Is there a housing crisis in Montreal? – The worst housing shortage in 14 years – Could CMHC be the culprit? – July 22, 2019,
I watched an interesting video yesterday and I was wondering if the issue of the Federal Government incentivizing Condo development over rental housing development would come up? The subject wasn’t brought up and wasn’t addressed. What was address was municipal ways to fight the growing housing crisis in Montreal which is going to prove to be disastrous especially in Montreal. Quebec is known as a very unfriendly environment for businesses and worse than a rental crisis in Montreal is a spike in prices fr commercial leasing space, this is definitely something that will prove even more problematic if Quebec doesn’t solve this problem soon.
Is there a housing crisis in Montreal? – Breakfast Television
So the major problem I see is the Canada Mortgage and Housing Corporation (CMHC) which is a Crown Corporation of the Government of Canada, just so I’m clear CMHC is a mortgage insurance company, which is distorting the market and incentivizing condo development. Now, the huge problem with Condo development or building houses where Rental Apartments would be sufficient is that you get a lot of small scale real estate investors who purchase a property in hopes of flipping it once it appreciates in value, you also get people purchasing condos with the idea of renting those condos out and then, of course, you get foreign investors as well as money launderers purchasing homes and condos as a way to either park or wash their cash of illegal activity.
This is why in my opinion CMHC should be dissolved, as it provides the economic stability necessary for investors to purchase Mortgage Backed Securities they’d otherwise never purchase. It’s less likely that you have the money laundering problems Quebec and the rest of Canada has if CMHC(a mortgage insurance company) wasn’t subsidizing the Mortgages. The mortgage insurance, backed by the Canadian taxpayer that represents the strength and stability of CMHC is now hitting Montreal, something that not even I expected would happen.
Let’s be honest, Quebec which is a perpetual ‘have not’ province heavily dependent on Western Canada’s Private sector to pay its Public Sector bills, would be bankrupt if it weren’t for equalization payments. Now, with all that Quebec is doing wrong, if it’s unfriendly to business and now has a housing shortage, this is definitely cause for concern, because I know one thing for sure, Quebecers will not understand the need for any austerity measures.
Socialists or Leftist who believe in big government will have a hard time understanding that the free market or capitalism was paying the bills. Socialist believe that Government can solve economic problems without shrinking the size of government, meaning that even if government programs aren’t working the mentality of the socialist is that either the program needs more time, the greedy capitalists aren’t being taxed enough or this insolvent government program is part of Quebec’s identity. This is why I’m going to have to start paying close attention to the Quebec economy. I never thought I’d hear about Quebec having a shortage of rental housing in the modern era, because Quebec is known to overspend at the expense of the private sector.
Quebec has already stretched its public sector to the limit and quite frankly, based on the information I heard from the people on the Breakfast Television show, it appears from my perspective that there will be a strong push for more government intervention, which is obviously going to be an attack on the private sector. Unfortunately, the Public Sector via politicians can’t force Private developers/builders to do everything you say, these developers do have the option of leaving. If you can’t see where I’m going with this, you have to change the culture before you can get people to think reasonably.
Equalization payments have given Montrealers and Quebecers, in general, a cultural identity that they can do no wrong, that their system isn’t bankrupt and is indeed working! Unfortunately, I think in general Canada is going to have learned things the hard way. I’ve tried to visualize a scenario where we can escape this National housing crisis unscathed and I can’t see it. CMHC is rarely brought up as the reason for all the price distortions in Canada, it’s an afterthought at this point and even if it comes to Canadians attention that CMHC(a mortgage insurance company) is the problem, I’m not sure they’ll be serious argument to dissolve it. Because don’t forget that the real estate lobby loves CMHC, something they use as their sales pitch to developers.
Interesting times ahead