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» babble   » current events   » national news   » Affordable housing gap tops $1 billion

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Author Topic: Affordable housing gap tops $1 billion
rural - Francesca
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posted 03 February 2008 04:05 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post
Affordable housing gap tops $1 billion

quote:
Ontario's failing record on affordable housing has left a $1 billion spending gap since 2001, the year it signed a federal-provincial pact to boost funding in the area, says a new report.

"Every province and territory, except Ontario, has made at least modest gains in raising housing funding from 2001," says the national report card on housing to be released tomorrow on the eve of a provincial housing ministers' meeting in Vancouver Wednesday.


quote:
100,000 Toronto households pay more than 50 per cent of their pretax income on rent

$1,061 Average monthly rent for a two-bedroom apartment 67,000 Ontario households faced eviction in 2006

26,600 New affordable homes the McGuinty Liberals promised to fund in 2003 campaign. By last November, just 4,060 had been occupied and 2,389 were under construction

17% Median Ontario rent hike between 2001 and 2007. Tenant incomes grew by 4 per cent

21% Median Canadian rent hike. Tenant incomes grew 12 per cent

1.5 million Households in Canada – including 600,000 in Ontario and 200,000 in Toronto – that pay more than 30 per cent of their pretax income on rent

More than half of Canadian renter households can't afford average market rents



(Interesting that Babble has tons of issue/activisim categories but "poverty" isn't one of them)


From: the backyard | Registered: Dec 2007  |  IP: Logged
jester
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posted 03 February 2008 06:26 AM      Profile for jester        Edit/Delete Post
RF: I have posted extensively on the housing gap and how Canada has an inventory of 50-60 year old housing that is past the end of its economic lifespan. It is not cost-effective to maintain this inventory.

If you are interested in furthuring the issue,I'll make the effort again - no-one showed any interest previously.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
Michelle
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posted 03 February 2008 06:34 AM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
(Interesting that Babble has tons of issue/activisim categories but "poverty" isn't one of them)

Yeah...I've wondered whether we should do that. I've always kind of thought of labour and consumption as our class issues forum, but it's not a perfect fit, I agree.


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
rural - Francesca
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posted 03 February 2008 06:36 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post
It's hard to know where to begin.

I run a winter heating program, and about 30% of those who access it are in gear to income housing. But they don't include utilities in the cost of housing and there are no repairs so leaky windows, doors and poorly built insulation units, just add to the cost of heat.

New builds are taking too long. There have been conversations about going to 'voucher' systems to avoid the build, but if there are no vacancies, where are you going to rent?

We just lost a historic apartment complex to build a drug store, to attract seniors who are buying $350 000+ beach front gated community condos etc.

This complex was not the greatest accommodation but it was the city's cheapest. The most horrible aspect of the demo was the landlord gave 2 weeks notice on eviction. Some fought it and got compensated, but others were so marginalized and so afraid of making a fuss - and therefore being branded a "bad" tenant, that they just faded away.

There just is no housing here, and what is here is falling down.

It's hard to keep this issue going, it's hard with any poverty issue.


From: the backyard | Registered: Dec 2007  |  IP: Logged
jester
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posted 03 February 2008 07:15 AM      Profile for jester        Edit/Delete Post
quote:
It's hard to know where to begin

I know where. CMHC. CMHC has been morphed from a Crown Corp mandated to improve access to affordable housing into a profit generating mortgage insurer competing with private finance.

The affordable housing side of CMHC has the depth of expertise to resurect the affordable housing mandate but not to resusitate the present form that has been subsumed by profit targets and government greed.

The largest problem with the affordable housing industry,such as it is, is that there is no cohesive policy to structure project for success. A hodge-podge of projects proposed by and managed by well-meaning amateur NPs and societies usually fall apart because every amateur thinks they know how to manage the project but the majority don't have a clue.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
jester
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posted 03 February 2008 07:19 AM      Profile for jester        Edit/Delete Post
quote:
Originally posted by Michelle:

Yeah...I've wondered whether we should do that. I've always kind of thought of labour and consumption as our class issues forum, but it's not a perfect fit, I agree.


Affordable housing will be the most pressing issue facing Canadians in the near future. In my opinion, it deserves its own forum in order to keep the issue from drifting off into generalities.


From: Against stupidity, the Gods themselves contend in vain | Registered: Jan 2006  |  IP: Logged
rural - Francesca
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posted 03 February 2008 07:38 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Michelle:

Yeah...I've wondered whether we should do that. I've always kind of thought of labour and consumption as our class issues forum, but it's not a perfect fit, I agree.


Poverty crosses all subjects from the loss of organized labour, racism, sexism so having a poverty discussion is challenging when you have no idea where to put it.

Affordable housing would be and will continue to be a positive solution to poverty issues. But so would child care, expansion of EI, training, small business investment, etc.


From: the backyard | Registered: Dec 2007  |  IP: Logged
Fidel
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posted 03 February 2008 10:53 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
It's pretty sad when New York City has more affordable housing units than all of Canada does.

And Labour in Britain is spending $17 billion on affordable housing. This is since Margaret Thatcher promised to transform that country into a "property owning democracy" We now know who she meant would become the new owners of property and wealth.

More of Canada will be scooped up by wealthy Americans and marauding multinationals while too many Canadians sleep on the streets and any rabbit warren they can manage to find in a country with unparalleled natural wealth being siphoned off to the USA at a torrid pace.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
brookmere
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posted 04 February 2008 09:56 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by jester:

Affordable housing will be the most pressing issue facing Canadians in the near future.


I disagree. Canada is heading for a housing bust not seen since the 1930's. We're just a year or so behind the US. It's not different here.

Yes there will be a continuing problem with affordable housing for low-income people, but that's an income problem, not a housing problem.

Oh and Fidel, I suggest you reset your clock to 2008. The US is the world's largest debtor and the US is being bought by foreigners, not the other way around. In particular, there is no reason at all for Americans to buy Canadian real estate given our high dollar, and that our market is just starting to head into the crash that is well under way in the US. It also doesn't make a lot of sense in practical terms - I assure you that hedge funds are not interested in buying that house down the street from you, when some uneducated rube (John Q. Homeowner) is willing to pay more than the economic value of the property and fix it with his own unpaid labour.

[ 04 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Pogo
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posted 04 February 2008 10:42 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
US prices have fallen and compared to the history of continuous rising prices that is an extra-ordinary event. Still the prices have not collapsed. If you own a home you still have something of value. It will take some external events for the Canadian market to follow suit. Homeowners have too much tied into high values to voluntarily accept lower prices. While CMHC has made a mockery of mortgage rules, we still have more backbone in our finance system than the US.

I predict that the Canadian correction will be instead a long term period of stagnation.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 05 February 2008 11:29 AM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Pogo:
[QB It will take some external events for the Canadian market to follow suit.[/QB]

So what external events caused the US crash?

Bubbles collapse because of internal reasons - the prices are too damned high, period. Supply exceeds demand.

The Canadian market will get hit by a double whammy - the same internal forces that caused the US crash, and a US recession.

US RE prices are going to return to historical multiples of rents and incomes and so are Canadian prices.


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Fidel
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posted 05 February 2008 11:55 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:

So what external events caused the US crash?

Bubbles collapse because of internal reasons - the prices are too damned high, period. Supply exceeds demand.

The Canadian market will get hit by a double whammy - the same internal forces that caused the US crash, and a US recession.


I think our banks are exposed to U.S. subprime mortgage risks and losses mounting for a number of months to come. CIBC World Markets just fired it's head of risk management unit at the end of last year.

But I think Canada has had the advantage of choosing between guns and butter, whereas the Yanks borrow and spend on both regardless of what's happening at home or abroad. No one has challenged US dollar hegemony until Saddam Hussein decided to demand Euros for oil. The Saudis are now experiencing real estate price inflation and would like to be less invested in US dollars themselves. Iran's new oil bourse is expected to begin some time this month.

I can't think of any really good reason for there to be a shortage of affordable housing in Canada. The rest of the world could drop off the face of the earth tomorrow, and we would have nearly everything we need to sustain ourselves.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Pogo
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posted 05 February 2008 12:02 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:

So what external events caused the US crash?

Bubbles collapse because of internal reasons - the prices are too damned high, period. Supply exceeds demand.

The Canadian market will get hit by a double whammy - the same internal forces that caused the US crash, and a US recession.

US RE prices are going to return to historical multiples of rents and incomes and so are Canadian prices.


I view the sub-prime collapse as an external issue. Until owners and/or their creditors have a gun to their head, they will not sell at a loss.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 05 February 2008 07:04 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
That's absolute BS. The subprime collapse happened a year after prices started falling in the US.

Prices starting falling in the US because they were simply too high and people couldn't afford them.

There's a reason why historically RE prices are about 3 times household income. That's all people can afford.

The real estate bubble is a neocon scan designed to rip off ordinary people by getting them to pay ridiculous prices for housing, and I'm amazed that anyone on this board, of all places, can't see through it.


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
RevolutionPlease
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posted 05 February 2008 09:05 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
Babble never cares about poverty, they ignore it. Bunch of "progressives" progressing themselves.
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remind
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posted 05 February 2008 09:10 PM      Profile for remind     Send New Private Message      Edit/Delete Post
quote:
Originally posted by RevolutionPlease:
Babble never cares about poverty, they ignore it. Bunch of "progressives" progressing themselves.


From: "watching the tide roll away" | Registered: Jun 2004  |  IP: Logged
RevolutionPlease
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posted 05 February 2008 09:18 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
quote:
Originally posted by remind:



Please share Remind. I'm interested.


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RevolutionPlease
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posted 05 February 2008 09:24 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:

I think our banks are exposed to U.S. subprime mortgage risks and losses mounting for a number of months to come. CIBC World Markets just fired it's head of risk management unit at the end of last year.

But I think Canada has had the advantage of choosing between guns and butter, whereas the Yanks borrow and spend on both regardless of what's happening at home or abroad. No one has challenged US dollar hegemony until Saddam Hussein decided to demand Euros for oil. The Saudis are now experiencing real estate price inflation and would like to be less invested in US dollars themselves. Iran's new oil bourse is expected to begin some time this month.

I can't think of any really good reason for there to be a shortage of affordable housing in Canada. The rest of the world could drop off the face of the earth tomorrow, and we would have nearly everything we need to sustain ourselves.


Thank goodness we have butter.


From: Aurora | Registered: Oct 2007  |  IP: Logged
Pogo
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posted 06 February 2008 07:27 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:
The real estate bubble is a neocon scan designed to rip off ordinary people by getting them to pay ridiculous prices for housing, and I'm amazed that anyone on this board, of all places, can't see through it.

I don't disagree. I have referred to it as the biggest pyramid scheme in the world. And the basic rule in pyramid schemes is that people caught in the scheme will do whatever is possible not to collapse the house of cards.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Pogo
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posted 06 February 2008 07:29 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by remind:


Well said remind.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 06 February 2008 10:41 AM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Pogo:
And the basic rule in pyramid schemes is that people caught in the scheme will do whatever is possible not to collapse the house of cards.

The problem is that a house of cards will collapse no matter what anyone does, once it gets big enough.

There is absolutely nothing anyone can do to stop the housing collapse in the US, any more than they could stop the dot-com collapse in 2000. All pyramid schemes bring about their own demise.

And the same end awaits the RE bubble in Western Canada. I think Toronto may see some pain as well, although the rest of the East is pretty reasonably priced.

And while we're on the topic, look at 60 Minutes - "House of Cards". Don't say "it can't happen here" - it has happened before and it can happen again.

[ 06 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Pogo
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posted 06 February 2008 10:46 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
I think we agree on what is going on, we just disagree about the timing.
From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Rod Manchee
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posted 06 February 2008 10:56 AM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
There are a few points it is useful to make here -

The first, just to make sure that we’re all reading from the same page, is that the gap is $1 Billion _per year_.

The second is that the elephant in the room is tenure. Although jester noted above “I know where. CMHC. CMHC has been morphed from a Crown Corp mandated to improve access to affordable housing into a profit generating mortgage insurer competing with private finance,”
this is only part of the problem.

CMHC has, from its roots(which were accommodating soldiers returning from WWII to avoid the ugliness following WWI) dealt principally with ownership and standards, rather than problems of housing people(mainly the poor), per se. There have been exceptions - the Public Housing and Non-Profit programs, for example, but most “poor-oriented” approaches - like Rent Supps, Assisted Rental, etc, have been oriented towards the idea that help should go to the landlord who, in return, sells the service of cheaper rents to poor folk. This may seem to work for a while, but the issue of who is actually buying and will end up owning the property is lost in a mist of free enterprise, and when seen over the perspective of 30-50 years turns out it be a pretty bad investment.

Much better to actually buy the property, either directly or(better yet) invest through a responsible agent(like a non-profit). The initial costs may be a little higher, but the return will become obvious after a decade or so and will keep growing as long as the property stays in public or quasi-public hands. This is exactly how the private investor makes a return on real estate, not in the short term(except in a hot market or bubble, which ends up burning far more people than it makes rich, and eventually goes bust and leaves somebody - usually very vulnerable somebodies - holding a very heavy bag) but over a much longer haul.

