If governments don’t control the price of houses, why should they control rents?
The question leaves cons nodding and lefties horrified. It seems to separate the wrinklies form the moisters. And it’s at the heart of a brewing, giant, never-ending political slugfest that just got a tad more vicious.
For example, Vancouverites have elected a dude as mayor who ‘s decidedly pro-renter and anti-landlord. The city will soon have a renters’ advocate, at the same time it’s double-taxing people with two residential properties (that they bought with their own after-tax money). Meanwhile in Ontario, the pro-builder premier has ended rent controls on new buildings which was introduced just a year ago. Soon amateur landlords can charge ‘market’ prices – which is basically whatever the market will bear.
At the heart of the debate is whether or not shelter is a human right. But does that right (if it exists) means everyone must get ‘affordable’ shelter? Does it mean people have a right to live in the centre of big cities, where land is most expensive, just because they want to walk to work? And are tenants to be protected from the same economic forces that whack property owners – like rising mortgage rates, property taxes, insurance or maintenance costs?
If the people investing in properties are not allowed to get a decent return because of government controls, why would they continue? So, do rent controls mean fewer units, squeezing out people who can’t afford to buy, and must be tenants?
Ontario just bucked a trend towards governments heavily favouring renters over owners. Any leases signed in new units that were completed/occupied after November 15th will have no price protection. That doesn’t mean a LL can toss out a renter just because s/he wants a higher payment, since existing legislation gives every tenant a huge swath of rights, whether they live in a rent-controlled space or not. Evictions can only happen for limited reasons, such as major reno or a family member of the landlord moving in.
But these buildings will go forward without controls, meaning the unit owner is able to set whatever price someone will pay when a vacancy occurs. Since 13,282 new condos were pre-sold in Toronto last year alone, you can see the future impact of this change. Before long tens of thousands of rental units will be priced by Mr. Market.
The logic is simple. Fewer controls will mean more supply. More supply ultimately keeps prices reasonable, while rent restrictions distort markets. Otherwise, developers abandon putting up apartment buildings, for example, and focus on condos – where projects can be pre-sold, making them easier to finance and giving a far quicker return on investment.
The pro-tenant groups, who’ve been successful in bending public policy, say this is hokum. Right wing Con crap in a world already badly skewed in favour of the rentier class composed of greedy leeches. Tenants are being pushed from urban centres altogether, they say. More often than not, these are highly-educated young people with urban jobs and meagre incomes. Is pricing these people out of their homes not a social crime?
But if we’re going to control some people’s rents, and not others, does this not create two classes of tenants, one with protection and security and the other with none? Equally, there are two sets of landlords. One with strict curbs on investment returns, the other unlimited – while both face equal costs and risks.
So, yes, we all should have shelter. But there‘s no right to shelter you can afford exactly where you want to live. Get over it.
If controls end, there’ll be more apartments built. Fewer condos. More long-term spaces without the fear of eviction when some amateur landlord decides to sell. Renting will still be cheaper than owning, and a viable, rational alternative for those who eschew being a mortgage slave and wish to pursue glorious liquid wealth.
It’s such a good thing I don’t live in BC. My head would be on a stick.
Oil crashed almost 8% Friday and a barrel of the good stuff is back down close to fifty bucks. Canadian oil is ridiculous at about $14. (In comparison a barrel of milk – about 160 litres – would cost about $300, depending where you shop.) The decline pulled down the poor TSX once again, making you wonder how something that was $80 not long ago (and $140 a few years back) can have fallen so much. Aren’t we using more oil than ever? Are investors just idiots? Is this one of those buy-low-sell-high-later moments?
I asked my fancy portfolio manager buddy Ryan for a few words on this, between gassing up his guzzly Porsches:
“A number of recent bearish factors have caused the price to decline with speculators/hedge funds then piling on with short bets. This steep decline is frankly stupid and not justified by the underlying fundamentals nor is it suggesting a major downturn in the economy, in my opinion. Demand remains strong with 100 million barrels per day being consumed in July, Aug and Sept (Oct it dipped to 99.9). Yes the global economy slowed a bit and we could see global GDP at or slightly below this year’s 3.7% to 3.8% in 2019, but there will be no major drop off in oil demand, absent a global recession.
“The issue is supply and there have been a few factors that have caused a short-term oversupply of oil relative to demand. They include Saudi/OPEC rising production, US production surging from 10 million barrels at the start of the year to almost 12 million today, the US agreeing to waivers of Iranian oil sales to 8 countries, concerns that global growth is slowing and investors significantly adding to their short futures contracts. In the chart below you can see that total futures (combines commercial hedgers and speculators) are hitting short levels not seen since 2011. Basically, the oil market is short-term out of whack and speculators piled into shorting the market through futures contracts.
“Where do we go from here? Higher! This is a complete overreaction with hedge funds and investors greatly contributing to this. Demand remains strong, and supply will naturally correct lower to these low prices. As they say, the solution to low oil prices is low oil prices (ie producers cut when prices fall this much). OPEC is very likely going to cut production in upcoming meetings which will likely be the catalyst to turn this around. I see prices returning to $60-$65/bl. The low oil prices will continue to weigh on the Canadian economy especially as we have little plans to address and build much needed pipelines. But a pick-up in WTI will help ease the current crunch on our energy sector.”
Now you know what to do.
149 comments ↓
That pic isn’t so funny after you read this…
https://www.cnn.com/2018/11/23/uk/farmer-killed-forklift-dog-gbr-scli/index.html
With all the Canadians out Black Friday shopping racking up debts too busy to read your important blog be prepared for some bad times ahead Canada without the resource sector and next the real estate and banking sectors….
Under control? Yes sir!!
And um, first!!!
“Unjustified” on WCS or preferreds or not that’s the reality.
Canadian index is garbage as usual and ZPR is going back to 9$ for sure.
Garth, although I’m hardly a fan of increasing the governments reach into private sector life, doesn’t this all seem a bit inevitable? We have urban areas that were structured around good wages, and relatively affordable living standards for the middle-class, and wages generally kept pace with increasing cost of living.
For at least the last decade wages haven’t kept up to the pace of the cost of living, and the cost of living has, in many cases, risen to impossible levels for most. I’m 35 and among my group of friends there are just two that own a home, and two that own a condo, the rest either live at home or . . well they live at home really, which suits the parents well as they’re aging and could use the help.
I don’t think more government is the answer, I mean clearly it isn’t. But what’s the end game here? How is this resolved? Or do we continue in this inexorable march to Canadian urban centers that are prohibitively expensive to their native populations, let alone newcomers. Added to this we have a majority of employers that refuse to allow employees to work from home, when there is absolutely NO reason to be in the office (like me, for example). At least if I could work from home I could find somewhere else to live. I mean the problem with living in “inexpensive” areas is that they’re inexpensive because of their smaller size, which results in a smaller economy, and so on and so forth . . .
Anyway, apologies but that’s me frustrated with the political class weaponizing everything, the body politic falling for the divisive politics because of their emotions, and a country that could be so much more but chooses to sit on its laurels, preach platitudes, and neglect its own riches.
We love what the NDP are doing here, Garth. LOVE it. Your arguments supporting old time capitalistic virtues aren’t relevant where local real estate has gone global.
I don’t know anybody, rich or poor, renter OR landlord who supported the old corrupt regime. By the time Eby is done, we are bound to see Christy Clarke do the perp walk.
You are beating a dead horse on this issue and the only support you are likely to receive is from those who are outside of province. They don’t understand what is going on, or watch CBC news or read the globe and mail.
Okay then…What are everyone’s favourite currently-downtrodden-oil-stock picks?
Invest in Milk futures??
— Now you know what to do.
Buy a house and fill it with barrels of oil ?
#7 Paully on 11.23.18 at 4:10 pm
Okay then…What are everyone’s favourite currently-downtrodden-oil-stock picks?
————-
Vermillion energy – VET
Excellent Canadian company with much of its production outside of Canada where it actually getsworld oil prices for its production, not the shitty price of Canadian oil courtesy of the pathetic federal government.
Stock price killed this year as sentiment in Canadian oil stocks is lower than Justin Trudeaus IQ (which is pretty damned low)
Now throwing off 8+% dividend.
While I don’t want to disparage your colleague’s elegant explanation of oil prices, could it be…
A coincidence that oil plunged immediately after the Saudi’s clipped one of their staunchest critics?
or
A mystery that the WCS discount skyrocketed after POTUS dropped US corporate taxes, making it much more profitable to recognize US-based refining rather than Canadian-based production profits?
Remember that the two largest producers, Exxon and Suncor, can play that game.
Renting a condo unit is risky because you don’t always have control living there for the most part. Its not a long term way to go. The best rentals are owned by large family corporations with a variety of buildings in portfolio. These started out in the 1950’s in Toronto and elsewhere, whereby the portfolio is handed down to the next generation with a variety of old and newer buildings. They tend to hold them as a long term investment, and your lease renewal is guaranteed on an annual basis. The landlord has funds, well managed, and updates are made as required. In fact the smallest problem will be fixed quickly because they have the employees of all professions working for them fulltime. This is where one should start to look for an apartment to rent.
What happens when Exxon-Mobil begins to drill for oil at several Caribbean and South American countries by 2020-2030?
One country gas discovered billions of oil reserves, and Exxon plans to drill at least 1mm barrels of oil a day by 2025. Tullow oil has planned to drill 2 million barrels of oil if it finds oil near Trinidad and Venezuela.
