Only now are we starting to see actual democratic referendums on these topics. For a long time everybody was brainwashed into thinking more construction = “greedy developers”, so nobody treated adding to supply as a possible solution.
But the tide is starting to turn, and in a lot of state/provinces you are starting to see real change it last. British Columbia will soon up zone province-wide for example. And slowly you are starting to see some good initiatives passing in California.
Seattle, Vancouver, SF, etc need to upzone, to permit more development, so that supply can meet demand. As I understand it, that upzoning is not happening nearly fast enough.
Public transit initiatives trigger (begats?) upzoning. This is an end run around the regressive restrictions on property taxes and entrenched NIMBYism.
I fully support it. Whatever works. I wish my peeps working on affordability, homelessness, economic justice would put less emphasis on set asides, protecting older listings, etc, and place more emphasis on increasing inventory.
One potential monkeywrench of increasing supply is absentee landlords. I just read something like 1/3rd of Vancouver properties are owned by Chinese investors. Which I'm totally cool with so long as the units are mostly occupied.
The problem with the "simple" solution of "just add more supply" is that supply creation is physically restrained by real world factors. It's not lines on a chart like in econ 101 class.
New development is constrained by available trades, construction times, design time, and city review time. Already the City of Vancouver has increased development application fees in order to hire more persons to review development applications faster.
In my neighbourhood there is a high rise under construction that is still not completed but already one year over due. The development industry is continuously stating that more supply is required, but they can't even finish building their own buildings.
We have some fairly big developments in my mostly suburban area that take years to build out. The building sites are already prepped and permitted, so they can increase the build rate somewhat dynamically. Since it looks like we are only talking about 10000 extra starts in a month I find it believable there is enough supply to react to an increase in demand for home building.
Libertarian organization delivers libertarian hot-take. No surprise there. It's tempting to believe! We all know the old story of the "law" of supply and demand. And there may be specific places where there is actually too much blocking new construction. Where I live, Vancouver, we have plenty of new construction - and have been pretty developer friendly for decades now. The problems I've seen with it are 1. it doesn't bring down prices and 2. all that gets built are luxury homes for the rich and condos for everyone else. Meanwhile developers and investors have gotten very rich off it. As a recent-ish example, the olympic village development sat mostly empty for YEARS, held by investors. There was no noticeable dip in prices when that development came online.
Long story short - yeah, we need to build more homes - but not using laissez-faire capitalism. As far as I can see in my lifetime that hasn't worked. Large scale socialized row-housing developments are what I'd like to see tried next.
Cities rarely try this out in practice. There are examples of smaller cities that manage to keep up - e.g. Kristiansand in Norway, which kept the real estate price development slightly negative during a decade when the rest of the country had a massive increase. I get the impression Copenhagen has also managed to build enough. Their bubble popped in 2006 AFAICT, with moderate development since then in spite of negative interest rates.
But for large cities, there seems to almost universally be democratic agreement that we won’t build a lot more right here.
You get the odd symbolic attempt. But I’m not talking about re-zoning the odd industrial park and rationing them out to the three developers that get things done in this town.
I’m talking about building 40 stories everywhere, where previously there were 8. Consistently allowing developers to build in front of their neighbors’ ocean view. Turning 50% of the beloved hills around the city into high-rise apartments. Stuff like this, to a degree proportional with demand. Annual price increase or decrease is the signal to steer by.
My point: If you support local democratic policy that will lead to an outcome every passing ECON101 student can predict -
There has never been an unwillingness to build and that narrative remains baffling to me. The city has been steadily building condo towers for decades and continues to do so. Look at a photo of Vancouver from 1990 and now and the difference is startling.
I stopped by two City of Vancouver public consultations today and both were about rezoning areas to expand housing. One was about upzoning Chinatown to include more housing and the other concerned the design of the new North East False Creek neighbourhood that will exist after the viaducts come down. Tons of housing will be created when that land currently used for an incomplete highway is freed up.
No but don't you see? They "have been building for decades" (in the sense that, every year, some small number of new units are built) and prices haven't fallen! So clearly "building more units" can't be the solution. That's just an excuse to line the pockets of developers! And besides, the "build more crowd" wants nothing but to "provide financial and regulatory incentives to developers", there is definitely no movement to remove regulations that prevent building! No, the author, who clearly has a deep understanding of this issue, has never heard of such nonsense.
