Do The Toronto’s elites really live downtown? It’s a little more complicated than advertised – August 14, 2018

Rental controls, minimum wages, and welfare had a fight and the end result was more poverty for Toronto. Personally, it’s my belief that most YOUNG politicians go into politics with hopes to make a positive change. The problem with young politicians or career politicians is they’ve never had to make payroll with their own money before. Until you’ve started a business using your own capital you’ll never truly understand how the real world works.

A lot of politicians only look at the money or the potential money available to the government to institute economic change. Most politicians are unable to comprehend that picking winners and losers makes problems worse. The reason why the government shouldn’t redistribute income is that the people that have experience in business have habits that people that don’t have any desire to start a business don’t have. The habit of business people is to look into the future and anticipate, predict and plan for both prosperity and potential disaster.

Most people that aren’t in business approach the world from a pessimistic point of view or they see learning, business and wealth as something that has an end or an expiry date. So when most people get a sudden windfall of money what they’ll do is they’ll immediately buy everything of their heart desire, when they get this financial windfall they spend as much money as they can in the here and now with the expectation that more money will show up later.

Real business people do not behave this way and a lot of business people don’t even realise that non-business people are looking at them like Scrooge McDuck’s what they’re doing is preparing for a raining day and making sure their money is making money, because most business people understand that currencies could collapse, societies could go into ruin, tyrannical governments can form, so most business people approach life looking at people as individuals instead of collectives. Politicians tend to look at people as collectives, politicians often try to mimic the free market from an authoritative position.

A politician will say to themselves this group of people are poor, and they’re poor because they’re not receiving the right kind of education, these poor people aren’t receiving the type of education the rich are getting so what the government should do is mimic the education the rich are getting to the poor. The government will then take on the responsibility of making things fair, which brings me first to rental controls.

How rental controls prevent housing from being built.

Does Toronto have a housing shortage? The answer is 100% no, there’s an abundance of housing in Toronto and had it not been for rental controls there would have been more. Government people attempted to remedy apartments not being built in Toronto by turning making the Canada Mortgage and Housing Corporation (CMHC) be an enabler of zero or under 20% down mortgages. The reason the federal government created this taxpayer-backed crown corporation that picks winners and losers known as the CMHC revolved around rental controls not working.

How rental controls prevent housing from ever being built

Why do I hate rental controls? Rental controls tell citizens that they’re behavior isn’t the reason why rental prices go up. In most apartment buildings the problem is the maintenance. Maintaining a building is very expensive, especially an apartment building with elevators.

• Now imagine you were a privately owned company that built an apartment building and when this apartment building started to have problems you were told by the government that you couldn’t raise rents even temporarily to help remedy maintenance problems related to the apartment building?
• Imagine also that were told that you were not allowed to raise rents above a certain threshold created by the government?
• Would you ever build an apartment building in Toronto again?

Making matters worse now that rental properties are scarce, imagine there was a commercial space sector that was basically unregulated, in which you were allowed to do all of the above? If you built a building where would you concentrate your investment capital?

Minimum wages and welfare, how the government prevents jobs from ever being created

Now, let’s take things a step further and jump on the topics of minimum wages and welfare. Now that it’s established that the government is suppressing businesses in real estate by forcing apartment owners to adhere to laws that may not reflect an aging building. Let’s jump on the topic of minimum wages and welfare. If you know anything about government housing, you’ll know that one of the reasons governments hate building them revolves around maintenance costs.

I’ve been to Regent Park which is being torn down and being quite honest it was a lot cleaner than the government project housing that you’ll see in the United States. But it’s clean because the city hires a lot of workers to keep in clean, the city hires a lot of contractors to keep it maintained and these costs are fixed to the taxpayers, yet there are still homeless people in Toronto. Why?

Well, a government created something called minimum wages, what minimum wages are is they’re a job prevention regulation. Because now all of a sudden every person in the rental market knows exactly how much money you should make minimally if you’re a person in commission or sales you can be discriminated even more, especially if your credit isn’t the best. The reason discrimination happens in this instance revolves around the perception of the landlord who will look at a potential tenant and inquire about this potential tenants employability.

This potential tenant on a minimum wage income now has limited options for housing, why? Because new housing isn’t being built which means there isn’t any or enough competition for housing. It’s important to understand that if there weren’t rental controls and also if there weren’t so many restrictions put on what landlords can and can not do, word of mouth would spread.

So, if a building was horribly run, nobody would move there, which in time would cause that building to go bankrupt. Furthermore in a free market, if a buildings rental price didn’t reflect the demographics of the area, that building would also lose money. The landlords in those instances could raise rents on current tenants as much as they wanted too but especially in this digital age where word spreads like wildfire, these horrible landlords would be out of business really quickly, primarily because there would be so many more options available. what the government did to housing is the exact same thing they did when they created minimum wages.

What did minimum wages have they created an artificially high barrier to entry-level jobs? It’s now illegal for an employer to pay an employee less than $14 an hour, so you know what winds up happening? Certain jobs simply aren’t created in Ontario. what’s worse is this $14 an hour also attracts more competition for jobs and an increased demand for housing.

Guess what happens when all these disasters meet each other? Well, that’s when more people apply for welfare or government assistance, one of the government assistance that people ask for is more housing. This is the cycle that eventually leads to economic collapses. Now, what’s kept Toronto and other Canadian cities afloat is that we still have some economic freedoms. However, as the government grows it’s inevitable that there will be a major economic collapse. Consider clicking the link below to read the Toronto Star article, this blog post is in response too.

Are Toronto’s elites really downtown? It’s not so simple