I still can’t get over that this blog is free. Better analysis and information than the big Toronto daily’s. The one with the direct line to the PMO’s office today focused on the environmental damage around the Alberta Oil Sands. Better to re-direct their reader’s focus from the politics behind our “black Friday”, deeply discounted oil as well as the impact that will have in Alberta and, soon, the rest of Canada.
Less than assessed.
This Westside townhome just sold nowhere near its assessed value.
The details…
67-4900 Cartier st ,Vancouver.
Originally asking 1.49
Just sold for 1.2
Assessment 1.8
So someone snapped it up at 66% of its assessment number.
Shaughnessy townhome or half decent Vancouver Eastside detached,same money.
These guys went with the townhome.
What’s that old real estate saying?
Snobcation, Snobcation, Snobcation…
M44BC
https://www.zolo.ca/vancouver-real-estate/4900-cartier-street/67
Socialists, communists and other assorted parasites will simply never let the free market work in peace. In the long run we will slowly but surely inch towards Venezuela.
The first question a decent and sane person should be asking themselves is that if X an existing Renter is unhappy with a market based increase why should the Landlord Y and the new prospective tenant Z both lose out from being able to do business with each other. Obviously the real estate X is occupying is worth more, otherwise Z would not be willing to pay more.
It isn’t Y & Z that are greedy, it is X, wanting to have what they have not earned, in a free and fair market.
How is oil prices set…its not based on real time factors. Its set by a handful of guys sitting in a room and deciding.
The central banks along with gov’t could have not made more of a mess in the housing sector. Grand daddy of all screw ups. Sadly this was done on purpose, debt = control
Question for the author:
The description of rent control here seems to indicate the existing tenants are protected, rather than the existing units being rented. There has been some confusion as to the nature of the new rules and whether they cover only new units built, or rented for the first time, after the rent control rule was changed. Alternatively, if the new rule is applied to existing tenants only, then ALL rental stock will eventually have no rent control as tenants move on, or die off, even those units that were previously subject to rent controls.
Any help clarifying would be appreciated. Thanks
“Okay then…What are everyone’s favourite currently-downtrodden-oil-stock picks?”
Consider making your shopping list now and then buying the shares after the tax-loss selling is over for the year.
Of course my advice is worth what you are paying for it but if I don’t post it, I won’t have proof of having picked the bottom to-the-day and won’t be able to start my own newsletter based on my documented forecasting abilities.
While I generally agree that market prices should dictate rent – some controls are necessary to rein in greedy landlords i.e. once a renter is in place renewals should only be at the rate of inflation.
Good time to get into oily stocks. I am partial to integrated i.e. IMO, Husky as well as the majors XOM, Shell, Chevron.
“But these buildings will go forward without controls, meaning the unit owner is able to set whatever price someone will pay when a vacancy occurs.”
Rent-controlled apartments can set whatever price they want when a vacancy occurs. That’s where the market price is set.
Rent control prevents a landlord from increasing rent beyond an annual limit. Because people have a strong disinclination to move every year, this causes a distortion in the market. Without rent control, landlords are able to extract higher and higher rents from existing tenants. When the tenant finally refuses to pay an increase and moves out to a place they can still afford, the landlord resets the price to what the actual market will bear.
As you watch the dog drive this is the soundtrack that accompanies it…
M44BC
https://m.youtube.com/watch?v=DDt3u2Ev1cI
Buy bitcoin
It solves everything apparently
There is but correlation
X = USD
everything else is a sound bite
#6 Graeme
Speak for yourself ….without the royal “We”
Believe it or not, there are others living in Vancouver/BC (myself included) who do not “love” what is happening here and we would not allow Garth’s head on a stick.
We partly read this blog to hear a daily faint echo of reason.
I was going to head my comment “Dogs are in Control in BC” but I could not credit our “esteemed” leaders with the qualities of dogs….probably even cats not appropriate ….. dealing with crocodiles or sharks here.
It will be fascinating to watch it all unravel … just would be more fun if not involved.
My family has owned property for 50 years. We sold anything not primary over the last 5 years as mentally challenged morons went mental on rental real estate.
For decadees it used to be a property was evaluated on it return – 7% net was always the standard
Somewhere along the line people forgot about this very simple and powerful measure.
If you aren’t getting 7net as we used to say you are gonna get whacked IMHO.
In Halifax where we still own a family even though we live in the US – I think the net rent right now on newly bought rentals is about 2%
It doesn’t much to see something will change
Either the rent or the price
I suspect the latter.
just finished perusing the previous blog post.
Bwahahahahaaaa.
Love it when Garth trolls the bigots/xenophobes about immigration.
These family corporations are composed of apartment buildings, office high rise, and shopping centers. The older family members land banked decades ago, and when money was cheap began to build cutting term deals with insurance companies. The apartment buildings have vacancy trends with people moving or buying homes, and they don’t want good tenants to move. I personally have received 6 renewals with no increase, and the increases amount to about 2%. The long term ownership run the portfolio like a business, and are not concerned about the cash flow because any of the sons or daughters can earn any amount in personal dividends or salary. They don’t want tenants to leave becomes their focus, and taking care of your unit which is inspected yearly.
Interesting thoughts on rent control.
I do not believe that a tenant should share the same kind of potential economic/financial risk as the landlord. The one buying the property is knowingly taking these risks in the hope of getting a positive return. The tenant is not taking the risk due to simply not having access to the market or for choosing not to participate in the market.
Given this, I think it is reasonable for their to be some kind of formula for rent control. Rents should not be frozen and they should be allowed to increase with inflation. I do not think however, that landlords should be able to increase because the landlord’s costs have increased for example, higher rate at renewal, higher taxes due to appreciation etc. These are risks inherent with investing in income RE.
I do not know what the perfect solution is though. I think BC gives the tenant too much power and I think stripping rent controls completely can give property owners too much power so who knows!?
I think it should be easier for landlords to be able to evict though. I have seen too many horror stories with professional tenants, pets and cigarettes.
My long term Housing Starts chart since 1956
http://www.chpc.biz/housing-starts.html#Annual
…shows that housing starts peaked in the mid-1970’s in the major cities of Canada but have been putting in lower highs since and my projection for year end 2018 is that another lower top will be in place as well.
On the chart, this looks to be the case for Toronto as well.
one word: CNRL
More rental buildings were not being built when there were no rent controls on newer buildings so why do you expect dropping the newly established rent controls for post November 15 tenancies will generate new rental buildings. Past experience would say it won’t.
I’m happy the rent control was removed.
Ontario needs to encourage developers to build larger purpose-built rentals made for families and not just young professionals with no kids. Parents will be able to save to buy an affordable home later in life or become a lifelong renter as not everyone wants or needs to buy home.
It’s a short-term pain for lower income renters who are struggling with their high rents now, but in the end they will win when vacancy rates go back above 4%.
I’m not sure all of the novice condo landlords are ready for the increase competition coming from newer purpose-built rentals. Experienced apartment management teams can lower rents in the short-term to attract better quality long-term tenants, individual landlords with a limited number of investment condo units cannot afford to lose anymore money than they already are by decreasing rental rates to attract tenants. But I guess that won’t be a problem for another 3-5 years.
DELETED
There was a time that had too much cash on hand, and Canada’s were yielding about 7.25%. You can deal with the right landlord, so went to the head office and made an enquiry about paying a year in advance for a discount. The lady said just a minute, and will ask the boss, and came back saying 6% – wrote out a check. It was not advertised or mentioned anywhere, but under the right conditions keep this in mind.
Sure let the dogs drive!!
https://www.cnn.com/2018/11/23/uk/farmer-killed-forklift-dog-gbr-scli/index.html
“If governments don’t control the price of houses, why should they control rents?”
Simple. In order to avoid abuse such as increasing rent by 30% or even 50% from one year to the next and be given the choice of other putting up with the rent increase or find a new home within a month. I’ve seen that happen. How would you like to be in that kind of situation?
“If governments don’t control the price of houses, why should they control rents?”
But, governments DO influence the price of houses;
– Governments, through their central bank’s easing policies, can put upward pressure on asset prices, including real estate. Or downward when tightening.
-The CMHC subsidizes mortgages and therefor subsidizes homebuyers putting upward pressure on prices.
-Commercial to residential property tax ratios average 3:1 in Canada, with Vancouver’s at a high of 4.4:1 – meaning homeownership is subsidized by business.
– Studies show that single family housing is the most subsidized form of land use, using more infrastructure and services $ per acre in comparison to $ taxes per acre collected. Businesses AND folks who live in higher density neighbourhoods subsidize single family houses.
I have no problems with renters paying real costs BUT ONLY if homeowners have to do the same.
If governments can’t influence rents then why should they influence house prices?
Influence is not control. – Garth
It always the weekend where the best information comes.
One quiet Friday the BOC does this
https://www.bnnbloomberg.ca/bank-of-canada-expands-balance-sheet-list-to-mortgage-bonds-1.1172891
They don’t do this because its the right investment. They do because they have to.
Something tells me liquidity is drying up and they see a Lehman moment on the horizon and are acting now..
I’ve said before and I say it again. An event will happen on a weekend when no one is paying attention.
That was Lehman
What will ours be?
Home Capital
RBC
?????
Someone is holding trillions in credit default swaps based on crap mortgages….
his own admin and then what does trump tweet?
https://nca2018.globalchange.gov/
WASHINGTON — As California’s catastrophic wildfires recede and people rebuild after two hurricanes, a massive new federal report warns that these types of extreme weather disasters are worsening in the United States. The White House report quietly issued Friday also frequently contradicts President Donald Trump.
