We all know that we have a housing supply crisis and that the answer is to build more apartments.
But my guest today Ross Elliott, who is a respected voice in urban economics, is going to challenge some of our preconceived notions about the housing market.
He doesn’t deny there are problems with housing, but he has a different opinion on what’s causing the problem, and he will explain his thoughts.
Join us for an exploration of housing supply and demand, challenges in building new homes, and the pitfalls of rapid growth in our housing market and communities.
Highlights from my conversation with Ross Eliot
- If not a housing crisis, what’s going on?
- Housing supply is not the only problem at issue. Like other markets, the housing market is based on supply and demand.
- Focusing only on the supply is shortsighted because it ignores the growing demand and all the pressures that it adds to the market.
- Specifically, immigration is at record levels.
- While several factors contribute to the crisis, it’s not necessarily an issue of policies from federal, state, or local governments.
- Instead, it’s an issue of all three combined.
- It’s not just housing that’s being affected, either. Infrastructure issues have arisen as well.
- There are shortages of hospital beds, schools, transport infrastructure, and even potable water and energy.
- Ross thinks part of the problem is that these issues are not being linked to the housing crisis, and they should be, as both stem from rapid growth.
- High-rise apartments are not the solution to the problem that some people seem to think they are.
- It’s more expensive to build high-rise towers than other types of homes. They’re the most expensive type of dwelling.
- A single-level project home is much more efficient.
- Tower costs have also increased since COVID began, by as much as 50%
- There are other issues as well, like planning problems and a lack of investors willing to commit.
- The Build-to-Rent program carries similar issues.
- Vancouver tried increasing the housing supply and found it didn’t increase affordability. There are lessons to be learned from this experience.
- Townhouses and low-set apartments in suburban renewal precincts are more affordable and provide better land-to-asset ratios. This may be a solution.
Links and Resources:
Some of our favorite quotes from the show:
“Statistics suggest the cost of building high-rise towers has increased by about 50% since the beginning of COVID.” – Michael Yardney
“I see more people wanting to live in townhouses - modern, large accommodation, but on compact blocks, but in gentrifying suburbs.” – Michael Yardney
“Understanding what’s right and what’s wrong is ultimately a matter of perception.” – Michael Yardney
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