As a side-issue to the tenure one, even before the Mulroney-Wilson crippling of what fairness existed in our tax system(sharply exaggerated by Martin, and moved even further by Harper et al), there were massive supports to homeownership not available to renters, both in the tax system and in the structure of housing finance itself. This support goes into the tens of Billions of dollars annually, so quibbling about $ 1 Billion per year seems a little picayune on the part of the assistance choppers.

The third is that jester asserted that “Canada has an inventory of 50-60 year old housing that is past the end of its economic lifespan. It is not cost-effective to maintain this inventory.” While this is formally true, the apparent conclusion(it’s near the juke heap, and we need to replace it with new stuff) would be an erroneous and not-too-useful one.

While some of it may be badly built junk and the interests of public health would be better served by replacing it with a Tim Horton’s, most housing goes through renovation cycles where the cost is some (usually gradually increasing) proportion of the original (real) cost. So say you built the original for $100,000(per door) and keep it reasonably well maintained. After, say, 50 years, no matter how good your maintenance, it will cost more to maintain than to just do a complete renovation. Now the private market approach is to sell it(for the inflation-adjusted equivalent of $50,000) and let the next guy do it(for a comparable amount), but you can do it at half the cost(ie what the next guy paid for the reno), for you own the land, foundations, frame, various connections such as sewer, and many soft costs, such as land transfer, are already paid, so an in-house reno will be much cheaper than a sale-reno. Say 40 years later this cycle repeats(except the reno cost is up because you also have to redo wiring and plumbing), and perhaps again so this property may have an effective life more like 150-160 than 50–60 years. This is one of the real differences between public(or quasi-public)ownership and private, namely that the former can(and the responsible ones do) take such a long view, while the latter tends to be restricted to the life-terms of its principals.

And regarding the further assertion “The largest problem with the affordable housing industry,such as it is, is that there is no cohesive policy to structure project for success. A hodge-podge of projects proposed by and managed by well-meaning amateur NPs and societies usually fall apart because every amateur thinks they know how to manage the project but the majority don't have a clue.

Actually, such failures are fairly uncommon(particularly when compared to similar-sized private market enterprises) and as the sector becomes more organized and cohesive even less likely. It would have been useful if, as these programs began to take shape(there were glimmerings before, but a good start date is the NHA S 15.1 program of 1973-1978.) CMHC had emphasized some coherent training and information program to parallel local initiatives, but the “let 100 flowers bloom” approach has resulted in tougher survivors and a fairly resilient national organization(CHRA).

Fourth brookmere comments "Yes there will be a continuing problem with affordable housing for low-income people, but that's an income problem, not a housing problem.

It not clear what this means. If it’s that poor people are poor because they don’t have very much money, OK, I can go along with that. If it’s that the solution is simply to give poor people more money to support a system that has been repeatedly demonstrated to be very ineffective in meeting their needs, then my response is “maybe it’s time to put more support behind a better system.”

Right now the Renter to Owner ratio is somewhere between 30-35% to 65-70%, although depending on to what extent the sub-prime mortgage meltdown in the US laps into Canada, it may approach the historic ratio of 40% to 60%. I wonder what the ratio would be it homeownership was not so fetishized and rental tenure not so debased, and the financial/tax advantages of each put on a level playing-field(perhaps more 50 to 50)?

Perhaps people would find it useful to check out some Adam Smith, particularly his “three duties of the sovereign” (especially the third one) found near the end of the Wealth of Nations.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Fidel
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posted 06 February 2008 11:48 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Since deregulation of banking and bailing out private banks with handing them the bulk of money creation, Canada's total infrastructure deficits are estimated at somewhere around $130 Billion dollars. Bubble markets in homelessness and housing shortages aren't working in the U.S., and it doesn't work in Canada.

We need a national housing strategy.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Sean in Ottawa
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posted 06 February 2008 01:33 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post
It does not help that we support a whole level of government (cities) on a housing tax.
Why on earth would anyone think taxing an essential human need like this makes sense?

Consider the numbers on a low-end Ottawa garden home condo of $150,000 -- you might pay that over a 25 year period-- or $6000 a year. the rest is interest which is not normally taxed. If the annual taxes are $2500 then you will pay $62,500 in tax or 41%. A little known fact is that the rates on residential apartments are higher so lower income renters actually pay higher rates of real estate taxes- at least in Ontario than do property owners. This is buried into rentals.
If we have a problem with affordable housing why are we not looking at how it is taxed. This is a part of a problem. Maybe we should tax cars with more than 4 cylinders at 40% and leave housing alone- just to start? Or tax luxuries more than essentials.


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brookmere
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posted 06 February 2008 11:12 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sean in Ottawa:

Why on earth would anyone think taxing an essential human need like this makes sense?


Instead of taxing an essential human need like income?

You cannot support a government on luxury taxes. You have to tax essentials, whether on the income or consumption side.

Property taxes have nothing to do with housing unaffordability. A house or condo will sell for whatever the buyer is willing and able to pay. If the property taxes were reduced, the buyer could afford a higher price for the same monthly payment and prices would go up.

This is exactly why the RE industry is always campaigning for lower property and transfer taxes. It would increase their profits at the expense of needed tax revenues.

The way to make housing cheaper is to punish speculators with high taxes on RE capital gains. Then only people who want housing to live in, or to rent long term, would be interested in buying.


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Indiana Jones
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posted 07 February 2008 05:12 AM      Profile for Indiana Jones        Edit/Delete Post
I actually think property taxes are the most stupid tax out there. For two reasons:

1. The value of one's home often bears little correlation to one's ability to pay taxes. Property values tend to appreciate voer time so the home that someone bought for cheap is now valued very highly when the owner is in a very different situation. They probably bought when they were working and could now be a retired widow living on a pension and being hit with property taxes tehy can't afford. You also have the problem of low-income neighbourhoods quickly becoming gentrified, thus raising property values but this punishes the original residents who bought there because it was an affordable neighbourhood and now can't afford the taxes. Just because your property value goes up, doesn't suddenly mean you ahve extra money in your pocket. You don't get that money until you sell.

2. I think that the taxes people should pay should bear some relation to what it costs to deliver them services or to reflect what costs they are passing on to the broader society. But property taxes tend to do jsut the opposite. Someone who buys a $5 million mansion in Rosedale in Toronto is going to be paying waaaay more in property taxes than someone who buys a $300,000 home in an urban sprawl subdivision out in the suburbs. But the infrastructure in Rosedale already exists. It costs very little to provide water, pipes, hydro and the rest. The roads are already there. Whereas, teh urban sprawl house mean, tearing down a forest and putting in roads, pipes, and everything else from scratch. And it's being subsidized by everyone else. Further, the person in the Rosedale mansion is presumably taking tansit or driving a short distance to work whereas the urban sprawl resident is spending 3 hours a day in traffic, spewing exhaust fumes into the air and hurting everyone else with their pollution.


From: Toronto / Brooklyn / Jerusalem | Registered: Dec 2007  |  IP: Logged
Pogo
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posted 07 February 2008 07:11 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
I lie awake at night worrying about how we are overtaxing the residents of Rosedale.
From: Richmond BC | Registered: Aug 2002  |  IP: Logged
rural - Francesca
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posted 07 February 2008 07:29 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post

From: the backyard | Registered: Dec 2007  |  IP: Logged
Indiana Jones
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posted 07 February 2008 08:14 AM      Profile for Indiana Jones        Edit/Delete Post
quote:
Originally posted by Pogo:
I lie awake at night worrying about how we are overtaxing the residents of Rosedale.

See, I lie awake at night wondering whether or not my children are going to be able to breathe clean air and drink clean water. People who live in Rosedale are much better for the environment than someone who buys a home that necessitates paving over a forest and spending hours every day in traffic billowing shit into the air that the rest of us ahve to breathe.

I'm sure there are also a lot of elderly widows on fixed-incomes who lie awake worrying about whether they'll be able to keep their house because the home they've lived in for 50 years has jsut been hit with higher property taxes while their annual income has jsut evaporated.


From: Toronto / Brooklyn / Jerusalem | Registered: Dec 2007  |  IP: Logged
Pogo
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posted 07 February 2008 09:06 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
Most communities that use market value assessment have plans that allow seniors to defer taxes. I also don't think that the sprawling low density estates of Rosedale can brag about their environmental footprint.
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rural - Francesca
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posted 07 February 2008 09:11 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post
I get it if seniors are still carrying a mortgage, but if not, it's not really a lot of money compared to rent etc.

And when you look at the services seniors suck out of a community....

(ok I"ve got a bug up...because I live in an area that tears down cheap housing for drug stores and allows waterfront development of seniors complexes worth $350 000+)


From: the backyard | Registered: Dec 2007  |  IP: Logged
Boom Boom
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posted 07 February 2008 10:38 AM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
quote:
Originally posted by rural - Francesca:
And when you look at the services seniors suck out of a community....

After having paid into those services all their lives through taxation etc... aren't seniors entitled to draw from those services?


From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
Pogo
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posted 07 February 2008 10:44 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
What about the seniors that are living in bus shelters? Are they entitled to live in a big house in a ritzy neighborhood?
From: Richmond BC | Registered: Aug 2002  |  IP: Logged
rural - Francesca
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posted 07 February 2008 11:02 AM      Profile for rural - Francesca   Author's Homepage     Send New Private Message      Edit/Delete Post
yes, but when the services to seniors suck up what is avaliable to the entire community and the voice of youth is silenced because they can't vote and don't pay taxes.......

Don't get me wrong, I'm not down on seniors per say, I just get frustrated that my youth are being sidelined by seniors issues.


From: the backyard | Registered: Dec 2007  |  IP: Logged
Fidel
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posted 07 February 2008 11:03 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:
Oh and Fidel, I suggest you reset your clock to 2008. The US is the world's largest debtor and the US is being bought by foreigners, not the other way around.

Name one sector of the American economy that is majority foreign owned and controlled.

More than 30 imortant sectors of the Canadian economy are majority foreign-owned and controlled. Canada has allowed its manufacturing sector to be more than 50 percent foreign owned, more than any other rich country.

Neither the scrapping of corporate income trusts or Canadian real estate prices bouyed by a higher dollar are deterrents to American takeovers or the scooping up of pieces of Canada by wealthy foreigners and multinational corporations. Mel Hurtig estimated that Canada's big banks have financed(with our money) as much as two-thirds of the nearly approximately 12, 000 takeovers in Canada since 1985.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Sineed
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posted 07 February 2008 11:21 AM      Profile for Sineed     Send New Private Message      Edit/Delete Post
quote:
After having paid into those services all their lives through taxation etc... aren't seniors entitled to draw from those services?
True. However, seniors have also benefited from social services throughout their lifetime.

And seniors also benefit from services that didn't exist when they were young, such as Drug Benefit (not sure what you call it outside Ontario--the free drugs for +65, the costs of which are continuing to skyrocket).

Basically, people of my generation (Gen X) are going to be supporting baby boomers to a greater extent than the baby boomers supported the generation before them.

And there was this, in Rod's well-informed post:

quote:
As a side-issue to the tenure one, even before the Mulroney-Wilson crippling of what fairness existed in our tax system(sharply exaggerated by Martin, and moved even further by Harper et al), there were massive supports to homeownership not available to renters, both in the tax system and in the structure of housing finance itself.

So people trying to buy homes now are getting less government help than folks in the past--another service they benefited from at the time.

From: # 668 - neighbour of the beast | Registered: Dec 2005  |  IP: Logged
Boom Boom
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posted 07 February 2008 11:32 AM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sineed:
Basically, people of my generation (Gen X) are going to be supporting baby boomers to a greater extent than the baby boomers supported the generation before them.

Would you like some cheese with that whine? You're enjoying the fruits of our labours already, you ungrateful young whippersnappers.


From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
lagatta
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posted 07 February 2008 11:53 AM      Profile for lagatta     Send New Private Message      Edit/Delete Post
I can't abide "generationalist" (ageist) generalisations.

The issue facing younger workers is the precarisation of the labour force - boomers who were downsized in earlier recessions also find themselves in precarious work.

As for funding for housing, that depends on the degree to which we will be able to mobilise to win back CMHC mortgages and funding for social housing.


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
Sineed
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posted 07 February 2008 03:29 PM      Profile for Sineed     Send New Private Message      Edit/Delete Post
quote:
Would you like some cheese with that whine? You're enjoying the fruits of our labours already, you ungrateful young whippersnappers.
Bitter, bitter fruit it is, you smug, self-satisfied geezers.

quote:
As for funding for housing, that depends on the degree to which we will be able to mobilise to win back CMHC mortgages and funding for social housing.
Yes; there isn't enough recognition of how much we've lost.

From: # 668 - neighbour of the beast | Registered: Dec 2005  |  IP: Logged
GreenNeck
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posted 07 February 2008 05:16 PM      Profile for GreenNeck     Send New Private Message      Edit/Delete Post
One practical, albeit partial, solution to the issue of affordable housing would be to allow more freedom to home owners to rent portions of their homes. For example, in most of the GTA, it is illegal to have basement apartments. Allowing those (with proper fire safety) could free up thousands of relatively cheap apartments. Everyone could win, the people looking for a place, and the owners, who can use the income to stave off the shocks of job losses and other side effects of the oft-predicted US recession.

