U.S. Vs Canadian Real Estate: Who Won, Who Lost? Liberals Rent Controls and Canadians Having Less Children
I find the Huffington Post to be a very left-leaning news website, they tend to make feel good comparisons without giving the economic and political facts to their arguments. In their article which can be read by clicking the link below:
U.S. Vs Canadian Real Estate: Who Won And Who Lost? – huffingtonpost.ca – By Daniel Tencer
The following argument is made regarding rental prices:
As pricey as Toronto and Vancouver have become, they don’t hold a candle to the U.S.’s most expensive rental markets. According to Padmapper, an average one-bedroom rented for $2,140 this past August in Toronto, and for $2,000 in Vancouver. Compare that to an average rent — in U.S. dollars — of $4,119 in Manhattan, $3,590 in San Francisco, $3,379 in Boston and $2,801 in Brooklyn. That’s according to data from RentCafe.com, cited by Point2 Homes.
Manhattan, San Francisco, Boston, and Brooklyn are all Democrat(Liberal) run cities with rental controls. As many Canadians know health care in the United States cost more per capita than Canada, but what’s often rarely paid attention too are the number of people that rarely if ever go to the hospital. San Francisco and Boston aren’t America’s largest cities. In fact San Francisco and Boston are 13 and 20th on America’s list of most populous cities, so why then is there rent prices higher than Houston, Dallas, Austin, Colombus etc.? Boston and Brooklyn are just as cold as Colombus Ohio, Boston is a lot colder than Dallas Texas, so why are rents higher in one region than in another region that has more people? Hmmm could it be the policy? could it be government intervention? could it be rental controls?
Well, the reality is that government intervention in the real estate and rental markets is why rents are so high. I’ve of course been saying for years that Toronto shouldn’t have a rental problem, we have more than enough housing to handle a population twice our size, the problem is housing in Toronto is not matching the demand. Currently, on the Huffington Post article, there’s a video titled “Watch: This is Canada’s most expensive condo“.
What should make you think when you watch that video titled This is Canada’s most expensive condo is that the condo is only 4 bedrooms, 7 bathrooms and it’s being sold for $28.7 million dollars! I highlight 4 bedrooms because what I’d like Torontonians to do is search for 3 and 4 bedroom condos? If the plan is to build housing for Canadians shouldn’t most condos be 3 and 4 bedrooms? I mean that is if housing is based on domestic demand right? Wouldn’t most Canadians opt for 3 and 4 bedroom condos? Wouldn’t those types of condos be easier to sell and rent out?
Anyway, I bring this up, because there are laws that families in Canada have to abide by when they’re renting or even buying a house. CBC did an article on this very issue.
Bedroom-sharing rules shut door on affordable housing for some families
Some people think high real estate prices are a game, it’s not, I understand that most of these leftwing news outlets are bought and paid for by foreign-owned real estate special interest groups but this issue is very serious and it’s going to destroy Canada. The main reason Calgary’s market has remained stagnant is, well, look at their rental control laws. The real disaster in Canada is that in Canada our rental control laws are competing with CMHC which by the way before evolving into a crown corporation that provides mortgage Insurance used to cater to the social and rental housing needs for low-income families.
Why this is problematic is that CMHC is guaranteeing loans that Canadian taxpayers are liable for. It should also be pointed out that because of this mortgage-backed securities scheme, CMHC a crown corporation like many other crown corporation is picking winners and losers, now this is hard for most Canadians to grasp but as in example CMHC makes the following admission
Insured close to 120,000 rental units
during the year—a five-year high
Now, to grasp the conflict of interest you’ll want to visit the following page:
Now, it’s important to understand that rental controls and the history of rental controls and how Government intervention actually created the real estate disasters in Toronto and Vancouver. Below is the explanation from the Ontario perspective. I should mention that CMHC is a Federal Crown Corporation and the link below is to the Provincial argument and provincial history for rental controls in Ontario.
