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Why Ottawa's plan to ramp up construction might not bring down soaring home prices – CBC News

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The federal government’s enormous bet on new construction is unlikely to have much of an effect on soaring home prices, some economists and housing experts are warning.

The strategy to massively ramp up construction of new homes across Canada is the centrepiece of the Liberal government’s updated housing strategy, which itself was the focus of the 2022 budget.

The spending plan sets aside $4 billion to create a Housing Accelerator Fund, a program still in development meant to help municipal governments speed up new housing projects.

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Ottawa says that fund will contribute to building the 3.5 million new homes it argues Canada needs over the next 10 years.

“The solution to housing affordability is housing supply,” Housing Minister Ahmed Hussen told the House of Commons earlier this week.

But some observers say that approach is based on misinterpreted data and the tendency of politicians to oversimplify complex problems.

No evidence that more homes means lower prices: expert

“[The government] seems to have bought into the proposition that any supply is good, and if we flood the market with supply that will bring down prices,” said Steve Pomeroy, a researcher at the Canadian Housing Evidence Collaborative at McMaster University.

“I don’t think there’s any evidence that will actually happen,” said Pomeroy, who has described the undersupply argument as a “myth.”

Christine Whitehead, an emeritus professor at the London School of Economics, said the identification of undersupply as a cause for high prices has been “absolutely consistent” among governments across the world.

‘The honest answer to the affordability crisis is much more tied up in macroeconomics,’ said Christine Whitehead, emeritus professor of housing economics at the London School of Economics. (The UK Collaborative Centre for Housing Evidence)

Whitehead — who said she has studied the economics of housing for “many decades” — said a narrow focus on speeding up new construction makes for an appealing political pitch but rarely makes a dent in prices.

“Most normal people would think that a lot more housing would make things better,” she told CBC News.

“Just building 100,000 homes a year or 200,000 homes a year is not going to make that much difference, of itself, to house prices.”

Pierre Poilievre has made housing affordability a central theme of his Conservative leadership campaign. He also has identified a lack of supply as the prime culprit driving up prices.

The NDP has been calling for new housing construction, with the caveat that newly built homes should be earmarked for low-income families.

How many homes does Canada need?

The federal government, opposition parties and numerous economists have in recent years argued that Canada doesn’t have enough homes for its population.

A 2021 paper by Scotiabank reported that Canada has the fewest homes per 1,000 residents of any G7 nation, something the bank described as a “structural housing shortage.”

The 2022 budget includes a similar analysis which shows that Canada is below the OECD average for homes per 1,000 residents — behind France, Japan and Germany, but ahead of Australia and New Zealand.

Pomeroy said statistics like those don’t adequately support the government’s undersupply argument since other important factors are left out — such as the fact that Canada has the second-largest average household size in the G7.

He said Canada’s recent pace of new housing starts has kept up with population growth — even as home prices have been hitting new record highs.

“When you look at the data, it doesn’t support this idea that we have a lack of supply, certainly at a national aggregate level,” Pomeroy said.

Canada added more than 271,000 new homes in 2021, according to Canada Mortgage and Housing Corporation data.

Housing and Diversity and Inclusion Minister Ahmed Hussen has said repeatedly that a lack of supply is behind Canada’s housing affordability crisis. (Adrian Wyld/The Canadian Press)

Robert Kavcic, a senior economist with the Bank of Montreal, also has questioned the government’s ability to stimulate more construction.

“The challenge here is that we are already seeing a record number of units under construction, and the sector is pushing against labour and capacity constraints as it is,” he wrote in a response to the budget.

Kavcic also noted that if the government succeeds in accelerating new construction, it could backfire by driving up material costs and aggravating inflation, pushing housing prices higher.

Ottawa says other factors contributing to high prices

In an email to CBC News, a spokesperson for Hussen added nuance to the government’s argument that undersupply has driven up prices.

“There are a number of factors that are making housing more expensive, but the biggest issue is supply,” wrote Daniele Medlej. 