Such a solution wouldn't require any government funds except the need to hire a few additional home inspectors to make sure the apartments meet proper safety and sanitary requirements.


From: I'd rather be in Brazil | Registered: Aug 2005  |  IP: Logged
remind
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posted 07 February 2008 05:31 PM      Profile for remind     Send New Private Message      Edit/Delete Post
quote:
Originally posted by lagatta:
I can't abide "generationalist" (ageist) generalisations.

Agreed, and they have no business in this forum actually.

Seniors, and those in their middle years continue to pay taxes, in all forms, including school taxes.


From: "watching the tide roll away" | Registered: Jun 2004  |  IP: Logged
Stephen Gordon
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posted 07 February 2008 05:35 PM      Profile for Stephen Gordon        Edit/Delete Post
Focusing on affordable housing per se is not necessarily helpful; the real problem is poverty. The problems with spending public money on low-cost housing are (at least) two-fold:

- It creates a class of insiders vs outsiders: those who have managed to get into low-cost housing, and those who have not. The fairness of such a system leaves something to be desired. Far better to give everyone with equal needs equal amounts of money.

- Those who are in subsidised housing risk losing their subsidy if they move. The subsidy then becomes a trap: moving to accept a better job or to be closer to family becomes unacceptably costly. Far better to simply give them the money, and let them take that money wherever they want.

It'd be much, much better to take that public money and simply give it to people with low incomes.


From: . | Registered: Oct 2003  |  IP: Logged
Fidel
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posted 07 February 2008 05:41 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
But what's to stop slum landlords from raising rents and simply gouging them even more?

If rents are allowed to rise on an already scarce supply of housing, the housing shortage is not solved.

The very first thing that needs to be done is create an adequate supply of housing, and greedy housing and land developers are not interested in building affordable housing. They allocate one or two low rentals per so many units of housing. And then when the low income people move, the rents are jacked up in-line with the market.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Stephen Gordon
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posted 07 February 2008 05:54 PM      Profile for Stephen Gordon        Edit/Delete Post
quote:
Originally posted by Fidel:
But what's to stop slum landlords from raising rents and simply gouging them even more?

The same thing that's stopping grocery and clothing stores from raising food and clothing prices.


From: . | Registered: Oct 2003  |  IP: Logged
Fidel
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posted 07 February 2008 06:43 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Okay, but what's real here? Is there a shortage of overall housing as well as not enough skilled workers to build them?

Or is it a case that there is a surplus of empty apartments and townhouses and too few with incomes which will cover the market rent?

Groceries can still be had. There are soup kitchens and food banks, although many report running out of groceries by the end of the month across Canada. But housing isn't something that can be obtained even that easily apparently. Will giving the poor more money be a green light for the rentier class, and who already own a large chunk of the scarce housing supply, to simply take the additional income from them with increased market rents? Or do these slumlords simply need some stiff competition from the taxpayers?


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
RevolutionPlease
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posted 07 February 2008 07:33 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
quote:
Originally posted by remind:

Agreed, and they have no business in this forum actually.

Seniors, and those in their middle years continue to pay taxes, in all forms, including school taxes.


Wow just WOW! No business here Remind?

OK, I'll just shut up about all the debt you ageist fighters caused us. Strength in numbers, sure you have that. Strength in thought is another matter.

I've been paying school taxes since I was 18 and ain't been in school since. I'm only 35.

Thanks for the debt.


From: Aurora | Registered: Oct 2007  |  IP: Logged
RevolutionPlease
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posted 07 February 2008 07:35 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
And the affordable housing GAP is huge but I figured that would be derailed. Boomers don't wanna pay up, worried about their beach in Mali.
From: Aurora | Registered: Oct 2007  |  IP: Logged
Fidel
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posted 07 February 2008 08:00 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by RevolutionPlease:

Thanks for the debt.


Man, have I got a YouTube video for you. And, you're welcome.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
RevolutionPlease
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posted 07 February 2008 08:06 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:

Man, have I got a YouTube video for you. And, you're welcome.


I'm well versed Fidel. You're preaching to the choir.

Fuck all you anti-Fidel's/


From: Aurora | Registered: Oct 2007  |  IP: Logged
Rod Manchee
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posted 07 February 2008 08:19 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
When Sean in Ottawa asks(re property taxes) “Why on earth would anyone think taxing an essential human need like this makes sense?” I would suggest that looking at the mode of taxation, rather than the target of that taxation, is a much better place to start. The overall result is they are regressive, but the main point is that they entirely mindless, reminding one of Tom Lehrer’s song about Werner Von Braun and his missiles: I just send them up, who knows where they come down, That’s not my department, says Werner Von Braun.”

Property tax can hit a poor pensioner who happen’s to live on some property whose value has been bid up, but whose pension barely covers cat food with the same bill as the high income yuppie who’s bid up the value. It’s a totally inappropriate chainsaw. Much more useful is a tax based on income, which leaves everybody with the essentials and costly(and often demeaning) redistribution as welfare is less necessary. You just need to notice how the attendance at food-banks and the waiting lists for assisted social housing have grown over the last couple of decades since the Mulroney crew started dismantling what was a by no means ideal, but at least moderately progressive Federal income tax system.

brookmere asserted “Property taxes have nothing to do with housing unaffordability.”

Given that Sean of Ottawa was discussing the situation of apartment renters, you know(or should know) that this is totally untrue. As he noted, quite accurately, the taxes paid for apartment(over six units) rental accommodation are larger(usually about twice) the taxes paid by a homeowner, for housing assessed at the same value. In the end homeowners pay about the same tax as renters because their assessments tend to be considerably higher which is not unreasonable since those accommodations tend to be more adequate/luxurious. In addition, owners benefit from any capital gains on the property while the renter gets bupkiss(and such gains, or rather the resulting higher mortgage costs, are a valid excuse for the next owner to jack up the rent). The assessment is provincially determined, while the city just gets to set the mill rate that applies equally to renters and owners - so the inequality is determined at the provincial, not municipal, level. Or at least that’s how it was the last time I looked, and I doubt it’s changed much since.

But this I can agree with: “The way to make housing cheaper is to punish speculators with high taxes on RE capital gains. Then only people who want housing to live in, or to rent long term, would be interested in buying.”

Well, not the only way perhaps, but certainly a valid part(except the buying part). The whole Canadian approach to capital gains taxation is pretty mindless(probably designed by a stock broker or his brother, but that’s another discussion). And of course the bias toward buying is a benefit to the RE industry and no-one else.


From: ottawa | Registered: Apr 2001  |  IP: Logged
RevolutionPlease
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posted 07 February 2008 08:32 PM      Profile for RevolutionPlease     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:

Property tax can hit a poor pensioner who happen’s to live on some property whose value has been bid up, but whose pension barely covers cat food with the same bill as the high income yuppie who’s bid up the value. It’s a totally inappropriate chainsaw. Much more useful is a tax based on income, which leaves everybody with the essentials and costly(and often demeaning) redistribution as welfare is less necessary. You just need to notice how the attendance at food-banks and the waiting lists for assisted social housing have grown over the last couple of decades since the Mulroney crew started dismantling what was a by no means ideal, but at least moderately progressive Federal income tax system.



How much more do you expect the young to mortgage themselves to the boomers? Seriously?


From: Aurora | Registered: Oct 2007  |  IP: Logged
Pogo
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posted 07 February 2008 09:25 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:
Property tax can hit a poor pensioner who happen’s to live on some property whose value has been bid up, but whose pension barely covers cat food with the same bill as the high income yuppie who’s bid up the value. It’s a totally inappropriate chainsaw. Much more useful is a tax based on income, which leaves everybody with the essentials and costly(and often demeaning) redistribution as welfare is less necessary.

The basic principle of taxation is that everyone should absorb a similiar amount of pain. A progressive income tax system is an important part of doing this but it cannot be the only method. Wealth is also very important. Property taxes are a key tax on wealth and a necessary part of a balances taxation system.

To illustrate the point consider two people. Both living off a low fixed income and paying the same income tax. One lives in a high value home with many amenities and the other lives in a low rent apartment. Obviously the income taxes paid by the person with no property are a bigger sacrafice than the person living in the expensive home. Having wealth and property reduces a persons need for new money (income) and the tax system should reflect this.

Add to this the tax free status of capital gains on principle residences.

[ 07 February 2008: Message edited by: Pogo ]


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 07 February 2008 10:00 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
Remember also that Canada has no inheritance taxes. Property taxes are really the only tax on wealth that we have.

In BC (I don't know about other provinces) seniors can defer property taxes indefinitely. Taxes are payable only when the property is sold or the owner dies. No senior is facing hardship from property taxes.

And for those who think their heirs ought to get the full value of the estates without paying any taxes, well I say tough beans.


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
mimeguy
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posted 08 February 2008 10:23 AM      Profile for mimeguy   Author's Homepage     Send New Private Message      Edit/Delete Post


A couple of photos from the Houses not Bombs rally yesterday outside of Minister Jim Flaherty's office. They locked the door and wouldn't let organizers deliver the letter and petition to his office. They wouldn't even come out and take it. His office was called but organizers were told he was not there and didn't have voice mail. MP Peggy Nash offered to deliver the letter personally to him in Ottawa.


From: Ontario | Registered: Jul 2005  |  IP: Logged
Sean in Ottawa
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posted 08 February 2008 10:55 AM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post
And yes, we should be consistant here. I do agree in a wealth tax but not property taxes. I am in favour of both inheritance taxes and realized capital gains. An ongoing taxation on housing to support an entire level of government is another matter. Functional housing (non luxury) should not be the foundation of government.

Yes income is an essential but income is not in itself a commodity- it is the base level measure of the capacity one has to buy things and a very good foundation for progressive tax. Spending on luxuries or environmentally unsustainable activities are also good to tax. Wealth can be taxed when you pass on and when you realize a major taxable gain. Taxing other types of wealth durign a person's lifetime could discourage saving and would be difficult to do equitably- should you tax gold jewelry for example?
An evaluation of an estate and a fair taxation of that works better.

There is also a debate here, indirect though it may be, between raising money fairly and publicly supplying services or trying to tax people based on what they recieve. The first is more progressive. The second if it is going to be fair is extremely cumbersome. Do you tax a person who lives out of the centre more because they spend more on our roads? How do you really know a person who lives in the centre spend less on the road?
I do not like the idea of using parking as revenue as is the debate in Ottawa because what is coming up is people with cars are being forced away from downtown but they still use the cars a lot in the suburbs. The downtown busiensses pay more in tax than the burbs and their customers are getting a double hit. It makes much more sense to tax automobiles registered to people living in the city. First, you exempt tourists who bring outside busienss and you include those who drive madly around to suburban shopping malls and pay no tax. You could also tax each car by the fuel economy so cars that ae more efficient are taxed less.

Of course, as I have said before, I believe the tax on cars ought to be sufficient to cover the cost of urban transit- replacing transit fares entirely. This would mean that a car would become more expensive but those currently driving a car could afford to take the bus as well.

A municipal income tax can partly replace the current property tax- properties could then have a basic exemption so only larger monster homes are taxed.

Business property taxes can also be eliminated and replaced with a modest gross earnings tax (net taxes are too easy to manipulate). A business that is not making money yet should not be forced to pay the same rate of tax as a company making a lot of money especially when you consider that a company making money will tend to use more city services than one that is not- and have a larger eco-footprint as well.


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Rod Manchee
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posted 08 February 2008 01:24 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
The problem with Stephen Gordon’s proposed solution is that it is a gross oversimplification of the problem. What does “the problem is poverty” mean? Well, on it’s face it may seem to mean simply that some people don’t have enough money, and if they had more they’d spend it in the most efficient way - that seems to be the assumption leading to the policy proposal that “It'd be much, much better to take that public money and simply give it to people with low incomes.”

That might have some validity if both sides of the housing market existed in the theoretical world of perfect competition, where information is complete on both buyer and lender side, where entry into the market is uninhibited, where there are an infinite number of undifferentiated actors on both sides of the transaction, etc, so contracts can be freely entered into.

And it probably bears some similarity to reality in the case of an upper income, or even middle income household which can use legal counsel before entering a contract, knows how to get and use credit, has enough resources to actually have a choice of where and whether to rent or buy, etc.

But in the experience of many of us, this is not the situation of a large number of poorer, mainly tenant, households. When putting food on the table and getting proper clothes for the kids is already a major hassle, negotiating a rent, asserting your “tenant’s rights” and making sure that housing conditions are properly maintained can be “a bridge too far.” For poorer tenants the consistent history(for centuries) has been that the market mechanism in housing is generally incapable of meeting their needs.

There are adequate and well-meaning private landlords, but not all of them are, and in any case the simple structure of housing finance is such that, over the life of a structure, non-profit management/ownership will deliver a more efficient product than will a comparable for-profit management/ownership. It is possible to create the illusion that the for-profit model is superior, but this can only be done by ignoring some factors, considering only a fairly short term, rather than the property’s life-span, and pitting fairly young and inexperienced non-profit managements against older for-profit ones.