======
fix-and-flip lenders?
FHA (Federal Housing Administration) loans used for flips dropped to a 10-year low. Of the 48,457 U.S. homes flipped in Q1 2018, 15.9 percent were backed by an FHA loan, down from 16.1 percent in the previous quarter and 19.2 percent year-to-year.
ATTOM: Home flipping slows in 55% of U.S. markets
https://www.floridarealtors.org/NewsAndEvents/article.cfm?id=367343
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The U.S. Department of Housing and Urban Development announced Wednesday it was making an investment that could allow thousands of children to leave foster care.
HUD awarded $30 million to public housing authorities across the U.S. that will work closely with local public welfare agencies to identify youth at risk of homelessness and families whose lack of housing is the primary reason their children are in foster care.
The vouchers will allow families to rent housing from a private landlord and pay 30% of their monthly adjusted gross income toward rent and utilities.
This funding will actually be a cheaper alternative to housing children in foster care, which costs more than $48,000 annually per family, according to NCHCW. The cost to keep a family together through housing vouchers, on the other hand, costs about $15,000 annually per family.
At the risk of joining Garth in the ‘head on a stick’ category, I agree that if government intervention does not apply to the price of one class of shelter (houses) then it should not apply to other types of shelter (rentals).
A question here: does the government regulate the price of a hotel or motel rental? If that type of shelter is not price regulated, then even in ‘rental’ spaces some are protected & some are not. Choice does not necessarily apply; various natural disasters often see displaced citizens occupying whatever hotel/motel space is available, sometimes for months on end. Government not infrequently resorts to putting up immigrants in motels/hotels when alternate shelter is not available. Presumably they do not dictate how much the facility charges for the service, though they may negotiate a better rate for ‘long term’ stays.
The argument that an unregulated market will see more rental units built does not account for the issue of low income earners being priced out of the market. Obviously in a free or unregulated market the owners of rental units will try to get the best ROI they can. Government can & does provide ‘low income’ shelter, but the demand always seems to outstrip the supply. Not to mention the social bias towards ‘low income’ housing. NIMBY is very much an issue when affordable housing sites are being proposed, the argument being that transient ‘renters’ will not be motivated to maintain the property they occupy & therefore nearby property values will be adversely affected. This is where the ‘affordable housing’ program is of value. The rent paid goes towards the purchase value of the unit, so that eventually the renter becomes the owner & thus has incentive to maintain the property.
Garth is also correct that there is no ‘right’ to shelter that is situated in a location that is most convenient to the occupant. Prime locations always cost more, hence the elevated prices for ‘views’ or access to amenities wherever housing is built. In this age of technology, we as a society should leverage the ability to telework so that we need not spend hours commuting. Ditto for shops/services. We talk a lot about better living & walkable communities, but keep on building as if we have no viable alternatives. Maybe the next great advance in human endeavor will be redesigning how we live/work/play.
“There has been some confusion as to the nature of the new rules … ”
Yes, this is also what I hear from people. For example, if someone builds a new basement apartment today, is it subject to rent controls?
“.If controls end, there’ll be more apartments built. Fewer condos…”-Garth
_ _ _
Poppycock.
The BC Liberals Reign of Error in BC spanned over 15 years, yet there were few apartments built during their pro-landlord term and a boatload of condos. Greed begets greed.
Unless offshore money skews your truism, but then you’d have to admit offshore money was a bad thing.
Garth, this is just more supply side economic voodoo handwaving and you know it. Literally the same concept as trickle-down economics.
Making it easier/more profitable for landlords to hose tenants won’t make rental units more affordable. Rents will stay the same since it’s been established that’s what the market will bear, and landlords will happily suck up the windfall as profit.
> The logic is simple. Fewer controls will mean more supply. More supply ultimately keeps prices reasonable, while rent restrictions distort markets. Otherwise, developers abandon putting up apartment buildings, for example, and focus on condos – where projects can be pre-sold, making them easier to finance and giving a far quicker return on investment.
So I have to ask … Where are all the rental buildings that were built between 1991 & 2018 when there was no rental control? The abolishing of rental control in ’91 was supposed to encourage new buildings, wasn’t it?
It seems to separate the wrinklies form the moisters.
====
That’s a great freudian typo!
@#12 Renting
Right on!
Renters have to pay full property taxes, since non-owner residences don’t qualify for property tax rebate. So much for favoring tenants.
Garth’s analysis assumes a more or less closed system… stable and only gently increasing population in major cities so that price and demand can reach a balance with no huge spikes in prices for local people just starting out. This is how it has been in my lifetime in YVR up until about 5 years ago (1980’s–2010). However, it is fact that our major cities have seen very large spikes of new arrivals from overseas and this influx is going to continue more and more… not a “closed system” for locals…. the increased demand for housing has rapidly spiked rents…. and without some controls it is a vicious cycle…. Curb immigration to more manageable levells in our major cities and this problem would be less acute…. To deny that housing affordability is an issue is to deny the views of all of the voters who went for Stewart and Sylvester over Sim
Buy a house and fill it with barrels of oil ?
—-
Someone in Hamilton who fell for the Peak Oil thing did this…his entire basement was turned into an oil tank. He lived next to my BIL’s dentist office on King St, which was mixed commercial/residential. When he died they found all the leaking oil in the soil…it was a disaster
And while I’m not a fan of strict rent controls, effectively evicting a tenant in a non-controlled market is trivial: double their rent. Voila. Evicted.
“If governments don’t control the price of houses”… They do via interest rates/amortization periods/minimum down payments/ regulatory rules Etc…
#7 Paully
RDS-B
Garth- problem is I built multi unit buildings in 2003 same thing at that time – no rent control. Then last year gov (libs)decide overnight to put rent control on them. Ford removes rent control on new builds, the future, cons lose next election, libs put controls back on. !!! I wont be building them again, See how that helps supply of legit units.
Bourbon production by the barrel? Grow some corn and make a product that is fuel for an Oldsmobile or ones bloodstream.
There is a solution for any problem. Rye ain,t bad either. Better profit margins than WCS, no?
#7 Paully on 11.23.18 at 4:10 pm
“Okay then…What are everyone’s favourite currently-downtrodden-oil-stock picks?”
Here you go Paully. All three of these Canadian oil stocks are approaching 52 weeks lows….
https://www.fool.ca/2018/08/28/3-top-canadian-oil-stocks-to-buy-and-hold-forever/
RE: “Renting will still be cheaper than owning, and a viable, rational alternative for those who eschew being a mortgage slave and wish to pursue glorious liquid wealth.”
===================================
Why would a landlord run a rental property at a loss over the long term? Makes no sense.
Rent controls for current renters are a needed protection.
Otherwise the landlord can arbitrarily raise rents any amount at any time whether to exploit or even for spite.
It is a very difficult activity to move, so price stability is important to protect the renter for being manipulated out of every cent they can afford until they absolutely must move.
Just spend 2 weeks and $1000 to move to a place you can afford?? Well you look a bit too wealthy for the landlord now, or you just annoy him with repair requests, so your rent is doubled in another 4 months.. going to move again??? Then let’s do it again at the next place.
When a tenant moves out rent can be set to whatever the market price will allow. Without this unscrupulous landlords (and there are a lot of them), will exploit their tenants ONCE they make the significant decision to move in.
In the last two decades in Ontario very little Rental Purpose Buildings were constructed despite 0% financing…in Canada risk is a four letter word especially where you get your financing (the big four) then the municipal development fees; and the property taxes in most Ontario cities is a whack more than owners pay for the same square footage. The guvment don’t like wentals.
Thanks for bringing up the oil price differential between the world price, and what Canada is currently receiving. I don’t believe many Canadians understand the gravity of the situation. If we had to sell our softwood lumber for 1/3 the world market price, there would be a national outcry. If we could only get $15,000.00 for $45,000.00 new cars because they were made in Canada, there would be huge protests. But when our oil sells for 1/3 the price, almost no one even notices. Most news sources only quote the WTI (West Texas Intermediate) price, which is currently about triple the price of Alberta Select.
A differential of a few dollars is to be expected, because Alberta Select is more difficult to refine. But current differentials are absurd.
Your milk analogy is excellent. But your numbers might be a bit off? It looks like you may have used the price of a 4 litre container of milk, as opposed to the price per litre. Unless you need fancy Organic milk, the cost should be closer to $1.00 per litre than the $3.75 that you used.
At least that’s what I pay for skim, at Costco.
Until renters can get tax-free capital gains on an investment of their choice just like homeowners can, I don’t want to hear another word about governments allegedly favouring renters.
#49 devore – The Province of Ontario the other year reassessed property taxes from apartments against the commercial establishments. I got one letter from the landlord, and another from the government that my monthly rental would be decreased for a period of time with the new amount to be paid.
” It’s such a good thing I don’t live in BC. My head would be on a stick” Your best line ever Garth!!
The government here in BC is literally destroying the provincial economy by desperately trying to cater to select groups that they hope will re-elect them – the economic cost is going to take a long time to remedy!!
Sir Garth:
Where do you buy your milk. Ours is $4.27 a litre. 160 litres are $170.80 not $440. Shop around.
160*4.27=683. – Garth
Since I have lived in Vancouver this has been one of the biggest debacles one could wish to see.
Little Mountain Housing Complex.
700 people,low income families, evicted so they could bulldoze their living quarters and take over a decade to let the land sit empty while the cost of living spiralled out of control.
These people needed the city’s help and guidance and the city shat in their face.
The last time I drove by 4 mid size complexes had been constructed.
