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Culture War Roundup for the week of May 27, 2024

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When governments burn the future to save the past they do it with housing

In the United States, there is a clear age gradient for voting: the young vote for the left, the old vote for the right. This is partly due to changing racial composition, but not entirely. Young whites are much more likely to vote Democrat than Republican. But in Canada, this is not the case. Here, there is almost no age gradient at all in vote intentions.

A standard model for politics is a combination of (1) people’s opinions on social issues settle fairly early in life and as Cthulhu swims leftward their views end up further and further right, and (2) as people age they become more economically secure and less and less likely to benefit from redistribution.

Canada violates this model for a few reasons. Our welfare state – which spends lavishly on the old – is the lynchpin of our nationalism: “We aren’t like those damn Americans” the Boomers cry as they hold on to their OHIP cards and wait for 8 hours in an emergency room. What it means to be a Canadian these days is to support large government and this keeps the old attached to the left. The right in Canada is also pretty neutral (neutered?) on social issues so issue #1 above is not that important – at least until abortion trots out during the election.

However, this has all be throat-clearing for my actual point. Canada now has a special issue which creates cross-cutting electoral incentives by age: housing. For decades one of Canada’s selling points has been that it’s a peaceful, moderate place that is cheap to live. That has been completely destroyed over the past decade under the leadership of the Liberal Party. The Liberals are the party of the status quo and don’t see it as a problem that prices are high. Just yesterday, Prime Minister Trudeau gave an interview where he said: “Housing needs to retain its value. It’s a huge part of people’s potential retirement and future and nest egg. So yes, we need to keep housing stable and valuable”. On the policy front and despite high interest rates, the government is letting people pull money out of RRSPs (equivalent of 401ks) for downpayments, instructing the Bank of Canada (equivalent of the Fed) to buy mortgage-backed securities to make borrowing cheaper, and creating new tax vehicles for home buyers. Despite promising to lower net migration, the stats show that a record 400,000 people arrived in the first three months of 2024.

In other words, the Canadian left (the lefty NDP party is in coalition with the Liberals) is spending more and more tax money to prop up home equity and price its young people out of homes on purpose. In Canada the institutional left sees its role as protecting middle class wealth. High house prices have existed in our big cities for decades and prompted a steady stream of Canadian outmigration to cheaper places. Cities kept growing because of replacement immigration. In 2020 however due to the pandemic and a surge of workers and student immigration to rural areas, unaffordability has spread nationwide and now literally nowhere is spared. Houses in small towns hours away from major cities generally cost over $400k. This has caused a deep well of anger and despair among the young. It shows up in polling to some extent, but anecdotally: one of my friends just moved to Colombia to become a remote worker … because of housing, another one abandoned trying to get pregnant … because of housing. A friend circle I’m near to is fracturing because half of it inherited homes and the other half will rent forever, and that fact is too corrosive to the friendships. Its just too hard to watch your kids grow up in an apartment you can barely afford while your friends live in a better neighbourhood and go on vacations.

In a normal society, housing is not a politically important issue. Its just a good like any other. But if house prices rise as they have here, your society has made a Faustian bargain. The older generation become millionaires despite barely saving, but it comes at an enormous cost. Social cohesion frays, more and more GDP gets paid to parasites realtors, high land costs mean new building also consumes more and more GDP, without the basics covered young people wont start businesses, cost of living soars for the poor and young, governments face pressure to both get new buyers into homes and preserve home values which means wasting money and mass immigration, etc. And the lucky ones who see their asset prices rise? They aren’t always better off either! Most will see their kids move far away or borrow against their homes to give their kids downpayments. Housing in a world like this is a special issue because it is truly zero-sum: one person's cost of living is another person's asset. Depending who you are, you want prices to be higher or lower. This is a nightmare for governments because there is no easy third option: your policies will inevitably hurt one group or another on the single most important factor for their financial health.

In short, it’s a disaster. Given how far its gone, there is no way for normalcy to return with economic growth (it would take decades for real incomes to rise sufficiently) so there are only three end games: (1) Canada becomes like Southern England or San Francisco, a dual society of property owners and proles, (2) inflation re-ignites and incomes rise enough in nominal terms to re-establish affordability, or (3) the crash and ensuing recession. I don't know which of the three is my prior or even which to root for. The new political consensus is for government to respond with overwhelming force to economic downturns and do what it takes to protect assets, especially housing assets. Political forces are arrayed in pursuit of outcome #1. Its possible that inflation is re-establishing a limiting principle for how much this will work in future, but it may not and we get scenario #2. There may also be a sui generis event or a conservative ideological policy mix after the next election that causes #3.

Housing in America is cheap. America doesn't have a housing problem, it has a policing problem. Housing is cheap in America.

