[friend_Fernando]

> I should mention that I've seen fairly convincing cross-sectional evidence that homelessness is more related to the housing market than mental illness

This is absolutely the right diagnosis. For instance, SROs used to be very affordable.[1] Placing someone into housing was well within the means of local governments and non-profits.

In Coppola's 1974 movie The Conversation, a large portion of the titular dialogue is about a homeless person Williams' character spots while walking around a crowded Union Square. That's how much homelessness stood out back then.

[1] https://ccsroc.net/s-r-o-hotels-in-san-francisco/

[retrac]

Fifty years ago in Ontario, Canada if you were a single adult destitute with no income you would be eligible for general welfare which would pay about $180 a month, when the average rent on 1 bedroom apartment in Toronto was about $150 a month. Today, an adult in the same position gets about $800 while rent is $1300. It used to be possible to afford (slummy) housing at market rates, even for the very poor. Now it is not. It can be viewed either as a housing price issue or an income inadequacy issue.

[lumb63]

I live near Boston. Part of the housing supply issue here is the mandate for a certain amount of “affordable housing” in all new developments (I forget the percentage, on the order of 10-20% of new units?). This results in either housing not being built, since the developer would not be able to earn enough on the sale of the building due to below-market rent payments, or the non-“affordable housing” units have to pay above-market rates to subsidize/offset the below-market-rate units.

This drives me nuts, because the goal should be for 100% of housing to be affordable. Stifling development or shifting the unaffordability to different areas of the income distribution do not solve the problem. More housing has to get built. This is a supply-demand issue, as anyone with basic economic knowledge can tell you. There are two ways out: people relocate, or more housing gets built.

[jimmydddd]

** "...the goal should be for 100% of housing to be affordable."

In a world where everyone had housing, I wouldn't mind if Taylor Swift built a house for herself that wasn't "affordable."

[verelo]

Fifty years ago Montreal was the business centre of Canada, now that’s Toronto. That $800 rate might actually be more affordable in a less business oriented city, or even Montreal itself since it’s seen a lot of decline in that time. Having said that, there’s zero debate rents are out of control. I own a triplex and every time a unit turns over and i do my research on rent i get a bit shocked. I’ve found myself legitimately concerned how someone can ask for full “market” rate when i know it’s simply not affordable.

[wat10000]

A business center doesn't have to be expensive. That’s made to happen because housing isn’t allowed to be built in sufficient quantity, not a necessary consequence of success.

[SequoiaHope]

I think quantity is a valid concern but I also think treating housing as a speculative asset is an issue. Housing serves as a valuable speculative asset precisely because quantity is restricted by a variety of factors, but actually using it as a speculative asset raises prices significantly.

[friend_Fernando]

Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't (there's a bit of slack with relocations, house sharing and spare bedrooms but it's largely inconsequential.) That means that supply (i.e. quantity) is enough.

It's true that if it was impossible to speculate on housing, there would be less incentive to create artificial scarcity by e.g. lobbying for restrictive land use policies.

[SequoiaHope]

> Relative scarcity is the necessary and sufficient condition. Either there's enough housing or there isn't

This seems like an oversimplification. Speculation affects demand, so the amount of speculation is hidden within “relative scarcity”. If there is no speculation then demand is directly related to the needs and finances of potential occupants. If there is speculation then demand becomes connected to the buying power of the wealthy, and thus demand and prices are likely to be higher.

In particular, the wealthy investing class collectively have way, way more money than the renting class, so the finances of the wealthy class distort housing prices upward in ways which dwarf the supply and demand effects from actual renters moving in and out of an area.

[nikitaga]

Just saying "speculation" doesn't really paint the picture of what's going on. In 2010-s everyone here blamed foreign speculators hiding in the shadows, but we live in a different, worse, world now.

This country's housing and immigration & temp. resident policies are absolutely out of sync, intentionally. In 2021 they've changed the rules to add hundreds of thousands of people overnight, but did not build anywhere close to the corresponding amount of housing. Then they did it next year again, and again, and again, and they're still doing it, and the next government plans to continue doing it.

This isn't mere speculation. This is deliberate policy to manufacture a housing crisis. To not only keep the pre-existing crisis going, but to deliberately and methodically escalate it. Politicians profit both from their own investment properties and from bribes (ahem campaign contributions, speaking fees, board positions, ...) paid to them by all kinds of businesses who profit from oversupply of labour and undersupply of housing.