In a relatively brief amount of time private contractors have built 2 on adjoining land for private sale to the best my knowledge.
For context it only took 4 years to construct the entire 2010 Olympic Athletes village.
Probably shouldn’t go there, another debacle of epic proportions.
The city and the province decided to turn Little Mountain into a big pile of cash…
M44BC
The Sad Housing Lessons of Little Mountain.
https://thetyee.ca/Opinion/2016/09/12/Little-Mountain-Sad-Housing-Lessons/
World according to Garp: Housing should be a speculative commodity–a place to park ill-gotten gains, a place to gamble and speculate and a way of accumulating wealth. Why should it be a human right? Let the rich accumulate as many houses as they can and let’s have more consolodation in the rental market so we can screw the renters.
Why should someone house you without making a return on that investment? No profits, no rental units. Figure it out. – Garth
When you gear the rent to inflation, is that not the same effect as freezing the rents? Freeze the rents for low income.
Garth,
Yesterday’s blog has inspired some poetic license….sing the following with your best Neil Young voice….a one and a two and a three,
“When you’re lost in the smoke in Salomon Arm when it’s summertime, too
And your gravity fails and negativity don’t pull you through
Don’t put on any airs when you’re down on Rue Morgue Avenue
They got some hungry women there and they really make a mess outta you”
If governments don’t control the price of houses, why should they control rents?
—————————————————————————————————-
But government does indirectly control the price of houses:
– setting interest rate;
– preferential tax treatment of RE gains;
– CMHC reduces risk for lenders;
– borrowing from RRSP incentive;
– renovation IC tax credits;
– provincial loans to buyers;
– etc.
No controls there. – Garth
193 IHCTD9 on 11.23.18 at 1:33 pm
“When I think about the future success of Canadian immigration, I think it all hinges on the success of China and India. If the quality of life keeps improving in these two countries, the raft of folks exiting same for Canada will peter out. I think it’s just a matter of time before it happens.”
Can’t speak for India but as for China, an enormous amount of wealth has been created in the past 40 years and they now boast a middle class the size of the entire US population. As for their desire to immigrate it will continue for a simple reason. They don’t trust their government. I have a decade of experience working with Chinese students and have spoken at length with them. Business people are leaving because you never know when the CPC will come knocking on your door and accuse you falsely about something or some jealous competitor decides to give false information about you to the CPC. They want the same freedom of speech and fundamental human rights that we take for granted in this great land and this is why they will continue to come here.
devore on 11.23.18 at 6:51 pm
And while I’m not a fan of strict rent controls, effectively evicting a tenant in a non-controlled market is trivial: double their rent. Voila. Evicted.
————————————————————————————————
Voila Eviction ,
I don’t think you have tried to evict a tenant,
#5 Ezzy on 11.23.18 at 4:05 pm
Garth’s answer will probably be that you should move to Thunder Bay or just shut up and accept your place, prole.
Meanwhile Boomer NIMBYs whining about rezoning for higher densification in big cities are never told likewise.
#58 Kelowna
“The government here in BC is literally destroying the provincial economy by desperately trying to cater to select groups that they hope will re-elect them – the economic cost is going to take a long time to remedy!!”
cons cons cons…
I’d rephrase that for my beloved Athabasca as follows:
The 44 year PC government here in AB literally created the current ongoing destruction of the provincial economy by desperately trying to cater to select groups that they hoped and did re-elect them – the economic cost will never be remedied!!
The “select groups”, oil companies, were given the publicly owned natural bounty. Nothing is left and nothing was banked.
And, people looking for companies in the oil sands they might invest in? Why not invest in the oil sands companies currently making record profits?
Certainly not CNRL.
https://thetyee.ca/Analysis/2018/11/23/Alberta-Policy-Problems/
#65 Dairy Man on 11.23.18 at 7:40 pm
I paid $4.79 for 4 litres (3 bags with 1.33L each) at Costco in Ontario the other day. Made by Natrel, who kindly reminded me they are a Canadian product for Canadian families.
https://www.youtube.com/watch?v=mKHCmVQcDRo
#28 KLNR on 11.23.18 at 5:18 pm
just finished perusing the previous blog post.
Bwahahahahaaaa.
Love it when Garth trolls the bigots/xenophobes about immigration.
———————————————————-
You for open borders?
Nobody is. Extremism fails. – Garth
#64 Kelowna on 11.23.18 at 7:38 pm
” It’s such a good thing I don’t live in BC. My head would be on a stick” Your best line ever Garth!!
The government here in BC is literally destroying the provincial economy by desperately trying to cater to select groups that they hope will re-elect them – the economic cost is going to take a long time to remedy!!
—————————————————————-
Frankly, a province whose economy is based on manic housing speculation propped up by money laundering from offshore probably deserves to be destroyed. Think of it as an opportunity to build a real economy from scratch that actually works for ordinary BC citizens.
Always wondered why dogs need a license.
For every futures short, there’s a futures long. So net is zero, by definition of a futures contract. It’s not clear what the chart shows. Is it net futures position held by speculators? That is, speculators are net short and hedgers net long?
If the people investing in properties are not allowed to get a decent return because of government controls, why would they continue? So, do rent controls mean fewer units, squeezing out people who can’t afford to buy, and must be tenants?
In Ottawa, a property owner is evicting tenants to build something else:
John Loubser, director of operations at Timbercreek Communities, said the company has to demolish all 150 units, even if only 25 per cent of them are considered “no longer viable.”
“They share sewage, they share water mains, they share hydro service, they share roofs, they share foundations. They’re indivisible in a way and that unfortunately makes them all compromised in the relatively near term,”
https://ottawacitizen.com/news/local-news/landlord-demolishing-more-homes-in-heron-gate-displacing-105-residents
In this case, I’m guessing some bad tenants have wrecked their units. And wrecked the viability of the units around them.
There is a false virtue which is willfully blind to a complete accounting. Which upholds tenants over property owners.
Here’s Kennedy Stewart, Mayor of Vancouver, in his own words:
As your mayor, housing affordability will be my number one priority.
this is a lofty goal, one where he cannot claim ignorance:
My entire academic and professional career has focussed on cities and housing. I’ve worked in the City of Vancouver planning department. My PhD from the London School of Economics was about cities. I’ve written books and taught about cities as an SFU professor. I’ve provided policy advice to municipal, provincial, and national governments and the United Nations.
https://www.kennedystewart.ca/housing
There is no rent control as such in BC. The rule of how much is allowable per year is the only major rule. When places become vacant the owner can charge whatever they want. The suite beside us went from being $1700 a month to $2800 for the new renter. Having the allowable increase helps keep it stable for us renters , turnover is pretty high in cities so it isn’t like owners are not seeing g a return on their money.
“……But these buildings will go forward without controls, meaning the unit owner is able to set whatever price someone will pay when a vacancy occurs…….”
Your confused, Garth. Landlords are already able to set whatever price someone will pay when a vacancy occurs. Nothing new there. My pre-1991 building landlord does this all the time when a move-out occurs.
The difference is now new tenants have no price protection after the lease is signed.
My current building landlord is already salivating at the prospect of low-balling new prospective tenants with sucker rates to fill the building, then astronomically jacking their rents at their lease renewals in a year.
He says he just has to find that sweet spot below the point where the one-year-old tenant doesn’t become so enraged at the renewal time that they move out.
64 Kelowna on 11.23.18 at 7:38 pm
” It’s such a good thing I don’t live in BC. My head would be on a stick” Your best line ever Garth!!
The government here in BC is literally destroying the provincial economy by desperately trying to cater to select groups that they hope will re-elect them – the economic cost is going to take a long time to remedy!!
– – –
Exactly the kind of comment one would expect out of Kelowna, erstwhile home to Wacky Bennett and his merry band of shysterish used car salesmen that formed Social Credit. Isn’t your current mayor a realtor?
Amateur landlords are mostly speculators expecting capital gains. I wonder though, is it ever worth it to maintain a duplex with a positive cap rate just for the rental income?
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@#76 Howard on 11.23.18 at 7:59 pm
#28 KLNR on 11.23.18 at 5:18 pm
just finished perusing the previous blog post.
Bwahahahahaaaa.
Love it when Garth trolls the bigots/xenophobes about immigration.
———————————————————-
You for open borders?
Nobody is. Extremism fails. – Garth
_______________________________
howie man, get a grip.
Garth is right on rent controls. At the same time, it is reasonable for a government to want to provide stable housing in economic centers. Not because it’s a right, but because it’s something that is good for the public, good for businesses, and good for economic development, in the same way as roads and hospitals. The obvious solution, adopted successfully in many countries, is for the government to build and run rental housing. Then, if the government wants to limit rents in the broader community, they can do so by outcompeting private landlords. The current situation is akin to all the roads being built, ten feet at a time, by private citizens trying to build a retirement nest egg and the government trying to regulate it all.
@#85 Proud Dreg on 11.23.18 at 8:42 pm
DELETED
_______________________
dude, take a hint.
Re #5/Ezzy. Nicely worded post. No finger pointing, but a well thought out observation of the current state of affairs in Canada at this time. This is one 35-year-old that is a pleasure to read. The telecommuting angle is so blindingly obvious to all but employers that it does make one wonder what century we’re living in, doesn’t it? Cheers.
Re: Title photo
He’s probably doing a better job at the wheel than most of our leadership….
“Governments don’t control the price of houses” – Garth
Even an idiot knows the CHMC is central to home values. So are the interest rates set by our Central bank which is heavily influenced by politics (ie. government).