The two “problems with spending public money on low-cost housing” are really mainly illusory. :
[sidebar - I don’t understand this term “low cost housing” ... housing of a given quality costs what it costs. The important factor is its financial/social structure, so I prefer the more generic term “social housing” in contrast to something like private or market housing, although some social housing has elements of “private” and/or the market.]

“It creates a class of insiders vs outsiders: those who have managed to get into low-cost housing, and those who have not. The fairness of such a system leaves something to be desired.”

This may have some substance when a social housing program is started but becomes less and less relevant as the number of structures developed under the program increases. If we continue the same vicious macro-economic policies as have been practiced over the last few decades the supply will continue to be dwarfed by the demand. An expanded(and, I admit, somewhat better designed) social housing program, more along the lines of the 1973-78 NHA one would be an approach that would have some chance of achieving something.(I’m not holding my breath - if anyone’s interested I’d be happy to discuss program details in another thread)

Besides, the proposed alternative is too easy to debase. When the S. 15.1(now S 27) was started the low income rent formula used Federally and in the provincial(Ontario) piggy-back program was a scale(called Carver-Hopwood) which started at 17.9% of income and increased to 25% as income increased. Then it was set at 25% for everybody who qualified for assistance. Then it was jacked up to 30%(shortly after the Reagan administration decided to do so), and in the early 90's there was some CMHC noise(fortunately short-lived) about going as high as 50%. What’s painfully obvious is that, if an income transfer approach were adopted, there would be two major holes in it:
I) the usual form has been to cover rent up to a point, and some decreasing proportion thereafter. So, for example, someone may get assistance at 30% of income up to(say)$700/mo rent, but if the cheapest apartment they can find is (say) $1000/mo, then they have to pay 50% of the difference, bringing their real RGI assistance to 36% in this case, but it’s obvious it could vary widely depending on local conditions.
II) If they’re feeling pinched or arbitrarily ugly, the funder(Feds or Province) can just decide to change the standard(say from 30% to 35% - it’s not like it hasn’t happened before). An added attraction of course is that it turns a bunch of poor people into non-poor, relieving pressure from upstarts like these UN poverty-rating people.

“Those who are in subsidised housing risk losing their subsidy if they move. The subsidy then becomes a trap: moving to accept a better job or to be closer to family becomes unacceptably costly. Far better to simply give them the money, and let them take that money wherever they want.”

This gets into a Constitutional hornet’s nest. Giving them the money puts this firmly into provincial jurisdiction(I have trouble seeing Stephen Harper or anybody on the federal scene invoking the federal spending power on this kind of issue/mechanism.) The alternative, having a network of social housing across the country, is certainly an unfinished project, but one that can be revivified with an intelligently constructed federal program, and many elements already exist.
Some groups already do it in an informal, occasional way.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Stephen Gordon
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posted 08 February 2008 01:42 PM      Profile for Stephen Gordon        Edit/Delete Post
I still don't see why just giving people money isn't better. Regardless of the assumptions you make about how the housing sector works (and quite frankly, the evidence of which I'm aware suggests that competitive model doesn't seem to be a bad approximation in the medium-to-long run: higher rents leads to more supply), giving money to low-income households will give them more bargaining power.

Getting into the business of building housing and then allocating them to people who can only benefit if they live there makes about as much sense as distributing coupons for pre-approved food items (no beer or popcorn), or distributing sensible clothing to lower-income households. In the latter two cases, this would be seen as an unconscionable affront to the dignity of those in low-income households. I fail to see why this would not also be the case for housing.


From: . | Registered: Oct 2003  |  IP: Logged
lagatta
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posted 08 February 2008 02:25 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post
Well, in the real world social housing (a co-op) means I haven't ended up in the street at 50, while my neighbourhood is threatened by gentrification.

In the real world, market "choices" would mean living farther from public transport and amenities, making it harder for me to get to jobs or eat properly.

And as for RevolutionPlease, kindly fuck off with your ageism. I am not wealthy and never have been. And I know lots of young entrepreneurial types - I work for them.

edited to add: policy statement http://www.rabble.ca/babble/policy.html

Ageism is not specified, though it can be deduced (whether against older or younger people).

[ 08 February 2008: Message edited by: lagatta ]


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
Fidel
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posted 08 February 2008 02:28 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Isn't this what happened in the UK and now the U.S.? The working poor were offered affordable mortgages at times when rents happened to be sky-high, and then they defaulted on those mortgage payments when the economy went for a nosedive.
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
lagatta
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posted 08 February 2008 02:33 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post
Not to mention that the invisible hand of the economy creates sprawl and is destroying the environment.
From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
remind
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posted 08 February 2008 03:44 PM      Profile for remind     Send New Private Message      Edit/Delete Post
quote:
Originally posted by RevolutionPlease:
Wow just WOW! No business here Remind?
No, ageist commentary has no business here.

quote:
OK, I'll just shut up about all the debt you ageist fighters caused us.

Caused you? Think again, or maybe just think, period.

quote:
I've been paying school taxes since I was 18 and ain't been in school since. I'm only 35.
Point? I have been paying school taxes since I graduated at 16, though I have been in 'school' numerous times since.

quote:
Thanks for the debt.
As I said above, think, instead of projecting your personal angst at ALL boomers.

From: "watching the tide roll away" | Registered: Jun 2004  |  IP: Logged
lagatta
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posted 08 February 2008 04:26 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post
Odd for someone with such a moniker, but RevolutionPlease needs a course in Social classes and class struggle 101.

and no, I'm NOT saying that because I presume you are younger than I am. I hate frigging yuppies as much if not more than you do.


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
Rod Manchee
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posted 08 February 2008 05:20 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
I have a little problem with RevolutionPlease’s comment: “How much more do you expect the young to mortgage themselves to the boomers? Seriously?” Cryptic can be good, cryptic and inscrutable can be intriguing, but cryptic and incomprehensible?

My disagreement with Pogo’s point in:

“The basic principle of taxation is that everyone should absorb a similiar amount of pain. A progressive income tax system is an important part of doing this but it cannot be the only method. Wealth is also very important. Property taxes are a key tax on wealth and a necessary part of a balances taxation system.”

is not with principle, but rather timing. Should wealth in a non-liquid form(eg a house) be taxed annually in that form, or rather at the point when its value is realized(ie when sold). Compare housing to shares. When somebody buys 100 shares of Acme Inc, those shares aren’t taxed annually, it’s any income from them that is. When they are sold, it’s not on their whole value, but rather on the capital gain involved that’s taxed(the method leaves something to be desired, but the underlying idea is OK). Somebody buys a house, the imputed income isn’t taxed annually(rather than taxing it I’d argue that a similar compensatory benefit be given to renters, but that’s another discussion), nor when they sell it(if it’s their principal residence) is any capital gain taxed(although I’d argue that it should be treated as any other capital gain). It would be simpler to simply incorporate it(and any and all wealth taxes) into the income tax system _on realization_.

And as brookmere said: “And for those who think their heirs ought to get the full value of the estates without paying any taxes, well I say tough beans,” I agree, I just think the appropriate point of taxation is realization(that includes transfer on inheritance, with the usual carry backward and forward rules) of the value of that property.

And finally I agree with Sean of Ottawa’s(or should it be Sean’s of Ottawa) comments - there might be minor differences, but few in light of the greater meatball.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Rod Manchee
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posted 08 February 2008 08:00 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
Stephen Gordon comments: “I still don't see why just giving people money isn't better. Regardless of the assumptions you make about how the housing sector works (and quite frankly, the evidence of which I'm aware suggests that competitive model doesn't seem to be a bad approximation in the medium-to-long run: higher rents leads to more supply), giving money to low-income households will give them more bargaining power.”

Just out of curiosity, I wonder which assumptions I made those are and where they are suspect. Evidence you may be referring to probably didn’t differentiate the low-income renter(whom I mentioned I was referring to) and instead talks about renters generally(and I did allow that the model might not be wholly inaccurate wrt households with higher incomes and more complete information). And/or it may implicitly follow the “trickle down theory” which is actually more an ideological assertion that the lower a household’s income the cheaper(and lousier) the housing the do and ought to get. Maybe I’m just a contrarian, but that just doesn’t sound like part the rules of any society I’d want to live in.(or perhaps, like W.C. Fields, it’s just that “I wouldn’t want to be a member of any club that would accept me as a member.”)

The second paragraph: “Getting into the business of building housing and then allocating them to people who can only benefit if they live there makes about as much sense as distributing coupons for pre-approved food items (no beer or popcorn), or distributing sensible clothing to lower-income households. In the latter two cases, this would be seen as an unconscionable affront to the dignity of those in low-income households. I fail to see why this would not also be the case for housing.” is a little unclear.

Who is getting into this business? Private non-profits, private co-op, even “municipal” non-profits which (often in Ontario, at least) have corporate structures separate from the municipal government(although usually selected councillors form the Board of Directors and the shares are held by the municipality).

And what form of it are you unhappy with - sounds to me like the pure RGI, Public Housing model which has been out of favour for quite a while now, at least in Ontario.

Perhaps you’re saying that transferability as a household ages and whose requirement change, is to be preferred. True, and the most intelligent way to observe that is to use the non-profit model, which is so much more efficient at using public funds than some private model, and expand it so that each proponent has lots of properties of different types, allowing households to transfer to more appropriate ones as they age, and promoting better information among groups in an area so that the field of potential properties to move to is expanded, and promoting the inter-city and inter-province exchange of such information in case such households have to move farther afield.

Although we’ve concentrated on low-income assistance needs, a proven effective way to do this is income mixing and resulting cross-subsidy. This has additional benefits by improving community integration and political acceptance/clout.

So where’s the beef?


From: ottawa | Registered: Apr 2001  |  IP: Logged
Fidel
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posted 08 February 2008 08:27 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
NDP says Conservatives’ record on housing is shameful

quote:
OTTAWA – Today, NDP Leader Jack Layton joined NDP Housing Critic Bill Siksay (Burnaby-Douglas) to criticize Housing Minister Monte Solberg for his decision to boycott the first provincial and territorial housing ministers’ summit, which is set to take place today for the first time in almost two and a half years.

“Solberg’s absence at the table with the provinces and territories is shameful,” said Layton. “It shows the Conservative government’s complete disinterest in the housing crisis in Canada. Solberg’s actions deny any federal responsibility to help find a solution.”

The Liberals put an end to federal funds for housing in the mid 1990s. The Conservatives have made no new investments in housing since and have yet to commit funding to current housing programs. The only new money that has gone into housing came from the NDP’s additions to the 2006 budget through Bill C-48.


NDP members are working harder than all the stoogeocrats in Ottawa combined.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Pogo
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posted 08 February 2008 09:03 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:
My disagreement with Pogo’s point in:
...is not with principle, but rather timing.


Owning property is a benefit. Take someone who is given a house when they are 20 years old and stays there until they die at 95 years old. The benefit that they receive far exceeds the capital gain when the estate sells the house. They have had free shelter for 75 years. Every single year they are getting a benefit and should be taxed at the time use.

From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 08 February 2008 09:37 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:
Isn't this what happened in the UK and now the U.S.? The working poor were offered affordable mortgages at times when rents happened to be sky-high, and then they defaulted on those mortgage payments when the economy went for a nosedive.

Wrong.

First, it was not just the poor, but everyone. I cannot emphasize this too strongly.

Second, rents were, and are, not sky-high. This is a key issue. People were not buying houses to escape high rents. People were making payments higher than the rents they were paying before. They were buying houses because they thought house prices would keep going up 20% a year and it would make them rich.

Third, the mortgages were not "affordable", they were severely unaffordable. The "affordability" was a ruse.

Fourth, the economic nosedive was the result of mortgage defaults, not the cause. The cause of the mortgage defaults is that the buyers could never afford them in the first place.

Both the US and UK economies have become Ponzi schemes based not on production but borrowing and speculation. The current crisis is the result of the inevitable failure of such a scheme.

[ 08 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Fidel
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posted 08 February 2008 10:21 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:

Close, but no cigar.

First, it was not just the poor, but everyone. I cannot emphasize this too strongly.


I believe what happened was that neocons in the U.S. tried to make work what failed in Maggie Thatcher's England. Thatcher tried to swing large numbers of labour voters over to the Conservatives by creating a "property owning democracy." It worked for an election or two until large numbers of Britons defaulted on mortgage payments after Maggie's NeoLiberal economic policies bore rotten fruit.

quote:
Second, rents were, and are,not sky-high. This is a key issue. People were not buying houses to escape high rents. People were making payments higher than the rents they were paying before. They were buying houses because they thought house prices would keep going up 20% a year and it would make them rich.

That was the way it was at the beginning of the housing bubble. Most well off speculators took the dough and-or spelled off long before the housing bubble began to inflate. Bush saw that less than 50% of African-Americans and Latinos owned homes. Most of them were not higher income. Apparently some NASA engineer created software to check the credit ratings of high risk borrowers for whom the banks would not offer mortgages to in years before. Bush gave a wink and a nod to Wall Street to shake the money tree so as to feed the tail end of the bubble with subprime mortgages, which have turned out to be bad news for new home buyers in the U.S. who were pressured into signing up for adjustable rate mortgages. Alan Greenspan began letting the air out of that bubble with something like 14 interest rate hikes since about 2004-05(He'd lowered the rate about 12 times to all-time lows to deal with the previous tech bubble and subsequent stock market nosediv e in 2001-02.