"Speculation" implies taking significant risk, often in an under-regulated market. But the current situation is nothing like that – there is barely any risk, when both the supply (zoning & construction) and demand (population growth) sides of the market are heavily regulated with the intent to raise prices. Capital is all you need to reap the profits, pretty much.

[gottorf]

> the next government plans to continue doing it

Asking as someone not that familiar with Canadian politics, is this "the next government" as in the Liberal one that would replace Trudeau after his resignation, or the (likely) Conservative one that would be in power after the general election?

[cudgy]

And yet most large cities have sections of it that are in total blight with abandoned homes, with windows blown out or plywood covering access holes to prevent intruders.

Much of the problem is that the bourgeois class wants to live in the popular neighborhood, bidding up rents and values in isolated sections of large cities. Meanwhile, large chunks of cities have relatively affordable, but not as attractive neighborhoods with homes that could be converted to house the homeless for a fraction of what it would cost to build new housing.

Just the other day, I heard a news report in my area where they allocated money for homeless at $100,000 per bed in order to add more beds to an existing shelter in the downtown area. Yet this city has neighborhoods with cheap and unoccupied homes that could be bought to house these homeless for much less than 100,000 per bed.

[andirk]

Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year. As a proponent, I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit. Housing as a speculative asset has some pretty terrible consequences.

[0] https://www.berkeleyside.org/2022/10/23/election-2022-measur...

[1] https://rentboard.berkeleyca.gov/sites/default/files/documen...

[maeil]

> Neither has happened much and these owners just take the hit

Then they're too low. It's impossible there exist no X and Y where at $X and Y% this would make them sell.

[dragonwriter]

> Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year.

It's not $ and % in Berkeley, its a fixed $3,000 for the first year the unit stands vacant for 182 days or more, $6,000 in the second and subsequent years.

Oakland's measure (which is older) is also a fixed dollar amount (varies by the specific kind of unit, either $3,000 or $6,000 per year), and only applies if the property isn't occupied for at least 50 days in a year.

San Francisco's new one (like Berkeley's, passed in 2023 and would have gone into effect for 2024 with payments in 2025) was struck down as a violation o both the Federal and State Constitution, so until and unless that decision is overturned on appeal, it effectively doesn't exist.

> I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit.

Well, the only significant one that is in effect at all (Berkeley's) hasn't had much time to have an impact (it only applies to rental properties with units vacant for more than 182 days in a calendar year, and it went into effect Jan. 1, 2024, with the first payments due in 2025 based on 2024 vacancies.)

[cudgy]

I don’t disagree that speculation on a critical resource like housing is a really harmful phenomena. Another concern is when people use housing as a store of value for diversity in their portfolio. These long term “investors” are less likely to care whether their houses are rented or occupied as they have enough wealth to weather the loss of revenue or even fluctuations of the asset prices.

The empty home tax is a great idea, but my guess is the tax/fee is not significant enough to change investor behavior. Or possibly it’s not being enforced at the level it should be?

[dbspin]

I think the principle is solid though. Tax should effectively be 100% of the market value of the property after a certain point though - say one year.

[dragonwriter]

> Meanwhile, large chunks of cities have relatively affordable, but not as attractive neighborhoods with homes that could be converted to house the homeless for a fraction of what it would cost to build new housing.

If they are "relatively affordable, but not as attractive" they are probably largely housing people currently, and not available to house the homeless.

If they are "in total blight, with abandoned neighborhoods, with windows blown out", they've probably also been stripped, structurally compromised, and contaminated with hazardous materials, and already sheltering squattors, and would need to be cleared, cleaned up, demolished, and have new housing built, making it a more expensive (excluding whatever differences there are in land costs) effort to use that space for housing than other places which might still require demolition and new construction, but not the clearing effort.

> Just the other day, I heard a news report in my area where they allocated money for homeless at $100,000 per bed in order to add more beds to an existing shelter in the downtown area. Yet this city has neighborhoods with cheap and unoccupied homes that could be bought to house these homeless for much less than 100,000 per bed.

I suspect if you research what the $100,000 covers, much of it is stuff that would still need to be done after buying the units. At least that's been the case most of the times I've seen comparisons like this.