For those not up to date on the developments here in BC, there are a number of interesting solutions being implemented currently:
- Unification of residential zones into a single zone with (marginally) higher density, which could make it easier to further increase density in the future
- BC Ministry of Housing has brought forth legislation to upzone housing in concentric rings of decreasing density around transit stations, with allowable minimums up to 20 stories in the nearest ring, where in many cases single family homes currently stand.
- Senakw development: native land still under control by a local native tribe is not subject to housing bylaws and is now being developed into several large towers (without parking requirements!)
- An even larger development has been proposed using the same land rights on the Jericho lands just west of Senakw, which proposes around 10,000 new homes and a new subway station which would count as another transit station for nearby development of what is currently extremely underutilized land.
- This new BC special, although I’ve heard it may not be automatically applicable to Vancouver because Vancouver has special privileges to enforce its own building code (?)
I think it good that developers in the city are able to meet the demand rather than ignore it. I'd like to see this level of development happening in US cities. It looks like progress.
It's about time. We've been holding development far below population growth for years, and we have the sprawling suburbs you'd expect as a result. Even this seemingly dramatic building spurt won't catch us up with expected population increase! But it's an improvement.
It’s so crazy, the government just has to get out of the way of developers and then the problem will just sort of solve itself. We are sitting on the biggest economic opportunity thinkable because there is 30+ years of pent up construction demand. Simply letting that happen would unlock so much prosperity for decades.
Right of course but my point is that view cones and other restrictions on the form of housing are not a dominant factor when you compare how much housing supply they would bring versus the level of housing being created elsewhere.
Vancouver is upzoning the entire corridor along Cambie street and is planning on building significant residential parcels at Oakridge (~2000 units) and Pearson Dogwoods (~3000 units). If you go out further to Burnaby, New Westminster and Coquitlam they're building tons. Burnaby just announced their long term plan for a redevelopment of Lougheed Mall that will create 11,000 units.
Basically adding further height downtown isn't really necessary and the gains are minor in comparison with the gains achieved by rezoning low density single family houses and low density commercial to higher density forms.
You can create more houses on the same land with technology called "taller buildings", mass timber construction, single stair apartment reforms, upzoning, &c.
The above comment saying corporate investors lobby for reducing supply isn't true though. It's individual old NIMBYs and small time developers who lobby for that. Big companies like BlackRock are passively investing because it's so easy when the local government already wants to help them by restricting supply, but they don't individually show up to city council meetings and lobby for this stuff.
You really can defeat them by showing up. No California YIMBY policy has lost someone an election yet.
There is a regional authority which tries to force communities to match new office space with new housing in the same city. And there's state action on the way to force local areas to approve dense developments near transit hubs like Caltrain. Obviously this isn't doing enough today, but there is action happening.
I think the "build more" stuff rings very hollow. I live in the sun belt where no politician has ever said no to a developer, and I assure you that rents and home prices are broadly unaffordable here too, though perhaps less so than elsewhere.
The frustrating thing about the supply side solution is that the answer to every argument is always "add more supply!" even if the city is obviously already doing so at an aggressive pace.
The reality is that there are real world physical limits to adding supply. There are a limited amount of trades for example. There is a limited capacity to review and process development applications. It takes time to complete buildings.
Unlike Silicon Valley Metro Vancouver has steadily built condos for decades and the region currently has more housing starts than at any other time ever.
Vancouver's issues are deeper and more urgent than a one dimensional supply side solution can solve.
we are at record low growth rates for "peaking" in the development cycle.
The problem is (1) we haven't built that much since 2008 anywhere, so any change seems like its a flood (2) most growth pre 2008 was greenfield SFH development, most growth happening now is in established communities
I think this is the best point to shout out, in the Bay Area. Show how building projects can alleviate supply concerns for demographics who can't afford your suburban home, and how the increase in population will still help your home price because it will make your fat suburban land parcel look even more exclusive. Everybody wins something.
But the tide is starting to turn, and in a lot of state/provinces you are starting to see real change it last. British Columbia will soon up zone province-wide for example. And slowly you are starting to see some good initiatives passing in California.
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