes, possibly for decades. It's a classic market failure, and doubling down on "markets but more this time" might not exactly help, either.

> It's a classic market failure

If you mean classic "free" market failure, then I would disagree. The housing market is replete with constraints that are imposed by government. I think it is more accurate to say that it is a classic regulatory failure (at least in some jurisdictions).

Unhindered housing markets haven't been allowed to exist for fifty years. Homes for people of limited means, outlawed for almost a century.

https://en.wikipedia.org/wiki/Single_room_occupancy

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

If the last few decades have taught us anything, it'd that location (and every social category that location encodes) matters to people more than luxury, or rather a desirable location is the biggest luxury.

This is why a 3 BD fixer-upper in Palo Alto will cost more than a luxury 5 bedroom house in East San Jose.

To have any effect on housing prices I desirable places, you'd have to build gobs more housing in the highly desirable places, but those are usually the places most opposed to new housing development. And if you build a little bit more, because location dominates all, the existing housing would be as expensive as the new luxury housing in that location, because there is always a higher demand/supply ratio to live in Palo Alto than for East San Jose.

By the same token, building luxury housing in less desirable places won't change things unless you somehow make those places more desirable, but that takes a lot more than new luxury apartments. You usually have to change the kind of people that inhabit that location.

We absolutely need to build more housing of all categories everywhere, but it won't have much effect on housing costs until we address transportation, public education, and crime, the massive factors that affect housing costs.

Even if you had no zoning or "organized" NIMBY restrictions, it would be extremely slow to build denser in the most popular "full" residential places: any new construction there requires someone else to sell and leave for that construction to take place. You aren't going to be able to build a hundred-unit tower like you could if the land was empty or was just a vacant old structure.

Targeting stuff that isn't currently residential would be a much easier starting point.

IMO, but more controversially, it goes even further: in the long run, especially with fast transportation and digital communications, it's hard to see certain places ever getting "affordable" given today's wealth distributions. Some locations are going to be in higher demand due to non-human-development related factors (weather, scenery, etc). Others due more to development factors: NYC is more in-demand than if it was an empty bunch of land because we've already done a bunch of development there. (That latter case is especially interesting because it shows how development can both increase supply AND demand, it's not solely something that affects supply.) So if some places are inherently going to be more in-demand than others, and you build more when the market price is currently $X, prices won't fall very quickly at all as you get the people who otherwise want to live there, but couldn't do $X but would do it for $X-1, $X-2, etc, now re-interested in the area!

> Others due more to development factors: NYC is more in-demand than if it was an empty bunch of land because we've already done a bunch of development there.

Agreed, and human development is a major part of that. NYC is a cultural center of the world, which is a result of its human development, and that has a tremendous currency and gravity over and above Manhattan's physical grid.

> If developers build more luxury housing

According to this reasoning, if Ferrari builds more cars, Fiats will get less expensive.

I don’t think that’s how it’s supposed to work.

If Ferrari sold 10 million cars per year, you don’t think that would have a downward pricing impact on other cars?

Basically, not sure how to interpret "sold 10 million cars".

2 scenarios come to mind:

1. Ferrari decrease their sale prices, thus they are more affordable for all, thus exerting price pressure on Fiat.

2. People somehow have a bucket more money and now buy Ferraris. But with all this money sloshing around, Fiat might as well up their prices because it'd make little difference on the end customers purchase decision.

In either case, the Ferrari and the Fiat are closer on price but the price pressure on Fiat varies. Curious to know your thoughts?

The vast majority of affordable cars are used cars. Used cars are cheaper when there's tons of new cars, and they get more expensive when new car production slows - prices jumped so much in the past two years that some used cars were sold for more than they were originally purchased for.

We treat that weird situation as obvious undersupply in the car market, but somehow expect it with houses. Why should old, used houses sell for more than their purchase price?

People forget that houses depreciate. It's the land that appreciates.

This isn’t true in all markets. Higher labor costs (for instance, caused by higher rents…) makes it more expensive to construct new homes. That makes any existing homes more valuable, potentially even accounting for depreciation

The cost of replacing a house appreciates, but a new house has higher value than an old one.

The mental model of buying something new/used doesn’t apply same as cars. Unlike a car, the structure is simply an improvement that’s factored into the price of what you’re purchasing — the rights to the physical space itself. Sometimes a lot of the “value” is locked up in the structure, and sometimes the structure is barely functional and most of the value is in the land. At some point that ratio of the land:improvements values reaches a point where the “used” structure is relatively worthless and gets replaced, the ratio rebalances.

> 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.

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!

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.

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.

Yeah, let the building plague begin.

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.

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

> 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'm actually happy they did it only because it will get people (at least the subset of people who follow casually and do care) to acknowledge that foreign buyers are not the root cause once a couple years pass and the data will be apparent.

That's a very cheerful take about people's ability to update about politics after a law fails to give them a promised result. I wish I lived in the territory corresponding to your map.

This is also, obviously, not intended to be a long term solution as evidenced by the fact that it’s limited to 2 years.

I do think it would have been better if they hadn’t announced it was limited to 2 years but that’s not practical.

I’m a huge proponent of the “build more supply” side. But that takes time. And in addition, there is a huge 2 year gap of supply creation that didn’t happen because of the pandemic.

This may help ease some of that pandemic related imbalance.

The next question to that is why does zoning exist in the first place? Zoning exists because of how hard it is to scale up infrastructure to match demand. And we decided to entrust governments with infrastructure, yet they are not nimble enough to handle these scaling issues

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why.

It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

What concerns me, as a non-Canadian not living in Canada, is that if a separate cause (i.e. global recession) makes housing prices drop in Canada during this period, NIMBYs everywhere will use that as evidence that "it works", and will try to replicate elsewhere.

It'll be interesting. Unless the population shrinks I think people will still feel squeezed, since things still won't feel affordable if e.g. interest rates go up and prices stagnate.

>how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in.

I imagine there are enough homes in both America and Canada (they are two of the largest countries after all). But it's all about location. Very few can even afford to move out to the middle of nowhere just to own land. And not many people that can are willing to turn their potentially short commute to work into a 90+ minute trek everyday.

Even with an increase in work from home, there's the whole entertainment aspect of living in the city that makes it a hard sell. When I mean middle of nowhere, I mean a small "town" whose businesses amount to a liquor store, some off brand shopping market, a burger joint, and a 20 year outdated public library. Anything else you need is in the suburbs 30 miles out, and Downtown will be another 30-40 after that.

You will quickly bore of any ventures in town and seek a drive to the city where there's actual events going on. If you're a recluse you can make it work, but I can understand millenial aged people not jiving with that style

Yeah, the NIMBY argument that there are "plenty of homes" is like going into a supermarket whose shelves are completely full of only sardines and saying "there is plenty of food".

I think an extension of that analogy is that there are thousands of supermarkets. A few of them are well-stocked while the rest are full of sardines. There are two proposed solutions:

* Let everyone shop at the couple of good supermarkets and hope the supermarket can keep the shelves stocked and deal with the crowds.

* Get those other supermarkets to start stocking stuff other than sardines.

The right answer is probably a blend of those.

Or just learn to love sardines.

>If you're a recluse you can make it work, but I can understand millenial aged people not jiving with that style

Which further creates a spiraling effect where even recluses will feel obligated to move to the city just for anything that you can't / is very difficult to get from a town. Turns out it isn't that fun when the majority of your neighborhood doesn't share your generation or interests. Especially for young people still looking to find someone to settle down with.

I dont get why a recluse would not want to live in a city. It is anonymous (no super friendly neighbours), you get the most food delivery choice and faster internet probably.

Noise, most probably. And perhaps smell. Also, being a recluse does not just mean antisocial or anonymous, for many people it means not being around any people at all.

It’s interesting to see what people consider an “unlivable” town - some would include places on that list that I would consider major cities!

There aren't enough homes _where people want to live_ and you solve that buy building more homes _where people want to live_.

But that's difficult because cities have all these veto points. It takes forever to get new construction going, right? Exactly. That's why we aren't building enough, because in the current regulatory environment we can't. That's what people talk about when they talk about NIMBYism as the cause of the housing crisis.

The not so radical solution is to make it easier to build new homes where people want to live.

Given that "want to live" is a factor that is fluid and changes more quickly than building homes (which is how we ended up in this situation in the first place), it's probably also good to invest in making existing places that people are currently fleeing more desirable.

The jobs left quickly enough that our physical infrastructure couldn't keep up. That implies that jobs are more fluid than building and that therefore that's probably the easier approach to getting jobs and housing in balance.

It should be fast to build houses. My family acquired land, designs, permits, and moved in to a place in rural TN in about 9 months. It's taken me 2 years to get a site development permit (permission to ask for a building permit) to modify a roofline so that it sheds water in CA.

Building houses in rural areas is fast and cheap because there's nothing already there and screwing up is unlikely to affect anyone else since no one is nearby.

Increasing density in places that are already built up is much harder. You have to remove the people and things that are already there. If you do something wrong, there are many people in the area who can be negatively affected.

Building permitting regulations are written using the ashes of fires that started from a single house and burned down an entire city.

That may be how they were written but now they’re used as an extension of NIMBY.

And often the density of “rural” areas is comparable to the big cities as even in rural areas most of the population is in small cities.

I'm on two acres with hundreds of feet between houses. There's no justification, just NIMBYism.

> There aren't enough homes _where people want to live_ and you solve that buy building more homes _where people want to live_.

You mean, if we had the density of Manhattan or Shanghai, our housing would be as cheap as Manhattan or Shanghai? I'm not sure people would like that (given that those places are more expensive in general). The best example in the states is Houston, but it is horrible sprawl (so housing isn't being built exactly where people want to live, but continues to build outward). Tokyo is the best example internationally, but they have special conditions (housing depreciates since second-hand houses are not popular, decreasing population, liberal definitions on what is needed to call something a home).

