Picturing Basic Housing Economics

Originally posted on Housing Matters.

A lot of people have a hard time figuring out how new “luxury condos” actually make housing more affordable for everyone. So I drew some pictures to clarify.

 


Continue reading “Picturing Basic Housing Economics”

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Toronto city councillors want to make housing even less affordable. Ontario’s stopping them

Originally published in the Financial Post. 


Building more homes just became easier in two of the most densely populated areas in Ontario: Toronto’s downtown core and its “midtown,” a small strip of land centred at Yonge St. and Eglinton Ave. For anyone interested in finding a place to live in those areas, this is great news. Continue reading “Toronto city councillors want to make housing even less affordable. Ontario’s stopping them”

Response to Ryerson CBI on Bill 10

Originally posted on Housing Matters.


Earlier in May, the Ontario Government tabled new legislation as part of its long-anticipated Housing Supply Action Plan. Known as Bill 108, it proposes numerous changes to several existing laws and regulations.

The preamble of the Bill makes it very clear: the Government of Ontario “believes that increasing the supply of housing will help every person in Ontario by making housing more affordable.” We at Housing Matters share in that belief. We’ve come to this belief through careful analysis of economic theory and data. And after careful study of the contents of this Bill, we believe that it will do as promised: increase the supply of housing, and, consequently, make housing more affordable.

However, the researchers at the Ryerson City Building Institute (CBI) have reached a different conclusion from their analysis of the same Bill. Indeed, CBI begins their analysis by predicting:

it is unlikely that the Housing Supply Action Plan and Bill 108 will improve housing affordability while also targeting the lack of housing options, including missing middle and family sized multi-unit housing. What is proposed may, in fact, reduce livability and affordability throughout the province — particularly in areas facing intense growth pressure…. (p. 1)

We disagree with these statements. To be clear, we believe that Bill 108 — while not a perfect panacea — will (1) increase the availability of housing options, (2) increase livability, (3) increase affordability, (4) and this will be especially true in areas facing intense growth pressures. The following post will analyze the changes to Bill 108 with respect to these areas, and we will compare our findings to that of the CBI.

Table of Contents

— The Economics of Supply and Demand
— On Development Charges
— On the LPAT and OMB
— On Heritage Protection
— On Community Benefits, Public and Private
— On Inclusionary Zoning
— Changes to the Building Code
— Conclusion

Continue reading “Response to Ryerson CBI on Bill 10”

Statement on the Decision to Partially Eliminate Rent Control

Originally posted on Housing Matters


The Government of Ontario announced in its fall economic outlook this past week that they were removing some restrictions on rent control. While rent control remains unchanged for existing tenants, new rental units will not be subject to any price controls whatsoever.

This policy change is a response to the previous government’s “Fair Housing Plan”, introduced in 2017. Prior to the Fair Housing Plan, only homes built before 1991 were subject to rent control. In 2017, rent control was extended to all rentals regardless of the year of construction.

Following the introduction of the “Fair Housing Plan”, 1,000 units originally slated to be purpose-built apartments were converted to condos. That, in a city with a rental vacancy rate of 0.7% — a sixteen year low for the city, and one of the lowest rates in the world.

As a partial reversal of a one-year-old policy, the short-term impact of the new government’s change will likely be small.

However, as we will explain below, this policy has long term impacts that affect the quantity, quality, and price of rental housing, as well as the kind of individuals likely to be affected. In particular, this new policy averted a future of extreme rental shortages, declining rental housing quality, rapidly increasing rents, and discrimination against low-income renters. Continue reading “Statement on the Decision to Partially Eliminate Rent Control”

Prices, Price Ceilings, and Subsidies

Originally posted at mises.ca on May 3, 2011

There’s an old saying that if you lay all the economists in the world in a straight line, you still wouldn’t reach a conclusion. That is very true on many matters economic, but there are a few instances where universal agreement exists. Two of those instances are the effects of price ceilings and subsidies. However, many economists still deny that specific price ceiling and subsidies will be harmful, because… well they never really say. Sometimes they point to an empirical study for “proof”, but for every empirical study proving one thing, there is another one that proves the exact opposite. So we must rely upon theoretical and analytical tools, to obtain logical answers to difficult and intertwined phenomena. Here we’ll examine the role of prices in the economy, and how their manipulation never has the effect intended. Continue reading “Prices, Price Ceilings, and Subsidies”