So now another neocon economy takes a nosedive, this second time in the same decade in the U.S., and those unable to make mortgage payments are now homeless again or in search of an apartment priced somewhere above the median U.S. monthly rental. Last time I checked, it was $910/mo for a two bedroom aptmt. across major U.S. cities in 2003.

quote:
Fourth, the economic nosedive was the result of mortgage defaults, not the cause. The cause of the mortgage defaults is that the buyers could never afford them in the first place.

Both the US and UK economies have become Ponzi schemes based not on production but borrowing and speculation. The current crisis is the result of the inevitable failure of such a scheme.


That sounds good to me. In fact, that sounds like previous NeoLiberal ideology tried in 1970's-80's Chile, and something pretty close to that in the roaring 1920's-29. And we should also consider that the neocons today have been spending like drunken sailors on successive wars - maintaining over 730 military bases around the world - thousands of nuclear weapons in the U.S. and on foreign soil and seven seas - cut hundreds of billions of dollars in taxes for those who don't need them - and sabotaging the productive American labour economy since the 1970s-80s while building a DisneyWorld fantasy economy based on banking, financial services, and Alan Greenspan's, Wall Street's and British banking cabal's plan to spread "securitized risk" around the world where no one can figure out who is libel for stock market gambling losses and massive fraud. FDR had to deal with something similar when nearly 40% of U.S. banks closed their doors between 1929-32. Today, US banks are considered too big to fail and have been bailed out by US taxpayers on several occasions. Same thing here in Canada since hare-brained schemes for deregulation of the 1980s. Have you ever wondered why there is no money for new roads, schools and hospitals, or to even maintain existing infrastructure across Canada, the very things which the capitalist system has relied on for decades?

quote:
Third, the mortgages were not "affordable", they were severely unaffordable. The "affordability" was a ruse

Exactly. But they were affordable as long as the working poor had incomes, and until the higher rate portion of the mortgage kicked in. I'm not sure how many more Americans are expected to default on mortgages as some large number of these subprime mortgages' interest rates adjust to a higher, less affordable rate over the next six or eight month's time.

[ 08 February 2008: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
N.R.KISSED
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posted 09 February 2008 07:44 AM      Profile for N.R.KISSED     Send New Private Message      Edit/Delete Post
quote:
I still don't see why just giving people money isn't better. Regardless of the assumptions you make about how the housing sector works (and quite frankly, the evidence of which I'm aware suggests that competitive model doesn't seem to be a bad approximation in the medium-to-long run: higher rents leads to more supply), giving money to low-income households will give them more bargaining power.
Getting into the business of building housing and then allocating them to people who can only benefit if they live there makes about as much sense as distributing coupons for pre-approved food items (no beer or popcorn), or distributing sensible clothing to lower-income households. In the latter two cases, this would be seen as an unconscionable affront to the dignity of those in low-income households. I fail to see why this would not also be the case for housing.

You might wish to check some of your own assumptions about the "housing sector." Canada actually had developed models of social and non-profit housing that were not only internationally revered and studied because they were highly effective. To a large extent the model was based on mixed income co-op dwellings instead of marginalizing impoverished communities in housing projects. Of course the actions of the neo-lib market fundamentalists( starting with Mulrooney and continued nationally and provincially by other neo-lib idealogues) put an end to a national housing strategy and any hope for new innovations. Governments claimed they were no longer in the "housing businees" to quote Harris, never mind that housing is not a "business" but a fundamental human right and necessary for participation in the community.

Let us be clear the housing/homelessness crisis was manufactured it was a clear and intentional part of government policy that would have a desired effect on the housing real estate "market". The slash and burn policies advocated by neo-lib economist not only resulted in an end to affordable housing projects it also drastically reduced the income for those with the least cuts in income support and employment insurance, ending of rent controls all contributed to the increasing homeless population. Since none of these policies have been reversed and some have been accelerated the problem has only increased.

Homelessness is beneficial to the "housing market" without affordable housing rents can be kept high and vacancy rates low,people are desparate, with high rents those who can afford to will feel compelled to buy and the condo boom occured and the overheated 'housing market" was created and for Real Estate developers and landlords my god how the money rolled in. Other affordable usits were either knocked down in order to build more condos and apartments were converted decreasing the affordable housing stock. To pretend that any of this was accidental is to be either naive or deluded.

[ 09 February 2008: Message edited by: N.R.KISSED ]


From: Republic of Parkdale | Registered: Aug 2001  |  IP: Logged
Fidel
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posted 09 February 2008 07:55 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Albertans have higher incomes, and yet that province has a housing shortage. Why is the market failing to provide enough housing in this case?
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
brookmere
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posted 09 February 2008 08:09 AM      Profile for brookmere     Send New Private Message      Edit/Delete Post
Because people were moving into Alberta faster than new housing was being built. That's all. Same thing you get in all economic booms from the Klondike on.

Migration into Alberta has now drawn almost to a standstill, but construction of housing continues. House prices are now down over 10% in Calgary and over 15% in Edmonton from the peak last summer, and are set to continue falling. Rents have also stopped going up or are falling and vacancies are rising.

quote:
Let us be clear the housing/homelessness crisis was manufactured it was a clear and intentional part of government policy that would have a desired effect on the housing real estate "market"

Homelessness is not an economic issue. It is a mental health issue. People are not homeless because of the cost of housing. Rents are not higher in terms of incomes than they were decades ago. Nor is there a housing crisis in general terms. Canadians on average have more housing space per person than they did generations ago.

We do have a problem with affordable housing for people on low or fixed incomes. That's an income assistance issue and should be dealt with as such.

We also have a situation in some parts of Canada where it costs much more to buy a house than to rent the same place. That's called a "housing bubble", and the solution to it is for people to get a clue and stop paying more for houses than they are worth. Such bubbles always collapse, as is happening all across the US and in Alberta, and as will soon happen in BC.

[ 09 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Rod Manchee
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posted 09 February 2008 08:19 AM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
quote riginally posted by Rod Manchee:
My disagreement with Pogo’s point in:
...is not with principle, but rather timing.

And Pogo replied:

“Owning property is a benefit. Take someone who is given a house when they are 20 years old and stays there until they die at 95 years old. The benefit that they receive far exceeds the capital gain when the estate sells the house. They have had free shelter for 75 years. Every single year they are getting a benefit and should be taxed at the time use.”

I repeat my caution. The benefit referred to, at least the income part of is called imputed rent, and the tax benefit is that it is not taxed, although it constitutes a benefit and a type of income. Sure, ownership has non-income benefits as well but who is to say renters cannot have some similar non- income benefits through things like increased mobility or fewer transaction costs? - each form does have its benefits and costs, and in all areas except income and taxation they may be seen to approximately balance each other).

Back to imputed income - this has a lot to do with the structure of our mortgages. The cost of living in owned premises can be seen to have two elements: the cost of operating(heat, hydro, maintenance, insurance, etc) and the cost of purchase(the mortgage, which in Canada is almost always and Equal Payment Mortage -EPM - made up of principal and interest. You slowly chip away at the principal, and the interest is reduced so that more and more of the EPM payment goes to principal). The operating part of the owner’s housing costs go up year by year but the EPM part does not.

The renter’s cost, encapsulated into the rent, has three parts: the operating cost, the mortgage cost, and the owner’s profit. When a building is new, profit is usually negative, the owner covers at least part of the mortgage cost, and sometimes even a little of the operating cost(or the building deteriorates faster than usual and living there gets less pleasant). But rents go up faster than homeowner’s costs, soon covering all operating and mortgage costs and eventually even yielding a rapidly increasing profit. In addition, of course, is that the benefit, if the property is sold, goes to the owner(home- or rental) and the tenant sees nothing except the resulting higher rent. The difference between what the renter pays and what the homeowner pays is “imputed rent” and it is not recognized as “imputed income” received by the homeowner, so the tax benefit is failure to tax imputed rent.

Should imputed rent be taxed? I think not - up to around the middle of the last century around a dozen European countries, recognizing this benefit, tried to tax it but there were significant practical difficulties so, last I heard, they had all given up on it. But the discrepancy is real, it’s just that taxing it is coming at it the wrong way.

It seems to me that the better approach is to estimate the tax benefit to homeowners and confer a similar tax benefit to renters. Let’s stop this nonsense of reductions in the marginal income rates of income tax, with the result that the higher your income, the greater the benefit you get. Rather we should redirect that benefit to people who actually need it, to compensate for the benefit already going to homeowners, namely that the imputed income from their housing is tax-free.

I can hear the howls already.

The danger of taxing it at the time of use is that, while some owners are fairly income-rich and could easily handle such a small drain on their resources, many others are income- poor, having invested heavily in this asset with the idea that it would ensure low-cost housing in a time of life when income would be reduced. Such forward-thinking should not be penalized by changing the rules so radically and introducing what for them would be a large drain.

[ 09 February 2008: Message edited by: Rod Manchee ]


From: ottawa | Registered: Apr 2001  |  IP: Logged
N.R.KISSED
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posted 09 February 2008 08:39 AM      Profile for N.R.KISSED     Send New Private Message      Edit/Delete Post
quote:
Homelessness is not an economic issue. It is a mental health issue. People are not homeless because of the cost of housing. Rents are not higher in terms of incomes than they were decades ago. Nor is there a housing crisis in general terms. Canadians on average have more housing space per person than they did generations ago.

This is complete and utter nonsense. The amount of affordable housing has been drastically and this was intentional. The incomes of the most impoverished has also been drastically reduced also on the basis of government policy. It has been relentlessly documented that those living in poverty whether working are not a having to spend more of their income on rent. Neither housing nor rental properties are affordable as they were. This has nothing to do with "mental health" it has to do with government stupidit/greed and the self absorbed complaceny of those who vote for them.


From: Republic of Parkdale | Registered: Aug 2001  |  IP: Logged
Fidel
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posted 09 February 2008 08:39 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:
Because people were moving into Alberta faster than new housing was being built. That's all. Same thing you get in all economic booms from the Klondike on.

There were 3, 436 homeless Calgarians(pdf) counted in that city alone in 2006.

Norway has oil and about as many people as Alberta. Socialist Norway has:

  • well-funded socialized medicine,
  • a national daycare program
  • no university tuitions
  • nil next to zero homelessness
  • a Petroleum-Pension Fund worth about $385 Billion dollars USD

Meanwhile, Alberta's Heritage Fund was cleaned out by Ralph Klein to pay down what were highest per capita debts in Canadian provincial history.

Even Russia's oil stabilization fund, created in just 2004, is worth more than the lowly Alberta Heritage Fund and CPP investment fund combined So much for the Klondike eh?

World conferences in Vienna, Copenhagen and Beijing recognized that housing is a basic human right. Our on-the-take stoogeocrats are failing in their jobs to do what other countries have been a lot more successful in achieving over the last ten to fifteen years.

Yes the housing crisis across Canada is quite real as well as the very real doctor shortage, a $130 Billion dollar infrastructure deficit, and a skills shortage. An adequate supply of skilled workers would seem to be necessary if there was a real housing boom happening in this frozen Puerto Rico.

[ 09 February 2008: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
brookmere
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posted 09 February 2008 10:17 AM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:

There were 3, 436 homeless Calgarians(pdf) counted in that city alone in 2006.



OK fine. So let's look at some more numbers.

If you take a look at Craigslist you can see shared accommodation advertised for around $500/month for a room. That's what it costs to get a roof over your head in Calgary.

In Calgary, even crap jobs pay at least $12/hour, so someone working a 40 hour week would make $480/week, let's say $1600/month after taxes.

Isn't that obvious that's enough to afford a place to live?

The problem in Calgary is not that working people can't afford places to live. The problem is that some people, due to mental health, addiction and similar issues, have trouble getting work and interacting with other people in general. Some people are also homeless due to domestic problems, although as your survey notes, they are a small number of the homeless.

Now let me say right at the outset that society has the resources and the obligation to provide these people with the help they need. But it's not a general problem of working people not being able to afford a place to live.

[ 09 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
N.R.KISSED
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posted 09 February 2008 10:45 AM      Profile for N.R.KISSED     Send New Private Message      Edit/Delete Post
quote:
If you take a look at Craigslist you can see shared accommodation advertised for around $500/month for a room. That's what it costs to get a roof over your head in Calgary.

In Calgary, even crap jobs pay at least $12/hour, so someone working a 40 hour week would make $480/week, let's say $1600/month after taxes.

Isn't that obvious that's enough to afford a place to live?


Calgary has a vacancy rate of 1.6% I doubt the majority of those are affordable.

Calgary also also has the lowest minimum wage in the country, I simply do not believe that "all" jobs are paying minimum of $12.