Manhattan (where I live) is extremely underbuilt. Lots of people want to live here!

But yes, the implication of a housing abundance agenda is that places will change. I think it's generally underrated exactly how much the cities we know today changed during the 20th century as they grew in population.

That said, you don't really need a lot of high rises to drastically increase density. Even row houses and low rise apartments make a pretty large difference and would be more than enough to meet demand for most cities that are experiencing a crunch.

Don't get me wrong, I'm pro density. However, it seems like they are kind of like building new freeways, which rather than reduce traffic, simply induce more demand. By say taking Seattle and making it 4X dense...I doubt it would become much cheaper...instead it would just become more popular (still, I would love to live in a more dense Seattle, but I don't think I would save money by it).

I'm not sure you can draw a parallel between those two things. Is there any evidence that induced demand applies to housing as well?

I would think it might to some degree, but there would be several cut-off points, as living conditions change with more density, and people who previously wanted to move to a place might not like how a place changes as density increases.

With a highway, you can add as many lanes as you want, and the experience of driving on it isn't changed much.

> Is there any evidence that induced demand applies to housing as well?

Yes, plenty of people are discouraged from moving to a hot city due to the lack of supply. Increasing supply then moves discouraged demand into actual demand. Otherwise why do dense cities (like Shanghai, NYC, Manila) still experience housing shortages?

If the place is desirable, demand increases to catch up to the new supply, bringing us to the same place where we are now. Even if we built a lot of housing in a desirable place, enough that we hit a cut-off point: in a hundred years or so, we might have just had more children to soak up that supply (like what happens with agriculture surplus). Things go until an equilibrium is reached (where prices are high enough that demand is discouraged, or the place becomes undesirable to really reduce demand).

I was asking for evidence, not a hypothetical rationale.

It's possible (and likely) that housing in Shanghai, NYC, and Manila just have not reached a supply-demand equilibrium yet, because housing policy still constrains supply. There's nothing requires that demand is effectively infinite in these cities, or that demand will keep growing as more housing is built.

Let's say unfilled demand for housing in San Francisco sits at 100,000 units right now (making up numbers; they don't matter). If we could magically build those 100,000 units tomorrow, yes, I do expect we will induce some more demand, because home/rent prices will drop. So let's say we build another 100,000 units. Maybe we get some more demand, because home/rent prices drop more. So we do it again, but not forever.

Because my feeling here is that the main driver of more demand in SF would be drops in home/rent prices. Those prices can't drop to zero; they will always have a cost, and it seems unlikely to me that the cost will drop low enough -- no matter how many units are built, within the physical constraints of the space -- such that there will still always be unmet demand. And home prices will still always be propped up by housing policy to some extent; the city would never implement unrestricted housing development with no hurdles. But maybe the "equilibrium" price can be something significantly less ridiculous than it is today.

> I was asking for evidence, not a hypothetical rationale.

Equilibriums are not hypothetical. The fact that increasing supply can induce more demand is well known in many areas (expressways being just one). Cities take off, and building booms don't reduce prices like a recession or bust will.

> the city would never implement unrestricted housing development with no hurdles.

Not many people would like to live in such a city (who wants to live in Houston?), so that on its own would limit demand.

> But maybe the "equilibrium" price can be something significantly less ridiculous than it is today.

Sure. Perhaps a lot more WFH will eventually eliminate or reduce critical mass feedback loops that lead to these problems in the first place (e.g. why live in Seattle when you can live in Toledo?).

Seattle is actually a good counter example showing that more supply does bring down rents: https://www.oregonlive.com/business/2019/01/apartment-rents-...

> Even row houses and low rise apartments make a pretty large difference and would be more than enough to meet demand for most cities that are experiencing a crunch

5 stories. Perfect height.

5 floors was pretty standard across Europe, from Paris to Kyiv, in the age before elevators, as it was about the maximum height most folks were willing to walk up the stairs. Though, in Paris a lot of the 6th floors (where lots of the typically small studio apartments are found) were originally constructed as the maids' quarters.

In Seattle we hav a lot of 4+1s: a concrete 1st floor and wooden 4 floors above that (some kind of code thing). The first floor is usually retail, however.

"you solve that buy building more homes _where people want to live_. But that's difficult because cities have all these veto points"

I'm not going to pretend there isn't some literal gatekeeping going on here that make this more difficult than necessary. But I'm also not exactly surprised that in cities as already densely packed as Los Angeles that there aren't exactly acres or hectacres of land just sitting around to be built "where people want to live". That's how we ended up with tiny studio apartments everywhere that still cost way too much.

Part of it is simply physical limitation. Land (unlike so many arbiturary policies nowadays) is a finite resource. Made more finite when the pareto principle kicks in.

> cities as already densely packed as Los Angeles

I live in Manhattan. LA is far from densely packed.

It’s idiotically packed, seemingly to maximise time spent in traffic and minimise the number of bars, restaurants and essentials within walking distance of the average resident. But visit Tokyo or Paris if you want to see true density.

>I live in Manhattan. LA is far from densely packed.

Depends on what you consider "LA". the "LA county" that extends from Lancaster to Long Beach (some 90 sq Mi) is extremely sparse. But good luck convincing someone doing business downtown to go all the way out to Lancaster to buy homes.

The "City of Los Angeles" that makes up the 10 square miles of Downtown and some immediately surrounding suburbs is densely packed IMO. There's not exactly acres of fields waiting to be tilled for living quarters, and it's not like there already isn't skyscrapers of studio apartments to reside in (that ofc is still way too expensive).

Maybe not to NY levels, but it's not a competition and I don't see that as a positive personally. especially when we can both admit which city has superior public transportation. I avoid driving downtown at all costs, but there's not really any good alternatives when I do need to do business there.

I question which issue between the two of land and transportation would take longer to resolve. I feel they've both been mutli-decade crusades at this point.

> There's not exactly acres of fields waiting to be tilled for living quarters

https://www.thelacc.org/

Also, https://noparkinghere.com/

And I wonder how much space is lawns

> The population density of the Los Angeles urbanized area is indeed greater than that of the New York urbanized area, with 7,009 people per square mile versus 5,239 people per square mile.

But there are acres and acres of single family homes in both urban areas that could become mid rise apartments.

> But visit Tokyo or Paris if you want to see true density.

The developing world has even denser examples [1], e.g. the #2 entry of Manila is about twice as dense as Paris.

[1] https://en.wikipedia.org/wiki/List_of_world_cities_by_popula...

I explicitly cited G7 cities to highlight that the quality of life in these cities far exceeds LA’s sprawl. This isn’t a discussion about trade offs. It’s one about parking lots and three-story condos crowding out planning.

1. There's tons of unused vertical space in LA.

2. They make more land all the time. Look at a map of Boston in 1800. In fact, look at an old map of almost any city near a large body of water and compare it to today and you'll find a lot more land being used.

> They make more land all the time.

It is true that many cities have filled in shorelines to create more buildable/usable surface.

It is not true that cities do this all the time.

I suppose that depends playing definition games with "all the time", but we are doing it right now in NYC with the coastal resiliency expansion. Battery Park city was created in the 70s from the excavation done to build the WTC. And right now there's a proposal to expand the southern tip of Manhattan to reach Governor's Island. Suffice to say that "all the time" is correct in this context.

> In fact, look at an old map of almost any city near a large body of water and compare it to today and you'll find a lot more land being used.

At a great environmental cost. Thankfully society is a bit more careful about environment destruction than in the days where all garbage was dumped on the shoreline to create landfill and build on it.

https://estuarypress.com/hrma-photo-post/filling-the-san-fra...

https://priceonomics.com/what-parts-of-san-francisco-are-bui...

There's the location choices you describe (city vs suburb vs middle of nowhere) and there's location choices around large city vs smaller city that's still significantly larger then "a liquor store, some off brand shopping market, a burger joint, and a 20 year outdated public library". Especially if/when remote work and non-location based salaries become the norm.

I recently had a recruiter try to convince me to move back to the midwest by throwing numbers about how median housing prices were over $500k less in my hometown then where I am now on the west coast. I don't need a house with my lifestyle right now, but I'll probably just move back if/when that changes. I enjoy living in a west coast city but not at the cost of 500k-1mil additional housing costs for a smaller place with less land. I'd be just as content moving back and using some of that extra money to travel or fund a long-term sabbatical.

Assuming you don't own in a high cost of living area you may have waited too long. I live in one of the highest cost of living areas. My assumption was I'd end up moving and be able to buy with cash in a semi desirable area in a low cost medium size city.

It is cheaper for sure, but it's not quite as I expected. Most of the desirable homes have doubled or tripled since 2020. They are still under a $1 million and usually have quite a bit more land, but most medium size cities have seen huge increases in housing costs and rent.

To specifically rail on the "liberal" Bay Area and numerous other "liberal" cities in the US:

The NIMBY housing policies and restrictions on building new housing are a massive part of sprawl, and with it the huge amount of excessive carbon emissions from commuting in single passenger cars.

A dense city is about the best organization of people for the environment. To get things you need, you travel the furthest distance. You centralize utilities and infrastructure. You preserve natural habitats. You reduce the effective footprint, actual and resource-wise, of the average person by huge amounts. It maximizes the effectiveness of public transport, and makes private transport less valuable. It makes transport modes like bikes, ebikes, scooters, or even walking viable. And people generally seem to prefer it.

Of course it's America, the incentives are completely messed up. The carbon tax exists as the one policy that everyone agrees would have helped reduce fossil fuel use to help avert global warming.

The other big environmental issue we face (well that we aren't facing up to) is the sixth mass extinction, which is primarily coming from sprawl. And the simple solution to that is to property tax the shit out of land in the exurbs and suburbs so that urban organization of housing is cheaper than suburban and rural, which is currently the opposite.

