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The story of Thunder Bay’s socialist Finnish restaurant (2018) (tvo.org)
38 points by nkurz 14 days ago | hide | past | favorite | 46 comments

While surely not the case circa 1918, a common slang meaning for "hoito" in modern use is "one night stand". Of course, the word is also used in its original, standard meaning ("care"; also "handling", "management", i.e. "to care about something"), but I think that the founders would think twice before naming it so today.

Former Lakehead University student chiming in: the loss of this restaurant cuts deep because of its emotional association with youth for a lot of my classmates. It was the place to go after a night of partying, for dates or just because. It was a place where the old guard mixed with the new.

They had a scale at entrance and the shtick was to weigh your self before and after eating.

I visited Lakehead University a few years ago, and had the pleasure of having a couple of meals at this restaurant. Nice food, though it was fairly empty at lunch time. Places like these deserve to be kept alive.

Looks like the restaurant filed for bancruptcy in May. The new owner of the building may or may not be opening some kind of restaurant:


This reminds me of when my great grandfather would talk about socialism. I believe in the 1950s the terminology got corrupted, or maybe he was always using some off shoot version of the terminology. What the socialism he and many protested for back in the day was for unions. The idea was to give control to the workers, so that living standards could increase. And you know what? It worked. From this the US saw its best years. When workers get paid more, they buy more. It boosts the economy, strengthens it, and from that we all end up with a better life.

Today 44% of US workers are low wage ($18,000 or less). Of this group the majority can not afford more than food, shelter, transportation, and clothing. This is not what a healthy economy looks like. Part of the challenge of paying people a living wage is land lords can and do up rent to match their income slowly over time. The free market is great when there is competition, but time and time again we see in markets where there is limited competition or limited resources, the market starts to fall down. So while socialism (ie unions and social services) at first seems to benefits us all, it does not benefit low income workers.

Without some sort of regulation on the housing market, blindly upping minimum wage will lead to a slow increase in living expenses. Unionizing has shown to work and work well for middle class jobs, but if the job is a near minimum wage job, while unions do help, it's unfortunately a complex problem. Without some sort of regulation there will always be some group of people struggling to make ends meet.

Rent control is almost always counter-productive. Real estate is subject to the same laws of supply and demand as everything else. The only way to make housing more affordable is to increase the supply. In certain highly desirable areas, it is always going to be difficult to increase the supply enough. Generally speaking, however, more housing = cheaper housing. (Expanding rapid public transportation can also help by giving workers quick access to larger regions, and more housing options.)

EDIT: Thanks to all for the good comments. I want to stress that I understand "just build more" (by which I really mean increase supply however you accomplish it) is often not a simple answer, but it is the ONLY strategy that has a hope of working to make housing more affordable.

The only way to make housing more affordable is to increase the supply.

That's not necessarily sufficient. From Für eine wirklich soziale Wohnungspolitik[1], citing empirical studies of rents in Germany:

Im Ergebnis muss demnach festgestellt werden, dass eine verstärkte Neubautätigkeit unter den gegenwärtigen Bedingungen nicht zu einer Ausweitung von bezahlbaren Wohnungsangeboten führt, sondern vielmehr die Ertragssteigerungen im Bestand beschleunigt.

As a result, it must be stated that increased new building activity under the current conditions does not lead to an expansion of affordable housing offers, but rather accelerates the increase in yields in existing buildings.

The reason for this is that the newly constructed housing tends to be higher priced, and when old housing gets freed, rents tend to get raised on the new tenants.

[1] https://zeitschrift-suburban.de/sys/index.php/suburban/artic...

The reason for this is that the newly constructed housing tends to be higher priced, and when old housing gets freed, rents tend to get raised on the new tenants.

If they are able to do this, there still isn't enough supply to meet the demand.

Space in cities is a limited resource, and it might not even be in the markets interest to build enough housing to let prices drop.

If you limit "markets interest" to people who already own property in the area, then yes.

It's a sort of bad mixture of politics and markets. People who sit on zoning boards tend to own property in the area (or get money and support from such people), and thus it's not in their interest to increase the supply of housing, as that would decrease the value of their investment. OTOH, the people who'd like to move into the area are not represented in the zoning boards.

One partial solution is to make zoning a national level decision rather than a municipal, like in Japan: https://urbankchoze.blogspot.com/2014/04/japanese-zoning.htm...

I believe I acknowledged that in my comment, and suggested a possibility of building rapid transit to also increase the effective supply in such cases.

The accompanying change in demographics (eg driving all but the most well-off families out of the city) might not be deemed acceptable.