Oh! and if you read as much as I do, you would know that there is “zero” published evidence that free market rents resulted in the building of more rental specific buildings within the GTA. Zero. If you can post a link to a reputable research paper suggesting otherwise, I’ll leave your blog forever with my tail between my legs.
Controls were lifted in 1991, a recession. And no, governments don’t control house prices. – Garth
@#80north
“Here’s Kennedy Stewart, Mayor of Vancouver, in his own words:
As your mayor, housing affordability will be my number one priority……
this is a lofty goal, one where he cannot claim ignorance”
+++++
Yep,
Kennedy Stewart, professional politician.
Ready to toss aside the current seat( and voters who elected him) for bigger and better.
Burnaby MP until the unelected leader of the NDP from Ontario Jag Singh needed a safe seat.
Stewart sniffed the winds and came up with a “win win” scenario.
Gregor ( 2010 “I vow to end homelessness in Vancouver” ) Robertson saw the writing on the wall ( and his abysmal polling numbers) and refused to run again for Mayor.
If Stewart ran for Vancouver Mayor and somehow lost….One can be assured the NDP had some sort of job waiting in the wings for stepping aside and letting Jag Singh run in his riding.
Either way he couldnt lose.
MP in suburnaby is a tad easier than the sh!tshow of Van.
Now that he’s Vancouver Mayor he can put all his multiple decades of theoretical ideas to work in the real world…….
Lets see how he’s doing in 12 -24 months dealing with the endless NIMBY, pro development, anti development, sexual orientation, religious, business, crime, police, unions, all clamouring for a piece of the action………
RE: rentals: Bob Rae and his rent controls led to large parts of Toronto becoming urban slums, with decaying buildings full of rights holding individuals who felt the world owed them a living and the world consisted of the corporate owners of their rapidly decaying apartment buildings.
Mike Harris and the “common sense revolution” changed all that, and people began renovating their rental buildings, providing better living conditions for their tenants, while at the same time engaging in much needed rent increases.
Then came the Liberals. At first, Dalton held things steady, supporting neither renters nor landlords and drawing an even line between the two.
However, the Libs then descended into socialist territory, deciding to smash and grab from landlords to provide low cost, privately subsidised rental units to those who already had a lease, effectively forcing landlords to participate in social housing, with their own private property expropriated and delivered to the needy masses.
Dougie will likely reverse all of this. His feelings on “needy” tenants and their “rights” are clear.
If you want to run social housing, then do so. But don’t try to rope private property holders into providing social housing for your cash strapped government.
In other news, a new breed of Company is emerging in the Alberta Oil patch.
Small, profitless, capital lacking enterprises, are accumulating millions and potentially billions of dollars in environmental clean up costs, buying up dried up oil and gas wells by the thousands, from the major players in oil sands operations.
These companies charge “consulting fees” to the corporations who sell them their dried up old wells, earning millions of dollars for “consulting work”, while buying dried up wells for a dollar a piece or less.
After paying salaries and bonuses, which are often hefty, these companies then quickly declare bankruptcy, and having no assets of any kind, are unable to pay the millions and billions of dollars in clean up costs for all of the old oil and gas wells they have purchased from major players in the industry.
Who knows what could be going on here?
Our countries with boarders (working citizens that are the taxpayers) has changed to world-wide citizens, globally. Ordinary citizens within borders cannot build and compete with other countries and are left out.
Have to agree with #6 Graeme “old time capitalistic virtues aren’t relevant where real estate has gone global.”
We all know that in any group(s) that illegal activities can go on and sway rules/laws in favour for them, themselves. Not the citizens they represent. Too many and for too long.
Time for a reset and back to fighting for the people within borders. BC is doing that now. If not then who will be next on being Homeless, living in Tent City. More and more all the time.
TGIF, and thanks GT for allowing us to speak.
Have to agree with cmhc being the crux of the RE financial folly befalling this country, but (it’s the inner redneck in me struggling to be set free) hot damn! Vancouver debt snorflers is stupid!
You need an oil board and will get the price of oil to 300$ :) Our government controls house prices. Live with it. It even controls where you can buy alcohol.
Added more to HXE today. Great holding and love adding on weakness. A very safe way to play the sector, and sleep soundly like Doug Rowat every night.
Your employees Ryan and Doug are always too bullish.
Oil is used to build things and move things around. When people stop buying it, that is because people aren’t buying things as much (predominately plastic things) and people aren’t moving things around as much as they used to.
So you want to ask, have people bought less oil, or has too much oil been produced (and people are buying the same amount).
The answer to that question, is that people have bought less oil.
That is a problem. If they had just over produced, that would not be a problem, beyond the oil industry. But people buying less oil, is a problem that extends to the entire economy.
A decline in purchases of oil is a “trailing problem” that takes years to make itself known, due to oil being sold in the form of futures contracts, rather than directly. So you start to see the problem years after it developed.
So to say it’ll all just pass, it’s nothing and keep investing in growth stuff is kind of reckless. Really, what you want to do is dig into the markets and find miss priced assets, dragged down in the general turmoil, and buy them up at discounts.
This is not a good time to be in the ETF business, but it is a great time to be a stock picker, if you are good at running metrics and valuing companies.
#159 akashic record on 11.23.18 at 7:25 am
Someone pee in your cereal today? Japan is merely an example of demographic inevitability. – Garth
Must have been a gross experience. Wishing you speedy full recovery from the trauma.
I was talking to an American fellow who is heading to Whistler this weekend with his hopes that it is finally snowing and more than 4 runs will be open. I did not want to discourage his but this winter does feel rather warm.
” We manufacture the Harley Davidson, Boeing, Facebooks, Amazons and so fourth. Chinese sell all the plastic junk, golf balls, and fake T-shirts, Koreans have Kia and Samsung, Japanese have Toyotas, Hondas, Sushi, and love hotels, Jamaicans have beef patty and Negril entertainment, Russians got the weapons, women, and Satan 2, English got the Jaguar, whiskey, and the Queen, French got the Renault, Peguot, and Lacoste. And you guys in BC have the condos for the world. A condo land is what we call you down here in Palm Springs!” Condos is the way to go I guess, and oh yes skiing.
#90 Jim – That is one smart dog because he saw the writing on the wall. He’s left the GTA behind by sniffing out where the cash was headed, and is following the herd out East to live the good life once again.
>Well, the BC Guacamole Party (Green-Dip Coalition) made at least one reasonable policy: commercial licences and criminal background checks for ride-sharing drivers.
(I’m not BC Liberal, either. I’m with NIRP: the Non-Ideological Rationalist Party. Just one member. Hee hee!)
—
B.C. not backing down on licence rules for all ride hailing drivers
BY MARCELLA BERNARDO
Posted Nov 22, 2018 6:02 pm PST
VICTORIA (NEWS1130) — The provincial government is not willing to budge when it comes to making all ride hailing drivers have the same licence classification as cab drivers.
That’s how Transportation Minister Claire Trevena is responding to resistance from Uber executives to legislation introduced in Victoria this week.
…Changes announced Monday include mandatory criminal record checks and Trevena is expecting Bill 55 to be passed in time to ensure ride hailing apps are legal by this time next year….
https://www.citynews1130.com/2018/11/22/bc-not-backing-down-on-licence-rules-for-all-ride-hailing-drivers/
—
Toronto police charge Uber driver in series of sexual assaults
By MARJAN ASADULLAH
Fri., Nov. 23, 2018
Toronto police have charged an Uber driver after an investigation into a year-long series of sexual assaults.
The first incident dates back to December 2017, when a 31-year-old woman ordered an Uber at 2 a.m. She was picked up by a man who was an Uber driver — but who was not assigned to her request — and allegedly sexually assaulted near Blue Jays Way and King St. W., police said in a news release Friday…
https://www.thestar.com/news/crime/2018/11/23/toronto-police-charge-uber-driver-in-series-of-sexual-assaults.html
#206 KLNR on 11.23.18 at 5:09 pm
god I hope someone did that to his cereal. if anybody deserves that it’s this guy.
–
Ah, an other dude with the who-deserves-what certificate.
Now you know what to do.
————————————————————
Has anyone checked the price of XEG lately? It’s one of those items selling off dirt cheap during those Black Friday sales. If you have little or no exposure it’s probably a good time to load up on it. If I’ve learned nothing else, I’ve learned that investing takes patience. Here’s a comment posted a year ago:
On 12.07.17 at 3:01 pm Trader Vic, post #189 said:
#184 Doug in London on 12.07.17 at 2:16 pm
Why not invest in something that’s actually quite cheap now like HNY-T that, at today’s price, pays a yield of 10.39% instead?
_————-
Is this a riddle? Maybe cuz the price of HNY-T has dropped by ~$6 this year while you collected ~$1 in dividends. Most of the previous years were much worse. Do you know what this ETF is for? It predicts the volume of gas that spews from Trump’s thunderbox. Please read the prospectus.
If you’ve been following HNY lately, it’s had a nice run up in value. If you had the patience to buy it when it was ON SALE and patiently wait you’d have a tidy capital gain now. Buy low, sell high. Sure beats the hell out of Bitcoin or Marijuana stocks.
Re: #136 For those about to flop… on 11.23.18 at 12:18 am
#110 Where’s The Money Greedeau? on 11.22.18 at 9:50 pm
Re: #93 For those about to flop… on 11.22.18 at 8:52 pm
+++++++++++++++++++++++
I would be wary if I was you as this information is being supplied by a dirty immigrant…
M44BC*Dirty Immigrant.