The externality to sprawl is the illusion that land is infinite. It most certainly is not. The real abundant supply in modern human architecture is going vertical, or even subterranean.

To get back to liberal cities where housing supply is being restricted, this is DIRECTLY causing environmental impacts, and has been for decades. It's not just a racial issue, it is very much an environmental one.

"the simple solution to that is to property tax the shit out of land in the exurbs and suburbs so that urban organization of housing is cheaper than suburban and rural, which is currently the opposite."

You can't really tax people money they don't have. Maybe it'd work in suburbs, but generally (at least in american cities) the more rural areas consist of

1. Farmland owners who likely contribute resources and get tax deductions anyway 2. mid-low income homeowners far from the city who's property cost as a whole pales in comparison to the cities. Either because of mass emmigration (which can be "White Flight" at worst, or simply dwindling resources/income at best in an evolving world) or simply happening to own/inherit land before costs went out of control.

There's not much to squeeze out of these people to begin with. And not exactly any alternative land to offer them that wouldn't be to their massive benefit (Again, this land isn't exactly valuable to begin with, comparatively speaking). Housing struggles to keep up as is and can't really afford this altruistic effort to try and consolidate everyone into a densely packed area.

The simple solution for global warming has been the carbon tax. But obviously it is a bad idea to do "shock" taxes. A shock tax in ICE vehicles wouldn't maximize the effectivity of stimulating long-term BEV demand, it would be a huge regressive tax on the huge number of people that don't rely on new cars, but used cars for everyday transport. It would inevitably simply lead to political backlash.

But a long term phase-in over a decade, which also is difficult to sustain over successive administrations and controls of congress, would be ideal. Obviously American governance is too incompetent to achieve that.

The carbon tax is for the current largest environmental threat: global warming.

But the sixth mass extinction will probably be the next big environmental issue once GW mitigations come into play. And the key to that is a big land tax to change incentives. And the same issues arise: how to avoid shock pricing and instead phase in over an economically adaptable timeframe.

It even has the same technological potential solutions but lack of supply: vertical farms and artificial meat have the potential to eliminate huge swathes of land that are currently used for 1) grazing and 2) crops that feed grazing animals.

Vertical farming and artificial meat should be getting massive research subsidies right now. Every research university should have substantial grants pursuing these. Because the habitats that we can reclaim back to nature and hopefully avert a total collapse of the "species web" is very important.

I feel we are constantly playing russian roulette with extinctions. Was this species so important that everything collapses? No. Well, how about this one? This one?

I mean, insect populations are dropping. Insects. Very concerning.

I'll stick to my "sprawled out" city where we couldn't build tall even if we wanted to simply because the land does not allow it. I can get anywhere in the city in less than 10 minutes and have access to plenty of creature comforts.

Sprawl is only bad in big cities. In a city of 250k, it's not really a big deal.

While I find some aspects of your comment interesting, I’d also throw out that the environmental devastation from farming far outstrips that of housing. However, in both scenarios, it’s clear that much of the solution space is vertical (pun intended).

In Los Angeles 90 minutes is a very short commute. The average for my colleagues is 120 min and many have a 160-180min commute. Per day. Usually worse on Fridays.

The waste of time, energy and the resulting pollution are mind blowing.

Anything more than 45 minutes is too long.

All the same, in the recent years wealthy foreigners have been parking their cash in Canadian real estate, and yes, lot of these places tend to sit unoccupied. It's not the sole factor driving up the prices, but don't discount it either.

I think the problem is that people want to buy 3 bedroom homes with a 3 stall garage on 2 acres of land. In my market, there are tons of affordable homes, but they aren't brand new, huge, with a ton of land. People are going to have to pay for that. It's a matter of keeping up with the Joneses from my perspective. People just don't want an average size home built in the 60s. They need a brand new 3k SQ ft home and bitch that's it's not affordable. They can't all be.

I live in Toronto, and there is no way that I could buy a small (not even average size) home built in the 60s for less than a million dollars, unless it's in a really bad neighborhood or needs so much work that I will end up spending that much anyway

That's true, but it's generally people from LA, Toronto, and NYC that really have a problem. They are massive metropolises. Extremely high demand and very little undeveloped land. Supply and demand. For everywhere else that isn't adjacent to a megalopolis, I think the housing "crisis" is massively overstated.

Yes, for the minority of people who live outside of a major city, they likely aren't seeing huge increases. But for most people, affordable housing is an issue.

No, most people do not live within a market that has these problems. Yes, something like 80% live in a metro area, but this isn't applicable to all metro areas. In the US, maybe the top 5ish cities. Even Chicago, for example, has tons of undeveloped, or underdeveloped land. It's not even close to Toronto or NYC. For most people, moving a little farther from work is what they need. A Chicago suburb commute isn't even close to the same thing as LA or NYC.

Moving farther from work and increasing sprawl and traffic is its own problem.

Fair, but packing more people into a small space is only going to drive up land and rent value. Not everyone can live in Manhattan or downtown Chicago.

I Ontario at least, houses in the middle of nowhere are still absurdly expensive. Getting permission to build anything anywhere is hard.

The issue is that building new “non-luxury” homes is either explicitly prohibited or not economically viable because of the overhead cost of just breaking ground.

At least in my area, developers spend over half of the expense of the home on land (including the legal/political costs of getting it up zoned) and “horizontal development” (utilities, impact fees, permit costs, roads, environmental mitigation, drainage, etc.)

If just breaking ground costs you $400k per lot, then it doesn’t make a ton of sense to build 1500 square foot starter homes that will sell for $600k instead of 3500 square foot McMansions that will go for $1.2mn

It's also amazing to me how resistant people are to the idea that housing is expensive because of near zero interest rates and tons of money being flooded into the economy.

Are people resistant to that? All i see in the mainstream news in Australian (and we know dumbed down it is) is future prediction of house prices based in future prediction of interest rates. They are predicting falls now.

> It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

It shouldn't be. That is describing the demand side of the equation.

The issue is people need homes to live, but people also use homes as an investment vehicle. These are fundamentally at odds with each other.

> It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in.

I have to wonder if it is ever possible to build enough in the places everyone wants to live for it to become cheap?

Manhattan is extremely dense and yet, incredible expensive. More expensive than nearly every less-dense area. So density isn't helping drive cost down.

Isn't this only possible with Alberta due to all the extra near flat land available? It reminds me of Texas.

As late as the mid-90s the vast majority of American cities had a median house price to income ratio of 3. California was 3.5-4 and New York was 5 iirc. A lot of factors converged to upend this, but within living memory housing markets were affordable. Whether everyone lived "where they wanted to" is unknowable.

There is nothing exotic or mysterious about empty recently-built houses.

They are about 0.5% of my neighborhood and are built by all sorts of people, but always for the same reason: Housing is an asset class. In some places, its expected return is always positive even without rental income.

You should buy in those places. If you leave it empty, you get an appreciating asset, and the demand for homes to live in remains the same.

And then, there are places like Kharian, where there is huge demand for the idea of housing, but the living is mostly done elsewhere. See: https://www.youtube.com/watch?v=_fOYJ3_ZppM

Yeah, no one wants to admit that musical chairs is a terrible game to play when the authorities refuse to allow the number of chairs to be increased. Shutting out players who already are no longer playing the game doesn't help. China has blocked money from leaving their country for two years now.

EDIT it's been three years and not two

https://www.scmp.com/economy/china-economy/article/3012312/c...

Why do you think people (lets say people like you and I) will come up with excuses? We will all find out together in a couple years what impact this may have had. I think its a good idea but if nothing changes I'll have some evidence that it was not a high impact intervention.

Like, there is no need to rail against people not changing their mind two years before you might reasonably expect them too. Besides, it would behoove you to reserve your judgement here and let results speak for themselves lest you fall into the same behavior you decry.

Good shout on the whole "build more houses to have more houses" thing though.

> Until we liberalize zoning, legalize building, and reject the idea that houses have to be appreciating assets, the issue will continue.

That’s it.

> reject the idea that houses have to be appreciating assets

Particularly this. This is the outlook in the UK and it so problematic because normal people want this "property empire". Its become a source of content creation on YouTube or boasting on social media platforms. So fustrating

We really should follow Japan on this:

(a) National zoning

(b) A culture that abhors second hand housing (so structures don't appreciate like land does). Housing that depreciates is no longer a sound investment.

(c) Liberal definition on minimal standard housing to rent (central heating not required, toilets can be shared, no personal shower or even a shower at all in the building you are renting a room in, small spaces are OK).

Maybe not this one:

(d) Not very open to immigration at all, have a decreasing population.

In what sane universe is not requiring toilets and showers a solution to housing issues? I'm reasonably sure we can meet housing needs and still maintain basic human dignity.

For example, it would be nice to be able to build a dormitory- or barracks-style high-density, low-creature comforts housing, where multiple rooms may share a common bathroom and a kitchen, in areas with high homelessness to give those folks a place to call home. This is not currently legal in many jurisdictions due to building code limitations.

I might feel that a gigabit fiber connection is necessary to maintain basic human dignity ;-) but I don't think that should be enforced via law. One should be able to opt out for something more afforable.

What is more affordable than Gigabit Fiber? Fiber infrastructure is cheaper to build than copper after all.

Well, that's another whole issue that relates to policy. From what I've gathered, there's an ungodly amount of red tape involved in trying to be an upstart ISP at the residential level. So much so that one of the richest companies on the planet has only made inroads in like ten cities.

Not all housing need to go to a 4-person family. In my late teens and early 20s I shared a bathroom and a bedroom and never felt my dignity impinged. At that age it was much more important for it to be cheap than for it to be good.

It should not be illegal for such housing to exist.

I think you're speaking past each other. The comment mentioned no access to shower facilities at all. Go search Youtube for tiny apartments in Japan or Tokyo and you'll quickly find rooms for rent where bathrooms and personal or communal showers simply don't exist, residents must walk to nearby businesses or public facilities like libraries during business hours just to relieve themselves. This is not a desirable housing situation either.

