Prior to CMHC getting involved in mortgaged-backed securities and mortgage insurance, the housing market was mostly a LOCAL government problem. Landlords during those eras had the same or similar problems you’ll see in the CBC video below.
The difference then was that the federal government was not involved in the process, so there were still incentives to build rental-purposed housing in cities that were not stupid enough to label ALL landlords as scum lords.
In a free society, people have the freedom to be DESTRUCTIVE, and Landlords should have the RIGHT to respond by evicting tenants or raising rents. But you see, RENT CONTROLS changed all of that.
When you’re talking about housing, it’s actually a PROPERTY RIGHTS issue. If I purchased a home and I’m using my home for residential commercial purposes, according to most LOCAL laws, the tenants have more rights to my property than I have.
This is why rental purposed housing stopped being built, this is also why most OLD STOCK Canadians STOPPED renting out their basements. One of the problems a lot o newly arrived immigrants are figuring out is that being a landlord almost everywhere in Canada really sucks.
Why, then, do I bring up the Canada Mortgage and Housing Corporation(CMHC)? It’s because they’re helping to build housing that otherwise WOULD NOT be in demand, based on LOCAL laws.
Although I consider Justin Trudeau the WORST Prime Minister in Canadian history, there’s one area, that Pierre Poilievre will likely find out is not what it appears to be, and that’s HOUSING.
Pierre Poilievre and many Conservatives who don’t believe in Austrian economics make the mistake of imagining that the FEDERAL government should have more control over local politics. I 100% DISAGREE with that.
Housing was one of the problems Stephen Harper had. Sure, Justin Trudeau made the housing problem worse, but Stephen Harper should have ENDED CMHC while he was in power. Instead, he hired a central banker (Stephen Poloz) to lower interest because Stephen Harper didn’t see CENTRAL BANK interest rates as Price Control mechanisms. Price Controls or “Price Fixing” creates SHORTAGES of things.
A market economy is supposed to be FLEXIBLE. Central banks, rent controls, and other price control mechanisms by different branches of government, along with their regulations, make the market inflexible, and inflexibility creates shortages.
Why should I be a landlord if my tenant has more rights to my property than I have?
Unless you’re a large corporation, you’re rolling the dice being a landlord in Canada.
In Canada, our central bankers can create a lot of destruction because CMHC is also a CROWN CORPORATION that revolves around PRICE FIXING. The CMHC and the Bank of Canada combined GUARANTEE consumer price inflation.
So foreign investors see the Canadian housing market ON CHARTS as a sure bet to buy and HOLD. Now, obviously, there are idiots who will assume this is a good environment to be a LANDLORD in because these “investors” are unfamiliar with local politics.
Canada has a lot of EMPTY CONDOS, for example, in major cities like Toronto, Vancouver, Calgary, Edmonton etc. There’s no genuine RESIDENTIAL DEMAND for these condos. However, there are SAVVY investors who look at the Canadian housing market on charts and graphs and say to themselves, this looks like a good “Buy and Hold” market, and so that’s what they do.
The people you’ll see in the CBC video below aren’t savvy real estate investors. The unsavvy investors imagined that they could profit from ever-increasing rental prices and never factored in the costs associated with being a Landlord in Canada.
It makes me laugh when people say there’s a housing SHORTAGE ANYWHERE in Canada; there’s no housing shortage; there are LANDLORD SHORTAGES, and there’s a HUGE difference, and if you don’t know the reason for it, you shouldn’t be a LANDLORD.
Local politics are what they are in Canada, and don’t assume you’re going to change LOCAL politics anytime soon. Canada has a gift and a curse, the gift is that we border with the United States, the curse is that we border with the United States.
In Canada, we’ve practiced and gotten away with a lot of PROTECTIONISM, and what this means is that most Canadians have a sense of ENTITLEMENT, in almost every facet of their lives.
Canada is marching to a period of FORCED Austerity. The thing about forced austerity is that once it arrives, if you’re unaware of what caused the problem, you’re going to have a hard time interpreting the solution, which obviously will lead to protests, etc. Depending on the politician in power during that period, things will get ugly, so they’d better get prepared.
Interesting times ahead