It has been reported that many of those living in shelters are actually working.

quote:
The problem in Calgary is not that working people can't afford places to live. The problem is that some people, due to mental health, addiction and similar issues, have trouble getting work and interacting with other people in general. Some people are also homeless due to domestic problems, although as your survey notes, they are a small number of the homeless.

This assumption is completely untrue and ignores the reality that issues of poverty mental health or substance use are interalated. Losing your housing is in itself traumatic, being homeless over a long period of time naturally has a profound impact on one's health. Neither substance use or mental health cause homelessness it is the lack of affordable housing that causes homelessness and you constantly repeating that there is not a lack of affordable housing does not make it true.

A simple google of homeless and Calgary and one can find enough information to dispute essentially every claim you have made.

quote:
Some workers who have moved to Calgary looking for a piece of the Alberta advantage are finding themselves out in the streets.

Agencies that deal with homelessness are overwhelmed by families who have arrive in the city without lining up housing first.

"I've never seen it like this," said Inn from the Cold executive director Diana Segboer. "It's a new trend that's got us very concerned. And it's going to get worse, a lot worse.


quote:
Analysts say Calgary is starting to reach a critical point, where the labour market will absorb as many bodies as arrive, but housing and infrastructure are becoming stretched to the limit.

The average house price has soared past $400,000. City transit is at capacity. Affordable housing is especially hard to come by, with 2,300 people now on the city's waiting list for a spot and rent rising with demand.

Segboer classifies most of her clients as working poor -- those who have jobs but can't keep up with the increasing cost of living in the city.

Calgary's need for workers isn't going to ease any time soon.

Segboer said the city needs a permanent shelter to handle the specific needs of families.


and this is just one article here

[ 09 February 2008: Message edited by: N.R.KISSED ]


From: Republic of Parkdale | Registered: Aug 2001  |  IP: Logged
New West
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posted 09 February 2008 12:47 PM      Profile for New West     Send New Private Message      Edit/Delete Post
I agree with N.R. Kissed. Brookmere, you don’t seem to understand the ongoing devastation of the slow-motion rental housing crunch that has developed over the last 20 years. I live in New Westminster BC and rental housing here and elsewhere in the Vancouver area is going the way of the Dodo. It is not being replaced, much less growing to meet the needs of an expanding population of renters. It is much more profitable for developers to build condominium towers - sprouting up like weeds throughout the region. Twenty to thirty percent of these condos are being bought up by out-of-province speculators or investors. These wealthy investors are crucial in supporting an inflated market, and they have made the market unaffordable for many first-time buyers. In New Westminster, as industries consolidate and retrench, the land is rapidly being rezoned for the benefit of condo developers. In some cities older rental properties are being torn down to make way for condos. (Thank goodness New Westminster has a moratorium on the conversion of existing rental stock to condos.) The net result of stagnant, declining rental stock is a low vacancy rate and a corresponding increase in rents.

When a renter moves, rents go up, and rents are rapidly increasing for those who stay put. In 2003 the Liberals revised the Residential Tenancy Act so that landlords could raise the annual rents for their existing tenants by inflation plus two percent without any justification. For the past 8 years my rent has gone up 4 to 5% every year. My income has not been going up at that rate, and as a result, more and more of our income is going towards housing. We will have to move to less expensive rental housing if this keeps up, but with a 1 or 2% vacancy rate, it will not be easy for us to find decent housing. And what of those at the bottom tier of the rental-housing market. Well, I guess they just end up on the street or, if they’re lucky, they have children with an extra room to spare.

Decent housing, like decent medical care is a basic human right. There are a number of reasons why the “free market” will never adequately address our housing or medical needs. Clearly, government at all levels needs to get back into the housing business. Government needs to act as a safety valve when the free market will not or cannot build affordable rental units. Why can’t government mandate that 20 to 30% of the units in a new condo development be designated for permanent rental housing as a pre-condition for issuing a development permit? Why couldn’t government buy 20 to 30% of the units in a development and permanently designate those units for rental housing? That would ease the scarcity of rental units and ease the upward pressure on rents. We must also reinvigorate the development of below market cooperative housing. Most developers and businesses are motivated by the siren song of unfettered profits - to the exclusion of the most important human values. We need a countervailing energy that intervenes on behalf of fundamental human needs.


From: New Westminster | Registered: Oct 2005  |  IP: Logged
Fidel
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posted 09 February 2008 01:29 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:

The problem in Calgary is not that working people can't afford places to live. The problem is that some people, due to mental health, addiction and similar issues, have trouble getting work and interacting with other people in general.

That's baloney. Decent housing is a basic human right.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Pogo
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posted 09 February 2008 11:22 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
When we talk about taxation we have to differentiate between theory and practice. Building a hypothetical model that adjusts the benefits of wealth into income may be okay in theory but in practice it is a different story. For example tracking of capital expenses of the principle residence can be a complex and time consuming ordeal. In practice the best way to fit property and the benefits that accrue from property is the current assessment system. (If we are talking theory, then my choice is to dump the income tax for a progressive consumption tax system)

As far as making housing affordable the co-op system provides a great opportunity. Co-ops by design have natural resell controls as the property costs are basically frozen at the time of construction. A critical mass of co-ops over time would provide downward pressure on market prices, particularly in the lower end. The question of course is what is a critical mass?

[ 10 February 2008: Message edited by: Pogo ]


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Fidel
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posted 10 February 2008 07:34 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Pogo:
As far as making housing affordable the co-op system provides a great opportunity. Co-ops by design have natural resell controls as the property costs are basically frozen at the time of construction. A critical mass of co-ops over time would provide downward pressure on market prices, particularly in the lower end.

Sounds good to me, Pogo. I think property values are out of whack and contributes to low income families being unable to afford a home.

I have to admit that Stephen Gordon makes a good point when he says low incomes need boosting. Habitat for Humanity was in a well-known Northern Ontario city a couple of years ago. They found that there was no shortage of need for affordable housing. The problem was with family incomes. Habitat had problems finding families with the minimum income of around $19, 500 a year to cover the subsidized cost and mortgage payments on a house built by highschool kids. There were a few screwups during pouring of the concrete walls, but I think overall the house was more energy efficient than some large percentage of run-down older buildings and homes around town.

We need something like this, SHARE There are millions of drafty, leakey buildings across Canada that should either be torn down or rennovated and made energy-efficient. The NDP says the building technology has been around for a long time that would allow us to save a significant amount of demand for electricity and overall energy consumption across Canada. It would spur a building boom in a similar way in which the U.S. economy was being driven by housing for the last several years. But we need a public housing boom not a speculation bubble.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Rod Manchee
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posted 10 February 2008 12:43 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
When Pogo said: “ When we talk about taxation we have to differentiate between theory and practice. Building a hypothetical model that adjusts the benefits of wealth into income may be okay in theory but in practice it is a different story. For example tracking of capital expenses of the principle residence can be a complex and time consuming ordeal. In practice the best way to fit property and the benefits that accrue from property is the current assessment system. (If we are talking theory, then my choice is to dump the income tax for a progressive consumption tax system)” I wasn’t quite sure what was being referred to.

It may have been a post I made on the 8th, but I used the example of a regimen that has been in force for about 40 years, hardly what could be called “a hypothetical model.” Tracking capital expenses is exactly what anyone in stock market transactions is expected to do, and anyone who owns a house and expects to sell it(if only in order to give a prospective buyer a record of capital maintenance, and anyone who buys without such a record or a very good [and expensive] evaluation by a structural engineer is an idiot). Fairly detailed annual tracking of adjustments to the ACB is exactly what is expected of any holder of any of those notorious income trusts, and it seems that thousands of pensioners across the country can handle that. So it’s hardly theory, unless Pogo is talking about something totally different(a quote might help).

One of the chief characteristics of a consumption tax is that it is inherently regressive. I’ve never hear of a progressive one, although I suppose it is theoretically possible, with a lot of bureaucratic overhang. Self identification, a necessary and characteristic component of an annual income-based tax system doesn’t seem too practical(unless we get pretty 1984-ish) with a consumption-based system. But perhaps I’m missing some element of design?

“As far as making housing affordable the co-op system provides a great opportunity. Co-ops by design have natural resell controls as the property costs are basically frozen at the time of construction. A critical mass of co-ops over time would provide downward pressure on market prices, particularly in the lower end. The question of course is what is a critical mass?”

Housing costs are never frozen - they creep up incrementally with the costs of rehabilitation(capital maintenance) even if they are never sold. Coops are not immune from being sold(if there is agreement among the members that it is time to cash in). CHF has recently become aware of this potential problem and is encouraging member organizations to write limiting By-laws and some Provincial enabling legislation puts a spoke in the wheel of such a cash in manoeuver, but Co-ops are not mystically or fundamentally different in this regard from everybody else.

The dual keys are that the property does not incur general transaction costs due to resale(ie it remains in one set of hands), and that no profit is extracted(ie the costs are kept to those of purchase, maintenance and other operating). Private and Municipal non-profits as well as some special purpose charitable foundations operate this way, as do many co-ops. Various characteristics of the different approaches make some more suitable is various circumstances.

Regarding Fidel’s post on Habitat for Humanity(inter alia): the one concern I have about H for H is that I understand they hand control the whole shebang to the new owners. As has been alluded to by others, a prime problem is selling the resource so that having H for H or some local land-bank retain control of the land, giving the structure and a right to use the land to the beneficiaries, with the only restriction being that they can’t sell the land, for some considerable period. The British used to have 99 year leases, for example. Or you could say that they could pass it on _as long as no money or other consideration changed hands, and that it continued to be used as housing_ (or some similar wording), so that it was a secure residence but had no potential as an inflation-mill.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Pogo
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posted 10 February 2008 03:49 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
I used theoretical in the sense that it calls for a wholesale change in our taxation system both as in how it affects the taxpayer and in how the revenue is allocated within different levels of government. Yes the US system taxes the gains on the sale of personal property, but the added bureaucracy is not insignificant both for the homeowner and for the government. I first read about this in a booklet put out by the Canadian Tax Foundation (not to be confused wth the Canadian Taxpayer Association!) and would reference the chapter and verse if I could find the book.

Resell controls are nothing new or special. A number of US cities have used them on new housing. New homes in these developments are sold with restrictions on the resale value of the property, limiting homeowners to moderate property value increases. The problem with these homes is that there is a defined end date (most often 25 years) and after this time all the increased profit is again available. Co-ops because resell controls are part and parcel of their structure (and at least in BC defined in the legislation) do not have any time limit on their resell controls.

When I spoke about co-ops I seperated the building and maintenance costs from the property costs. I live in a co-op with a land value that has grown from about 2 million to about 20 million dollars. For members this means very little as their initial share value is unchanged. Our townhouses rent for $700-$900 which is a direct reflection of our costs. Meanwhile the rental market charges $1500-$1800 for similiar units. Fast forward another 10 years to the end of our mortgage and our costs will drop significantly and co-ops (where the members own the property) will be ridiculously priced below the market. If there was a critical mass of co-ops then if will put downward pressure on the housing market.

[ 10 February 2008: Message edited by: Pogo ]


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Pogo
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posted 10 February 2008 04:03 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:

One of the chief characteristics of a consumption tax is that it is inherently regressive. I’ve never hear of a progressive one, although I suppose it is theoretically possible, with a lot of bureaucratic overhang. Self identification, a necessary and characteristic component of an annual income-based tax system doesn’t seem too practical(unless we get pretty 1984-ish) with a consumption-based system. But perhaps I’m missing some element of design?

The system that I read about was in an Atlantic magazine about 4 years ago. The idea was to declare all income and pay taxes on anything that wasn't allocated or 'saved'. In essence putting the tax burden on expensive lifestyle and encouraging thrift and investment.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Fidel
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posted 10 February 2008 06:26 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
I've noticed a trend in the Ottawa area that kind of looks like what's been happening in the U.S. for many years. I've noticed some large sprawling homes being built along the canal and south toward Manotick. And I believe it's being done to avoid paying city taxes and to get away from the hubub in general. Mind, it's not quite as bad as the creation of inner city ghettos the likes of which were evident in large American cities for many years with poorly funded city schools because the wealthy in outlying buroughs don't want to pay school taxes to benefit a growing inner city poor population. But I'm wondering if this is the direction we're headed in Canada with an American-style two tier society while national infrastructure falls apart. Across the U.S. there are formerly immaculately maintained Olympic size sportsplexes, roads, hospitals, and schools in such states of disrepair now that some say it resembles dilapidated Soviet infrastructure toward the end of the 1980's.
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Rod Manchee
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posted 11 February 2008 08:37 AM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
Referring to Pogo’s post of 10 February 2008:

“I used theoretical in the sense that it calls for a wholesale change in our taxation system....”

I would think the term “radical” might better suit your intent although, as I suggested, it’s not so much trying something new(which may be in use in other areas) but rather just changing the categorization of something so that a certain procedure applies. As to affecting the taxpayer, there should not just be a net tax increase but rather a rebalancing of the system(the goal should be revenue neutrality, but among the broad class of people needing somewhere to live, not just homeowners.) Changing the approach from one where, on the Federal level, the benefit is pretty closely restricted to homeowners(emphasizing housing as an equity) to one where the benefit is more uniformly available best characterizes it.