I think a dormitory or barracks style housing is perfectly acceptable as a solution but putting the burden of supplying bathrooms on private businesses or implicitly requiring people shit in buckets in their one and only room is not.

One with a public bathhouse culture

A $250/month room with a shared toilet is better than living in a tent somewhere. Also, the need for showers can be mitigated with public bath houses, we used to have more of those...again...it makes lower end housing more viable, but most people will probably want their own toilet and shower and will pay for it.

> I'm reasonably sure we can meet housing needs and still maintain basic human dignity.

The proof of your hope would be in the pudding, and right now we have no pudding.

> A $250/month room with a shared toilet is better than living in a tent somewhere.

For the person living in it, yes. For other people living in the area, bringing in a large number of people who are just one step above living in a tent, may have impacts on the neighborhood that they don't want. Much of the resistance to building more housing is this at various different levels.

NIMBY just is “keep out the poors” for the most part.

Or we could, you know, intelligently tax property nationally and tie it to a national dividend that directly goes to landed immigrants and citizens in the form of a basic income. It will make sure that the poor and lower middle class don't get hosed and simultaneously make property a less attractive investment for foreigners or would-be mansion builders.

I don't want to live in the same place my whole life and I don't want every Canadian city to look and feel the same.

Property taxes should be doing that already, maybe we just need a national property tax? I'm all for basic income as a form of wealth re-distribution (as long as the money does't come from nowhere and stoke inflation).

Land value tax would prevent people from buying land without a plan to make it useful. IE ending land speculation and encouraging productive uses of land.

> Land value tax would prevent people from buying land without a plan to make it useful.

Ya: a land value tax is just a property tax that ignores improvements (charing based on what could be built rather than what is built). But it would totally destroy the low income housing market (since property owners of old run down low-end rentals would be seriously penalized for not building new luxury apartments).

1. There is a difference between luxury apartments and new apartments. 2. More likely the most egregious wasted land uses will be destroyed and not something already being used fairly productively. For example empty lots or parking lots are low value and would be turned into housing, driving down prices far before any existing building would be affected

> 1. There is a difference between luxury apartments and new apartments.

In the USA, not really. Today's new luxury apartment is tomorrow's old but affordable housing. Given the expense in building something, there isn't much cost difference to developers in building low-income units or high-income units, and if they go with the latter they will lose their shirts (Not to mention the low-income tenants of those houses would have to pay land use taxes similar to their richer neighbors).

> For example empty lots or parking lots are low value and would be turned into housing,

There really aren't many of those left in the cities people want to live in. Undergound parking and multi-level parking garages are already a thing in dense locations where property values alone mean turning something into a parking lot is bad use (unless you are saving up the parking lots to create something rand like Vulcan's South Lake Union project in Seattle).

I'm still all for it, but we would probably have to sink a lot more money into public housing to prevent a bloody revolution from occurring.

>It will make sure that the poor and lower middle class don't get hosed and simultaneously make property a less attractive investment for foreigners or would-be mansion builders.

It will also make sure that you get enough leeway to build in all the corruption you want. Or at least all the NIMBYism you want.

"Yeah, to build in this region you have to pay this huge tax unless you fill out this form and we approve."

Any time you build an intelligent (read: complex) system you rely on the goodwill of the people that build it and maintain it to do what you want the system to do. This in turn gives those people great opportunities to take advantage of others.

You're talking about "impact fees" which are dumb for that reason. OP is more about land value tax

That is actually a good idea but you shouldn't tax the improvement to the land. If someone constructs a building that building should be privately owned just like a car would be privately owned.

A national dividend that pays out land value taxes democratizes access to land for all citizens of that nation and thereby makes it pointless to have exclusive access over specific plots of land for the sake of rent seeking. It only makes sense to own a plot of land if you want to "work" that land or rephrased, when society collectively agrees that you should have this plot of land.

> A culture that abhors second hand housing (so structures don't appreciate like land does). Housing that depreciates is no longer a sound investment

That sounds tremendously wasteful. All housing will have to be built new now?

> (d) Not very open to immigration at all, have a decreasing population.

This is probably the biggest reason housing is depreciating in Japan, especially outside of Tokyo.

> That sounds tremendously wasteful. All housing will have to be built new now?

Well ya. You don't build to have your home last for more than 30-40 years, which can save some materials. We should get better at recycling and renewing building material, maybe the Japanese counteract things that way?

Is this satire, are you really advocating building houses with an expected life-span of 40 years? So if i buy a new house when im 30, i should expect to have to buy new if i live to be more than 70 and I havent moved.

If we assume your idea of close to perfectly recyclable houses comes true, i think people would have to really dial down their expectations and standards. No more drywall, particle boards everywhere. Tiles.. forget it, kitchen counters made by reclaimed wood etc

> Is this satire, are you really advocating building houses with an expected life-span of 40 years?

I'm really not sure. On the one hand, I agree it is wasteful. On the other hand, I personally like living in a new home.

> No more drywall, particle boards everywhere. Tiles.. forget it, kitchen counters made by reclaimed wood etc

The average kitchen where I live is renovated every 10 years, so the drywall, much of the electrical and plumbing, the floor, tile backsplash, etc...is redone. Bathrooms are also on a 10 year schedule. You can let the reno slide, of course, or perhaps you can do a higher quality reno and hope it lasts longer than a decade. (I'm looking at a kitchen reno right now and my house was built in 2016...the builders just made too many mistakes, but $150k to redo the kitchen...ugh)

In Japan, they don't do the reno every 10 years, they just rebuild the house every 30. How is that much different?

I have never seen that in the US. Any significant remodels are on the order of decades. My house is 200 years old.

https://www.usacabinetstore.com/how-often-should-you-remodel....

Median duration of home ownership is 13 years - only need them to do one remodel and we basically hit the proposed numbers.

Being in a 200 year old house already puts you WAY into the far outliers - the median US house is 37 years old.

> You don't build to have your home last for more than 30-40 years, which can save some materials.

I'm very skeptical it would save any non-trivial amount in materials. What would you leave out?

Housing in the USA is already very cheaply built, 2x4s and drywall and the cheapest hardware they builder can get. Such houses easily last over a 100 years barring some disaster.

To build a house that crumbles to unlivable in 30 years, you'd have to intentionally design it to do that. Which sounds terrible from an environmental waste perspective.

They “last” 100 years with pretty Constance maintenance - and the average house isn’t that old so the jury is still out on some of it.

In many places tear down and rebuild is cheaper than remodeling, especially when energy costs are taken into account.

> They “last” 100 years with pretty Constance maintenance

It's no surprise to anyone that a house needs some maintenance, that's a given. If someone lives in it and keeps up with basic maintenance, it'll last many generations.

> the average house isn’t that old so the jury is still out on some of it

I suspect the average house will never be that old, simply because a lot more houses are getting built all the time bringing down the average.

But plenty of 100+ year old houses, even here in California where most construction is more recent.

> In many places tear down and rebuild is cheaper than remodeling

Remodeling is a whole different topic. Yes, remodeling a house to be much larger or much nicer (or both) can be very expensive.

But on the topic of simply living in the same house in the same configuration as it was originally built, for 100+ years (multiple generations surely), there's no need to remodel. Only maintenance.

> That sounds tremendously wasteful. All housing will have to be built new now?

It is if you're building concrete houses common in much of the world.

If you're building houses that are common houses in Japan, it's not nearly as bad.

When you think of a house as something that not only you will live in - but also will be the vast majority of your net worth that you pass down to your children - then building houses the Western way makes more sense.

When a house is just something you live in - you think of it more like renters do.

Great plan, for a favela

Tokyo is the farthest possible away you can get from a favela.

>[homogenous Japanese population] is the farthest possible away you can get from [unrestricted immigration from the southern hemisphere].

Why yes, indeed, it is!

Ah, racism. Long time no see.

I'd certainly be interested in how racism within japan affects the housing market there, especially considering the racial bent behind this Canadian policy

"Long time no see" is a racist mockery of Chinese immigrant broken English.

This is an absurd argument considering that American zoning has been exceptionally successful at segregating black people into their own separate communities. You have homogenous American neighborhoods and cities. When you are blaming someone else in this way you are not only admitting defeat but you are also an asshole.

American neighborhoods are homogeneous, and you can see the result when you walk between them.

e) a land value tax

That solves a) through d) to.

what does abhors second hand housing imply?

> A culture that abhors second hand housing (so structures don't appreciate like land does). Housing that depreciates is no longer a sound investment.

If you want a house that depreciates faster, manufactured homes are an option. It's not at all obvious to me though that a structure that depreciates faster will necessarily be more affordable than a traditional house that has been properly maintained. Even if it is, building a new home every N years will almost certainly consume more resources over the medium to long term.

(b) is the biggest one. It doesn't make second hand unlivable, it just stops putting a premium on things which clearly aren't premium (unlike say Europe). It also makes it easier to tear things down in case of future needs, whereas Europe tends to "lock" itself in, creating a market which is very inflexible.

>(c)

Keep in mind 1LDKs (living room, dining room, kitchen) come with everything you'd expect a full apartment to come with, and are still very cheap in Tokyo compared to most metropolises and big cities. Many DKs also come with personal shower, small kitchen and toilet. Their spaces are generally on par with what you'd get in bigger European cities, for an equal or lower price. Not bad considering it is Tokyo.

>(d)

I mean, between the US and Japan, Japan isn't that much more difficult to immigrate to, unless you expect to get by with just English. Decreasing population also isn't a problem considering population numbers are getting far too big for comfort among developed countries.