Sure, but isn't that happening anyway? At least this gives the less well off a reasonable option.

Sure, but isn't that happening anyway?

Not necessaarily, no. The example of Vienna has already been brought up, where the city outright owns something like 1/4 of of all rented flats, and (as of 2017), about 2/3 of all citizen live in municipal or publicly subsidised housing.

There are reason why it's considered one of the most livable cities in the world.

Regular supply and demand doesn't really seem to apply to real estate because renters are not voluntary participants in the market: The alternative to consuming the available housing is homelessness. Supply and demand obviously are efficient to determine property values, but optimal property values isn't the goal of rent control regimes.

This report from Brookings is illustrative: It shows that property values (and rents) in Cambridge have sharply risen after rent control has been cancelled. The article concludes:

"In short, the policy imposed $2.0 billion in costs to local property owners, but only $300 million of that cost was transferred to renters in rent-controlled apartments." [0]

That is undoubtly true, but seems to miss the point - the goal of rent control is not to help in optimal pricing of real estate. Rent control only seems to not work when high real estate prices are the goal of the researcher, instead of low rents.

[0] https://www.brookings.edu/research/what-does-economic-eviden...

EDIT: I think one core problem in this discussion is the assumed relation between real estate values and rent level. In hot markets these are only loosely correlated, though: Investors can often savely assume that appreciation alone will result in profits. An example for Berlin, Germany: from 2010 to 2020 real estate values rose about 400% but rent "only" rose 66%. This means investors can safely assume profitable investments even if rents are not part of the equation, by real estate appreciation alone. An unregulated real estate market therefore will certainly result in rising property prices, but this doesn't mean more living space will be available.

renters are not voluntary participants in the market

Maybe not across the country as a whole, but they are certainly voluntary participants in a given market which is likely limited to a small geographic area.

Having to live in a location so you can work is not voluntary for most.

The problem is that land is not subject to the same laws of supply and demand as other goods and services. It's very hard to make new land (unless you're Dutch), and very hard to move residential capacity around in response to fluctuating demand. The alternative isn't necessarily rent control. The smart people in this forum could probably come up with some market-oriented system which would dramatically improve the flexibility and efficiency of residential real estate supply.

-As you state, making new land is hard, so the simplest option remaining probably is to make more land desirable to live on - say, by improving local transit so that you can live farther away from downtown and still have a decent commute.

Obviously, though, this approach requires an awful lot of people willing to fill the newly developed land to make the infrastructure investment worthwhile.

Free lunches are few and far between. Sigh.

Another alternative is building both up and down. Taller buildings for more residential space, and buried infrastructure for more room at the surface. Planning regulations need to acknowledge this reality though.

Supply and demand is too simplistic an approach for a lot of places when so many properties in major cities are purchased by foreign investors and left empty.

Supply and demand still works. That is a confounding factor artificially increasing demand (or decreasing supply). There are lots of approaches to fight this, including banning foreign ownership, or just building so much housing that it doesn't matter (the foreign ownership problem may also go away in the latter case if it turns into a poor investment).

Building housing isn't enough. People need to be able to get to work in a reasonable length of time, they generally need to be able to maintain prior relationships, have access to hobbies, shopping etc. that all tend to be further away from undeveloped land.

That's also ignoring the problem of landlords using the excess capital extracted from rents to drive the price of housing further from the reach of the people actually interested in using it as a house. The higher prices are then used by landlords as a justification for raising rent, and this cycle then repeats.

> so many properties in major cities are purchased by foreign investors and left empty

This is a bit of a popular myth. Vancouver is the only city i know of where it even approaches being significant. Try to dig up some statistics on empty properties for some cities that matter to you and you'll see.

There are about 25,000 unoccupied properties in London, UK worth about £11 billion.

That's all homes empty for any reason, not just "purchased by foreign investors and left empty", which is what i'm talking about. It's still a tiny number compared to the size of the city.

Here's a report, covering England but with some extra detail on London, from 2019:


Table 5 tells us that in London, there were a grand total of 2126 empty homes in council tax bands G and H, ie the kind of property an investor might buy. The vast majority of empty homes are not offshore investment material.

It's a complex problem. Supply and demand works in some housing markets and not others. Some markets are non-competitive so supply and demand doesn't quite work. This is not because land is a limited resource, but travel times to work are a limited resource. Land use is limited to a number of minutes from where jobs are. Before cars became common commute times were the same length as they are today, but people lived much closer to where they worked.

