> “We have doubled the number of people per square kilometer in the city since 1970; there is no other center city that I’ve been able to find in North America that’s come even remotely close to the addition of new supply,” Condon said. “If adding supply was going to reduce prices, Vancouver should have the cheapest housing in North America. It now has the most expensive housing in North America.”
This is a really weak argument that density doesn’t decrease housing costs. Vancouver has way more than doubled in desirability since 1970, and it has 3x the population it had in 1970
The reality is that if Vancouver hadn’t added the housing it has added it would have even higher costs … and if it were able to double or even triple its density again it would see cost decreases.
I agree with this -- and Condon did get much skepticism from the panel and audience! And yet I do think there need to be asterisks around the idea that increasing any kind of supply will lower prices ... if all the housing that is being built is priced at the high end (because there's a robust market for that), it's going to be hard to realistically lower prices. But yeah....clearly not building housing is a bad idea.
I honestly believe that building a bunch of luxury housing will lower prices.
In many cities with the worst housing crises the majority of the housing stock is fairly old and fairly low quality, yet it is occupied by high income families for very high prices.
If you build a tone of new luxury (note that any new housing will be luxury housing in such a market simply because it is new) then these families will leave their previous homes and occupy the luxury housing.
This will open up a new market of affordable housing made up of these older units.
I feel like we see this dynamic in places like Chicago which have lots of 70s era high rises that are fairly cheap now because their original wealthy tenants have moved to nicer newer buildings.
This is such a timely reminder for me... just last fall, I heard Alan Mallach speak at a conference where he gently chastised any of us in the audience who thinks that increasing supply alone with solve the housing crisis... a position I've admittedly leaned on in the past. Despite being in housing for my entire career, I'm still amazed at the huge industry (and accompanying COST) that has developed around LIHTC deals, without meaningfully solving the housing crisis.
> “We have doubled the number of people per square kilometer in the city since 1970; there is no other center city that I’ve been able to find in North America that’s come even remotely close to the addition of new supply,” Condon said. “If adding supply was going to reduce prices, Vancouver should have the cheapest housing in North America. It now has the most expensive housing in North America.”
This is a really weak argument that density doesn’t decrease housing costs. Vancouver has way more than doubled in desirability since 1970, and it has 3x the population it had in 1970
The reality is that if Vancouver hadn’t added the housing it has added it would have even higher costs … and if it were able to double or even triple its density again it would see cost decreases.
I agree with this -- and Condon did get much skepticism from the panel and audience! And yet I do think there need to be asterisks around the idea that increasing any kind of supply will lower prices ... if all the housing that is being built is priced at the high end (because there's a robust market for that), it's going to be hard to realistically lower prices. But yeah....clearly not building housing is a bad idea.
I honestly believe that building a bunch of luxury housing will lower prices.
In many cities with the worst housing crises the majority of the housing stock is fairly old and fairly low quality, yet it is occupied by high income families for very high prices.
If you build a tone of new luxury (note that any new housing will be luxury housing in such a market simply because it is new) then these families will leave their previous homes and occupy the luxury housing.
This will open up a new market of affordable housing made up of these older units.
I feel like we see this dynamic in places like Chicago which have lots of 70s era high rises that are fairly cheap now because their original wealthy tenants have moved to nicer newer buildings.
This is such a timely reminder for me... just last fall, I heard Alan Mallach speak at a conference where he gently chastised any of us in the audience who thinks that increasing supply alone with solve the housing crisis... a position I've admittedly leaned on in the past. Despite being in housing for my entire career, I'm still amazed at the huge industry (and accompanying COST) that has developed around LIHTC deals, without meaningfully solving the housing crisis.
Thank you for this. And I actually emailed Alan Mallach today about this piece because he also has a piece about LIHTC in Shelterforce today: https://shelterforce.org/2023/12/21/how-to-really-reform-the-low-income-housing-tax-credit-program/?utm_source=weekly+&utm_medium=email&utm_campaign=01022024
I saw that headline it my inbox but then promptly forgot about it, reading now!