2018-04-17 : $899,900
2018-10-11 : $729,900
2018-10-29 : $629,900
Thanks Flop, you dirrrty bugger……
I know at least another price; $799 back in May-June before the smoke from the interior settled in the lower mainland and I could still ride around, just after I brought it up on this blog.
So I guess the original realtor (John Helliwell) at the time must read Garth hehe.
I guess the owners tossed him after he couldn’t sell the dump for their outrageous prices and didn’t want to listen to reason.
This is an old story but still shows BC realtors fighting the info reveal:
https://www.burnabynow.com/sports/photo-galleries/b-c-realtors-still-not-allowed-to-openly-publish-home-sale-prices-1.23417786 but when you go to the Property Insights page link to get more info, it’s as scarce as before the Ontario ruling.
Fighting all the way.
Zealty works good…..I will keep using it, though it still doesn’t show
previous prices and you have to know that most prices in the LM have gone down.
Blog Dogs. Talked to my Dr today. Sent a pic of my blood ptessure. He called four times. I never answered. Lef a message up my dosage of blood pressure pills and go to emergency..
Asked me if I quit Smoking and drinking. Naturally I lied, called his answering machine.
I said I have a problem with compliance no matter the cost.
Getting a feeling ill be summoned to Nictonite soon.
I’ll be in Toronto next weekend. If I make it.
Have 20 x 20 storage unit of stuff. Giving it all away. Any fans who know some downtroton. Giving it all away for free.
Email me if you know people who need stuff.
I will give you directions.
[email protected]
There are already two classes of renters in Vancouver: 1) the ones who haven’t had to move in ten years (due to rennovictions, landlord personal use, growing family, or god forbid: wanting to live elsewhere in the city for some reason)
2) the ones who have had to move, perhaps multiple times, being charged “market” with each move.
#1 is paying $1500/mo for a two bedroom. #2 is paying almost double. Is it fair to #1’s landlord? Is it fair to #2 as a renter?
I know your political position doesn’t line up with the NDP and Vancouver’s new mayor, but you really need to look past politics here. This town is a shit show. Property taxes make landlords need to charge more rent. Foreign money *is* here and until the playing field is level (Lower Mainland buyers can buy a home with the income they earn), I welcome any messing around to try to fix it. Until the CRA has proper filings from everyone, the foreign money isn’t going to stop influencing.
By the way: again one of my Facebook friends is buying and congratulations are flowing in their comments. They’re part of the problem too.
https://www.bnnbloomberg.ca/investing/video/trump-saudis-make-fundamental-oil-analysis-impossible-analyst-sen-says~1545487
I can’t help but think Trump has exercised a 1.4 million BOE per day U turn with Iran in granting 8 waivers to other oil import nations from sanctions against Iran for insider trading with hedge funds. Trump spent months talking up trade sanctions with Iran forcing their customers to stock up with Saudi oil and forcing the price of oil up, only to do a U turn like this?
Its corruption. Can’t be proven yet, maybe never will, but that’s how it looks. We are seeing direct WH manipulation on world oil pricing here with billionaires having advance knowledge of these decisions. It looks bad and its smells bad because it likely is that bad.
Meanwhile, tariffs on Chinese imports kicked in last month. The IMF recently evaluated U.S./China trade war risk and predicted a .5% dip in global GDP. Since the back and forth Chinese trade with the U.S. is roughly a 3:1 imbalance, China will take the biggest hit. If this is happening during a global economic slowdown trend, it will effect supply/demand fundamentals as well so its hard to say where the true bottom for oil is here and by all means, opinions are welcome but lets look ahead for a moment.
Trade wars and trade agreements with other nations have to be ratified by congress after 6 months. It could be 8 or 9 months before WH executive orders are ratified or not, but this trade war decision will need at some point to pass congress and to that end, I don’t expect the U.S./Chinese trade war to last past Q3 of next year.
Is this enough to give Putin the U.S. recession he is looking for from corrupt, traitorous Trump? With the kind of inflation coming and predicted fed response on rates and what impact that will have on consumer/corporate/public debt coupled with a world economic slowdown from this trade war, I think so yes.
As the U.S. slips into recession in 2020, look for further U.S. isolation from Trump to get out of the WTO and NATO triggering Russian aggression at its borders around the same time. Of course, we can hope for Trump to be impeached before then, but if he isn’t, and Trump is the traitor most with intellect and awareness believe him to be, this is the Putin playbook manifested. Trump will try to hold power through war and Putin will try to expand Russian borders. Putin is a villain with a Trump puppet for a reason and it would be unwise to see it any other way at this point, at least in my mind.
Weird times. If the Russians didn’t mess with this site and me personally back in 08′, I wouldn’t be thinking so darkly but now I have to “conspiracy theorize” and I really don’t care if they hear it, they can KMA. What makes us safe Garth (aside from the fact that we are civilians) is we are far from the only one’s thinking this. What a mess.
Once again it seems like people are inexplicably ignoring the country’s second largest city when discussing rent controls.
Montreal has had strong renters’ rights forever. What’s it been like here? Affordable rents, reasonably affordable real estate, people living far more within their means than in Toronto and Vancouver, and people generally enjoying life. To wit: my girlfriend and I – both millennials – are having no trouble affording our recently-purchased 2,500 sq ft house, with no need to borrow from parents. My parents’ mortgage has been paid off for decades. And this has been with relatively pedestrian jobs: Dad is a machinist by trade, I’m a flight attendant, girlfriend is a translator making less than the annual Canadian average salary.
Is that going to continue with prices now bubbling upwards? I don’t know, but as of right now I’d much rather have Montreal’s more moderated price growth and no impending crash as compared to Toronto and Vancouver.
The ROC just can’t seem to grasp the fact that B.C. is different. Economy is boom-bust. Politics is straight up across the board populism, switching from right to left
never a middle. Money comes in from the vast riches of the hinterland & stored in Vancouver R/E cause its the only thing eastern banks trust. As it appreciates you use it to access capital to buy B.C. resources that the rural population can only harvest. Rich urban buys quality rural.
The thieves here are myriad & endless. The smartest from all over the world. Nobody ever goes to jail for white collar crime. Same with the dope. Its the best & cheapest anywhere. The women are beautiful & see no reason why they can’t be a somebody in Hollywood North. So be careful on all fronts.
Lay low in Maui or Palm Springs when the lefty populists are on the warpath, like now & go back to plundering when you figure its all clear. Don’t mess with the regulars.
So yes ,if your a middle of the road, sensible, honest canucklehead that believes doing the right & honourable thing will get you ahead here; you will end up with your carcass picked over by crows & your head on a stick.
But don’t let me discourage anyone from coming. Us old-timers need some fresh money & fresh meat.
When you hit the point of no return. The review mirror is a waste of time.
Enjoy the view of what’s next.
There has to be some sort of balance with rent controls for both tenants and landlords. My offspring rented a condo for about 3 years. His rent started at $1400/Mth (which I thought was insanely high) and after 3 years was still under $1500. After he vacated,the amateur LL Jacked up the rent to $2400. It took several weeks, but it was rented out. Absolutely NO Improvements were done. Not even painting. Are the LLs claiming this as income? I highly doubt it! I generally don’t have a problem with amateur landlords, but I have a real problem with tax evaders.
On the road to no where. A view exists.
Happy to share.
It’s a road. Not everyone sees .
Trudeau makes dpeeches around the world, but never reported by Canada’s media, that he is bound by agreements to global activists to kill Canadian enery ” as soon as I possibly can”. The problem with Canadian oil is not supply or low prices, it’s Trudeau and his American backers purposefully killing the industry. Wake up people, it’s not time to hope, it’s time to revolt.
Property Rights should be respected per the Law.
As long as homeowners follow the law themselves, they should not be interfered with nor demonized (observe bylaws, declare rental and capital gain income, pay their taxes, utilities, etc).
If low cost character neighborhoods are paved over by Condo’s blame City Planners and not the investors that buy those properties from Developers.
If RE Market forces have economically interfered with your ideal of a 5 min. walk to work and cheap digs nirvana, do what the sensible do: either get roommates so you can live in and afford that nirvana place or move to where you can afford to live on your own.
Do not ask Gov. to be your Landlord of Landlords and RE price arbitrator. Live within your means. Save your money. Invest wisely for the future.
And above all, GROW UP. Stop confusing Rights with Privileges.
Stop WHINING because God, Country and Family did not give you the life you think you so richly deserve. Earn it or ensure in the next life you come back as a Trust Fund baby like Trudeau (New Age style).
Garth contrary to your opinion big urban centres need to have affordable central family housing as this is where the actual blue collar and service people need to live. TO needs nurses, bus drivers, shop workers, taxi drivers etc. These vital service providers cannot commute in from 1.5 hours away. TO would die without accommodation for the workers of the city.
A relative works at the Uni of BC and says that due to the high cost of living they cannot hire professors never mind folk down the food chain. TO is going the same way.
#184 Long-Time Lurker on 11.23.18 at 12:18 pm
Sorry I did not respond. Good link; although, Zero Hedge can be conspiratorial at times.
Typical.
Because the EU will not let Italy exceed its blessed % of GDP threshold, Italy Gov has not been able to bail the banks out NOR fix earthquake ravaged towns quickly (for many, many years now not just under the current “Populists”).
Of course, this gets bad press – Italian Banks a “Populist Mess” – your typical necessarily short Lefty manifesto easy to remember for the WEAK OF MIND.
Funny how Canada & the American’s bailed their banks out post 2007 to the tune of hundred’s of billions of $$$$$$.