Fire up Redfin, and sort by low to high. You can buy a "missing middle" townhome in Philly, in a medium density neighborhood, close to mass transit, for the same price as the median new car. On the other coast, you can buy a place in Long Beach with a three digit mortgage. In the middle, there are houses that are literally free.

If you buy any of these affordable houses, you'll find yourself living next to People of Affordability. I wouldn't live in Kensington if you paid me to.

Since you can't separate yourself from criminals through law enforcement, you do so by proxy using price.

If you are a landlord or a developer, you need to price your rentals high enough that a family of fentanyl zombies plus a few hangers-on can't scrape the money together. That usually means setting your price floor at the point where two young professionals can just about pay for it, if they struggle. Price it any lower and you might get good tenants, but you'll eventually get your good tenant's dirtbag sister, and then your good tenant's dirtbag sister's baby daddy/dealer, and eventually your building gets condemned.

In the 1960s developers were building 2/1 houses with a car port, on small lots, and selling them at a profit to young middle class families. Build the same housing now, and nobody will buy them, because they know that such a neighborhood will quickly become unsafe.

If you want middle-class buyers who will make regular mortgage payments, you need to build a house big enough that the People of Affordability can't afford it, far enough from the city center social services that they don't live nearby, and far enough from mass transit that they can't get to you. Not only do you need to price out the dirtbags, you need to price out normal middle-to-working class people who might have a daughter that had a baby with a dirtbag five years ago.

The equilibrium point here is the only housing you can find in a safe neighborhood is just barely affordable for two young childless professionals or an established PMC family, and everyone else is screwed. Decent working class people with in-person jobs can either live with the underclass or commute for two hours each way, and middle-class people will take a big pay cut to work remote or in the exurbs so they can live someplace where their family will be safe.

"Housing" was never the problem in America. You can buy a cheap house. You can buy land cheaply. You can build cheaply. Outside of a handful of counties, you can even get a cheap permit. There are cheap places in the cities. There are cheap places in the inner suburbs. There are cheap places that are dense and cheap places that are open. You just don't want to live in those places because of crime.

far enough from mass transit that they can't get to you.

I've seen this claim numerous times but never backed up. Are people really taking commuter rail to bedroom suburbs, committing crimes, then taking commuter rail home? It seems... Hard to believe.

For what it's worth, this happened to family of mine in Calgary. People would take the C Train, walk around the (very nice) neighborhood at the end of it, check car door handles, and then train back to wherever they were from. Locals got wise and started following/putting in ring cameras and realized they weren't local.

While that is more or less what suburban NIMBYs imply when they protest against new transit developments, I think the truth is more that our inability to police low-level crimes or keep homeless people off the street inhibits growth that would occur naturally around transit stations after they are built i.e. some new Metro stop on the Silver Line in the DC area is currently surrounded by a mostly empty parking lot used by a small number of commuters into the city, and is pretty clean and well-maintained, but for it to not be a permanent money pit denser housing and businesses would have to be built in the area and that would attract unsavory characters and run the risk of it becoming like a BART station (shudders) and spoiling the entire vicinity, so why build it in the first place?

It seems to me that there are some pieces missing from this argument.

  1. Why should a small station be a money out?

  2. If there were apartments built by it, they would probably be "luxury apartments" with fairly high rents (as is typical for new construction). Why should that attract unsavory characters?

  3. There are plenty of unsavory BART stations in SF/Oakland, but there are also perfectly fine stations with no homeless around such as Warm Springs (which is surrounded on one side by million dollar newly built condos) (pay no attention to the industrial zone on some of the most expensive real estate in the country). That suggests that it's in large part due to local policies about what to allow, and if the local constituents are suburban nimbys they are probably going to demand some actual policing.

Why should a small station be a money out?

Because its public works in America, in this case in a blue area. All public works of that sort are money pits.

If there were apartments built by it, they would probably be "luxury apartments" with fairly high rents (as is typical for new construction). Why should that attract unsavory characters?

Because high concentrations of people with money creates opportunities for peddlers and beggars. Peddlers and beggars will travel to such real estate so long as their drug supply is close enough. The closer to the city center the more will come. Then once enough peddlers and beggars locate there a few dealers will be attracted to that supply of customers and located there.

There are plenty of unsavory BART stations in SF/Oakland, but there are also perfectly fine stations with no homeless around such as Warm Springs (which is surrounded on one side by million dollar newly built condos) (pay no attention to the industrial zone on some of the most expensive real estate in the country). That suggests that it's in large part due to local policies about what to allow, and if the local constituents are suburban nimbys they are probably going to demand some actual policing.

Indeed, but the argument is you have to get out of SF/Oakland because the residents of those places are huge libs and softies and will never let you do your own thing, and you only can do your own thing by evading the libs and also being far enough away for them to ignore you.

