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Argus

Liberals make housing a 'right'

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On 4/14/2019 at 8:09 AM, Argus said:

You can tell it's an election year when this kind of crap finds its way into budget bills.

 

Lol. It's soooo shiny! And the best part is that people will only have two choices when they talk about it: they can marvel at the greatness of Trudeau's new humanitarian achievement or be forever known as hateful, racist, misogynistic, xenophobic, religiously-bigoted, alt-right FASCISTS! Seriously, if you utter a word of doubt regarding this project you're instantly guilty of all those things.

Did I say project, as in "the Projects:

https://newsone.com/1555245/most-infamous-public-housing-projects/

 

 

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On 4/18/2019 at 5:08 PM, Argus said:

\Ultimately, he's not in any way responsible for ensuring you have a nice place at a reasonable price. He's in the landlord business to make money. Why shouldn't he make as much as he can?

Let me begin to apologize for guerilla posting...I have been away and now am even further away with only a few minutes of time and access to internet daily.  So, I will make this post, but not sure when I can be back to defend/discuss.

To start with: a country's economy needs to create wealth to survive and prosper.   Adding value to a resource or delivery of a service in support of that are the ONLY ways wealth can be created: everything else one could do does nothing but re-distribute wealth.   I make this statement because it is extremely relevant to the status of real estate within our economy.

There are several things that cause housing to be expensive, but the greatest of all is the free ride on taxation that one can get from speculative gain.  Yes, people need a place to live, but when housing was 1/4 of today's price, they already HAD a place to live.  Homeowners love to buy real estate because they fantasize that the increase in price that is TAX FREE to a permanent, primary residence is somehow a great "investment" to them - never considering that they will have to pay the inflated price down the road to replace whatever they sell to cash in.  Developers love to tear down existing housing and build as much new as they can, because they can get fabulous margins in a marketplace where their end buyer is looking for some kind of windfall, tax free profit from their not-so-humble new abode.  The profits they make from this speculative gain is also given very special treatment by the tax system.

 BUT: all of this activity that is measured as good for the economy is in fact one of the worst things you can do.   As I said: you had housing before, you get housing at the end, but you now have many orders of magnitude more money tied up for the thing you once already had.   What that does is take people and capital OUT of the parts of the economy that create wealth and tie them up simply recycling housing over and over for the simple purpose of making more profit, without creating any more wealth...i.e. nothing but re-distribution.  Government does its part to promote this not only by little or no taxation being incurred by speculative gains, but worst of all putting the bank rate down so low, developers can develop on much greater scale and homeowners (including landlords) can rack up stunning levels of debt that divert much of their total working efforts into paying for nothing but the same roof over their head that they had no so long ago a 1/4 of the value.

Now: we have seen how individual homeowner fit in, but what about renters?   All of this cheap money and low tax speculative gain means that investment dollars flee from productive endeavours (that might net them 5 or 10% a year in dividends earned from actual work) and throw money at rental properties.   What we see is the row house built for $50 a sq. ft. 50 years ago being mostly paid out in a decade, then the landlord sees the value go up, so he cashes in on a sale to the next landlord, then the money gets dirt cheap and it happens again.  Then it gets cheaper, and now the REITS and such rush in where others have already cashed out.  In the end, same property now valued at $200 a sq. ft....and it is still exactly the same property as before at $50.   Problem is: these things are occupied by real people on fixed or simply tied-to-the-overall-economy incomes who simply have no way of paying the ever increasing rent as the tax breaks and cheap money (and yes, fair to mention costs imposed by many levels of government on the landlord - who must collect that in rent).  

So, the answer to your question "why shouldn't he make as much money as he can?" is that his business activity is largely predatory and contributes nothing, but takes a great deal OUT of the economy that is robbed of investment for wealth creating business activities.

BTW: you can lump the entire world of Bay Street/Wall Street casino capitalism into this whole discussion, as they do little different to and for the economy and the country.

ALSO: there is a LOT of affordable housing in Canada - it is just not located in downtown asshole factories.

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12 hours ago, cannuck said:

So, the answer to your question "why shouldn't he make as much money as he can?" is that his business activity is largely predatory and contributes nothing, but takes a great deal OUT of the economy that is robbed of investment for wealth creating business activities.

This is awfully simplistic. The costs have gone up for the landlord over the time period he owns the residence; taxes, services, supplies, all gone up to a greater or lesser degree. Besides, the same system runs in the United States but their housing and rental prices have not increased anything remotely as much as ours except in municipalities which adopt the same sorts of regulatory frameworks designed to discourage housing. As I pointed out in the original post, half the cost of a new house is due to government intervention, fees and regulations. How many more people would be buying the same home if it was $250k instead of $500k?

There are similar regulations, plus more, on those who wish to build housing projects and buildings for rentals.

 

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5 hours ago, Argus said:

This is awfully simplistic. The costs have gone up for the landlord over the time period he owns the residence; taxes, services, supplies, all gone up to a greater or lesser degree. Besides, the same system runs in the United States but their housing and rental prices have not increased anything remotely as much as ours except in municipalities which adopt the same sorts of regulatory frameworks designed to discourage housing. As I pointed out in the original post, half the cost of a new house is due to government intervention, fees and regulations. How many more people would be buying the same home if it was $250k instead of $500k?