Imagine if some non-elected bureaucracy told Canada and the USA they could not do this because of some GDP spending threshold?
Ya, there would be blood on the streets.
THAT, to give you an idea of how patient the Italians have been for well over a decade now…add to that, a go nowhere GDP…if it where Canada or the US:
INSURRECTION would be the result.
—————————————-
And on the Xenophobic Lefty BS that Italy’s Salvini is accused of, try an Italian youth unemployment rate in the 40% range and the, per the EU bureaucrats, typical “Migrant” profile is:
85%+ of them.
18-39 yrs. old
Male
And they can’t find work in Italy as they were promised by their Body Trafficking agents. Imagine that with our own 40% unemployment rate? A Globalism cheap labor fail.
And France, Switzerland, Austria and everyone else keeps Migrants bottled up in Italy having closed their borders to them.
How CTV, CBC, Global, MSNBC, CNN et. al. manage to find the correct camera angle for their National News that shows ONLY WOMEN & CHILDREN Migrants is beyond my comprehension.
For me, North American Migrant news reporting is always a ROTFL moment of abject truth distortion taken to CGI heights.
Brainwashing, WWII style.
Inform yourselves with both sides of the story, not just the one that suits your rose colored glasses.
Beijing to Judge Every Resident Based on Behavior by End of 2020
China’s plan to judge each of its 1.3 billion people based on their social behavior is moving a step closer to reality, with Beijing set to adopt a lifelong points program by 2021 that assigns personalized ratings for each resident.
The capital city will pool data from several departments to reward and punish some 22 million citizens based on their actions and reputations by the end of 2020, according to a plan posted on the Beijing municipal government’s website on Monday. Those with better so-called social credit will get “green channel” benefits while those who violate laws will find life more difficult.
The Beijing project will improve blacklist systems so that those deemed untrustworthy will be “unable to move even a single step,” according to the government’s plan. Xinhua reported on the proposal Tuesday, while the report posted on the municipal government’s website is dated July 18.
China has long experimented with systems that grade its citizens, rewarding good behavior with streamlined services while punishing bad actions with restrictions and penalties.
#106 Smoking Man on 11.23.18 at 11:40 pm
Blog Dogs. Talked to my Dr today. Sent a pic of my blood ptessure. He called four times. I never answered. Lef a message up my dosage of blood pressure pills and go to emergency..
Asked me if I quit Smoking and drinking. Naturally I lied, called his answering machine.
I said I have a problem with compliance no matter the cost.
Getting a feeling ill be summoned to Nictonite soon.
I’ll be in Toronto next weekend. If I make it.
Have 20 x 20 storage unit of stuff. Giving it all away. Any fans who know some downtroton. Giving it all away for free.
Email me if you know people who need stuff.
I will give you directions.
[email protected]
———————————
I hope you don’t get summoned to Nictonite any time soon dude, I never got a chance to drink with you and pick your brain!
Get well soon!
“Rent-controlled apartments can set whatever price they want when a vacancy occurs. That’s where the market price is set.
Rent control prevents a landlord from increasing rent beyond an annual limit. Because people have a strong disinclination to move every year, this causes a distortion in the market. Without rent control, landlords are able to extract higher and higher rents from existing tenants. When the tenant finally refuses to pay an increase and moves out to a place they can still afford, the landlord resets the price to what the actual market will bear.”
Yes, there is a total asymmetry between potential outcomes experienced by the landlord vs the tenant when rent is increased. Worst case, the landlord needs to find a new tenant, and can raise rent beyond inflation if they wish. Conversely, the tenant has to move their entire family, possibly far from their current neighbourhood.
Incentivizing landlords to kick out tenants is not good policy.
There is always the human right commission if the landlord/ tenants tribunal doesn’t work for you:
https://torontosun.com/news/local-news/mandel-landlord-loses-bid-to-overturn-human-rights-tribunal-order
The Fordites are probably correct in eliminating the rent controls but no developer will dare start constructing purpose built towers as the next govt. will just change the rules before the building is even finished.
Garth,
Southseascompany is making a valid point…you labelling a decade of orchestrated central bank interventions to suppress the costs of money by purchasing bonds and other dodgy securities en masse as ‘influence’ is a bit rich. States and quasi state (FED) and supra state EU/ECB interventions do much more than influence. Do you think we would have seen this extreme run up in almost all asset classes since ’09 if the central banks didn’t use their influence and rates stayed around seven percent? Demand equals income plus or minus available credit. Want/desire are a different thing altogether lol. My guess is we either a) see central banks begin to back pedal or b) we witness the catastrophic economic effects of debt deflation round the world as almost all asset classes get ‘remarked’ to market as interest rates rise.
@#116 jane24
“A relative works at the Uni of BC and says that due to the high cost of living they cannot hire professors never mind folk down the food chain….”
+++++
Yep.
I talked to a elevator repairman I know a few months back.
Most of them are ‘retiring out” and they cant find people to replace them. He also commented that they tried bringing in an experienced supervisor/ salesman from out of Province.
The guy flew in with his wife. Spent the week looking at the job, the city, the housing prices and said, ” Beautiful city, great job but why would I walk away from my paid for house to come here and assume a million dollar mortgage AND deal with this traffic? No thanks”
This city needs a 70 % reduction in housing prices to become competitive again.
@#118 rate rise
“The Beijing project will improve blacklist systems so that those deemed untrustworthy will be “unable to move even a single step,”
++++
China’s spent (and spending) billions on facial recognition software programs and AI programs for predictive behaviour.
So you will have the ultimate Police State where the govt can track your every move AND know what you will do before you do it.
Technology’s great…..Great for controlling the cities.
But most revolutions in China start in the countryside where 600 million peasants live…..
Toss in desertification, crop failure, escalating trade wars, food security issues( kinda hard to feed the people when the ships cant deliver), pollution and…..all the propaganda, money and vacant condos in Vancouver cant stop hungry, starving peasants from eventually hacking the leaders heads off and sticking them on a pike at the city gates…….
@#117 Dolve Vita on 11.24.18 at 3:25 am
Inform yourselves with both sides of the story, not just the one that suits your rose colored glasses.
______________________________________
What a hypocrite you are.
you’d do well to follow your own advice.
Nothwithstanding the usual flotsam jetsam on here there are some real gems. Southseacompany, Kaganovich, and Jacky (Chan) Dangerous are fun to read. And of course a perennial favourite of mine, Fishman. All gems.
@#124 crowdedelevatorfartz on 11.24.18 at 8:16 am
@#118 rate rise
“The Beijing project will improve blacklist systems so that those deemed untrustworthy will be “unable to move even a single step,”
++++
China’s spent (and spending) billions on facial recognition software programs and AI programs for predictive behaviour.
So you will have the ultimate Police State where the govt can track your every move AND know what you will do before you do it.
Technology’s great…..Great for controlling the cities.
But most revolutions in China start in the countryside where 600 million peasants live…..
Toss in desertification, crop failure, escalating trade wars, food security issues( kinda hard to feed the people when the ships cant deliver), pollution and…..all the propaganda, money and vacant condos in Vancouver cant stop hungry, starving peasants from eventually hacking the leaders heads off and sticking them on a pike at the city gates…….
____________________________
and they are rapidly running out of fresh water.
Wondering what happens then. stronger ties with russia?
Knowledge & Insights – Morneau Shepell
https://www.morneaushepell.com/ca-en/knowledge-insights
On October 15, 2018, the Financial Services Commission of Ontario (FSCO) announced … Tracking the funded status of pension plans as at October 31, 2018 .
https://www.morneaushepell.com/ca-en/knowledge-insights
Hey Smoking Man,
In your immediate future remain within 15-20 minutes of a hospital that performs angioplasty (stents). Keep Aspirin on you at all times and if you feel any chest pain chew a few (must be Aspirin not Tylenol) and dial 911. In the meantime, get your Toronto Dr. to book you an Exercise Stress Test or Exercise Tolerance Test (same thing). When you get to Toronto, go for the test. It will almost certainly show that you have Coronary Artery Disease. No big deal. You will then be referred for an angiogram with subsequent angioplasty, stents. Then you are good to go for another 10 years with smoking, 20 years without.
My bet is that we’ll see a ton of reno-victions in Ont before spring.
What do Canadians know about government control and protection of the common good? Zippo! They seem to want a society where only rich people can live and all manner of immorality is protected and practiced and resistance to it is outlawed or banned. Ebeneezer Scrooge would be proud of Canada. If the basics of life is just an investment vehicle that has no limit to price then there is no future for any society that allows this except extinction just like what happened in John Calhoun’s mouse utopia experiment.
Yo,
Had a nice break in a mountain retreat for a few days. Reading the news from Canada over a glass of quality Irish whiskey:
– e-coli outbreak due to ‘quality’ lettuce produce.
– Canadian startup that wants to kill Apple iWatch with
ANALOG watch, has 100 k in ‘venture’ capital attracted (a few bricks in a shitty townhouse in GTA or just the 10 % of the glass walls of a new glass condo) and no product, apparently that is a news by Canadian standards.
– Alberta in deep doo doo with WCS closing on 10 box/per barrel handle and the sox boy bewildered by the complexity of the issues he is facing.
– a ‘generous’ tax cut by the daddy’s boy/french villa guy that targets manufacturing (cough cough, Quebec and Bombardier, the Sox’ boy favorite subjects) but apparently not high tech equipment.
Thanks god for allowing me to observe and enjoy that shit-show from the sidelines.
Cheers while filling another glass of whiskey.