In housing markets where there is a lack of competition this allows land lords to raise prices as much as they want, up to a point, as long as tenants can pay. Because it's an inelastic good, people have to pay or be homeless, so they'll pay up to how much they make.

China is a good example of this. It has some of the highest rent prices in the world with people crammed into these coffin sized living conditions, so China has strongly stimulated building development. This has let to handfuls of ghost cities with no one living in them, and yet rent prices continue to increase beyond just about anywhere else in the world.

Singapore is a good example as well. It's a country with limited land and a high population. The government there builds condos with a locked rate, so the average citizen can afford it. The government effectively becomes their land lord. "Buying" land there is renting, and the condos are quite nice. They have the resources to do this, it limits land prices, the people benefit from it, the government benefits from it. I'm not saying this is how other countries should do this, just that it makes a good use case to show an example of what reduces land prices and an example of what increases it.

One such solution I am unfamiliar if any country in the world does, is build more Ivy / high end business universities. The largest reason someone chooses to start a business in an area is because their social network is there. They get this network at a university. By building education up in a better way, more cities will form around those universities. We could get more cities with businesses, instead of people fighting over the few options in the US, despite all of the land we have.

Another such solution is limiting business in an area. If the number of workers in an area are limited, around those businesses house and rent prices become competitive and supply and demand starts working. Business that want to expand or new businesses would have to move to another area. (Of course, this solution is not without its faults.)

The European solution is two fold: 1) mixed zoning, so businesses are more inner-twinned with residential reducing commute times increasing the ability for supply and demand to work. 2) limit building size to regulate the residential to business employee ratio, which allows supply and demand to start working. We can see today that this works and works well.

Vienna is a another example of successful housing policy. The majority of the population live as rentiers in government or nonprofit owned housing. And that doesn't mean some shabby slum tenements, but nice middle-class homes. Apparently this also keeps private sector prices reasonable.

One article about it: https://www.huffpost.com/entry/vienna-affordable-housing-par...

> limit building size to regulate the residential to business employee ratio, which allows supply and demand to start working.

Isn't this the opposite of what is needed? Build denser so that people can live closer to their workplaces?

Vienna is an excellent example of housing that works. Friends of mine live there as not well paid artists and have beautiful, independent apartments, doing grand things with their lives. It's enviable.

Because it's an inelastic good, people have to pay or be homeless, so they'll pay up to how much they make.

Housing demand is more elastic than many people suppose. As you indirectly point out, people will generally take the best housing they can afford. If they can only afford a shared apartment or living with their parents, that is what they will do. If they can afford their own apartment, they will do that. If they can afford a mansion with a swimming pool, many will do that. People will sometimes move away from high priced areas and toward lower priced areas if they can manage it. To a certain extent, therefore, demand will increase and decrease relative to supply. So, back to my original thesis, if you want cheaper or better housing, build more of it. Ideally, you do this in places where it is in demand though I acknowledge it may be difficult in the highest demand areas. Alternatively, build rapid transit to increase the effective availability of housing (increase the reasonable commuting distance).

What you quoted is about people taking the only housing they can afford. Keep in mind low income households are 44% of the US. 44% of the country can only afford the cheapest rent. When half of the country has a flat limit, it restricts rent prices, which is why in most of the US there are two grades of rent: 1) cheap rent, which isn't great or 2) slightly more expensive rent where you get seemingly double for it, eg your commute is reduced by an hour, you get all of these amenities like heating and AC, you get way more square feet and so on. For most of the country the difference is around $200 a month.

I know there are wealthier areas like out here in the SF/Bay Area, where there is much more of a gradient due to the average person making six digits. Keep in mind if the bay area was its own country it would be the second wealthiest country in the world, so yes the US has exceptions, but lower income rent is still capped to their income.

If you think housing is elastic either you misunderstand the word or you can always prove it by living out of your car. In comparison, eating out is elastic, despite it being food. You can easily prove it by cooking at home. Maybe you're saying living in an expensive place is elastic so the free market works? Yes, this is true for the upper half of the country. For the lower half it is absolutely inelastic. A tv is elastic, because you can easily prove it by not owning one. Utilities, eating cheap food at home, and housing are inelastic. Try living without power.

On the contrary. Housing demand is elastic. Three people can share a single apartment or they can each have their own. The latter takes three times as many apartments as the former. The strategy people choose will depend strongly on what they can afford. The tighter the supply is, the higher the price, the more people you will find living in each unit.

The reason the price is capped by the lowest income is precisely because demand is elastic, if the landlords raised prices any, they would find themselves without tenants. The prospective tenants might move back in with their parents, for example (and yes, some of them might just end up homeless). There is insufficient demand at a higher price level.