> (b) is the biggest one. It doesn't make second hand unlivable, it just stops putting a premium on things which clearly aren't premium (unlike say Europe). It also makes it easier to tear things down in case of future needs, whereas Europe tends to "lock" itself in, creating a market which is very inflexible

Could you elaborate on what this paragraph means? How do we "lock" ourselves in here in Europe? I can go out _today_ buy a rundown house and tear it down. If the cost of renovating it exceeds the cost of building new, it's financially sound to do. Unless i'm buying some historically important building there are zero restrictions.

If you can buy a rundown house, yes. Now place yourself in the shoes of the generation who can't reasonable buy a rundown house in a place close to work, and are expected to commute to work. They are dependent on laws and profit margins for anything to happen.

When the profit margins say "building apartments isn't profitable" and the laws say "well whatever", nothing's gonna get torn down for apartments. Turns out when you build things to last and the mentality is that a 30yo house should still be in good shape, there's not a lot of profits to be gained tearing it down and building an apartment complex compared to renovating it a little and selling it to some upper middle class family with more dough to spend.

And yes, there are ways around this, e.g. turning that SFH into a sharehouse. Why that isn't happening more is a whole different story.

The USA is about 12% immigrants, Japan is around 2%. I mean, it is definitely no China, but it has the lowest immigration rate of the all the developed countries.

That's not what I was pointing to. Check the visa requirements for various visas for the US, Japan and other developed countries. They follow similar thought patterns: skilled workers with demonstrated experience and/or knowledge, who won't be a burden on the state. The biggest boon being most skilled workers from developed countries already know English at an okay level, and most developed countries accommodate non-native language speakers better than Japan does when it comes to immigration.

USA is a "salad bowl", it expects immigrants and varied cultures. Basically, coming from anywhere in the world, with some getting used to, you can blend in.

Japan is much more homogeneous culturally, and as an immigrant you will always be a stranger. Even if people will be nice and polite towards you, they likely won't be able to treat you as they would treat a Japanese, because you'd miss the cultural context which builds up from early childhood on.

Toronto has tons of upzoning. There are developments all over the city.

The problem is that your primary residence is a tax-advantaged vehicle in Canada (infinite tax-free capital gains). So the optimal choice is always to buy as much real estate as you possibly can. People also use their children to hold deeds when they want to expand into second and third homes. The tax advantaged status drives the Canadian housing bubble

People are regularly talking about "housing cannot be both a good investment and affordable". In Canada, it is a 'good investment' by tax law.

Look at how much real estate prices have diverged from rent in Toronto. It is mind-boggling. The gap's growth accelerated with COVID-era quantitative easing.

This is a policy addressing one side of the supply-demand equation.

I think most people would agree that measures can be taken on both the supply and demand sides. It’s a rather extraordinary claim to suggest that root causes don’t exist on the demand side, and that the issue can only be addressed from supply side. That’s an opinion on a debatable topic stated as fact, and it may be a popular opinion among the HN crowd, but that doesn’t make it more of a fact.

If foreign buyers are using Canadian housing as an investment vehicle and to park assets, that additional demand decreases supply for Canadian citizens who require housing for shelter.

Of course, they can (and should) directly address the supply side as well. But there’s the possibility that foreign buyers’ demand will continue to outpace supply, leading to ghost cities like there are China, with 65M+ empty homes. Canada is under no obligation to perpetuate that.

It is not just that it is an attractive place to park wealth as far as ROI. It is attractive period because you can park your wealth in an obscured way in a place more fair than where you live.

If you have a lot of money in places like China and Russia or if you have money from graft, it could all be taken away quickly. So these people are very willing to buy something real in a "safer" country, even if it has a negative ROI.

This is not the only problem with housing in general, but it is a contributing factor that does not provide value for people that are looking to actually live somewhere.

From that perspective, the simplest way to resolve the money parking issue is to seize assets owned by chinese or Russian citizens. Break that assumption for non-canadians.

Alternatively, provide a dedicated asset class for that, so they can put their money in something other than housing

> If you have a lot of money in places like China and Russia or if you have money from graft, it could all be taken away quickly.

I don't think people from Russia or China can do this anymore. At least the Russians can no longer do it in the West. As for the mainland Chinese, the CCP has blocked capital flight and they have even blocked cryptocurrency. This happened two years ago ie. unless they already got their money out of China two years earlier, they can't buy anything in Canada

EDIT it happened three years ago and not two years

https://www.scmp.com/economy/china-economy/article/3012312/c...

> The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

These are contributing factors, but the energy that drives the bubble is capital, and bubbles have a way of becoming self-perpetuating. When a bubble becomes critical, you can't "build out of it", unless you think you can actually produce 10% more houses in a year, every year!

You can pull capital out of it by making it expensive to leave a home empty. Then capital will go where they can get better returns. Bonus tax when the average occupancy of the property drops below a certain percentage, say.

People will just rent it.

I don't know what the solution to the problem is, but I fear where it's heading. If people cannot get housing, anarchy and revolution are in the making. Then it's heads on pikes, French Revolution style.

Yes. That's the point. People will rent it. Which means they need to be priced such that people can rent it. (If the rent is too high, people can't rent, which means it sits empty, which triggers the punitive tax). Lower rents will drive prices down, as people will decide to rent instead of buy for a while.

I don't think the empty tax is a bad idea, but I don't think it will have a substantial effect.

>Foreign investors jump into the housing market because the current system ensures that the supply

some do, others just want to safely park capital away from their own government reach (China/Russia/various *stans/corrupted countries).

The real reason is that those foreign investors are productive and have excess capital available to invest. They are from creditor nations, not debtor nations.

If you call local corruption productive.

You cannot lie in the foreign exchange market. If you bs your productivity vis-a-vis loose money supply, your currency will rightly be worthless. The USD would usually be worthless too, it's just that due to Petrodollar system and reserve currency status, it's artificially propped up to be strong.

I hope you notice the irony in your comment. You praise the exporters while completely ignoring that imports must exist in equal proportion to exports.

> You praise the exporters while completely ignoring that imports must exist in equal proportion to exports.

In a closed system with two economies, yes, true. But in reality, many nations either run a trade deficit (exports < imports), or a trade surplus (exports > imports)

Mark off China and Russia from the list. With Russia it's obvious, while for China, the CCP has clamped down on capital flight starting two years ago. They keep clamping down harder, which is a big reason they banned crypto

https://www.scmp.com/economy/china-economy/article/3158048/c...

I agree that this is the root cause, and it remains a third rail in Canadian politics. The province of Ontario commissioned a "Housing Availability Task Force" to do a [report](https://www.ontario.ca/page/housing-affordability-task-force...) spelling out the problem. They identified under-supply due to land use restrictions as the primary cause. The government ignored it and addressed secondary issues with lame bandaids in their June election platform.

They are conservatives, this "foreign buyer ban" bandaid is put in place by liberals. NDP and Greens offer nothing different. A quadri-partisan consensus on ignoring the root cause.

I do think there's another major cause - cheap money. It's fuelling a lot of the meteoric price growth and making the housing market even more of a wild speculative one, where all that matters is the carrying costs and not any underlying fundamentals. This one is more of a worldwide problem, and a small country like Canada cannot use monetary policy to bludgeon the housing market back into reality without bludgeoning the rest of the economy with it.

The recommendations of the committee reflect the fact that they had only one month to work in and as such severely limited the consultations they did. To take just one example of how ridiculous some of the conclusions are: They recommend forcing any municipality to accept 6 to 11 story buildings on any street that has a bus route regardless of whether that bus route actually reaches the building or not. This is a huge deal in Canada as many streets are absurdly long. Yonge Street for example is the longest street in the world and effectively transitions into a highway through rural areas. Still this policy says you could build an 11 story building without providing parking in any small township on Yonge Street because it has a bus or subway route while it's in Toronto.

I think we have a philosophical difference here. You seem to accept the idea of centrally planning a city down to the micro-management level. I reject it. Yes, as you say, "this policy says you *could* build an 11 story building without providing parking in any small township on Yonge Street".

The operative word is *could*. If there's market demand for it, you could and you absolutely should do it. If there isn't, you (the builder) won't build it, and you (the tenant) won't move in.

If you focus urban planning on the big picture and allow the market to determine how many parking spots a building needs, or whether a single family neighbourhood makes any sense next to subway stops, the housing crisis will literally solve itself with private money. Instead, we keep floundering while entire generations of our under-30s struggle in precarious housing, because we are unwilling to adopt a different approach. 3/4 of discussions about 'housing affordability' at my city's council meetings are about money pits and bandaids such as airBnB bans and 'affordable housing' (can we build 30,000 units of it with taxpayer money? Didn't think so, let's move on).

If you ignore the blah-blah and focus on actions, we the voters don't really want to solve this problem. If we did, we'd act on the obvious solution.

I think you are leaping to a lot of conclusions not in evidence. There is a big difference between "centrally planning a city down to the micro-management level" and overriding any ability for a municipality to assert what it feels is needed in a development. Negative externalities are a very real thing and allowing developers to have arbitrarily many of them at arbitrarily bad levels is not the only alternative to complete and total central planning. Believe it or not there are reasonable middle grounds that allow some influence on developments from central planning to limit negative externalities while also listening to market forces. My beliefs align somewhere in this middle ground.

>I think you are leaping to a lot of conclusions not in evidence. There is a big difference between "centrally planning a city down to the micro-management level" and overriding any ability for a municipality to assert what it feels is needed in a development.

Not really, if the municipality is in fact willing to centrally plan a city down to the micro-management level, and a different level of government wants to prevent it from happening. Some overriding is gonna have to happen here.

>Negative externalities are a very real thing

Indeed. Example: artificially embalming swathes of single-family neighbourhoods in time, right next to recently built public transit we're sinking billions into building. So let's not be selective about negative externalities and consider the ones created or exacerbated by NIMBY-driven urban planning, too.