For example, why not end all other housing-related exemptions(like the capital gains exemption) and instead give everyone a lifetime “housing” exemption(something in the order of a few hundred thousand currently, but adjustable to track inflation). Left them spend it as they wish, perhaps as a dribble to mitigate rent or mortgage payments on an annual basis, or as a bulk amount to help cover a purchase. Keeping track should be no problem - the tax system does it now for RRSP contributions, and a system for housing need be no more complicated.

The current system is basically a “the more expensive your housing asset, the more you get,” and since the ability to get expensive housing assets seems to mysteriously correlate with income and wealth, it can safely be restated as “the more you have, the more you get.” For the rest, not only is it a bit of a ponzi game, as gets forcefully demonstrated every 25 years or so, but there is really very little net benefit to anyone but the top income decile or so, and it’s the top few per cent who really rake it in. Except of course when there’s a really hot market, and those few years of bubble economics seem to get everybody(or at least the media) to forget the many years of slogging and collapse. And of course most renters are shut out of the whole thing. An alternative is certainly radical and, unfortunately, all too often theoretical.

“.... Co-ops because resell controls are part and parcel of their structure (and at least in BC defined in the legislation) do not have any time limit on their resell controls.”

The point here is that this is not inherent to co-ops as such, but rather is a restriction that has been introduced into their enabling legislation in some jurisdictions(Ontario has also had it added recently). There are other types of restrictions(such as the general non-profit one) that are effective in their own ways, but unfortunately each seem to have ways to end-run them(often subtle or complex enough that it’s not worth it, but still there). That’s why I suggest the separate, single-purpose trust as a vehicle for hold the land - it to can be end run, but it’s complicated and takes lots of time, but meanwhile the concept of land as a public asset gets more entrenched in the popular consciousness, to balance the current fetish of land as a private asset.

Re your co-op: “.... Fast forward another 10 years to the end of our mortgage and our costs will drop significantly and co-ops (where the members own the property) will be ridiculously priced below the market. If there was a critical mass of co-ops then if will put downward pressure on the housing market.”

You should be cautious with this. You have a deteriorating asset(as it ages) and instead of just reducing housing charges holus-bolus you should think about redirecting some of that new-found surplus into a redevelopment fund to make up for increased renovation and redev costs. Replacement Reserves, as currently constituted, will probably not do the trick, and say 10 years after the mortgage ends you may be hit with something that the insurance company manages to squiggle out of. Besides, buildings age, and at some point will just become so old(and aspects of their technology will be so out of date) that it will be more cost-effective just do a gut job on the old place and treat it as an acquisition-renovation(with no acquisition costs and few soft costs), so you effectively restart the clock on it.

Re Pogo’s comment on tax systems: “The system that I read about was in an Atlantic magazine about 4 years ago. The idea was to declare all income and pay taxes on anything that wasn't allocated or 'saved'. In essence putting the tax burden on expensive lifestyle and encouraging thrift and investment.”

This sounds very much like the system we have, if “allocated” is the equivalent to what deductions are given for and “saved” results in a similar treatment as the current system deals with capital(50% inclusion on capital gains, CCA, etc). It sounds like what we’ve got with a slight change in emphasis and a change in perspective(but little in substance).

Re Fidel’s comments: There are two seasons in Ottawa - Winter and Construction. This, although sometimes a real pain, is a good thing since at least there is an attempt to maintain infrastructure. That deficit in Canadian cities has long been noticed and bitched about by the FCM(I first noticed their complaints in the ‘70's when their shortfall estimate was in the few tens of billions, but even then they had a history of raising the problem). I gather many other cities, like Ottawa, are attempting to keep up, but with their resources it’s not to realistic.

Ontario, still recovering from Harris, is making some attempts to help, but the Feds need to get on the ball with support rather than the insanity which started with Mulroney-Wilson, carried on with Chretien-Martin(OK they did something, but not too much, and continued to distort their tax base) and now the torch is in the hands of ole what’s-his-name and his Harris retread.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Fidel
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posted 11 February 2008 11:23 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
I think home ownership and the huge infrastructure deficit across Canada will not improve until some outstanding issues in our economy are addressed. Banks which provide mortgages are closing up shop in low income neighborhoods, and mortgage insurers want to cherry pick low risk customers. The U.S. may now realize that deregulated relationships between lenders and mortgage insurers has no place in a free and fair market system.

Meanwhile, banks and energy companies have made unprecedented profits here in Canada. In Canada, new home construction is anywhere from 20 to 25 percent below what's needed to satisfy real demand for housing. It hurts our economy and curbs job growth in a sector the Americans were depending on as an engine for economic growth in recent years. There is no excuse for Canada to be short of housing for a relatively small population and what are unparalleled in the world natural resources to draw from.

Sure, Rod, there are so many ways in which we could make Canada's tax system as efficient as the Nordic countries. Bank mortgage rates could be capped at 6%. This would allow for an inflation rate of 3% and addition 2 percent profit for lending institutions. Canada's banks would rather loan our money to marauding multinationals looking to scoop up Canadian corporations and valuable public assets at bargain basement prices on a wink and a nod from their friends in Ottawa and Queen's Parks. There is no real excuse for the ongoing housing crisis in this country.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Rod Manchee
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posted 14 February 2008 07:00 AM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
On 11 February Fidel said: I think home ownership and the huge infrastructure deficit across Canada will not improve until....” I would question the underlying assumptions - “homeownership is not something that is subject to “improving,” it is simply a form of tenure, just as rental is a form of tenure(there are subtle variations, but these two are the major categories). They are simply methods of achieving a particular goal, which is “housing people” and it is achieving that goal, not one or another way of achieving it, that we should consider subject to “improvement.

Each method carries baggage - homeownership mainly that it really combines three things, namely housing, exclusivity, and equity accumulation. Now I have this(perhaps naive) attitude that, while it is the state’s role to create conditions where everyone has access to adequate housing, it is not the state’s role to do it in such a way that some people, because they have a password(greater wealth in this case, as in most) get more help while others , not having the password, are denied any assistance at all. And making this assistance in the form of equity accumulation available to a select group is not only prejudicial, but also not particularly efficient.

Rental’s baggage, as it has developed historically, is that it has required specific consumer protection legislation by various jurisdictions, which are sometimes a little confusing or overlapping, often obtaining a less than optimal effect.

Where there is public support or some other public interest, preserving some control of the equity within in the public sphere, either through strong regulation of the product(in this case housing)) or, more efficiently, some restriction of the owner of that equity(as, say, a non-profit corporation) is a more publicly responsible way to go. In practice this would mean making all such assistance fully repayable, either as cash or in the form of delivery of specific goods and services(eg RGI housing) in the most cost-effective manner.

And he goes on to say....” Bank mortgage rates could be capped at 6%. ...(etc)” I think a better approach is to encourage(and create as appropriate) more competition or alternate modes of financing more public or quasi-public resources. For example, the mortgages for the early (NHA S. 15.1) Non-Profit Housing(and Public Housing before that) were held by CMHC, at a constant rate, with certain assistance to mitigate that rate(in return for meeting certain requirements). Many of those mortgages are now or will be expiring with the next few years and deliver RGI units much more efficiently than any alternative. Returning to such direct lending would be an obvious investment for a responsible and thoughtful Federal government that was actually interested in building a robust foundation for dealing with the housing problem low income households continue to face(and continue to see getting worse).

As a related aside - in all the reporting of the sub-prime mortgage problems in the US, I have yet too see any mention of any role of the restrictions on the import of Canadian lumber, which was such a big deal here in the last few years. The effect was to raise the cost of the lumber making up a considerable part of the cost of a (US) home(to keep a not-very-efficient bunch of lumber Barons raking in cash due to effective lobbying and some rather mindless ideology). That doesn’t mean it caused the crisis, but rather that it probably was a factor in pushing some households over the edge, making houses(and thus mortgages) a little more expensive. Of course the main problem was and is the homeownership fetish and ponzi-game aspect that’s been forced on the provision of housing.


From: ottawa | Registered: Apr 2001  |  IP: Logged
Pogo
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posted 14 February 2008 07:48 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
Regarding Rod's post:

I agree that the principle residence does serve as one of the biggest unjustified tax shelters. Linda McQuag did a great analysis of this. I am just not sold on the ease of moving it into the income tax system (and if I ever find that text I will be able to put words to my anxiety).

I see that you are very familiar with co-ops, CMHC and replacement reserves. We went through a period where our 'rent' subsidy was withheld because we wanted to put more into our reserve than their mandated $10K per year (our analysis showed a replacement cost of $95K per year not counting the building envelope). The bottom line though is that our land has grown in value by a factor of 10 and that this value is passed on to members by reduced housing charges and this is something that goes on indefinitely without a public body having to own the capital asset.

A land trust is also a good idea. I do know that BC Co-op Land trust was not very successful and they have backed away from the concept. I do not know the details.

In additon to being defined in legislation, the prohibition of profit taking is also in the guiding principles of co-ops:

quote:

3)MEMBER ECONOMIC PARTICIPATION
Members contribute equitably to and democratically control the capital of their co-operative.
Members receive limited compensation, if any, on shares.
Surpluses are used for the following purposes:
developing the co-operative,
supporting other activities approved by the membership.
No member can profit on money invested in the co-operative.

I will look for the link to the thread I started a few years ago on consumption taxes.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Fidel
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posted 14 February 2008 08:36 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:
On 11 February Fidel said: I think home ownership and the huge infrastructure deficit across Canada will not improve until....” I would question the underlying assumptions - “homeownership is not something that is subject to “improving,” it is simply a form of tenure, just as rental is a form of tenure(there are subtle variations, but these two are the major categories). They are simply methods of achieving a particular goal, which is “housing people” and it is achieving that goal, not one or another way of achieving it, that we should consider subject to “improvement.

I think at one time there were certain cost savings for families renting their homes. The idea was to save money over the course of so many years to either build a nest egg, and-or, invest personal savings into a home. But personal savings rates are negligible compared to the 20 percent average some time ago. The housing crisis here in Ontario has created a rental market ripe for rent-gouging the working poor.


quote:
Now I have this(perhaps naive) attitude that, while it is the state’s role to create conditions where everyone has access to adequate housing, it is not the state’s role to do it in such a way that some people, because they have a password(greater wealth in this case, as in most) get more help while others , not having the password, are denied any assistance at all.

You mentioned CMHC as being a better method for financing mortgages, and I agree. And I believe the feds were able to offer low interest loans to Canadians at one time because the feds were able to create money for everything from infrastructure and social program spending to low interest home mortgages. The cost of federal borrowing from the Bank was somewhere around two percent, and even then the interest paid on loans came back to the federal government through the Bank of Canada less administrative costs. For some time after the depression, buying a home was the only equity many Canadian families were able to accumulate.

As for the price of lumber driving U.S. real estate prices higher, I'm not so sure. We tend to hear that whatever happens in Canada, U.S. companies can always shop abroad for lumber imports(and they tend to neglect the same argument for Canadian energy exports however). I think when building booms happen in the U.S., prices for Canadian veneer and two-by-fours here in Canada go through the roof. What's our's is their's and generally not vice versa in the free market NAFTA game.

An interesting letter from George Crowell to Irene Mathyssen, NDP MP for London-Fanshawe, about the Bank of Canada.

[ 14 February 2008: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
N.R.KISSED
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posted 14 February 2008 08:47 AM      Profile for N.R.KISSED     Send New Private Message      Edit/Delete Post
THere was a actually a good op-ed piece on housing and homelessness in the Star.
quote:
In other words, much of Canada's population now faces housing markets that exceed the generally accepted definition of affordability. Some cities, such as Toronto and Vancouver, now require from 44 to 70 per cent of average household income, respectively, to own and maintain an average-priced house. It is no wonder, then, that total household debt in Canada has increased by almost 50 per cent in the last 15 years.


Canada losing housing dream


From: Republic of Parkdale | Registered: Aug 2001  |  IP: Logged
brookmere
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posted 15 February 2008 04:05 AM      Profile for brookmere     Send New Private Message      Edit/Delete Post
The cost of buying a house is greatly out of whack with the cost of renting the same house in Vancouver, to a lesser extent in Alberta, and to a lesser extent in Toronto.

This is because people are speculating on houses, or paying ridiculous prices to buy houses to live in, when they can rent the same houses for far less. Both cases are entirely voluntary.

This is called a "housing bubble" and such bubbles inevitably collapse due to basic economic reasons, which is now happening throughout the US, and in Alberta, and will soon happen in the rest of Canada.

Such bubbles can be prevented at the outset by appropriate government tax policy but no political party, including the NDP, advocates such policies. I do.

I will also point out that housing stock in Greater Vancouver is being built at a much higher rate than population growth, which is at historically low levels. Yes you heard that right. The reason is simple - high prices lead to high supply.

Much housing stock is currently being held empty by speculators. Inevitably when the bubble ends this housing will be either sold at a price ordinary people can afford or released into the rental market. This is happening already in the US and in Alberta.

I reiterate that I favour tax policies that would eliminate speculation, which is something that the NDP has never advocated or implemented at either the federal or provincial level, to the best of my knowledge.

