One reason could be that people who own strollers still largely prefer low-rise housing. Maybe it's for reasons of affordability, maybe it's a cultural bias, or maybe it's a genuine preference. Either way, let's turn our attention to resale homes. In this scenario, who is likely to pay the most?

If you're an investor, then you are looking for a specific yield. And so in theory, it should be a mostly dispassionate decision: "Here's the most that I can pay in order to meet my minimum returns. Do not exceed." But the question is whether is this is going to be more or less than what a stroller-owning group of people would pay.

The answer is probably that it depends. However, if the answer is that the investor wins and they then turn around and rent it to people who own strollers, is this actually a problem? And if this same investor happens to own 25 other rental homes and they're all rented to people who own strollers, is this an even greater problem?

I suppose it is a problem if you're worried about Canada's homeownership rate, which has in fact declined from about 69% (in 2011) to 66.5% (in 2021). But what does this even mean? Is a higher homeownership rate always better? Does Canada have a target number? As of February of this year, the homeownership rate in Switzerland was only about 36.3%. And the last time I checked, it was still a rich country.

There is nothing wrong with renting. I know wealthy people who have opted to rent their entire life because they enjoyed the flexibility and/or had better places to put their money.

All of this said, the argument in the above scenario is that, but for investors outbidding people with strollers, these homes would be more affordable and that would in turn increase the homeownership rate. It's a similar argument to, but for foreign buyers or but for Airbnbs, these homes would be more affordable.

But in a city like Toronto, we are building very little in the way of new low-rise houses. New supply is virtually non-existent. Similarly in Seattle, they are now building more accessory dwelling units than they are single-family houses. So it is any wonder that demand is constantly outstripping supply and that prices are being bid up?

In my opinion, a better solution is to rethink how we build our low-rise neighborhoods. And here and here are two good places to start.

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