>allowing developers to have arbitrarily many of them at arbitrarily bad levels is not the only alternative to complete and total central planning. Believe it or not there are reasonable middle grounds that allow some influence on developments from central planning to limit negative externalities while also listening to market forces. My beliefs align somewhere in this middle ground.

Sure. I too am somewhere between allowing toxic smelters next door to kindergartens and Soviet-style central planning where government owns all and builds all. Everyone's gonna align themselves somewhere in this middle ground between two contrived and straw-man extremes, all NIMBYs included. The whole debate is about where in this middle ground we ought to be. Forgive my skepticism, it's just that I've heard this middle-ground line often. And often, this is simply a rhetorical cop-out and a prelude to killing off any meaningful changes that allow for building the types of housing people want in places where they want it.

>Not really, if the municipality is in fact willing to centrally plan a city down to the micro-management level, and a different level of government wants to prevent it from happening. Some overriding is gonna have to happen here.

I never said some overriding isn't going to have to happen. I never said the municipality should be able to plan down to the micromanagement level. All I said was that a blanket allowance for all buildings of a certain size on any street with a bus route regardless of the route reaching the building or not was absurd.

I criticized a specific recommendation of a panel that suggested we completely override municipal planning and not allow them to address any concerns with any buildings on a street with a bus route as long as those buildings were 6 to 11 stories tall. I pointed out how it allowed for certain absurdities and was not a sound policy recommendation.

>Indeed. Example: artificially embalming swathes of single-family neighbourhoods in time, right next to recently built public transit we're sinking billions into building. So let's not be selective about negative externalities and consider the ones created or exacerbated by NIMBY-driven urban planning, too.

What you call artificial embalming others might call a status quo. It has its own negative externalities, I agree. I want more development than many people I know and don't think the status quo is sacrosanct. I also don't think the status quo is a state like any other that doesn't deserve any special consideration. I think it represents a way of life that people bought into and became part of a community with. Parts of that are bad: low density forever doesn't work. But there is a certain standard of services provided in the neighbourhood and developments need to be cognizant of that and be coordinated in ways that don't have huge adverse effects on that.

I want smart development that considers the surrounding neighbourhood in reasonable ways. I don't want 50 story condo buildings in crowded school zones without a plan to build new schools. I don't want 50 story condo buildings that aren't on highways or good public transit when traffic studies show nearby intersections are at or near peak capacity. I also don't like it when developers consistently claim buildings in my neighbourhood will end up with 76% of occupants using public transit when after the fact surveys show that number is 39%. Instead of 24% of occupants driving we end up with 61% doing so, an impact of 254% of what was predicted on traffic patterns. I also dislike that we consider each development in isolation and don't do any holistic studies on the impacts, the net result of which is four different developments within two blocks of my house each show that facilities won't be overcrowded and traffic will be "within acceptable limits" if only their development proceeds. Then the province overrides the city and approves all four at once and we get severe overcrowding and overburdened facilities.

There is also the double whammy that property taxes are based on a percentage of property value (which is lower for condos) and the percentage used is also lower for condos. The net result of this is that the municipality gets far less budget per capita and this leads to a decline in services. I'm not sure what a good solution is since we need more density but I have a lot of sympathy for people who don't think it's fair that the services of their neighbourhood are forced into a significant decline.

>> As it is often the case, politicians go for the headline with the highest electoral ROI

They also conveniently target people who can't vote, much like big taxes on out-of-province housing purchases that are very popular within Canada.

>The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

I don't agree that this is the root cause. The root cause is the artificial demand on housing created though our mass immigration policy. Canada accepts _at least_ 500,000 people per year through various channels, "temporary" foreign workers, international students (many of whom stay), refugees, and of course, normal immigration. And I am low balling that number. It could be closer to 1 million.

When you bring in an entire large city worth of people, it stands to reason that this will cause massive pressure on housing prices. Now sustain that yearly increase for decades, and you have the problem we face today.

There are 9 million people in Canada (a country of around 40M) currently living here on 10 year visa's. - Crazy!

So there you have it. How could you leave that completely out from your argument and only blame zoning laws and nimbyism?

> And I am low balling that number. It could be closer to 1 million.

Canada's population has increased around 4 million over the past ten years, so I don't know if that velocity of closer to million tracks.

I assume the response would be that with policies that allowed for rampant building/sprawl, the market would sort this all out regardless of the population.

However, these kinds of price spikes still happen in lots of places that have neither a ton of immigration or constraints on building, so it's not clear to me that either one is really a singular root cause.

A price spike, maybe. A long term unending price increase, no. Would love to see an example of a place that doesn't have such constraints on building that has high prices.

In what world are "temporary" foreign workers buying homes in Canada? With what salary? Same with Refugees, students.

Funny how in the first hundred years in Canada, we didn't have any issue with housing costs, despite accepting vast amounts of refugees. I'm not saying it's not making the problem worse, but to SOLELY pin it on them is IMO willful ignorance.

if we banned all immigrants, of any kind, tomorrow, would Canada's housing prices collapse? I'd suspect not: credit is still cheap, and every day canadians still want homes.

>Same with Refugees, students.

There are Twitter accounts dedicated to calling out multi-million dollar homes in Vancouver and Toronto, owned by "students".

Are you saying that Canada's housing crisis are caused by these individuals?

If you're referring to mainland Chinese people, China has banned capital outflows in the last two years. It's so bad and strict that mainland Chinese people are freaking out that they can't move their own money outside of China. Game's changed. Wrong scapegoat.

https://www.scmp.com/economy/china-economy/article/3012312/c...

In the real world! There's enough rich people in the world, that some of them send their kids to Canada for school. And some of them buy houses. Why does near every American assume that everyone outside of America is poor.

I'm Canadian, but thanks.

If you pour water into a bathtub it will handle all the water... until it can't, and then it overflows

Temporary Foreign Workers is everyone with a work permit for their first three years (or longer!) regardless of qualifications -- NAFTA means doctors, engineers, and software developers are TFWs for a few years at least until/unless they apply for permanent residency. The idea that they are somehow less wealthy than the average immigrant is incorrect. So to answer "with what salary?": The one from their jobs.

This is factually incorrect. NAFTA workers--TN visas--are not part of the the TFW program, which is something entirely different and requires market assessment impacts.

https://www.canada.ca/en/employment-social-development/progr...

My residence status for three years under NAFTA was Temporary Foreign Worker. I still have the paper permit. I was exempt from a labor market opinion but all other requirements, such as a single employer sponsor, applied until permanent residency.

When more people show up, you should build more housing. Canada is a big place with a small population relative to its size — you have plenty of space. Your argument might work if Canada was a small island like Singapore, but it is one of the largest countries by land area in the world.

What prevents you from just building more housing in all that extra space you have? Zoning laws and nimbyism.

>What prevents you from just building more housing in all that extra space you have?

There is plenty of cheap, available housing in the hinterlands of Canada. And yet, nobody wants to move there. Why do you think that is? Prime locations are scarce no matter how much land mass you have.

Because people want to move where jobs are available. There is a decades-long trend of urbanization throughout the world, as economies continue their transitions towards services.

Canada has a deep labor shortage in its urban areas, with plenty of pent-up demand for growth.

It's certainly true that if we must perpetually conserve each and every single family home in an urban area, then we'll remain housing-constrained. If that's what everyone wants to do, that's their right, but it's necessarily going to result in lower income and living standards for the country.

I thought Alberta has a ton of free space available. No?

Honest question: where are these cheap, available houses? I thought I did live in the hinterlands, and there's nothing in that category here that doesn't need to be torn down. Since I work online, I might be able to move if the prices are right.

>"What prevents you from just building more housing in all that extra space you have?"

That's the wrong way to look at the problem. Developers can already build in the hinterlands, but there's virtually no demand to do so because the economic activity is concentrated in the established cities. You also run into the Siberia problem where despite having massive tracts of "free/undeveloped" land in the taiga, actually inhabiting it is very expensive because of how brutal the weather can be. Unless you have something like a literal gold mine or oil well, the expense of heating the buildings and maintaining the equipment is not at all economically viable.

What stops you from building more housing where there is demand?

We know the answer to that, but the GP was asking why we aren't building in "all that extra space you have" and that's what I was responding to.

You don't need to build in the hinterlands. Looking at a map I see space around many major Canadian cities.

Vancouver may be the most constrained geographically but quite a lot of it looks suburban and could be built up if the political will existed.

Or, Canadians could choose to build nothing but single-family homes, but if they make that choice, they should own it and admit it is the real reason rather than blaming foreigners.

> There are 9 million people in Canada (a country of around 40M) currently living here on 10 year visa's. - Crazy!

Talk about distorting statistics in bad faith to further xenophobia…

The 10 year visa is a non resident visa that allows temporary enter into Canada during that period.

It doesn’t let people work, and just because someone has the Visa doesn’t mean they’re currently living in Canada

Plenty of those immigrants work in the housing industry building houses. Immigration is increasing both the supply and demand of housing.

Labor generally ranges from 20-40% of the cost of a home, the land and materials make of the majority. An absolutely massive percentage of all immigrants would need to be in construction to outweigh the increased demand from their presence.

So you're saying supply isn't meeting demand. Why isn't supply meeting demand? What's preventing buildings from building more and faster?

Demand for housing is not artificial merely because it doesn't come from a citizen.

Separately, Canada's population growth rate is the lowest it's been in over a hundred years, and it isn't close. The lower trend continues for decades and decades. The last time the population growth rate was increasing was in the 1950s. So this is a very strange argument to make.

> Canada accepts _at least_ 500,000 people per year through various channels, "temporary" foreign workers, international students (many of whom stay), refugees, and of course, normal immigration. And I am low balling that number. It could be closer to 1 million.

> When you bring in an entire large city worth of people, it stands to reason that this will cause massive pressure on housing prices. Now sustain that yearly increase for decades, and you have the problem we face today.

