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 2 days ago by sbv@sh.itjust.works to c/canada@lemmy.ca

66 comments fedilink hide all child comments

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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[–] CanadaPlus@lemmy.sdf.org 1 points 1 day ago* (last edited 1 day 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 3 points 1 day ago* (last edited 1 day 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 1 day ago* (last edited 1 day ago) (1 children)

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.

[–] definitemaybe@lemmy.ca 2 points 21 hours ago (2 children)

The stock of dwellings per capita has risen considerably over that time, from about 290 per thousand people in 1971 to 403 in 2023. Even housing stock relative to the adult population alone (which has remained at a flatter and higher level due to the declining share of children in Canada’s population) has grown, from 477 dwellings per thousand adults in 1971 to 510 in 2023.

Some analysts prefer to take households as the key demographic unit, but this approach also reveals no clear evidence for the supply-shortage argument. Census data show that there have consistently been more dwellings than households since 1971. In the intense period of housing inflation since 2001, that ratio has actually risen slightly, from 1,011 dwellings per thousand households to 1,017 in 2021.

They address all three metrics explicitly.

[–] CanadaPlus@lemmy.sdf.org 1 points 8 hours ago* (last edited 6 hours ago)

If you have a minor in economics, you know about frictional misallocation. It addresses nothing.

Maybe I'd attach some kind of significance to the slight fluctuation they mentioned, if the "trends" they identified from the statistics they actually showed us weren't lying with statistics. As it is, I'll put that in the innuendo category.

[–] ChairmanMeow@programming.dev 1 points 18 hours ago (1 children)

And they're never going to correctly identify the problem if they're analysing it as a national issue, rather than a bunch of local issues in a trenchcoat.

It's clear that there must be a supply issue, as there is an observed reduced availability in homes, driving up prices. But it's hard to spot in nationally averaged data, as these are local shortages, not national ones. The capitalisation of the economy demands a centralisation of labour, meaning people move from rural to urban areas. Similarly, there are some urban areas facing population flight due to the closure of key industries, meaning people move out to where their income is. And then there's the matter of immigrants, who tend to stick around in progressive cities where they are both welcome and can get a job.

This is also why Covid had such a high impact on housing prices: mostly rural businesses went under, whereas urban businesses in high-density areas were more easily able to keep sufficient customers, or could rely on subsidies provided by richer cities. This too shifts the demand for labour from rural areas to denser urban areas.

The availability of credit is an accelerator of rising prices, not a direct cause. In a buyer's market, supply is plenty so there's no need to overbid as you can easily buy a similarly priced (or even cheaper) home nearby. But as anyone who's looking for a home will tell you: that's not available at the moment. So they have to overbid to get anywhere, and prices rise faster because that credit is available to do so.

In a nutshell, available houses aren't where the demand needs them to be, ergo there are local supply issues. Building more homes in economically attractive areas would cool off prices.

[–] patatas@sh.itjust.works 1 points 16 hours ago

Sounds like remote work would help, then. Unfortunately most Canadian employers and governments are forcing return-to-office.