Why is Falling Rent Framed as Bad News?

[@rodbhar6522]

"Why shouldn't my house make me a millionaire?? I spent 30 years sitting in it watching TV!" is a disturbingly common attitude.

[@MissingMiddlePodcast]

It's true! I often hear people say that they put work into their home so why should they accept the value decreasing at all. But the improvements only account for the increased value relative to the homes around them that did nothing, which is a TINY portion of the massive increases they've seen over the past decade or two.

[@Knightmare435]

@@MissingMiddlePodcast The problem is the bleeding together of ideas from two separate markets. Land only goes up in value over extremely long terms, barring natural disaster or government intervention, but land has been increasingly treated as speculative assets by investors who have very short timelines for profitability. Now landowners who have become accustomed to the insane increases in assessed values year over year, which has been driven up by demand from speculators, but now with the cheap debt out of the market, the speculators have left. The water level on the market is dropping and the landowners don't want to admit that the land itself isn't actually as valuable as the speculators had convinced them it was, and now they are likely to find out that the actual level of their properties is several feet below where it was floating for the last five years.

[@Jancan20]

Kitchener-Waterloo rents have stabilized or have come down a little bit. Properties are on the market for lease a lot longer. longer.

[@MissingMiddlePodcast]

That's great to hear. Hopefully it's giving more opportunities to students, and means they don't have to jump on the first property that will accept them regardless of quality and whether it matches their needs.

[@zachweyrauch2988]

"Only have the ability to hike rents so much because of a surge in demand" THEY COULD COLLUDE! Why would you assume everything is working like its supposed to after the recent story about zillow and the rent manipulation algortithms in the US? That could happen here even more easily.

[@zachweyrauch2988]

Also, why shouldn't we villainize people with money? Society is not working well and the poor people didn't get us here.

[@michaelwiebe8273]

18:13 "Is it going to be affordable?" The best response is that demand has increased through rich people moving in, so if we don't build expensive housing for those rich people, they'll just bid up the price of the existing housing stock.

[@headab9027]

Rich people buy and 'filtering' has been totally disproven.

[@user-64962]

About not understanding supply and demand, people see new supply they can't afford, often that is more expensive than what it replaced, and they don't always personally see the supposed effects that they were promised would come from older supply filtering down. This can both be that people don't see the counterfactual (the 'it would have been worse otherwise' argument), but also with apologies to economists I think it sometimes just happens on a geographic scale that people don't find that relevant. The condo boom in Kitchener, for example, has arguably been a pressure valve for the *GTA* housing market but it certainly has not led to affordability in Kitchener itself and plausibly (although I have no proof) could have got the region a larger share of population growth than it would otherwise have had. It's not surprising to me personally that people don't understand something that's happening over long time periods (demand shocks like this one aside) and with somewhat geographically diffuse consequences. And uncharitably, given that the government did not care about the effect of immigration on housing until there was a large degree of public resentment about the level of crisis, even if supply had been slightly more responsive you can imagine demand might have gotten right up to the breaking point a few years later anyway.

[@zachweyrauch2988]

For two decades preceding this crisis anyone with a home they bought in the previous decade could releverage that mortgage into another debt for a larger hom and then rent their first one. With that option why would the older supply filter anywhere?

[@butwhytharum]

lets not excuse business owners too by pointing the finger at schools... businesses using LABOUR MARKET IMPACT ASSESSMENTS... tim hortons mcdonalds loblaws etc... anywhere low wages are desired for max profits lets take advantage of these students desperate to escape their home country...

[@jimmybaggs5342]

If this wasn’t done on purpose why did the government refuse to change course even when it was obvious how damaging their policies were? They are only making small changes way too late to obfuscate their real intentions.

[@butwhytharum]

im currently looking to move, units ARE SITTING... and im not a student... oh no these leveraged landlords are loosing their shirts.

[@jamiesonroberts]

We need more than just student housing costs to come down ultimately, but it's a good start. We need all rentals coming down, and like anything previously said, we need a lot more family sized units coming to market to make sure that they are also affordable.

[@headab9027]

They don’t come to that conclusion because the prices in new builds are outrageously unaffordable-and there are almost no family friendly suites. Also, these towers are often replacing older larger cheaper suites (in Vancouver/Burnaby) Also, landlord lobbies are so powerful now -lobbying govern to get rid of rent control, using AI to price fix etc, etc. Do you not hear the stories of people living in corporate REITS? The MO is increase rent as much as possible, push older tenants out by not doing basic repairs and nickel and diming them on laundry and parking, and get tax breaks that are so unfair. Finally, rents may have come down a bit-but from what prices?from outrageously unaffordable to incredibly unaffordable?Everyone’s rent goes up every year as well no matter the situation. You guys need to actually talk to tenants and tenant advocates.

