[lhorie]

Personally, I think the problem is more a question of the sort of business development that happens downtown vs the surrounding areas. If you look, for example, at development on highway 7 over the decades, there's definitely densification going on, e.g. this area[0] used to be farmlands back in the day, but now those red lanes are public transit lines and there are condo buildings sprouting up along that corridor. All in all, though, it's still much sparser than Toronto's downtown core.

If you look around the area, other than campuses like IBM's and CGI's, a very significant percentage of the business development in the area is still big box B2C (walmart/home depot/etc) or small-ish businesses. That's in stark contrast to areas like the financial district where the vast majority of workers are white collar office people. Which is to say, Markham/Vaughan could still stand to become much more metropolitan with the presence of more B2B big corps.

My pet theory is that concentration of white collar work is what drives up home prices. Exhibit A: places like Palo Alto and Mountain View in the San Francisco Bay Area (vs, say, Pacifica or Half Moon Bay) are clearly propped up by the presence of FAANG campuses. I'd bet that if a Google setup a campus in Ajax, you'd see an appreciable increase in demand for housing in surrounding areas even if they are traditionally considered too far from downtown TO (e.g. Whitby)

[0] https://www.google.com/maps/@43.842627,-79.3906732,3a,75y,20...

[aspenmayer]

People want to live close to work, because it's hard to multitask while commuting, and if you're paid hourly, it's essentially unpaid work time. Higher paying jobs allow those higher earning workers to bid up prices on the land closest to their high paying workplaces, which tend to be in desirable areas, because those areas have other amenities that the highly paid workers are able to pay to enjoy. It's a ratcheting flywheel that drives up home prices.

The high paying companies benefit from this when the markets are up, as their stock prices appreciate due to being able to compete in the market and remain highly paying companies. And when bubbles burst, their stock prices may go down, but so do their outlying obligations, which are denominated in dollars also. The gains made and invested into the company during the boom years allow strong companies to ride out the lean years better than their weaker competitors, whose workers are then in need of a job at one of the remaining companies unless they become or are already self-employed. This allows the strongest companies to get the benefit of both extremes of market conditions.

All of this causes metro areas, which are full of both established megacorps and VC-infused startups, to become pressure cooker bellwether barometers of property values and rent prices.

There are many ways to solve the problem of unaffordable home prices, and an answer is more supply. Why it isn't chosen more often is primarily a political problem inasmuch as it is a market problem, or land availability problem, or zoning problem.

[lhorie]

I mean, for a market like the SF Bay Area, sure, the political landscape wrt housing is notoriously difficult to navigate, but at least for Toronto, I never got the impression of housing construction being deterred to as significant of a degree. In fact I'd say condos have been going up all over the place for decades to the extent that people were even voicing concerns over disappearing parking lots as construction companies gobbled them all up and turned them into condo projects.

I think at some point, even if the government were to scream "let there be more housing", there still needs to be private capital poured into these very expensive projects, and surely there must be a significant amount of analysis done to determine where it makes sense to put up condos, where amenities and other businesses sprout up in response, and rinse and repeat.

The side of supply where I think things get dicier is wrt wealth inequality. The real estate agent I used to buy my house had 3 mortgages of her own, it's an incredibly common thing for well-off people and real estate insiders to over-leverage on rental property mortgages. My wife had friends from China buying up property with corruption money given to them by their parents, it's been a thing since forever. There's no easy way to regulate who gets to buy houses and who doesn't.

[aspenmayer]

> There's no easy way to regulate who gets to buy houses and who doesn't.

I get what you’re saying, but didn’t Canada do just that? That’s not to say that it was easy, but I think it’s a step in the right direction.

Additional/secondary homes, and especially empty homes need to be taxed more to help disincentivize the anticompetitive behavior in the housing market that you mentioned.

[lhorie]

I think making it harder for foreigners to buy houses as appreciating assets has always been a talking point and I suppose it probably helps if the bar against foreign money is higher, but I see it more as a whack-a-mole game. The example of chinese kids buying property to park their parents' money comes to mind as a way that people get around regulations. It's relatively easy to get permanent residence and even citizenship compared to the time scales of real estate, combined with the "using family members to siphon money out of China" thing.

But you're right, I don't think there's going to be a single action that solves the problem fully on its own, so taking it one step at a time is a good approach.