[cudgy]

> they've probably also been stripped, structurally compromised, and contaminated with hazardous materials, and already sheltering squattors, and would need to be cleared, cleaned up, demolished, and have new housing built,

Seems like you’re looking for any and all reasons to establish such a high standard for any housing for homeless people that literally sleep on the ground on top of a plastic bag that creating housing for them is too expensive.

In my opinion, this type of analysis is that the root of the problem. There is no perfect solution, but building high quality housing meeting the latest standards of the city planning committee for 1% of the homeless while leaving 99% out on the street is not a useful solution.

[immibis]

> and already sheltering squattors

i.e. already providing housing to someone who would otherwise be homeless

[ANewFormation]

I don't think it's people just wanting to live in 'popular' neighborhoods, but safe neighborhoods. In the places you're describing you don't go out after dark, crime is common, and you also get to enjoy things like SUVs slowly cruising around at 1am with sound systems more fit for a stadium than a car.

In places, like most countries in Asia, where crime rates are vastly lower, you'll see far greater levels of socioeconomic mixing with defacto mansions near rather modest houses. The same is also true to some degree in rural areas in the states, where you'll see a trailer on a couple of acres with a truck husk or two in the front yard right beside a house that you'd be more inclined to call an 'estate.'

[immibis]

Transport affects this. Berlin has a pretty extensive network that gets you from any part to any other part in an hour or less. It's thought to be a factor in why the rents rise uniformly instead of rising a lot in the middle.

[squigz]

I'd be shocked if you could find $800 rent in any city in Ontario, business-oriented or not.

[seanmcdirmid]

Windsor? As a nicer Detroit, I thought they might at least benefit from weaker rents considering what’s available across the border. But that’s just a guess, I haven’t lived in that area since the 80s. Here is one source that says a 1 bedroom will set you back $1400: https://www.zumper.com/apartments-for-rent/windsor-on

[squigz]

Ha, I wish.

[throw5959]

It can be viewed as a housing supply issue.

[chgs]

Doesn’t matter how much money in the system, if there are 100 homes and 110 people, ten will be homeless.

[HPsquared]

"People per house" is not a fixed number.

[hiAndrewQuinn]

Ooh, as an American involved lightly in real estate who relocated to Suomi a few years ago I always love this topic. Let me ramble.

It's worth pointing out that, on a country-wide level, Finnish housing prices have been remarkably stagnant for the last 20-30 years when compared to e.g. the United States or most other European countries. That is not true of the cities, obviously, and cities are where all the work is, but it is quite possible here to find very cheap housing in the "middle of nowhere".

Government subsidies don't change that dramatically between these different areas, so it's entirely possible to rent e.g. a studio apartment someplace like Kemi or Vaasa for 500€/month or lower and then just coast if you are willing to put in some effort. If you're willing to live with roommates, who may well be running the same strategy you are, it becomes even easier. (The downside is you then have to live there. Many of these areas have record high unemployment rates, for much the same reasons 3000 person towns in the United States do. Having done something like that for a year, I can report it felt like living in cryostasis.)

So there's arguably an oversupply of Finnish housing in these remote areas, and most of the country is correctly classified as remote (seriously, look at a map, Finland is huge for 5 million people). One interesting mechanism which might help curb that oversupply in the coming decades is the 15% inheritance tax - many people who live in these areas are older and don't want to hand down e.g. a $50,000 valuation home to their kids and then force them to somehow pony up 7.5k in liquid capital. That incentivizes them to sell sooner rather than later.

The more interesting question: Has Finnish housing supply growth in areas like Helsinki, Tampere and Turku kept up with demand growth? I suspect that no matter which country we're looking at, the one which answers that correctly today for their largest cities will be the best place overall to live 10 or 20 years from now. Personally I'll always prefer Finland's massive concrete suburbs to the endless, pointless sea of single family homes I grew up in in the States, and I hope we keep building more of them!

[ghaff]

A lot of that probably applies to the US as well. There's no shortage of relatively inexpensive housing but a lot of people just don't want to live in those places for a variety of reasons. Ask a lot of the people here: it's cold and snows, it's not welcoming to people like me, there aren't a lot of good local jobs, there's a lot of crime...

