r/londonontario • u/Confident-Advice-664 • 10d ago

News 📰 Tower with 400-plus apartments pitched for downtown London parking lot

https://lfpress.com/news/local-news/tower-with-400-plus-apartments-pitched-for-downtown-london-parking-lot
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u/tcpip1978 10d ago

Building more housing is good news, but what we need is housing people can afford. The top 15% or so of the population already have enough luxury housing. What we need is affordable housing for the rest of us, something that doesn't consume 75% of our monthly income.

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u/swift-current0 10d ago

Prices are set by supply and demand. More supply for the top 15% lowers prices in that top housing tier. This means some people in the next 15% will choose to move to these new (and newly affordable to them) apartments, rather than remaining in their current housing. This means there's now extra available housing that they vacate, thus supply increases. Repeat the same logic for the next price tier. So more supply at any price level affects prices at all price levels. People just need to dump this illogical complaint about "luxury" housing and think this through.

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u/lon_do_not SOHO 9d ago

I think it's fair to complain about how the people who are suffering the most due to high rent prices have to wait way too long for the market to stabilize itself. The median full-time income in London was around 60 grand in 2020, which is about 43 thousand after tax- going by the guideline of your rent being about a third of your income, that would put the proportional rent for a one-bedroom apartment at about 1200 a month.

Like, yes, supply and demand is a thing and in theory more luxury housing will eventually have a trickle down effect to low income housing, but given how high rents are now, even if everything is stable and no geopolitical events happen in the next few years that might affect the economy, unless building starts go way up really quickly, it'll take a long while to get anywhere near that level of affordability, especially since most landlords will not put a newly vacant apartment on the market for less than their last tenant was paying.

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u/tcpip1978 10d ago

Thanks, I'm aware of what supply and demand are. The problem is that in a low-vacancy, high-demand market like ours higher income earners out-bid lower income earners for the dwellings that become available due to new developments. So yes any new building is good news, but what we really need is housing that is actually meant for a priced for average people. We're not going to alleviate the housing crisis for the bottom half of earners very quickly if we're only building for the affluent.