I don't expect every station to be a moneymaker, but I would rather population growth and infill occur naturally around existing stations, which at some point become profitable and can help support the next extension, as opposed to the sort of stasis that suburban voters and zoning regulations implicitly promote. The high levels of dysfunction we see around urban transit centers probably require population densities that wouldn't be reached for a long time, if ever, around new suburban stations, but the correlation between density and homelessness/crime is observed by all and hardens the resistance to any movement in that direction. I will admit that it's hard to tell how much of this is a result of national factors and how much is a result of voters with different policy preferences on policing self-segregating into different communities, and we will never know for sure without some kind of impossible social experiment involving large-scale population transfers.

If there were apartments built by it, they would probably be "luxury apartments" with fairly high rents (as is typical for new construction). Why should that attract unsavory characters?

Luxury apartments with high rents tend to be more profitable to rob.

This proves too much. The existing homeowners are wealthy and therefore are already profitable to rob.

Yes, which means that the station will also be a problem if there are existing homeowners who are left there withouyt building new apartments.

But RR's scenario is that the luxury apartments are built instead of "a mostly empty parking lot used by a small number of commuters into the city," In that case, luxury apartments would be more attractive to thieves than the alternative.

The station isn't built in the middle of nowhere, so yes, there are existing homeowners already. Navigating past a parking lot is not a problem, this is America and everyone has a car.

Apartment buildings are probably less vulnerable to burglary than your average SFH, if only because you need a key to get into the lobby and smashing the lobby windows would attract too much attention. With a SFH it's easy to just go around the back, probably nobody will even notice in less dense neighborhoods.

How are we going to be able to prove this to your satisfaction? We couldn't even get a consensus that retail theft, homeless misbehavior, and bad driving skyrocketed in 2020-2023 despite all the evidence. People who didn't want to acknowledge it just went "oh ho, I see you're falling for fox news scaremongering, didn't you know crime is down?"

I don't know, consider my question more like "what is the evidence for this?"

For what it's worth, I'm pretty sympathetic to the claim that property crime is underreported in certain jurisdictions (less so for murder).

I do not know whether criminals are doing this. But I do know that homeowners believe that this happens, and in my area they have been trying to stop or slow down the expansion of mass transit into wealthier and quieter areas, for this exact reason, sometimes explicitly so. The dynamic still works based on fear alone.

I think people aren't worried about cat burglars, they're worried about vagrancy and the associated crimes that come with it. With nonexistent fare enforcement vagrants can ride just for fun, or to get out of the elements, instead of being constrained to a relatively small area.

This was a concern in my area, but the local government gave us a huge confound by opening a big no-barrier shelter in our wealthy enclave a year before the light rail was due to be completed.

Its also true that they feed off each other. Vagrants need their drugs, so drug dealers will migrate to where they are. Then those dealers have existing criminal networks so their coordinated robbery of CVS and Walgreens for all the razors and tide they have every Monday has a resale network. Then the dealers have the money to move to that area permanently, and all of the sudden the local high school has replaced a weed problem with a fentanyl problem.

I think people aren't worried about cat burglars

Also lots of these crimes are more crimes of convenience than 'cat burglar drives 2 hours out of their way to a random middle class suburb and conducts elaborate stake-out to steal their TV'. I also genuinely believe that burglary is less lucrative than in previous eras unless you happen to land on a house where there's significant amounts of jewellery. Tech is cheap (and increasingly secured + the expensive bits are mounted flat screen TVs), people hold less cash.

I am not an expert in patterns of contemporary American criminality, however when the first railroads were constructed in Japan during the Meiji era, many people opposed building a station near where they lived. In particular, when the Mito Line was supposed to go near Ueno, Makabe District, Ibaraki Prefecture, the villagers disputed this decision on the grounds that railway would bring burglars. Those suspicision were not unfounded as not a few train travelers caused trouble in the provinces:

We doubt that it is fair exchange for Sendai fish, bit the trains have been carrying a fair number of pick-pockets and the like from Tōkyō to the Sendai area, and the people thereabouts, many of whom have suffered losses, are quite disturbed. (Tōkyō Nichi-nichi Shinbun, January 12th 1888)

No, they’re not, although opportunistic thieves will use highway exits/on ramps opportunistically to get out of dodge before homeowners come to investigate(homeowners in DFW are presumed armed).

Homeowner-class people clearly prefer living far from apartments but don’t identify commuter rail or bus stops as a problem.

Some commuter rail can mitigate the problem by jacking up the fares and aggressively policing evasion.

But on the bus (in America) you see a certain kind of clientele no matter how gentrified the neighborhood is.

Even that isn’t intractable; there are countries where the middle class take the bus.

Only when the bus is a pleasant journey free of violence, filth or disturbance. The statistical chance of a crazy tweaker smoking up on public transport is always substantially greater than 0 in US public transport, and Showtime is basically thugs shaking you down artistically in NYC subways.