You make it sound like those people enter Canada and then just sit there doing nothing. Which is wrong.

As long as they're LEGALLY in Canada, I don't see a problem.

They're studying/taking up jobs or whatever, and they're also spending the money that they make in Canada, in Canada. This helps the existing Canadians as well. And some of them start their own businesses. That's how the economy develops. Money should keep rolling.

> There are 9 million people in Canada (a country of around 40M) currently living here on 10 year visa's. - Crazy!

What's so crazy about that? You should check the numbers for USA.

As for the 10 year visa part. From what I know, Canada grants B1/B2 visa with a 10 year validity for businesspeople and tourists. It does not mean they can enter and stay for 10 years. They can enter, stay for sometime (they have to state how long they intend to stay at the time of entry), and then they leave. Or atleast, the vast majority of them do. They have better things to do back home.

By the way, you might also want to look into Canadians emigrating to USA. Not that there's anything wrong with it. Just saying that it happens.

The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

You can believe that if you want to.

Any level-headed analysis of the situation, however, points to multiple factors at play, here -- dark actors with huge pools of dark money to park somewhere (that just so happens to be mildly appreciating on average) being one of them. A system which promotes and protects de-facto anonymization of luxury assets at scale being another. Truncating the root cause analysis simply to "supply" is simplistic at best.

Until we liberalize zoning, legalize building, and reject the idea that houses have to be appreciating assets, the issue will continue.

As much as one may want to believe that this is the right fix in the long term -- even under the best of conditions, it will take years, more like decades to pan out. Meanwhile the housing market needs relief now.

I hear this all the time on HN, but I never see any data to back it up.

It's also a very broad statement: I never see any construction when I visit SF, but in Montreal everything is under construction all the time. There are a dozen new condo developments within a few blocks of where I live, and yet the prices of homes still rose something like 20% last year.

There isn't usually one The Root Cause for economic issues, so blanket statements about policies being "boogeyman politics" are the kinds of unlikely sentiments that I'd like to see backed up by significant evidence.

Building more housing does not lower housing prices. This should be fairly obvious but here’s why it doesn’t work, at least in the US, and frankly would cause huge problems if it did.

The major problem is that the vast majority of the U.S. which is not underwater in debts, has the majority of their wealth in their houses. So if building more housing led to a secular reduction in housing prices, people would get poorer.

Which means that it will never happen, because people who own housing in those areas and therefore control the entire political processs, will not accede to shooting themselves in the foot even if they are YIMBYs.

What this means then, is that the only housing that will be allowed to be built, or the only housing that will not in turn make the people of the area poorer, will be “luxury” housing, which does not lower their property values because it compensates for the drop in housing value due to greater supply by adding “amenities”, allowing them to maintain their existing house values.

The escape route for this is low income housing. Creating cheaper housing for people who couldn’t afford to buy their houses anyways, and therefore even though it leads to lower cost housing, it doesn’t lead to a drop in their house values (if anything, it may lead to an increase in their house values since it reduces virgin land that could have otherwise been used to build non low income housing that would compete with their houses).

> The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

You're conspicuously avoiding low interest rates and 30-year mortgages from that list.

When people can borrow against their entire life's earnings to buy a home, the price of a home will trend towards that of a person's entire life's earnings.

Limiting maximum mortgage terms to 9 years would do more to bring down the price of homes than dealing with anything else you've listed.

This is insightful.

> Limiting maximum mortgage terms to 9

Or at least not bolstering the mortgage market. Fannie and Freddie practically caused the extreme leverage mortgage phenom in the US.

Would it? Or would it simply push home ownership further out of reach and favor landlords with capital?

To rephrase my point: What do you think would happen to the price of the average home if we printed, and handed out, each man, woman, child, and dog in Canada a million dollars?

My guess is that it would increase by ~2.6 million.

But it would certainly level the playing field between the average person and 'the landlord with capital'.

So if we are so concerned about keeping the average Joe up with that landlord, why don't we go ahead and do it? [1] It's not like it's hard to run the printing presses!

[1] Unfortunately, we do do it, except instead of just handing this money out, we wrap it up in decades of indentured mortgage payments, instead. The net result is the same, with the addition of a colossal wealth transfer from borrowers to lenders.

No I don’t think that argument holds. A hand out is not a loan. It’s also possible that even if loans raise home prices, that there’s a floor to this effect if loans are shrunk.

Many companies and people buy homes currently for investment rentals. They’re competing with homebuyers. Strictly speaking I would expect the share of homes owned by landlords to rise even if prices fall.

> A hand out is not a loan.

It has the same inflationary effect on the economy. Under fractional reserve banking, loans inject money into the economy, increasing prices. The lower interest rates are, and the longer mortgage terms are, the more such money gets injected.

On the flip side, what do you think would happen to home ownership if the mortgage terms were set to be 1 year max? That ought to really lower the home prices, right?

My guess is most homes on the market would be bought by private equity firms and retirement funds. There are a lot of confounding factors; just changing mortgage terms is not sufficient.

Building a modern home requires more than 1-person-year of resources and effort, so a 1 year mortgage term wouldn't make any sense. You can't make something out of nothing, so obviously, there would be a pricing problem in that situation.

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location. For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more houses won't reduce the value of those condos the same way that adding more lanes to a highway doesn't reduce the congestion.

The idea that houses are appreciating assets doesn't come from some fundamental law or ideology. It comes from recognizing reality. There is only so much land where people want to live, and population tends to increase (we are talking about urban and suburban areas, of course), so the demand and price increase. It's pretty simple, really.

NIMBYism, zoning laws, permitting, those are always familiar and convenient boogiemen for people who don't want to do actual analysis of market factors. But, what you are really wanting to argue against is private property ownership.

You can always build more dense housing on land that is in high demand. In fact, doing that is the most obvious and effective way to keep prices low for desirable locales. Backed up by pretty much all the economic research on the subject in the last decade.

Great, is that economic research based on thought experiments or reality? I'd love to read it. Let's go back to my example. You build denser housing on top of or next to the condos I mentioned, what happens? The workers move in closer to the city center. The price is low for a short period of time, until more people migrate. Just like when the highway opens up a new lane. The traffic is better for a short period, until more people begin using the highway more. Then you are back to the status quo.

You could argue that you can just keep building up and up until you cross the threshold of demand affecting the price, but without a market incentive to do that, it's wishful thinking at best. "Well the government could fund it" you could say, and indeed it can. But speaking of economic research, everytime the government has done such a thing, it causes widespread economic depression of the local area.

Those are empirical studies. The Finnish one is the most recent I'm aware of, but they all say basically the same thing[1], here are a couple more [2][3].

Housing does not suffer from induced demand like road capacity does. This is easy to disprove by reading those studies. Sure, building nicer better neighborhoods does make them more desirable but it doesn't follow that they have to be more expensive, as long as you build enough homes for people to live in. Taken to its conclusion the induced demand argument against density is an argument against improving quality of life in general, and pretty nihilistic.

[1] https://ideas.repec.org/p/fer/wpaper/146.html

[2] https://www.dropbox.com/s/oplls6utgf7z6ih/Pennington_JMP.pdf...

[3] https://docs.wixstatic.com/ugd/7fc2bf_ee1737c3c9d4468881bf14...

>You could argue that you can just keep building up and up until you cross the threshold of demand affecting the price, but without a market incentive to do that, it's wishful thinking at best.

Tokyo, with its reasonable zoning, seems to have figured out how to build densely without being absurdly expensive. The key here is that the "market" is indeed allowed to figure it out, and not as restricted by NIMBYism.

The best thing the government can do right now is to get out of the way in regards to building more units.

Tokyo has managed to keep housing prices pretty affordable (and while Japan's population may be shrinking, Tokyo's has continued to grow). Unsurprisingly, they build a LOT of housing and removed most legal/regulatory obstacles to building it a few decades ago.

They issue more permits for new housing units in a year than the entire state of California does, even though California has more than double the population. (or for an East Coast comparison - they issue around 9x the housing permits that NYC does, even though the population is <50% larger).

There have been many articles written on this topic by many publications that you can find, but here's one citation: https://www.ft.com/content/023562e2-54a6-11e6-befd-2fc0c26b3...

> As of April 1, 2020, there were approximately 115.8 thousand square kilometers of high-class asphalt roads in Tokyo metropolis, Japan, which was the dominant type of pavement.

Tokyo metro area is 14,034 km2.

Meanwhile LA is 14% parking lots or so I’ve heard.

>You can always build more dense housing on land that is in high demand.

you CAN. But that takes a while. There's always something under construction in Califnornia and a good portion of that is trying to build more apartments and housing. The time to make those don't keep up with the influx of people emmigrating to LA or otherwise leaving the parents' homes to seek their own lifestyle.

It's honestly a more feasible solution to try and convince certain companies to build in a city that is otherwise "vacant". Make it a place where people will work around, have the existing land and homes appreciate in value. That's why Amazon and Apple had such aggressive bid wars from cities to try and get them to make new campuses in their respective city areas.

We dont have a shortage of dense housing because it takes to long to build

We have a shortage of dense housing because it is illegal to build dense housing in the places it should exist, and where it is legal, community review processes quickly shut it down

It's a bit of both, at least for my state specifically. There is a bunch of gatekeeping, but also some necessary restrictions and codes in California which is stricter than most other states, but necessary given its history. You can't take shortcuts anymore here like you could in the 60's (or heck, even in the 80's in terms of Los Angeles).

It's a a long and expensive process and I wouldn't be surprised if some deals fell through something because the minimum expenses exceeded what some potential clients expected.

> You can always build more dense housing on land that is in high demand. In fact, doing that is the most obvious and effective way to keep prices low for desirable locales. Backed up by pretty much all the economic research on the subject in the last decade.

In which dense cities in Canada (or the USA) did this work, resulting in a desirable dense city with cheap housing?

