The arrival of every 1um July brings us reports and chronicles about these people who cannot find affordable rent.
I feel sorry, I swear.
Now let’s think with our heads and not with our hearts.
market
There are landlords who rent apartments.
This is called an offer.
There are people who are looking for a rental apartment.
This is called demand.
When people struggle to find housing, it is because there is not enough supply to meet demand: available housing is scarce or too expensive.
For what?
For many reasons.
Even before the dramatic increase in the number of immigrants who also needed housing, there was a lack of affordable rent.
Couples are less enduring than before. After the separation, another adjustment is required.
But the root of the problem lies elsewhere.
There is a shortage of rental housing simply because it is not profitable for the individual to invest in the construction and maintenance of a building with multiple rentals.
A big tower of condos being sold at inflated prices?
Yes it is profitable.
A modest triplex for rent?
In the past yes, today much less.
For what?
Because of the rental price brake, a perfect example of a measure that is inspired by good feelings, but ultimately feeds the problem it wanted to solve.
Rents are controlled while construction and maintenance costs are not controlled, which also leads to unsanitary housing.
Not crazy, investors put their money elsewhere.
They will object that if we liberalized rents, landlords would increase rents drastically.
No, because if the rents were unaffordable, they would remain uninhabited.
The landlord wants rent. The tenant wants a roof. Everyone has something that the other wants. You will get along. The market would adapt and the state would only intervene in cases of blatant abuse.
Renovating to displace tenants and raise rents is simply an inelegant way to circumvent the current rigidity.
It is often objected that housing is a fundamental right. Clothing and groceries too, but we don’t set the price of clothing or groceries (with exceptions).
That doesn’t mean the government should wash their hands of it.
It can subsidize private investors or cut bureaucracy to speed up ongoing projects.
But these sensible measures will not get to the root of the problem: Individuals are currently not very interested in dealing with the construction of affordable rents.
Taboo
If we have two pennies of realism, the government cannot be the only one building modest housing while its other basic responsibilities – welfare, education, road maintenance, etc. – are already cracking everywhere.
Evidently there will never be a relaxation of rental rates. Too many votes to lose. We chat to chat.
It’s a taboo, a real one.