Disclosure: I have to admit that just reading the latest news from Canada gives me an orgasmic pleasure (due to the escape from the daily ‘quality life’ and the crowd/GTA commute) that renders me practically unable to live normal life while reading Canadian news at the same time.
Like reading chronicles from a mental hospital while trying to live normal life, when the very though of having escaped gives you a lifetime fulfillment.
As my former CEO was saying: I don’t know what you guys/gals are doing, but keep up the good work.
Cheers,
socks. damn that spellchecker.
Nope. WTI is going to settle in the low $40s. Could overshoot to the downside though.
Our family received termination notice in bad faith this year in B.C. We have put a case together with the hearing set for Feb 2019. the evidence is crystal clear and I can’t see how we will not win our case, but I am wondering about collecting the award should we win. Landlord lives out of country and does not claim income in Canada. Does anyone know if the option of garnishing the rent paid by the new renter is a possibility? We certainly could put a lien on the house but that could take years to receive payout.
Mini Ice Age is coming.
https://www.investors.com/politics/editorials/climate-change-global-warming-earth-cooling-media-bias/
@#127 KLNR
“Wondering what happens then. stronger ties with russia?”
+++
Lake Baikal .
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&cad=rja&uact=8&ved=2ahUKEwi6y_7Au-3eAhX9GDQIHaXGCuUQFjAIegQICBAB&url=https%3A%2F%2Fgeology.com%2Frecords%2Flargest-lake.shtml&usg=AOvVaw0VxwC2ZxLaEwZAcVSQDLBc
The Largest fresh water lake on the planet( 20 % of the worlds drinkable water in one lake) is within a pipeline distance to China’s northern border.
The Russians have been polluting it for years but not as effectively as the Chinese have polluted their own drinking water.
The only thing keeping China from sucking it dry is rapidly aging and depopulating Russia’s nukes….
Give it time.
Russia’s current leadership has never let details like the environment or Rule of Law get in the way of a multi billion dollar deal.
I’m sure they will be announcing a pipeline deal that will make Putin ten times richer than Croesus….
“The logic is simple. Fewer controls will mean more supply. More supply ultimately keeps prices reasonable, while rent restrictions distort markets. Otherwise, developers abandon putting up apartment buildings, for example, and focus on condos.”
Respectfully, Garth, I have just been researching exactly that topic and it’s not true, at least in Ottawa. CMHC now makes a whole pantload of its data available in a much easier to use spreadsheet form (it used to be in PDF’s which were a pain in the ass to work with.)
Anyway, when Mike Harris eliminated rent control for new units in Ontario in 1997, the logic was that it would spur more rental construction. But it didn’t. Over the following twenty years, there’s no correlation visible in the rates of rental construction.
So while markets have their role and need to be allowed to work as much as possible, this is clearly a lot more complicated than just rent control.
I would suggest an alternative example for why developers favour condos:
When someone rents a unit, they’re paying for its shelter value. But when they buy a unit, they’re paying for shelter value plus a speculative capital investment. And because we’ve allowed expectations about future price appreciation to run rampant, the expected value of that capital investment has ballooned. So, one, people buying a unit are paying for more than just shelter. (Okay, you don’t need me to tell you this.)
But, two, there’s also the time preference for money. You buy a unit to sell, and you immediately make your profit and walk away; all future risk and discounted returns are gone. Versus a rental building, your spreadsheet is telling you that the present value of future rent is less and less, and with (to my mind) ludicrous discount rates of 10% routinely being applied, it means that if something doesn’t pay off fast, it doesn’t pay off at all. So why would you do that, especially if you can get some chump to buy your magic beans at beanstalk prices today?
Long story short, I’m a public policy guy and I spend a lot of time on housing issues. Most problems have a solution that is simple, easy to understand, and completely wrong. Radical rent control is one of them; so is eliminating it.
I postulated a position, without indicating my support for it. My post also acknowledged your basic points. – Garth
How not to water management. I remember co-worker telling me about nikita h and his vision for cotton industry, all that disaster for some cotton t-shirts…
From 4th lake in world to big salty pond, over few decades. video short and interesting.
https://www.britannica.com/place/Aral-Sea/media/31983/156916
The good times seem to leaving in Canada.I’m here in Puerta Vallarta and taking a couple months of work.Why work so much to pay for war and welfare.There used to be alot of oilworkers down here partying like its 1999.Not anymore,so sad but they can switch to the pot industry!I can’t believe the beer prices here,3 tall cans of Heiniken at Oxxco for 38 pesos or 89 cents each!The beach bar I like to go has corona for $1.26 Cad.Can’t beat the prices here,a good meal for less than $6.Vancouver is so overated,its a soul less city,where the majourity are just working tax and debt slaves.Dont mention the 2 hour day commutes.I guess some has to do it.
In the immortals words of Rodney Dangerfield. “If everyone is selling, buy. If everyone is buying, sell.”
Urban centres need workers for retail, restaurants, hotels, taxis, coffee shops, etc. These are not high-paying jobs. These workers have to live in the city because commuting a couple hours by car isn’t feasible. Do they even own a car? They also can work late hours. Any city worth its salt needs housing low-income earners – who are necessary for the proper functioning of the city – can afford to live in.
If they leave the cities, will they continue to work there or will they look for another similarly paying job in retail or whathaveyou in their new smaller town?
This is so much bigger and more complex than “move if you can’t afford it.” Shelter *is* a right and since all cities need low-income workers in order to function properly then all cities need affordable housing built into its infrastructure where said workers can actually live.
Rent controls should exist enough to prevent LL from scorching current tenants with, say, yearly 25% increases. In TO there was that one guy who doubled the rent on his tenants. That story hit the news, outraged everyone and while I wouldn’t suggest he alone “ruined it for everyone,” I will say that he was representative of peak LL greed in TO’s rental market and evidence of that greed harming people is what led tenants to demand protections.
So, there needs to be something in place. No protections in place can literally unhome people and in this climate that is scary as hell. Families can lose housing and it’s not like two working people with kids can just up and switch cities in the 60 days they have to figure out how to avoid homelessness.
My opinion? Governments influence home ownership. They don’t control it, but they exert influence to make it lucrative. Do the same for rental buildings. Make it lucrative to build those purpose-built rental buildings. Subsidize the expensive planning period where nothing is being built and you’re out of pocket for years. Legislate fast-track options for rental buildings, reducing the costs. Tax incentives/breaks for building and owning rental buildings.
Stop focusing on the end users (who have the least amount of money out of all the parties in the equation) and whether or not they deserve the right to live somewhere, and make the whole process more cost-effective at the front end where builders aren’t de-incentivized to build rental units. No one wants to pay a ton of money up front for slow, slow, slow returns someday. Lower the cost of entry with long-term tax breaks and see how builder behaviour changes.
Garth
the issue is NOT whether housing is a right.
the issue is
DO YOU WANT A STABLE, AVAILABLE PRODUCTIVE WORKFORCE???
or do you want a workforce where every month 8% of renters are
pre occupied with relocation????
#71 Mao Zedong on 11.23.18 at 7:49 pm
You might find this to be interesting. It’s one of the most terrifying things imaginable.
China is well along in the process of building the infrastructure for it’s citizens to imprison and police themselves through behaviour control that becomes self-reproducing and self-managing. Orwell is rolling in his grave.
https://www.aljazeera.com/programmes/101east/2018/11/china-spying-eyes-181115060044471.html
We live under a monarchy – all land is owned by the crown – the crown has eminent domain over all land in canada – no citizen of canada can use the land for their survival without permission from the crown – the queen doesn’t care how many loonies or toonies you have in your pocket – call her and ask her yourself what the deal is – long distant charges may apply.
#144 Long Term
Thanks for the link and that is exactly what is driving the Chinese to leave China…
#62 Howard: you decry the ‘tax free capital gain’ that homeowners receive for ‘an investment of their choice’. While it is true that those who purchased property did so of their own volition, keep in mind that the homeowner paid for that investment in after tax dollars, just as renters pay rent in after tax dollars. The difference is the interest charged by the mortgage provider. A renter is not assessed interest on their monthly rent. The sum is fixed by contract & while late or missed payments may result in legal action, if the renter pays what is due that is the end of the matter, though the landlord may not renew the rental agreement when the term is up. However, interest paid by a homeowner adds considerably to the cost of shelter. To put it into perspective, the average 25 year mortgage term has a multiplier of 5. So if you purchased a property for $400,000 the actual amount paid for the property after 25 years would be $400,000 multiplied by 5, or $2,000,000 (two million) dollars. If at the end of 25 years that property has appreciated in value to reflect the actual price paid, you are ahead of the game. The capital gain for a principle residence is a recognition that the amount invested was paid for in after tax dollars. To tax that investment again, especially when so many end up paying 5 times the original purchase price, would virtually ensure no one would ever purchase property unless they were able to pay the full purchase price up front.
The extremely low interest rates of the past decade are now beginning to return to historical norms. Most who purchased property at highly inflated values will suffer financially as interest rates rise.
For anyone who is interested, the formula of length of mortgage term to original purchase price is as follows:
25 years = a multiple of 5
20 years = a multiple of 3
15 years = a multiple of 2
If one is fortunate, that ‘tax free capital gain’ exemption might possibly equal the amount you paid in interest above & beyond the original purchase price. Or not…..
UK best days are ahead, thanks to Brexit!
NO RENT KONTROLS
NO KONTROLS
FREE CANADA
OLIGARCHS CAN SUBSIDIZE THE RENTERS HOW MUCH THEY WANT – ONE SOLUTION IS TO FIRE 1/2 OF THE BUREACRATS