> The idea that houses are appreciating assets doesn't come from some fundamental law or ideology. It comes from recognizing reality.

Houses are not appreciating assets, in general. They are durable goods but tend to degrade if not maintained. Land is often an appreciating asset for the reasons you mentioned. And of course the "NIMBYism, zoning laws, permitting" play a part in that, by restricting the land available for various desired uses. Removing these factors would help, though of course it wouldn't completely negate the tendency for land prices to rise, especially in densely populated areas.

> But, what you are really wanting to argue against is private property ownership.

Removing private property ownership wouldn't make more land available, or cause it to be used more efficiently. Quite the opposite in fact.

To be clear, I wasn't suggesting that I support removing private ownership. I was merely suggesting to parent to be honest about what they are really upset at. It isn't NIMBYs or town councils with their, admittedly, sometimes backwards zoning laws. Its private parties who own land and are acting in their own best interests.

I think that most YIMBYs are arguing the opposite: That if I buy a piece of land, and I want to build a duplex in it, all the way to the property line, I should be able to do it. As it is, zoning and the approval processes make all kinds of viable projects impossible to do, by the property owners.

If I wanted to turn my single family house into a duplex, or just tear it down and build bigger, to far closer to the property line, I'd be completely unable to do so, because the zone is R1, the minimum offset to the edge of the property is enough to part 2 F-150s lined front to back. The maximum legal usable square footage, across all levels, of the house must not exceed 40% of the square footage of the lot. Most of my property must, by regulation, be lawn, and the taller I build, the more lawn I need. There's houses with this zoning structure right next door to supermarkets.

So how is asking to be allowed to redevelop your own lot being against private property ownership? If land is so plentiful nobody wants to build taller, the land will remain very low density. But the idea of having a lot that, if razed, would be worth a million dollars, but where building a duplex is illegal is not, in any way, going against private ownership.

> So how is asking to be allowed to redevelop your own lot being against private property ownership?

To answer that: consider, would me being allowed to build a joint pig farm and jet engine testing facility 10 feet from your bedroom window be compatible with your property rights?

Externalities exist. Changes in the usage-- which includes density-- of the surrounding property can have a real effect on the existing residents. Debate over zoning is just a debate over the thresholds.

This isn't to say that existing policies in any particular place are well informed. But the basic concept of setting out the characteristics of neighboring properties, particularly to the extent that these rules were done in advance of your ownership and were clearly established, not only doesn't conflict with private property rights but can help protect them.

There’s a far cry between “no unlicensed pig farms” and “each house must be an entire freeway’s width from the next one”, especially as one is a different type of use instead of just a more dense one.

I used an extreme example, for sure! I think it highlights that stable zoning rules can promote property rights rather than undermining them. Sure, they can go too far-- but there is no fundamental contradiction.

> one is a different type of use instead of just a more dense one

Differences in density are differences in use! perhaps insubstantial ones--- ones that don't meaningfully impinge any existing residents property right, and if so they shouldn't rightfully be restricted by zoning. And obviously they are-- I'm not attempting to defend existing practices-- only arguing that the conflict is not fundamental and that people arguing over them can all be making reasonable arguments over the right thresholds.

> Until we liberalize zoning, legalize building, and reject the idea that houses have to be appreciating assets, the issue will continue.

Even if all those things are done the issue will still continue.

There is a limited amount of land at desirable locations with desirable properties.

You can increase density-- sure-- but after densifying more than some threshold of land it won't help because the extremely high density housing is itself extremely unattractive to many people, so building more density only helps to the extent that there are people who want that with unmet housing needs.

The fundamental natural of housing is the root cause, restrictive policy is an exacerbating factor.

To use an extreme example, you can easily go find big tracts of land in Montana for under $1000 an acre where no one would prevent you from building a gosh darn arcology if you wanted to. Yet the existence of cheap land someplace else doesn't magically make the issue of housing costs solved. People don't want to live in that someplace else, they want to live in particular places and there always is and always will be a finite amount of land in those particular places.

Maybe at the extremes there will be an issue, but doing all those things would massively bring down prices.

In general I agree, that the root cause tends to be a supply constraint. Even if there were a bunch of people buying up houses, at least in theory that should make rents go down.

However, in places like Vancouver people are buying up property as a place to park money and they remain unoccupied. Policies like additional taxes on unoccupied or secondary residences. Seem like one good way of adding supply.

Similar happens in Sydney. There are a lot of foreign people looking for safe havens for their cash. I can't blame them (I'd do the same), but it is problematic for the people living there because it does reduce supply.

The easiest way to solve that is by making housing a less attractive investment, which you can do by building a lot more of it.

Otherwise you're stuck crafting clever anti-investment legislation which may or may not work and may or may not create weird distortions due to some unforeseen consequence of how the regulations are worded.

I feel like this works for housing but not really for land? As density increases the cost of housing should go down (more houses), but the cost of land would go up (ability to build more houses on the same plot). I’m imagining the house from Up in the middle of manhattan; you could never build enough housing to make that a bad investment.

If they buy properties as an investment, why not rent them out? If you dont want the hassle, there are property management companies that will handle everything for you.

It's more a place to store value - they aren't looking for a return on it per se. It also adds complexity tax wise. If you have a lot of money in a jurisdiction where it could "disappear", just dumping it in real estate in a safe jurisdiction is attractive.

The root cause of high real estate prices are low interest rates. There is always a correlation between those two.

The lack of housing is not a issue of attracting investment. Canada (and basically every other country with a housing price crisis) is perfectly capable of funding construction with domestic investment. It is, as you mentioned, an issue with policy.

Until the policy is fixed, additional foreign investment is pointless and only serves to drive speculative price increases. It makes sense to deter it.

In theory as countries apply similar policies across the world, the surplus countries driving these capital flows will be forced to either invest in developing countries that could actually use the funds, or park the cash domestically. That will force countries like China and Germany to deal with their issues internally instead of exporting them.

Land Value Tax would solve this.

> Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth.

If they were targeting mainland Chinese investors, it's too late. China already stopped capital flight out of their country two years ago. They even banned crypto, so getting money out of China is both difficult and expensive for both Chinese citizens and even expats. The former is understandable since it's an authoritarian country, but expats? That's a new one unless countries in the Middle East do the same thing.

This has most to do with being a signal to investors that Canadian housing is not a safe place for their money and that has the largest likelihood of having a more lasting effect beyond two years.

Really doesn't matter how much we build if tax law continues to scream at everyone to reallocate everything they have into bets on land value

I disagree that zoning alone is the problem as you see these market developments in almost all western nations and some of them have ample land to build upon.

Zoning could be more liberal, but it would still be massive stakeholders that would build new homes and rent them out to get a decent ROI.

Build, baby, build. But we need property rights to be able to do it. None of this discretionary permitting nonsense; that's how we got into this mess.

When you liberalize zoning you get slum cities. This has already happened many times in latin america, india and africa. It also happened in America when we had liberalized zoning. (See, for example, the history of San Francisco, and New York).

I am all for increasing density in places where there is high demand for housing. But a lot of people are living in this libertarian fantasy that all you have to do is liberalize zoning and you will magically get a perfect high density city like Singapore (which ironically has some of the strictest zoning in the world) and not a sea of slums (which actually happens in the real world when you combine high demand with no zoning).

I think cities should increase density when they see high demand for housing. But they should do it smartly by providing services and infrastructure for more citizens when allowing higher density buildings.

The most important service for high density living and the first pain point a city hits when population increases is transport. So if you want higher supply of housing, the most important thing to do first and foremost is to vote for all mass transit initiatives and try to convince your city leaders to put in more mass transit. Once the mass transit is there it will be far easier to put in apartment buildings and increase density without choking the city in traffic.

> See, for example, the history of San Francisco

SF has notoriously strict zoning.

Right.

Communist until you get rich

Feminist until you get married

Atheist until the plane starts falling

Critisizing NIMBYism until you own the house.

If houses don’t appreciate, why buy a house? Just rent

because you want to settle down and stop moving? maybe have a family? have a place for your own that you can actually configure to your own liking? not get kicked liked a football because rent was increased for lease renewal because new corporate landlord doesn't give a shit? give next generation a fair/reasonable chance of making it on their own and not because they were not lucky enough to be born with family money?

I laugh when I see people have BLM signs on their property because those are the exact people who don't want to care about it.

We bought a house, then had to move cross-country. After owning, where all they did was examine our finances, it was really degrading having to submit an application to rent a house, background check, references etc. Also when something breaks I have to call someone, who will then, within a week or two schedule a handy man to come by and fix it. I have no say over the appliances, external appearance of the house, can't apply for a permit to convert the attic into a third story, fix the inadequate wiring (technically to code, but my space heater will blow out the circuit because it's attached to several other things in the house). I recently reseeded the back yard, at great time expense, and things generally while nice, look a lot more run down than if I owned it and could make improvements knowing I would retain the value, but I'm not going to pour money into this house just to let the landlord receive that value at no charge. Also when he and his wife feel like retiring here, we're going to have to move, at our expense with no recourse. We already tried buying it from them. Renting sucks.

It can't be reduced to just zoning. Corporations also buy up 30-50% of new housing. Also immigration rate doubles than of new housing starts.

The wealthy of the world should shouldn't be able to buy up our real-estate period.

In the USA, all it takes is a email, or phone call, from practically anywhere in the world and they own it.

At minimum we (USA) need to start with citizenship as a prerequisite. Oh yea, stop corporation for buying up precious stock too.

(Until we have more stock--the last thing we should allow is foreigners with funds buying our land. I have found it infuriating since I found out about how easy it is to buy here. Other countries do not let wealthy Americans buy land so dam easy.)

When the wealthy of the world buy land in USA, isn't their wealth from abroad getting transferred into USA?

That's foreign money coming in to USA.

Technically, that's a good thing for the country as a whole.

Reply on news.ycombinator.com