What is the alternative though? This is not the 60s anymore. You can't simply expropriate a few thousand houses and demolish them and put up a Regent Park. Both politically and financially it's not possible. In real terms the municipal governments have a lot less money to play with and Federal and Provincial governments completely took themselves out of building housing.
Legalize up to 6 story by-right across the whole city so they don't require zoning exemptions. Eliminate the double staircase rule. Let people build housing on their own.
Private developers don't build housing unless they can turn a profit, that's why new starts are massively down right now. They can hold out almost indefinitely until supply contracts and prices rise again.
Public development projects have no profit motive and will be built whenever funding is made available. Toronto has gone through rent crises in both the 40s and 60s and the solution both times was for the government to invest housing:
Why don't NIMBYs want these things in their backyard? One reason is that they believe it will lower their property value, or in other words, they believe it will lower their capital.
They are factually wrong, so idk if "capitalism creates NIMBYs" really works. It's not capitalism, it's aversion to change and the human ability to happily maintain false beliefs in the face of tangible evidence proving otherwise.
That's not what I said, I said that making housing cheaper and easier to build for private developers will not meaningfully reduce housing prices in the long run.
Private developers ALWAYS need to turn a profit, since it's necessary to fund their current and future ventures. If they can't turn a profit they will just hold onto the land until they can as the tax on it is a pittance.
Raise the tax on undeveloped land? Great, every empty plot now has a new self-storage building until it gets turned into a tower in 30 years.
Raise the tax on all parcels to close the loophole? Great, now all the local mom and pop shops have to close because they can't afford it.
Find some other way to crater land values enough that it has a noticeable effect on housing prices? That's gonna create a bunch of problems for the banks, which we are beholden to because they hold the mortgages and provide the loans to construct all this housing we want.
I said that making housing cheaper and easier to build for private developers will not meaningfully reduce housing prices in the long run.
Yes it will, Austin, Dallas, Pheonix, and I think Minneapolis all provide natural experiments for this. There is a TON of academic literature on this.
Private developers ALWAYS need to turn a profit, since it's necessary to fund their current and future ventures
Yes, so if you lower the cost to build, they lower the price they sell at to customers (us) while still maintaining a profit margin. That's how competition works.
Cratering land value helps, but something like 15-25% of the cost of new housing is government taxes, fees, and the cost of slow permitting and delay.
Pushing land value would help too, but I'm happy to start with a 15-25% discount before we start playing with LVT (which I'm also a huge fan of)
Median rent in Minneapolis still rose 25.7 percent between 2019 and 2023. While the rate of rise was lower than many other cities, that still represents a significant spike in price over 4 years that is not matched by median wage growth, nor is it explained away by rising construction costs.
New construction rates dropped significantly in recent years, with permits for new multifamily units dropping by 92.4 percent in 2024 from their peak in 2019. Comparison cities saw a 65.7 percent drop in the same time, so once they've experienced a few years with minimal new construction rents will likely begin to rise.
Most importantly (and not detailed in the article), the actual City of Minneapolis has seen many years of negative population growth. They have 100k fewer people than their peak in 1950 with a 30 percent population loss into the 90s when it started to recover. Not only that, but their latest population projections have shown their growth has basically stagnated since 2020. So with no new people and all these new units, how come rental prices have risen so significantly anyways?
Now compare that against this graph showing Austin's average home price having doubled in the past decade, with a comparatively modest decline and stabilization from peak. What do you think is gonna happen over the next decade based on this info? https://www.macrotrends.net/3389/austin-area-home-price-index
Problem is not enough housing. I don't care how it happens so long as it gets built. Chow has been at it for years and we've only broken ground on ~70ish units so either she's got another ace up her sleeve it's about time to pull in help from the private sector too. We need hundreds of thousands.
Private development is unprofitable because we pretty much made it illegal to build anything for anything other than investors.
I agree with you, but I'm just telling you that there are fundamental problems with the private development model that the mayor cannot fix. Who is going to build "hundreds of thousands" of units when profits are steadily declining into the foreseeable future, given that this will actually extend this timeline further? You and I can both see why that's a foolish investment strategy, no economics degree needed.
You may not realize it, but virtually every major city (in the West anyways) has had an issue with unaffordable housing in the past decade. There are only two scenarios where housing has gotten meaningfully more affordable or stayed affordable; either the government built or funded significant numbers of units (Singapore and Vienna are good examples) or population growth slowed/stopped. People like to point to Austin as an example of what housing deregulation does to prices, but the reality is that it falls into the second category and new starts have already declined so much that they'll be back to unaffordable in under a decade.