There are similar regulations, plus more, on those who wish to build housing projects and buildings for rentals.

 

You cited "$229k" as the cost added to houses by " regulations and red tape".

But that's the cost only if you live in Toronto or Vancouver ... Not representative of the rest of the country at all.

And I think that included the cost of municipal infrastructure - roads, lighting, sewers, watermains.

Infrastructure is very expensive in suburban areas with big lots (usually built on greenfields).

People who live downtown in more densely packed areas have been subsidizing those real suburban infrastructure costs all along. 

Building on big lots on greenfields in far flung areas and expecting low cost infrastructure subsidized by downtowners ... those days are over I hope. 

You want that, you pay the price! 

And in most of Canada outside of Toronto and Vancouver, it is not the price you claimed, Argus. 

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19 hours ago, jacee said:

You cited "$229k" as the cost added to houses by " regulations and red tape".

But that's the cost only if you live in Toronto or Vancouver ... Not representative of the rest of the country at all.

Read the report. It's there on the first page. It does give individual amounts for various areas, such as $168,000 for the GTA, $264k in Victoria, $252k in Calgary and $112k in Ottawa. These are substantial additions, and while this might not have a lot of impact in some small town in Northern Ontario, most Canadians live in the big cities, and are heavily affected.

19 hours ago, jacee said:

And I think that included the cost of municipal infrastructure - roads, lighting, sewers, watermains. Infrastructure is very expensive in suburban areas with big lots (usually built on greenfields). People who live downtown in more densely packed areas have been subsidizing those real suburban infrastructure costs all along. 

That's an excuse. When you move into an older area of the city you're not expected to pay the cost of your roads, sewers or water mains, not even if they need to be replaced due to age. You also leave out that it's primarily families that move to the outer burbs, so their kids can have a place to play and roam free. The people who live downtown are largely older, younger, childless or poor. Those with young families want houses with yards.

 

 

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Letting people live on the streets is massively expensive for our country. Street people need huge amounts of medical care and police attention, which is not cheap. The most extreme examples of this end up receiving ICU care regularly throughout the year. ICU isn't cheap to run, not to mention that having regulars going through there repeatedly ties up beds and attention for normal cases.

I've read a lot of well done studies suggesting and even testing out the idea that its cheaper to just house the worst habitually at risk street people and task a full time squad of people to baby sit them than it is to pay their ICU bills all year.


So from just a pure money perspective, housing as a 'right' is going to save us money in the long run.

 

I've included this link to an LA Times article citing a Utah housing assistance program and how much it saves that city in medical expense.

Edited by ImBrock

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On 5/27/2019 at 11:16 PM, cannuck said:

BTW: you can lump the entire world of Bay Street/Wall Street casino capitalism into this whole discussion, as they do little different to and for the economy and the country.

We would much prefer for the markets to simply be allowed to find a price, none the less, when central planning imposes itself as a market force,  we simply play the cards we are dealt.

Contrary to popular myth, traders are not steering the ship, it's not a casino, it's more like a school of fish.

I don't know any casino where I can get a guaranteed thousand percent return on investment because the house is driving everyone into the equity markets.

I don't know any casino where the house subsidizes my diversification  out of equity into real estate investment properties by handing me free money.

I don't know any casino where the house allows itself to then be short sold for additional gains when the piper has to be paid.

When the central planners stand above the fish tank trying to pick which fish they want to feed by dumping buckets of food here and there, the school just darts around and gobbles up the manna from government heaven where it finds it.

The market will find a price in the end, corrections are a good thing, in the meantime tho, a man's gotta eat.  Personally, I like surf n' turf, beef tenderloin and bacon wrapped scallops, grilled veggies and salad, vintage Cabernet-Sauvignon, followed by single malt Scotch and Cuban cigars.  Here's to disaster capitalism *toasts*

Edited by Dougie93

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If the Liberals want to do something then they should stop the ridiculous qualifying regulations for working or retired people to purchase a home and provide some tax incentive relief when purchasing one.   Property Taxes and Utilities also are out of control for home owners and you do not get good value for the money that you spend.  Renting it seems may be a better option for a lot of people because of all of that.  This country is so backwards.

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7 minutes ago, Ell said:

If the Liberals want to do something then they should stop the ridiculous qualifying regulations for working or retired people to purchase a home and provide some tax incentive relief when purchasing one.   Property Taxes and Utilities also are out of control for home owners and you do not get good value for the money that you spend.  Renting it seems may be a better option for a lot of people because of all of that.  This country is so backwards.

That tax incentive relief will simply incite the debt bubble to even more massive heights, just another incentive for people to bite off more than they can chew, particularly with artifically suppressed interest rates.

Property taxes are out of control because the municipal councils are captured by their own unionized municipal employees.  The unions come up with make work for themselves,  the city councillors enable it, then you get sent the bill.

Utilities are going up because of centrally planned Green Schemes being imposed by the very same central planners you are demanding intervene to no good purpose even more than they already are.

Aegrescit Medendo.

Edited by Dougie93

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