So, the CBC is the the national broadcaster in Canada, similar to the BBC in Europe. They’re pretty stodgy, they run good radio programs and they are wary of the government, as you’d expect.
They just wrote a really good article in problems in the housing market.
The two graphs that really matter are:
Glad CBC is writing about this. Things seems to be getting worse and worse for young people and renters on the housing front. https://t.co/hx6jfxEM1D pic.twitter.com/FV7kQ8tKF1
— Derrick (@DerrickSimpson_) April 16, 2024
But here’s what I find interesting. Quotes like this:
“What started happening in B.C. and spread throughout the country is that we weren’t just satisfied with paying off our mortgage to build equity. We’re like: ‘You know what? I want this home price to double, triple, quadruple.'”
When existing homeowners want prices to rise faster than earnings in the local economy “is the moment you want a wealth windfall for those who are owners now that will come, by definition mathematically, at the expense of affordability for those who follow,” Kershaw said.
“That’s the trouble we’ve gotten ourselves into. And if we cannot have that conversation, we will never solve the crisis of housing affordability.”
If housing is an investment; a way to get rich, then by definition it’s going to get expensive faster than most people’s income. This is common sense. It’s acknowledged in Japan, for example, but in North America we’re addicted to our free riches, and since most people are locked out of the other sources of unearned wealth, real-estate prices are politically off-limits, they’re supposed to go up faster than inflation and wages forever, and the government colludes to make it happen, including by guaranteeing mortgages and stepping in 2008 to limit the price crash.
Homeowners and home investors, after all, vote and donate to political parties.
Anyway, CBC is stodgy and politically wary, for it to allow an article saying that home owners aren’t saints and perhaps housing prices shouldn’t be allowed to float into the stratosphere is very interesting.
The technical solutions to fixing rent and housing prices are well known: if Japan, with way less land, fewer resources and far more people can keep housing affordable, obviously Canada can do it.
But we can’t do it political parties want housing prices to keep rising and rising because it make an important chunk of voters happy.
And lack of housing (aka. homelessness) and increased food prices are going to lead to political unrest if something isn’t done.
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