So, in short, you can see why CMHC took the position it took and also why we have two tiers of government competing with each other. Now in regards to picking winners and losers, this is what CMHC stated in 2017
As a Crown Corporation, we are the only mortgage insurer whose proceeds
benefit Canadians. Last year, we declared
to our shareholder, the Government of Canada.
$4.7 billion in dividends 2017 PERFORMANCE HIGHLIGHTS 1-CMHC
The government of Canada gets the money CMHC raises off the backs of taxpayers which the Government of Canada spends on whatever and whoever it deems worthy. So, let’s say Ontario wants money to build affordable housing but Justin Trudeau who is the current Prime minister of Canada thinks that it’s a better idea to spend $10.5 million dollars making that Omar Khadr problem go away or if Justin Trudeau decides to give $372.5M to Bombardier in “loans”? Well, you see, how these $4.7 billion in dividends to CMHC’s shareholder, the Government of Canada takes get spent! Now, of course, I only illustrated wasteful government spending on things I know about off the top of my head, we all know how bloated the Government of Canada is and how overly taxed Canadians are.
CMHC mortgage insurance business continues to shrink in the third quarter, profits down
So this is why I’m irritated when the Leftist spread this propaganda without giving people the pros and the cons. There are pros and cons to government intervening in the economy. When the government regulates or monopolizes industries it means that the cost of living will go up, because there are no competitors and therefore fewer options. It can also mean that certain jobs will disappear, because as the value of property increases so does the cost of living, which equates to a brick and mortar business having to spend more for less profit.
Brooklyn, San Francisco, and Boston aren’t America’s largest cities however they have higher costs of living than larger cities with less government intervention. Are the homeless counted when these stats are delivered? Not only the homeless but the people who can’t leave mom and dads house because rent is too expensive? Are these people counted? Lots of homeless people in these rent-controlled cities and take a wild guess what’s happening in Vancouver?
Motor city: Vancouver home to growing community of RV-dwellers amid housing woes
What I’m attempting to illustrate is that this stuff isn’t funny, these leftist are heartless, anyone that volunteers know that each problem is different, so people lost their job and ended up on the street, while on the flip side you’ll have people who are gaming the system. People can only game the system if there are regulations and welfare created by the government.
Prior to government involvement into the economy, it was easy to identify why a person was poor or how they became poor. Now, we can no longer do that because the cost of living is at ridiculous levels so even if some do everything right way he/she can still end up broke and with no options to correct this because the government regulated their options out of existence.
Minimum wages means that a person has to work for a wage set by the government, so guess what that means? It means you can’t really measure poverty levels because the government just artificially raised the entry to find a job. So once there’s a minimum wage there’s an excuse not to work or find work, so automatically the people who do work are paying for the people who don’t work and there’s less incentive for the people who don’t work to find a job especially if those people who don’t work can simply have more children or cry victim to get more government benefits.
As far as real estate goes, when given the option rental companies want to stay as far away from family rentals as possible because family buildings tend to be more problematic, so what ends up happening are the condos being built that are bachelors, 1 and 2 bedroom condos.
One of the issues I’ll be talking more about in the future is retirement homes, because if you go to the CMHC link I provided earlier you’d understand why retirement homes and home care for the elderly is going to be a huge problem in a few years, people are living longer, Canadian manufacturing is disappearing health care wages are stagnant and well there’s a fight for higher minimum wages which of course begs the argument why bathe an old person when I can flip burgers for the same amount of money per hour?
I’m not the only one that sees the Canadian disaster that’s approaching fast, sure I may speak of it in different terminology but, Canadians aren’t having children for a reason and it’s not only the old stock Canadians, having fewer children, the people having the most children are usually on welfare, wealthy or they work in the public sector where the benefits often exceed those of us working in the private sector.
This upcoming election in Canada is going to tell me a lot about the mood of Canadians. Justin Trudeau said exactly what he was going to do and Canadians bought in and voted him in. I didn’t vote for Justin, but a lot of Canadians did. With that said this coming election will tell me all, I need to know going forward about the future of Canada. If you want to know why Canadians aren’t having children it’s because the cost of living is too expensive.
Interesrting times ahead