01-24-2022, 12:04 AM
Here's a housing conundrum that I don't know the answer to:
Previously, a lot would have one house. When the owner of that house wanted to move, they sold their house and bought a new house elsewhere so the housing stock was 1 sold : 1 bought. At most there would be two houses needed to replace the one had been sold to have two homeowners were previously there had been one. The supply of home buyers was limited to those who had access to a previous house, or those who had saved up enough money to enter the market. Geography also played a role as there was only so much space for building.
Now, a plot of land that might previously have held four houses to the half acre can hold a tower with 100 housing units. When the individual owners of those 100 units want to move (say to a house), there are now 100 home buyers who are looking for 100 units of housing. Unless another 100-unit tower is built, those existing owners are going to wash into a low rise development and increase demand. In theoretical terms, a tower can be built infinitely high and where previously there had only been 4 houses, there could be 100, 200 or more homes that serve as capital to climb the housing ladder. Many of those owners moving from towers do not want to move into another tower. They would like a single-family home or a row house. This then puts an incredible pressure on everyone involved in the housing industry to build more single-family homes or other low-rise buildings. On the other hand, if the 100-unit condo tower wasn't built, that would keep 96 potential home buyers from entering the home buying pool (I deducted the 4 original houses that were on the lot). Some would find other accommodations (eg rentals), others would look elsewhere.
We have heard the complaint from developers that they cannot afford to build larger units that could serve as a proxy for a single-family home, which results in a large amount of 1-bedroom apartments, and not much for families to graduate into as they need more space.
Will a city like those in Waterloo Region ever get to a state where all the housing needs are met regardless of income or station in life? Greater minds than mine will likely still be struggling with this long after everyone here is gone.
Previously, a lot would have one house. When the owner of that house wanted to move, they sold their house and bought a new house elsewhere so the housing stock was 1 sold : 1 bought. At most there would be two houses needed to replace the one had been sold to have two homeowners were previously there had been one. The supply of home buyers was limited to those who had access to a previous house, or those who had saved up enough money to enter the market. Geography also played a role as there was only so much space for building.
Now, a plot of land that might previously have held four houses to the half acre can hold a tower with 100 housing units. When the individual owners of those 100 units want to move (say to a house), there are now 100 home buyers who are looking for 100 units of housing. Unless another 100-unit tower is built, those existing owners are going to wash into a low rise development and increase demand. In theoretical terms, a tower can be built infinitely high and where previously there had only been 4 houses, there could be 100, 200 or more homes that serve as capital to climb the housing ladder. Many of those owners moving from towers do not want to move into another tower. They would like a single-family home or a row house. This then puts an incredible pressure on everyone involved in the housing industry to build more single-family homes or other low-rise buildings. On the other hand, if the 100-unit condo tower wasn't built, that would keep 96 potential home buyers from entering the home buying pool (I deducted the 4 original houses that were on the lot). Some would find other accommodations (eg rentals), others would look elsewhere.
We have heard the complaint from developers that they cannot afford to build larger units that could serve as a proxy for a single-family home, which results in a large amount of 1-bedroom apartments, and not much for families to graduate into as they need more space.
Will a city like those in Waterloo Region ever get to a state where all the housing needs are met regardless of income or station in life? Greater minds than mine will likely still be struggling with this long after everyone here is gone.