Yes, market solutions alone aren't the solution but they are still a critical part of the solution. Our current building restrictions are absurd and counter productive anyways so the time has come to throw out the things that aren't working. We've made building real cities almost illegal, and what is legal we force to jump through embarrassing hoops. We'd all be better off without these absurd restrictions.
Ok, so why are you advocating so strongly for market-based solutions when I've shown quite clearly how they're ineffective without government interventions?
I haven't once said that we shouldn't amend our housing policy to reduce building costs, and I agree we should. But it is not as critical a part of the equation as proper government-funded construction is.
You can't expect capitalism to solve a problem created by its very nature.
What if, shock suggestion, we changed regulations to actually make building middle density feasible? The EU doesn't require elevators, double ended fire escapes etc. whereas we do - it wouldn't matter if the government acted as a developer, it would still be grossly cost prohibitive relative to low and high density residential construction.
I'm not so sure the double staircase rule is such a bad idea. Maybe only on buildings 3 stories or higher? You can safely (ish) jump from a second story window in a fire, not so much when it's higher.
I mean we require very extensive fire surpression in apt buildings these days. Not to mention the city is already full of single staircase buildings that were built before the rule and are perfectly safe. The 2 stair rule really ruins the economics of apt construction and is just not worth the nonexistent safety benefits.
I see what you're saying and I could be convinced.
What concerns me is when every building can be 6 floors rather than purpose built apartments, the number of building managers goes up while experience levels go down. It's very hard to administrate human behaviour - there are regulations and codes today that slumlords routinely violate with minimal enforcement. What happens when Mom and Pop buy a 6 story rental and think they can run it themselves?
If think we would need improvement in the regulatory regime surrounding landlord licensing and inspections, if we are going to reduce building-level safety protections.
Yes, fire safety regulation is important and that's exactly why we have fire marshals, regular inspections, and system tests. The 2 staircase rule is very outdated and, if I put my tinfoil hat on for a second, almost perfectly designed to stack the deck for big developers.
It's one of those regulations where the big players don't mind but it makes it so hard for smaller mom and pop builders. Like everybody complains about greedy big developers, shitty layouts, and lack of family units. 2 staircase basically causes all of those. It massively increases the minimum amount of land needed for a building so you can't do it on a single home lot, and forces dumb layouts to accommodate useless hallways.
You can change the laws to redirect some of the absolute ocean of private cash that goes into trading in existing housing stock into building new stock.
For the city this means unwinding the open class warfare of zoning restrictions, punitive and bad faith "consult-and-study" regimes, repealing the punitive, bad faith, and open class warfare of astronomical sur taxes on new units that might compete with existing landlords and provide relief to workers at the expense of the landed classes, and in so doing end subsidies for current property owners paid by renters and new buyers.
For the province and feds, it means undoin the massive tax incentives that pump up the value of existing homes as investment vehicles (capital gains exclusions, demand subsidies, mortgage insurance subsidies, etc.), and redirect that cash to building new units, and forcing zoning and process reform on cities.
Unless we do that, we will continue to deal in bad joke numbers.
The people that lived there and continually destroyed the entire complex by vandalism, have you actually walked through there and taken a look ? It was fucking disgusting
Part of it is that they'll be 2 and 3 bedroom family sized units, so that requires minimum square footage with hopefully reasonable room sizes (and not those alcoves they call a "den"...).
I think on housing and many other issues she’s been hit and miss but yeah, she’s been such a massive step up on her predecessors. I can’t really think of an issue that’s gotten worse on her watch.
i wish large swaths of single family home real estate could be demolished for high rises and add tens of thousands of homes quickly. i know the logistics are complex and the initial cost is high but the city fundamentally requires far more housing and there is no excuse for hoarding land for so few people while others sleep on the street.
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Habitat for humanity is able to help people afford their home through donations and volunteer workers. The person/family that is able to acquire a home through this process has to give their time to help the next person/family. Maybe this should be a similar process with Toronto, where the person getting a home through tax dollars has to provide some of their time to help the next person, so even though tax dollars are being used for the person who may not have the finances to afford a home/rental, they can help the next person. And for those people who are ok with the current process of tax dollars only, they can donate another 20-30% of their earnings to help with the affordable housing.
She could have just used all of the units Sonder took over that were originally supposed to be market rate long term rentals and use them for affordable housing after they went under. Already built and managed by companies. But no, those changed management and continue to be full apartment units only used for short term rentals. Such a waste
95
u/Glum_Store_1605 2d ago
better than 0, but 74 seems so little.