Why Overcrowding In Housing Is Worst In Toronto, at the very least CMHC should be Provincial, not Federal – December 3, 2019,

If Canada we’re to end Equalization payments a few things would have to happen in all Canadian provinces, starting with Austerity measures and whatever government took office would have to take a serious look into the causes and effects of particular policies. A large portion of Eastern Canada is bankrupt and has been bankrupt or has been hovering on the edge of bankruptcy for a very long time. The reason why a lot of Austrian economic experts want to return to a Gold Standard is that history has shown that societies do more economical innovations when the Government or the authoritative power doesn’t have the ability to manipulate the currency supply.

On the flipside to the individualist argument are the collectivists who argue that the people have a demand for some sort of collectivism, this is a great harmonious argument as long as both sides are allowed to engage in proper debate, unfortunately in Canada, we’ve gone too far Left and particular arguments of individualism and individual responsibility have been used as tool by the Leftists to label their opposition as racists. This, of course, is why in an era where technology has actually made our lives cheaper, things like rental prices have skyrocketed.

CMHC which is a Canadian Crown Corporation with a Federal designation currently assists the market with insurance for mortgages. In easy to understand terms, condos in Canada that otherwise wouldn’t be built are being built because via the Federal Government agency known as the Canada Mortgage and Housing Corporation has rules that benefit investment. Detached homes are one thing Condos are something completely different.

Huffington Post writes a lot of articles that revolve around housing, I tend to disagree with what most of their writers claim is the problem, the problem is easy to see once you look at the data for what it is. Condos in Toronto are being built where rental housing should be. A condo can be used as an investment for an individual and it’s important to understand that Provinces like Toronto have Rental Controls. Rental Controls are government price-fixing schemes that there’s a demand for, now a lot of Canadians can not save for a down payment on a house and in a free society humans have a right to spend money any way they wish, sure I can make the argument that the cost of living is high in Toronto because of government edicts, but this article revolves around housing and why it’s so high in Toronto.

Rental Controls and Government Mortgage Insurance had a fight and the Housing Developers Gave the Win to CMHC

When governments pick winners and losers, the private sector will opt to side with the government. First off, I don’t think CMHC should offer any insurance that is based on the Canadian taxpayer, because there are Canadian taxpayers who will never even qualify for a house, even with the existence of CMHC. If CMHC exists it should be a Provincial crown corporation that is governed by the province. Provinces and the Federal Government are not harmonious as long as the Federal Government Agency CMHC can impose itself on any province.

If you’re a developer the last thing you want to think about is rental controls, just the other day Mayor of Toronto John Tory attacked some rental housing company because they raised rents to a level unacceptable to the government. I’m against rental controls personally, but if you’re a developer looking to build housing and the Toronto mayor sets a precedent that he will side with the voters if a landlord raises rents to a level that is unacceptable to the renter, then the developers will say, forget this, we’ll build condos.

CMHC rewards developers who builds condos by allowing a larger pool of buyers to qualify for condos they’d otherwise not be able to purchase because the downpayment for that Condo would be at the very least 20%, now what’s worse about all of this is that these condos can sometimes get equity and as many people in Toronto know, the equity in these Condos allow the real estate investors to purchase more condos. Now the government might be able to prevent rents from going up for existing tenants via rental controls, but the government can’t control the selling price, actually, they can if they have some type of supply management scheme, but you see supply management forces prices up to and few competitors equate to fewer options and in Toronto there are fewer options.

Most Governments don’t want to get into the business of supplying housing because after all Government workers can unionize and drive the prices up for public services and as this process repeats itself the Private Sector gets smaller and smaller because government workers don’t like competition. Now, if you’re into Austerian economics, all of this stuff is easy to understand and predict, however, if you like many other Canadians subscribe to unchallenged Leftist dogma, well my dear friend you’ll assume there’s no answer to this housing debacle we have in Canada. The article below is worth a read.

Overcrowding In Housing Is Worst In Toronto, Western Canada: StatCan | huffingtonpost.ca

Interesting times ahead