All about the Vancouver Real Estate Bubble

Second, we have a problem with some individuals and families not being able to afford adequate rental housing due to low incomes. This can be addressed either by provision of low income housing or income assistance. I think the most affective approach, or combination thereof, depends on local situations.

Third, we have a problem with people being homeless due to mental illness, drug addiction, or other personal crises. They can only be helped by programs designed to address the root causes of their problems. This costs money and governments should be budgeting for it.

These are entirely different problems and no useful purpose is served by trying to conflate them and pretending they are the same problem.

[ 15 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Pogo
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posted 15 February 2008 06:59 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:
These are entirely different problems and no useful purpose is served by trying to conflate them and pretending they are the same problem.

While I agree that the problems have many differences, I think your breakdown was far too simplistic. For example there are more and more people who are homeless while gainfully employed. This situation has long ago outgrown the stereotypical definition.

Moreover combining homeless problems with low income subsidy issues and middle class affordability issues reminds us that we are all in this together.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Fidel
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posted 15 February 2008 09:44 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by brookmere:
Second, we have a problem with some individuals and families not being able to afford adequate rental housing due to low incomes. This can be addressed either by provision of low income housing or income assistance. I think the most affective approach, or combination thereof, depends on local situations.

This is the only thing that makes any sense in your entire post. And you've obfusacated the facts throughout. The NDP does advocate a national housing strategy. Why? Because the market isn't meeting demand for affordable housing across Canada.

And no, rents are not affordable. Not when 1.5 million Canadians cannot access affordable housing. I know it's mind-boggling but true. Why, after decades and decades of the same two old line parties running the show in Ottawa and Queen's Parks, are real estate prices inflated but not wages and incomes? Who does that setup benefit? Is housing a captive market, like shooting fish in a barrel?

Conservatives and Liberalers can always produce answers but never the goods after being in power and sharing power decade after decade.

There are 1.3 million low wage workers in Ontario alone living anywhere below poverty line. Apparently they are not able to afford both rent, or mortgages, and put food on the table throughout the month without experiencing some financial difficulties. And I highly doubt they all have mental or substance abuse issues. I find your comment there to be highly insulting to those Canadians struggling to get by without adequate incomes and decent housing. Housing is a basic human right. And you can look that up on your own time.

Canada has unparalleled in the world natural resources. We're swimming in an ocean of timber with which homes are sometimes made of. It's comparable to Canadians being locked in a big box grocery store and going hungry after being told they can't eat anything because the market will provide manna from heaven. Self-regulating market ideology requires a religious-like a leap of faith in order to believe it works. But the emperor is naked, and I refuse to worship at this altar, I'm sorry.

[ 15 February 2008: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Rod Manchee
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posted 15 February 2008 01:41 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
On Feb 14 Pogo said:

“I agree that the principle residence does serve as one of the biggest unjustified tax shelters. Linda McQuag did a great analysis of this. I am just not sold on the ease of moving it into the income tax system (and if I ever find that text I will be able to put words to my anxiety).”

It’s already in the income tax system(as sheltered income) but perhaps you mean removing that shelter. I agree, if only because the amount of dislocation and resistance would be pretty significant. But the average size is pretty easily calculated, so I think the right approach is to say “this benefit is available exclusively to homeowners, so we(the tax guys) are going to make an equivalent benefit available to renters - say as a refundable tax credit.” Is there money to do this - well we keep hearing about the Federal surpluses, so instead of giving them away in income tax cuts where the lion’s share of the benefit goes to the wealthiest, why not direct it to renters, who are generally poorer, but don’t get a shot at the benefits wealthy homeowners do.

“A land trust is also a good idea. I do know that BC Co-op Land trust was not very successful and they have backed away from the concept. I do not know the details.”

The trick with a land trust(and most similar tools) is to keep it pure and single purpose. If it’s a land trust that’s all it should do, which might mean that it lies dormant for a decade or so, and people should revive it only when it’s needed and only to do its job. Making it wear different hats will only lead to its operation eventually being compromised.

“In additon to being defined in legislation, the prohibition of profit taking is also in the guiding principles of co-ops:”

It’s the guiding principle of principled co-ops, but over a generation or so some of this can be lost in some(not all and thankfully thus far not many) but, for instance, some of the program co-ops are at or nearing the end their mortgage and Operating Agreement restrictions which means all that capital(the land and building) is just sitting there unencumbered. It’s a temptation which the legislation helps to keep in check.

It’s an example of one of the few intelligent things Ronald Reagan was ever scripted to say: “Trust, but verify.”

And Fidel on the 15th:

“As for the price of lumber driving U.S. real estate prices higher, I'm not so sure. We tend to hear that whatever happens in Canada, U.S. companies can always shop abroad for lumber imports(and they tend to neglect the same argument for Canadian energy exports however). I think when building booms happen in the U.S., prices for Canadian veneer and two-by-fours here in Canada go through the roof. What's our's is their's and generally not vice versa in the free market NAFTA game.”

Lumber price is not “the” factor, but it is “a” factor, and it is that the pricing is determined while a free trade agreement is supposed to obliterate protectionist policies. The result is that housing prices are marginally higher than they would have been if there was actual free trade in lumber, so some households at the margin find housing cost a little more than they can handle or would have to if there was real free trade. The reality is that while the US lumber industry is producing more than it can sell, there is rampant protectionism, but when demand gets a little more than they can fill, they’re willing to let some in, as long as its price is high enough to not expose their prices for the inefficient and/or gouging ones they are.

And brookmere asserted: “I reiterate that I favour tax policies that would eliminate speculation, ...” and I ask “what would such policies look like(eg, at what point does making a profit become speculation....?)

And brookmere again: “Third, we have a problem with people being homeless due to mental illness, drug addiction, or other personal crises. They can only be helped by programs designed to address the root causes of their problems. This costs money and governments should be budgeting for it.

These are entirely different problems and no useful purpose is served by trying to conflate them and pretending they are the same problem.”

Although on one level differences can be isolated, they often interact and exacerbate each other. For example, you may develop excellent therapies and drugs to help a person with certain mental illnesses deal adequately with their realities, but pushing them out into the clutches of some random landlord may end up exacerbating the situation and leave them no better off. Social Housing programs are not cure-alls, nor should they be expected to be, but they can alleviate situations which make other problems worse.


From: ottawa | Registered: Apr 2001  |  IP: Logged
brookmere
rabble-rouser
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posted 15 February 2008 06:48 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:
this is the only thing that makes any sense in your entire post


Makes sense to you, that is. I claim no originality about what I said about RE bubbles. This is the same thing as what the critics have been saying about the US bubble for years, and who of course have been proven right. Did you bother reading that link in my post? This guy knows what he's talking about:

The prospects are bleak for Vancouver real estate as there are very few potential buyers out there, population growth is low, average incomes are below urban Canadian averages and we have a housing inventory that is projected to increase dramatically in the next 12 - 24 months. Stay tuned and grab some popcorn since this is going to get real interesting.

quote:
Originally posted by Fidel:
The NDP does advocate a national housing strategy.

Which is what exactly?
quote:
Why, after decades and decades of the same two old line parties running the show in Ottawa and Queen's Parks, are real estate prices inflated but not wages and incomes?

I have already told you the answer. It's because of speculation. Speculation can be stopped by tax policies which would actually raise money, which could be used to put low income people into affordable housing.

Such policies have not been, and are not being advocated by the NDP. Why?.

Oh by the way, the "old line parties" have not been running Queens Park for "decades and decades". There was an NDP government in the early 1990's, which happened to hold office during a real estate crash, which followed a speculative boom earlier. It could have enacted legislation to prevent speculative booms from happening again. It didn't.

Nor has any other NDP provincial government.

[ 15 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
brookmere
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posted 15 February 2008 06:58 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Rod Manchee:

And brookmere asserted: “I reiterate that I favour tax policies that would eliminate speculation, ...” and I ask “what would such policies look like(eg, at what point does making a profit become speculation....?)


Speculation means buying an asset for expected capital gains rather than income. An obvious example is buying a house or condo and leaving it empty rather than renting it out. Anyone can see that this sort of thing directly results in a shortage of rental housing.

Right now our tax system includes rental income as 100%, but includes capital gains as 50% taxable. This is a built-in incentive for speculation. Now if people want to speculate in stocks they can go right ahead as far as I'm concerned (dot-com, etc) as they are playing with their own money and are not creating negative effects to society.

The obvious way to curb speculation it to level the playing field and tax RE capital gains at the same rate as rental income, or even more steeply if you want. This will discourage people from buying RE for short term gains. And as I have said this would raise tax revenue which could be spent on low income housing.

Another policy which would curb speculation would be for CMHC to refuse to insure any mortgage for a speculative purchase, i.e. one by an investor where the rent does not cover the mortgage payments. This would get a lot of flippers out of the market and let people buy houses to live in.

This is not Nobel Prize stuff, it's just common sense.

[ 15 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Pogo
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posted 15 February 2008 08:27 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post
One area of reform that I would like to see is changes to the homeowners grant. I am not sure if there are models across Canada, but in BC it is used to cover the first bit of property taxation. High value properties are excluded which is a small step in Rod's direction. Perhaps in addition the grant could be changed into a homedwellers grant(so that we are now only excluding homeless and couch surfers). I do agree that we should be offering renters similiar tax relief to what we offer homeowners.

I would also like to have a 3 year waiting period to discourage people from moving. The constant movement of people as they chase tax free capital gains works counter to our need to build safe and healthy communities. And while it doesn't deal with speculators it does put some downward pressure on flipping.


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
brookmere
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posted 15 February 2008 10:49 PM      Profile for brookmere     Send New Private Message      Edit/Delete Post
Agree Pogo. BC should have a renters' tax credit which would give the same benefit as the homeowner's grant. The current system discriminates against renters.

Also by getting renters to report their rental payments to the tax authorities we could put a stop to tax evasion by landlords. More tax revenue to help people in need.

And in closing, would be too much to ask of our NDP elected officials to warn the "working families" that we care so much about that real estate is likely to crash and it's a bad idea to buy a house at today's inflated prices, and shackle yourself to 40 years of mortgage payments?

Well guess who isn't afraid to come out and say it:

[ 15 February 2008: Message edited by: brookmere ]


From: BC (sort of) | Registered: Jun 2005  |  IP: Logged
Rod Manchee
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posted 16 February 2008 09:30 AM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
In reply to a question of mine re what speculation is, brookmere replied:

“Speculation means buying an asset for expected capital gains rather than income. An obvious example is buying a house or condo and leaving it empty rather than renting it out. Anyone can see that this sort of thing directly results in a shortage of rental housing.”

So if they rent it out that’s OK, but if market conditions are such that it can’t be rented at that point it’s not. Perhaps we need a motivometer to grok what their reason really is. Besides, an intelligent person would rent it out(unless a sale was imminent)since there would be a flow of income and a test of the adequacy of the house(how do various systems stand up under use, does anything need repair....) prior ro being sued by a buyer.

“Right now our tax system includes rental income as 100%, but includes capital gains as 50% taxable. This is a built-in incentive for speculation. Now if people want to speculate in stocks they can go right ahead as far as I'm concerned (dot-com, etc) as they are playing with their own money and are not creating negative effects to society.”

But the capital gains issue is a little more complicated than that. While an income is occurring at a specific point in time and inflation is not relevant, invested capital is effectively frozen and so depreciates at the rate of inflation. The equivalent of taxing income is taxing capital gains _minus the effect of inflation erosion_ . The idea of having a set discount(50%) rather than a dynamic one(related to inflation, and as a result making short-term speculation as attractive, or even moreso) as long-term investment is a large part of the problem with our investment mechanisms (It does supply brokers with more business than if there was a sane system tho’).

“The obvious way to curb speculation it to level the playing field and tax RE capital gains at the same rate as rental income, or even more steeply if you want. This will discourage people from buying RE for short term gains. And as I have said this would raise tax revenue which could be spent on low income housing.”

I would say a start would be to apply capital gains taxation to owned housing(where there is a real problem). This would increase rental demand, attracting more supply leading to more competition in that sector. Because of the nature of housing supply, there would be time lags and periods of rental price inflation, but these should be temporary and of (relatively)short duration.

“Another policy which would curb speculation would be for CMHC to refuse to insure any mortgage for a speculative purchase, i.e. one by an investor where the rent does not cover the mortgage payments. This would get a lot of flippers out of the market and let people buy houses to live in.”

The nature of the rental market is that, for an initial period, rents do not cover costs, but the market rents rise faster than the costs, and after an initial period(say 10 years) the shortfall is covered, then past shortfalls are recouped, and then a significant return is made. This has been the case as long as records have been kept. Net profits from day 1 have occasionally been made, but that’s rare and unexpected. Anybody who doesn’t plan for a negative operating budget for the first decade is in for a rough ride. That’s why the array of government “Rental assistance”(really landlord assistance) programs have been around for decades.


From: ottawa | Registered: Apr 2001  |  IP: Logged
M.Gregus
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posted 16 February 2008 05:34 PM      Profile for M.Gregus     Send New Private Message      Edit/Delete Post
Long thread.
From: capital region | Registered: Oct 2006  |  IP: Logged

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