[@SteveBluescemi]

Yes, you are the person they are talking about who just doesn't get it -- and I don't necessarily blame you. Because yes, it can be counter-intuitive when you see how expensive new builds are and when you hear those villain stories about landlords and developers on social media. None of that contradicts the basic fact that rents are high because there isn't enough supply. Try this analogy: during the pandemic, there were major supply chain issues affecting the manufacturing of cars. Consequently, far less new cars were built. But the demand for cars didn't change much. Therefore, more and more people had to buy used cars instead. The price of used cars shot up as a result. Did a bunch of greedy used car salespeople all become greedier at the same time to raise used car prices? No. Were brand new cars still even more expensive than the used ones? Yes, because they were brand new and brand new is always more expensive than used. It's all just supply and demand. The solution to the expensive car problem was to overcome the supply issue that was making it difficult to build new cars to meet the demand. Only then did the price of used cars start to come down again. Similarly, there have been policies in places for decades that have made it impossible for housing supply to keep up with demand. Following the pandemic, there were big increases in demand as people needed more space for home offices, plus the wave of temporary immigrants. Since there weren't enough new homes being built to accommodate all the demand, more and more people had to get used housing instead. The price of used housing shot up as a result. Did a bunch of greedy landlords all become greedier at the same time to raise rents? No. Are brand new homes still even more expensive than old ones? Yes, because they are brand new and brand new is always more expensive than old. It's a supply and demand problem. The solution to the housing crisis is to remove the barriers that make it difficult to build enough housing to keep up with demand. Only then will the price of housing start to come down.

[@headab9027]

@@SteveBluescemi There are very few barriers left in BC and we have the highest prices. If I were to move, my rent would go from $1875 to $2600 - $3500. In Vancouver we have had the most builds in North America in the last 10 years, and we are the most expensive. I talk to tenants regularly - all terrified of their low rise affordable rental or house with multiple suites being upzoned and made into a new tower with tiny suites at astronomical rents. Seniors, families, workers, -- all priced out. Domestic violence victims - stuck. Yes corporate landlords are more greedy - financialization of housing has been detrimental to ordinary people who didn't get on the housing ladder. Didn't you see that latest CBC expose of the shenanigans the corporate landlords are up to in Toronto? Same as here. Tenants are becoming dehumanized and talked about as if they are a number. Oh - "it will trickle down" "oh - filtering - people will move out of their affordable rental to a fancy new tower". Talk to tenants, go to tenant union meetings, go to ESL classes of new immigrants, talk to seniors on fixed income, talk to construction/office/health-care/education workers who can't afford to live in the city. It is so frustrating listening to the comfortably housed pontificate on how the future supply will trickle down and rents will lower. How the hell does that help people now? What is the evidence of this? Expensive towers with tiny suites are not what people need or want.

[@butwhytharum]

if no one can afford the rents who will pay the mortages these corporate REITS took on to pay their executives... and the unit they bought...

[@BowtieJDP]

Inflation is killing us all. Paying rent and groceries took up all my PS5 money. I’ll make do with older games. I’m tightening by belt. Maybe I’ll buy a ps5 in ten years when it’s $200 in a Sony going out of business sale

[@rzmk8620]

Home prices up, problem is property tax, insurance, maintenance went up. Imagine not selling ever but paying others greed. Media, market is up 10-15% YOY but when it goes down they will be like 0.8% compared to last year. Media is totally villain here.

[@MissingMiddlePodcast]

Here, property taxes only go up with the value if it increases relative to other homes. Assessments haven't been done on existing homes since 2016, so I don't expect most homeowners are seeing property taxes go up unless they've done major renovations that lead to reassessments.

[@fredbergotte]

Close to half of Canadians are asset-poor, or even asset-less. likely not people who vote much or read "Financial Facelift" in the Globe and Mail.

[@jeffotoole4509]

So we have conservatively 8-10 months supply of condos in Toronto right now. All I have heard like a broken record by every level of government is supply supply supply supply and more supply. What gives? This seems just a little convenient no?

[@test_ing_123]

That particular situation in Toronto with its condo market is complicated. The surge in condos on the market is almost entirely very small, poorly laid out investor condos. They are still highly inflated in price, and first time buyers don't want them as their starter home. We're talking like 500sqft one-bedroom condos. Investors also don't want them because the math doesn't pencil out on them. They can't charge enough rent for these units to break even. These small condos might become attractive to first time buyers if the cost falls enough (or investors if interest rates fall enough for the math to pencil again). Right now the price is still inflated because of the investor aspect of that bubble. No one wants to buy one of these condos to live in at that inflated price, but if it comes down enough I think you''ll start seeing first time buyers jump on them.

[@uncouver]

Frances Bula has always struck me as a bit of a mouthpiece

[@adamb1229]

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