Utilities, eating cheap food at home, and housing are inelastic. Try living without power.

Sure, living without power sucks, but above a bare minimum, the amount that is used is highly elastic. If I am having trouble paying the bill, I will absolutely keep use to a minimum.

Elastic means you can go without it. Can you go without housing?

Well, yes, but that is not what elastic means. Elastic means not fixed. The demand for housing can vary quite a lot even for a fixed population, so it is quite elastic. Demand for food on the other hand is much less elastic, but even there, I wouldn't call it completely fixed as people can change what they eat even if they can't drastically change the number of calories they consume.

What you're talking about is price elasticity, which is not the same thing. Here, I'll paste in a definition of inelastic:

Inelastic is an economic term referring to the static quantity of a good or service when its price changes. Inelastic means that when the price goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.

Yes, I am using the same definition that you quoted. I will try one more time:

What happens when an adult child moves back in with their parents? They have "gone without" one unit of housing.

What happens when three friends move in together? They have collectively "gone without two" of the three units of housing that they would have otherwise have occupied.

Conversely, what happens when my wife kicks me out because I spend too much time on Hacker News? I am now looking for new housing.

In each case, the number of people remains fixed, but the demand for housing has changed. Price will definitely affect what strategy people adopt: whether to live alone or share with friends or whether to live in a cramped apartment or in a 3 bedroom house.

To first approximation, everyone needs a place to live,* but there is more elasticity in the amount housing each individual consumes than is commonly believed.

*I have known several people who have deliberately gone without housing entirely for a time in order to save money.

Another way to think about inelastic is it is relative, not absolute.

Textbooks, teachers, and professors, love to use gas as an example of an inelastic product when teaching the topic. However, if gas hit $100 a gallon you better believe people would be driving less.

Yes, gasoline is interesting because demand does seem quite inelastic, especially over short periods of time. If prices remain high for extended periods, you sometimes hear of people changing to more fuel efficient vehicles, but I don't think I've ever heard of people changing their driving behaviour in response to gas prices. I find it particularly interesting because it is one I naively feel like should be more elastic than it is.

This was a thing in recent years..

In the 90s it was normal for truck drivers to literally drive 100mph in some parts of the country (No, I'm not making this up. A few states even had no speed limit on their freeway and semis would drive even faster.), but once gas prices rised during the bush administration most companies capped their driver's speed to 62mph to increase mpg.

During this time when gas prices shot up people stopped traveling for vacations as much. Ride share programs popped up at this time too. This was the time I got my first remote job, but that may be a coincidence.

Where did you get 44% make less than $18,000? The median hourly wage was $19.33/hr in 2019.[1]

And the lowest quintile of household income was $21,300 before taxes and transfers[2]

[1]https://www.epi.org/publication/swa-wages-2019/ [2]https://www.cbo.gov/system/files/2020-10/56575-Household-Inc...

> I believe in the 1950s the terminology got corrupted

Well, yes, in the McCarthyite era rightwingers learned that you could discredit any idea by calling it "communism" regardless of content or origin, and the discussion went downhill from there.

The cold war produced a strange politics where Western governments often had to offer real economic concessions to their workers out of fear that actual communism might become popular, while at the same time being very wary of the unions as power centers, culminating in the Thatcher/Reagan era of explicitly dismantling unionised industries in order to disrupt that power. They had a certain amount of support from the non-unionized public who were fed up with the level of strike action and disruption as a result.

That was also the era of significantly higher interest and inflation rates, which is a whole other sector of politics.

> This reminds me of when my great grandfather would talk about socialism. I believe in the 1950s the terminology got corrupted

Well, it got corrupted when USSR was created (and also Chinese People's Repulic), and people suffered under its boot.

Hitler called his party socialist too. I'm not sure if anyone fell for it in the US then and it's really a more 1940s type corruption.

I'm probably saying the obvious but fun fact: These communist and fascist countries called themselves socialist and advertised themselves as such because it was socialists that fought against them the most. Socialists were the opposite to their authoritarian ways, so they lied to the people saying they were the same as their competitor.

I visited Canada's Finnish Socialist Paradise "Sointula" in 1991. The COOP had really good cigars and straw hats from Cuba and Swedish Mora-Puukkos from 1965. Weirdest thing was I re-remembered the aroma of Cuban "Che"-cigars from 1972 Yugoslavia. https://youtu.be/3TMziykDR0s

They had also "Jäätelö"-bar (in the video). But this cultural icon seems to destroyed by Creepy American Hippies who now run the place and understand nothing of anything.

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