A Private Sector Fix for Affordable Housing? Steve Paikin speaks to Cary Green – December 11, 2018,

TVO has made it a habit not to allow comments under their videos and one of the reasons they do this is because a lot of big government problems would get exposed to the disasters they create. Below is a video with Cary Green, whose talking about what I assume he believes is a Private sector fix to Ontario’s housing problems

The key thing to Cary Greens argument is the creation of development bonds, obviously, government-backed development bonds which he claims will help Ontarians get more affordable housing. The examples used by to describe is development bonds are California, New York State, and Florida, well we all know there’s a housing shortage in California and New York State, furthermore both California and New York State have some of the highest rental rates in North America, so I don’t think those were good examples, in the case of Florida, one thing Ontarians should know about Florida is that Florida doesn’t have State taxes, which is one of the reasons it’s a top destination for retirees.

That aside, allow me to point out what else is wrong with Cary Green’s proposal, it’s building maintenance, the problem with most renters are the renters themselves, if you’ve ever been inside most metro or government housing, the apartment buildings usually reek of urine, smoke and all manners of things, most government housing in Ontario is very well maintained, by very highly paid government workers, however, what tends to happen is if the government workforce cleans the building in the morning within 24 hours the building reeks of urine and smoke again.

What should also be pointed out are the types of opportunistic people who will often end up in Government subsidized apartment buildings, what you get once these buildings are built are often people who simply want to pay less money in rent, which is normal, who in their right minds don’t want to pay less in rent and let’s say a Doug Ford comes along and says we’re removing rent controls, well those exact same people will then go to another politician who will reimplement rental controls and possibly add some more regulations on top of that, so let’s say this happens, which it will, then the numbers start to get skewed, it’s not to say that the private investors won’t get paid, people who invest in CMHC’s taxpayer-backed mortgage-backed securities get paid their 5%, it’s what happens to the renters, in the housing market in Canada, namely in Ontario and Vancouver, the prices for homes and condos have skyrocketed, now, the reason prices have skyrocketed isn’t because adequate housing hasn’t been built, housing prices in Toronto and many parts of Ontario skyrocketed because the demands of the people aren’t being met.

There aren’t too many families that want to buy one or two bedroom condo, however foreign investors and domestic flippers see these types of condos as easier to afford and therefore easier to flip, most families prefer to live in a house, however in Toronto, what’s often being built are condo, not just condos, but condos that don’t meet the demands of the growing domestic population, so because of this, the properties which are in demand go up and of course a 3 bedroom condo price goes up, the assumption of the people who own 1 and 2 bedroom condos is to raise their prices also, now, the key to understanding a bubble is grasping what’s going on, so as long a buyer qualifies for a condo or a house they’ll typically buy it, maybe buy it to hold it and then when the price rises sell it, what’s often missed in all of this are the people that buy the property at the top of the bubble.

If you buy a house at the top of a bubble there’s little to no hope that you’ll sell the property for a profit, now if your mortgage exceeds the going rent in your area, you’re really screwed. I bring all of this up because this is the disaster that CMHC created with their bond. Basically what Cary Green is trying to sell to the public is to repeat this process in the rental market and I’m here to tell anyone reading this that in any business undertaking there are unexpected costs, Cary Green even brought up unions, a lot of Government workers in Ontario are unionized.

Ontario has a very large public sector that if history has shown us anything demand higher pay scales than they would in a competitive private sector, in the event the government subsidizes the private sector in any capacity it forces costs up, the government created monopolies force costs up and also minimize alternatives because there’s less competition. Everywhere you see a crown corporation in Canada you find that prices are inflated. How you solve the housing crisis in Ontario is telling people the truth, that rental prices are high because of government intervention.

This is one of the reasons why I hate things like mutual funds if you’re going to invest in the stock market, invest on your own, learn to take a loss on your own. If you’re a tenant and everybody knows this instinctively, if you’re a tenant it’s in your best interests to maintain the building in which you live if you don’t the landlord will raise rents on you, now if your a greedy landlord who raises rents because you feel like doing it, well now we’re in the internet age and now more than ever bad landlords can be exposed for the filth that they are.

Simple reviews online could do wonders to change how landlords behave and if Toronto’s housing market was less regulated more investment would come in, there are already tons of stories where municipalities try and reject housing developments in their area, the real problem in all of this that the people are being misinformed that excessive government regulations are the solution, no massive government regulations are the problem, these government mortgage back securities are the problem, government-backed development bonds are the problem, an intelligent educated Ontarian is the solution and it’s not hard to educate people about how to fix these problems, the real issue is that the government forces don’t want an educated society, because an educated society asks a lot of questions, an educated society won’t get offended when government people call them names.

An educated society would shrink the size of government, I honestly don’t think Canadians realize how much money they’re getting screwed out of.

Interesting times ahead.