“However, we recognize that there are other elements at play, which is why we are putting in place multiple measures to curb unfair practices in the housing market, including banning foreign homebuyers, introducing an anti-flipping tax and banning blind bidding.”

Whitehead said government efforts to boost new supply and change regulations are dwarfed by the forces of macroeconomics, such as income levels and interest rates.

Short of instituting politically toxic measures such as capital gains or inheritance taxes, she said, the Canadian government will have little direct control over prices.

“I wish I could be more cheerful about it,” Whitehead said. “What I am saying is that there’s no harm in building houses. You should still go on building the houses and try to allocate them to people in need.”


Have a question or news tip for CBC News? Email: ask@cbc.ca.


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STD epidemic slows as new syphilis and gonorrhea cases fall in US

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NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

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WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii‘s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.

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Waymo’s robotaxis now open to anyone who wants a driverless ride in Los Angeles

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Waymo on Tuesday opened its robotaxi service to anyone who wants a ride around Los Angeles, marking another milestone in the evolution of self-driving car technology since the company began as a secret project at Google 15 years ago.

The expansion comes eight months after Waymo began offering rides in Los Angeles to a limited group of passengers chosen from a waiting list that had ballooned to more than 300,000 people. Now, anyone with the Waymo One smartphone app will be able to request a ride around an 80-square-mile (129-square-kilometer) territory spanning the second largest U.S. city.

After Waymo received approval from California regulators to charge for rides 15 months ago, the company initially chose to launch its operations in San Francisco before offering a limited service in Los Angeles.

Before deciding to compete against conventional ride-hailing pioneers Uber and Lyft in California, Waymo unleashed its robotaxis in Phoenix in 2020 and has been steadily extending the reach of its service in that Arizona city ever since.

Driverless rides are proving to be more than just a novelty. Waymo says it now transports more than 50,000 weekly passengers in its robotaxis, a volume of business numbers that helped the company recently raise $5.6 billion from its corporate parent Alphabet and a list of other investors that included venture capital firm Andreesen Horowitz and financial management firm T. Rowe Price.

“Our service has matured quickly and our riders are embracing the many benefits of fully autonomous driving,” Waymo co-CEO Tekedra Mawakana said in a blog post.

Despite its inroads, Waymo is still believed to be losing money. Although Alphabet doesn’t disclose Waymo’s financial results, the robotaxi is a major part of an “Other Bets” division that had suffered an operating loss of $3.3 billion through the first nine months of this year, down from a setback of $4.2 billion at the same time last year.

But Waymo has come a long way since Google began working on self-driving cars in 2009 as part of project “Chauffeur.” Since its 2016 spinoff from Google, Waymo has established itself as the clear leader in a robotaxi industry that’s getting more congested.

Electric auto pioneer Tesla is aiming to launch a rival “Cybercab” service by 2026, although its CEO Elon Musk said he hopes the company can get the required regulatory clearances to operate in Texas and California by next year.

Tesla’s projected timeline for competing against Waymo has been met with skepticism because Musk has made unfulfilled promises about the company’s self-driving car technology for nearly a decade.

Meanwhile, Waymo’s robotaxis have driven more than 20 million fully autonomous miles and provided more than 2 million rides to passengers without encountering a serious accident that resulted in its operations being sidelined.

That safety record is a stark contrast to one of its early rivals, Cruise, a robotaxi service owned by General Motors. Cruise’s California license was suspended last year after one of its driverless cars in San Francisco dragged a jaywalking pedestrian who had been struck by a different car driven by a human.

Cruise is now trying to rebound by joining forces with Uber to make some of its services available next year in U.S. cities that still haven’t been announced. But Waymo also has forged a similar alliance with Uber to dispatch its robotaxi in Atlanta and Austin, Texas next year.

Another robotaxi service, Amazon’s Zoox, is hoping to begin offering driverless rides to the general public in Las Vegas at some point next year before also launching in San Francisco.

The Canadian Press. All rights reserved.

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