this post was submitted on 07 Feb 2026
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The numbers don’t lie: The housing crisis is not caused by a supply shortage (www.policyalternatives.ca)
submitted 1 day ago by sbv@sh.itjust.works to c/canada@lemmy.ca
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the housing crisis has been created by banking practices that have directed excessive amounts of credit into the property market, and especially residential mortgages. As a result, buyers can bid prices up to ever-higher levels, resulting in a market where people must pay more for the same type of housing. Hence financialization can be defined as an inflationary tendency in the housing market that is induced jointly by banks’ desire to expand mortgage lending and buyers’ confidence that the value of their properties will rise.

...

However, the image of a bubble bursting and prices returning to a more rational “equilibrium” level does not seem to apply to the housing market. Because housing is a necessity, people are willing to pay high prices for it. Bidding wars can therefore persist even when relative supply grows, so long as credit markets enable them.

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[–] definitemaybe@lemmy.ca 3 points 16 hours ago (2 children)

Housing size is specifically addressed:

On top of that, the square footage of housing units in Canada has on average been growing across all housing types, which should in theory provide more flexibility for people to live with roommates.

Housing units are bigger and there are more of them per capita any way you slice it: by population, by number of adults, or by number of households.

They make a very compelling argument that the big change is not anything to do with supply, it's entirely a result of easing burrowing standards and increased access to credit. It's not as simple a story, but it actually offers a reasonable explanation for the observed data, while ECON101 Supply & Demand arguments don't match the data. Doesn't matter if it makes sense if it's wrong.

[–] CanadaPlus@lemmy.sdf.org 1 points 1 hour ago* (last edited 1 hour ago) (1 children)

Household, not house.

In 1900, people in the West lived with extended family members, like in essentially all other cultures. By 2000, not so much. In between it varied by socio-economic class. Your 1970's family might include grandpa if they're not rolling in it.

Most likely, that's what you're seeing on the bulk of this graph.

It’s not as simple a story, but it actually offers a reasonable explanation for the observed data,

No, no it doesn't. I'd explain why, but that would be the exact same comment again.

ECON101

What, do you have an economics degree?

You can't shit on other people's education unless yours is better.

[–] definitemaybe@lemmy.ca 1 points 1 hour ago* (last edited 1 hour ago) (1 children)

Did you read the article? Household size is accounted for.

And yes, I have a minor in Economics with a Math major. FWIW.

[–] CanadaPlus@lemmy.sdf.org 1 points 35 minutes ago* (last edited 32 minutes ago)

How could I possibly be quoting out of this article if I didn't read it? They divide housing stock by number of (thousands of) adults for the upper line of the second graph. If the average number of adults in a household changes, that line is misleading. They make an effort by not including children, but it's not enough.

That's my guess why the 20th century looks that way, anyway. If you crop at 2000, suddenly it shows exactly what mainstream analysts have been saying - lots of immigrants came in all at once, and the housing supply tightened. Otherwise it's close to flat.

Beyond housing itself, they inject (current, Canadian) numbers about debt, but that connects to a lot of things, and the ratio of home price to median income. Median household income has diverged from the mean, and yes the finance system has changed. They really haven't made an argument for their version to dissect. It's all innuendo and appeal to the authority of other people they agree with.

They start with "the CMHC is recommending too much construction", which is defensible, but "housing is all a huge bubble" is a more extraordinary claim, and "actually there's plenty of houses" is a non-sequitur.

And yes, I have a minor in Economics with a Math major. FWIW.

I'm surprised at the language you're using, then. ECON101 is a phrase you see from people who think Das Kapital is a current textbook.

[–] FireRetardant@lemmy.world 1 points 12 hours ago (1 children)

I think a big part of the supply problem and the generational difference in ownership is the size creep of homes. Homes have been getting bigger and bigger to support the same sized families meanwhile wages have stagnated. Thats all extra flooring, walls, insulation, labor to build, energy to heat, wires to run, property taxes to pay etc. We need to change the way the supply is skewed and start offering more reasonably sized homes.

Sure if you want and can afford a 2500+ sqft 3 storey house then shop for that, we build lots of those, but we don't build lots of 500-1200 sqft homes which reflect the size of starter homes from decades ago. Many homes this size need to be custom built or are built by smaller developers. We don't see entire neighborhoods of these sized homes anymore. Same goes for apartments, they've experienced luxury condo creep despite demand for that level of luxury being met already.

[–] prodigalsorcerer@lemmy.ca 2 points 7 hours ago (1 children)

The problem with building a 500-1200 sqft home is that most of the price is in labor and land. So it doesn't cost a lot more to make that a 1500-2500 sqft home instead, which will in turn give more profit.

[–] fourish@lemmy.world 1 points 3 hours ago

A local developer bought an old single detached home for 1.3 million and knocked it down to build 4 small sdh micro units on that property. Each one is currently listed for $650,000. I was watching the construction and I’m sure they didn’t pay anywhere near that for materials. They’re ok but definitely not quality.