this post was submitted on 09 Sep 2024
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Cool, so if you’re not increasing supply then you’re failing your free market duty, and therefore need to be regulated out.
We’re humans using market incentives in this country. If you aren’t delivering value to the humans you should get swept off the board.
I disagree. Brooks is correct in saying that it's not their job and that its two separate industries. Affordable/social housing is the government's job, not theirs.
In theory, the free market should see this increase in rental prices and react by building more units. Why isn't that happening? Largely it comes down to the fact that a lot of developers are also landlords, and thus have a huge conflict of interest in this area. This is where regulators need to step in. But landlords (on their own) do not, and should not, be responsible for building housing.
The government needs to step in and turn the CMHC into what it originally did: creating massive supply of cheap viable housing.
I don’t think the evidence is supporting a pure free market on rentals is working. Markets need to serve a human need, and in this case they’re failing.
Subsidies provide zero incentive, they just transfer public funds to REITs and investors.
I would be in favour of adding steep taxes and fixing the amount profit delivered to investors through REITs, which would cap investor demand for them and favour a long tail of owners.
Then they can give credits/exemptions for large buildings and new builds. And maybe introduce a home buyers plan where older buildings that REITs want out of can be purchased by the tenants with the government contributing a direct loan for the upfront costs, and having an accountant in the mix to ensure proper Strata funding after.
I don’t know, it just feels like we haven’t tried much of anything here.
You're absolutely correct in that. We've mostly just allowed for monopolies and oligopolies to take over industries in a way that only supports their bottom line.
This is one place where I think the free market could have worked, given enough time and sufficient enforcement to prevent this sort of conflict of interest, but the time for that was a decade or two ago. Now we need strong interventions by multiple levels of government to fix this problem.