[gottorf]

> there's a lot of crime

This is maybe the biggest difference between America and other developed countries when it comes to this subject. You'll find that a fifth-percentile priced home in Spain, Korea, or Australia will be in a rural area with not a lot of economic prospects, but in the US you'll have the additional burden of finding a meth lab next door or being a homicide victim.

[ghaff]

In the US, it's probably more about being in a bad area of Detroit (or even cities that are considered much more elite) than being rural with a meth lab next door but I don't really disagree with your basic point though I'd have to look at the actual stats. Not sure that US rural areas in general have a big crime problem relative to areas of some cities.

[gottorf]

Yeah, you're probably right. To restate my point, it's that buying a cheap house in the US comes with risks to one's basic safety that you don't find in other developed countries.

[ghaff]

Although I'm not sure that's true in general outside of bad areas of cities--which do also exist in other developed countries. Maybe some rural areas are iffy but many inexpensive ones are really not.

[dyauspitr]

There is plenty of cheap rural housing in places without a lot of crime in the US. The other problems still hold however.

[ghaff]

Yeah. In that case, I was thinking more about cheaper housing in especially 2nd/3rd tier cities. Rural areas are, in general, fairly safe.

[FpUser]

>"One interesting mechanism which might help curb that oversupply in the coming decades is the 15% inheritance tax"

Housing is one of the areas I do not see any problems with oversupply.

[hiAndrewQuinn]

To be precise, "oversupply" here means "supply which has not yet reached the market clearing price". You could theoretically cause San Francisco to have an oversupply of housing if you waved a magic wand and made everyone selling their homes right now double their prices, but they would probably fall back to the natural equilibrium. Or, if they didn't, and those homes actually sold, you could describe the current situation as undersupplied.

Oversupply is almost definitionally a bad thing because it means 10 families are trying and falling to offload their $20,000 home for $80,000, and for whatever reason none of them are willing to lower their price to the sane level. That's an obvious market failure, even if its causes aren't well understood. And when I say "curb the oversupply" I actually mean "put or rent these properties on the market at prices where they will actually get used."

[worik]

> To be precise, "oversupply" here means "supply which has not yet reached the market clearing price".

That is true for consumer goods where demand can shift to substitutions easily

It is not true for infrastructure goods such as housing. (Housing is infrastructure)

There is a measurable need that can be under or over supplied.

[hiAndrewQuinn]

That claim is just false. No one needs to live at exactly 123 Acorn Street, Pierre, South Dakota, USA.

They may have good reasons to want to live there, including "My job is here", "My family is here", and "The only doctor in the world who can treat my exceptionally rare illness lives here". But God will not smite them if USPS starts delivering their mail to a different address. They have many options for figuring out a different place to live, either locally in Pierre, or farther away in a different state or continent.

The fact that the supply and demand curves seemingly move slower in the housing market compared to e.g. the electricity or food markets, which are arguably much more basic "infrastructure goods" (you can survive being homeless if you have food - you can't survive living in a mansion with nothing to eat), doesn't mean they stop being subject to the laws of supply and demand. At worst it means "Plan carefully, because if you miss the mark you will lose a lot of money for a long time." At best it means "Sweet - I wonder if I can make these markets more dynamic with a new company?"

[lotsofpulp]

Pushing and pulling water/sewer/gas/trash/food/electricity/fiber/police/ambulances/healthcare long distances is not cheap.

Typically, “housing” implies those amenities nearby. Obviously, a little bit extra doesn’t hurt, but building out and maintaining infrastructure is not cheap.

I imagine the calculations get even tougher when 50 year projections are for smaller populations.

[euroderf]

> the "middle of nowhere".

*"snow-where"

That being said, yes Helsinki has been a magnet for employment at least since the Nokia boom years, but its population has ebbed at least once in lulls since then when rental demand cannot meet overpriced supply.

Outlying regions do have a big overstock of housing. Even with low rents, I don't think you can keep any even moderately ambitious young person out in the sticks and away from Helsinki/Tampere/Oulu. Long ago one might think that maybe the country's policy of universal high-speed internet coverage might counter that tendency, but... no.

FWIW some stats on population age by region here: https://www.statista.com/statistics/529458/average-age-of-po...

[vintermann]

They say that in rural Norway, a new house loses half its value when you turn the key. Some municipalities build houses at a loss to try to attract young families.