Here is a chart that we have all seen many times before. This one is from a recent New York Times opinion piece called, "America Needs to Build More Housing" and it shows the relationship between home prices (the price-to-income ratio) and houses built (average housing starts per 1,000 households). In this scatter chart, the four quadrants are as follows:

• Cities that don't build a lot of housing and are expensive (San Francisco)

• Cities that don't build a lot of housing but are still relatively affordable (Chicago)

• Cities that build a lot of housing and are affordable (Austin)

• Cities that build a lot of housing but are still relatively expensive (Hilton Head Island)

This last quadrant has the fewest number of data points and a number of the locations are resort or second-home destinations, which have their own unique market dynamics. Similarly, the lower-supply cities, like Chicago and Detroit, have managed to maintain some degree of affordability by virtue of the fact that their population and economic demand haven't grown as quickly as in other cities.

But generally speaking, the correlation is as one would expect: more homes equals lower prices. It is, however, worth pointing out that not all homes are created equal. The cost and time required to build a low-rise, wood-framed house in the suburbs is not the same as building a high-density, reinforced-concrete tower in the city.

Still, we know that all forms of supply ultimately improve affordability in a market. With this in mind, how might one describe Toronto today? We've been told we're in the midst of a housing crisis, and yet there are lots of available homes on the market, both to buy and rent. Indeed, it's a buyer's and tenant's market. So what's going on?

Well, it's important to keep in mind that a chart like this represents a long-term historical average and that building new housing generally takes a long time (too long, I might add). Right now, we could describe the Toronto housing market like the proverbial "pig in a python."

The market is in the midst of absorbing a huge influx of completed supply and, as our chart suggests, this is having a deflationary effect on home prices in the short term. However, once this pig gets digested, there's absolutely nothing next in the pipeline to digest, and according to basic economics, we know exactly what that will mean for the market.

Cover photo by Artem Labunsky on Unsplash

Chart via the New York Times

Paris has residential rent controls. They were put in place on a test basis starting on July 1, 2019 and, broadly speaking, they limit what rents can be charged on a per-square-metre basis according to the neighbourhood, rental type (unfurnished or furnished), number of bedrooms, and the period of construction.

Since then, there have been various studies examining their effects. Here's a recent one by Apur. In this report, the authors conclude that over the six-year period, the controls moderated rents by -5% compared to where they would have been had they been unfettered. Importantly, they also conclude that the rent control policies have had no meaningful impact on the city's rental supply.

However, it's important to point out that "rental supply" means the supply of rental homes in buildings already built. The report does not talk about new construction. And as I understand it, the rent controls are more flexible for new construction. There's also a complément de loyer (rent supplement) that developers and landlords can charge for new builds that are energy efficient and offer exceptional comfort or amenities.

Regardless of the specifics, it's interesting to think about rent controls in a city like Paris. The central part of the region, Paris proper, is already built out and constructs very little new housing each year. By some estimates, the net amount (factoring in existing units being demolished) is only something like 1,500 to 2,000 units annually. And if you consider new market-rate units, it's an even smaller number.

From a policy standpoint, this presumably means you're a lot less concerned about new housing supply — at least in the central neighbourhoods — and more concerned about the overall affordability of the existing supply.

Cover photo by Salomé Watel on Unsplash

I sat next to a software developer at my friend's wedding a few weeks ago, and I figured I would ask him the obvious question: "What percentage of the code that you write today is now being done through AI?" At first he was reticent to answer, but eventually he told me that it's, like, the majority. That sounded right.

I then decided to pull out my phone and force upon him something that I've been vibe coding. I'm sure he found this boring, but his response was interesting nonetheless. He said, "This is the future of software. It is going to be both highly personalized and built by actual users. And because of this, it's going to be better software." In other words, accountants will build what they need, photographers will build what they need, and real estate developers will build what they need.

What I showed him was Propeur.com, a residential property management platform tailored toward small Ontario landlords that I have been building for my own purposes and as a tool that Globizen can use for its infill rental projects. It's still early days and there are bugs to work out, but here's what you can do so far:

• Add your rental properties and receive a Monday morning email with a summary of what happened over the last week and what's on the horizon.

• Manage tenants and rental units, including move-in and move-out dates, and all of the critical dates surrounding rental increases.

• Automatically track current debt balances and maturity dates.

• Store all relevant property documents, and have them automatically labeled and categorized in the appropriate folders.

• Create a public property profile for both on-market and off-market units (here's an example).

• Sync bank accounts and categorize expenses by property and unit.

• Export transactions to a CSV, filtered by property, date, and revenue/expense category.

• Log maintenance requests and automatically email them out to a contractor or maintenance person (the next step will likely be some kind of tenant portal).

• Export tax reports at the end of the year.

Again, it's still very much a preliminary beta release and there are certainly bugs. But already, I find myself using it almost daily. If you're a small landlord in Ontario and would like to give it a spin, you can sign up here. I'd love to get your feedback on the platform. And if it's something you find useful, please feel free to drop me a line and I'll buy you a coffee.

Cover photo by Alexander Andrews on Unsplash