Canada hits all-time high for immigration

Here’s some good news for the Century Canada crowd; Canada welcomed 430,000 would-be Canadians to these shores from June to September. That’s over 140,000 per month! Meanwhile, housing starts were bumping along at roughly 20,000 per. You can shut down every Air B&B in the country and it won’t make a dent in the housing catastrophe the Ottawankers are creating for us. How the hell are we still on this path when everybody and anybody who knows anything about real estate has been waving red flags for years? Hilliard MacBeth wrote a book about it - eight friggin’ years ago! But, let’s look on the bright side. All our new Canadians are coming from places where they’re accustomed to far larger households than we are. Like double and up. All those nattily attired Nigerians you saw crossing at Roxham Road with their designer luggage? They’re coming from a place where seven to ten under a roof is the norm. Putting up one new build for every seven new Canadians sounds just about right!

Canada to lead world in affordable housing

The Globe & Mail informs us this morning that “Ukrainian newcomers face housing challenges.” I’m shocked! Who could have seen that coming? If the white, blonde, and Christian Ukrainians are having difficulties, what of the Somalis, Nigerians, Guatemalans etc. wandering across the border at Roxham Road? And this is before we welcome any of the million new immigrants scheduled to arrive over the next three years. Clearly, our political elite are fashioning a housing crisis of epic proportions. It’s not that the politicians are unaware. There’s not an election cycle goes by at the local, provincial or federal level that leadership candidates don’t regale us with their plans to address the housing crisis. The problem is that our political class conflates talking about problems with solving them. We’ve been refitting our frigate fleet for over ten years. No new frigates on the horizon yet. Ditto fighter aircraft, military helicopters, the government payroll system, and on and on. Talk is cheap; doing stuff costs money. (Although I did learn in today’s paper that MPs are keen to spend $250 millions on a parliamentary tunnel system that will allow them to escape the pitchfork-wielding mobs they expect will visit Ottawa with increasing frequency going forward.) Point is, we can’t live in a politician’s promise. It’s time for action! And what better place to start than that over-looked housing option already favored by many thousands of Canadians; the dumpster. You’ve no doubt passed many of them without even realizing that, especially after dark, these rubbish bins also serve as accommodations. But first we’ll have to destigmatize dumpster living. What self-respecting refugee wants to move to Canada to live in a trash bin? To that end, I’m working on a proto-type 20 yard bin that will have all the comforts of home; fridge, microwave, wi-fi, and composting toilet. What else does anyone need? Once folks see how cozy and economical dumpster living can be, Canada could become a world leader in affordable housing!

When Guelph was affordable

In the early 80's I bought a two storey pile of bricks just off Exhibition Park in Guelph. The price was just over 50 thousand, or roughly two times my income.

I couldn't afford that house now. In the ten years I owned it, it tripled in value. The next ten years, it tripled again... and today it's in the 800-900 thousand range.

Real estate inflation gives real estate owners an inflated sense of economic security. At the same time, it fosters resentment among the ever-growing slice of the populace who find themselves excluded from the market.

Real estate inflation is a simple case study in that staple of Economics 101, the law of supply and demand. Everything government has done thus far to supposedly alleviate our affordable housing crisis, has goosed the demand side, ensuring that prices will continue to rise. This does not address the problem, nor does it arrest the growth of that aforementioned resentful segment. All it does is give a few marginally qualified folks a leg up to get into the market.

This year Canada will see about 220,000 new homes built. Between legal immigrants (target, 350,000/yr.), foreign students, foreign workers, and refugees, we'll see somewhere around a million new folks looking for a place to live in the coming year. While that looks a lot like "that's only five beds per new build," bear in mind that most new builds today are studio to one bed condo apartments.

The law of supply and demand tells us we have two options if we want to ease the affordable housing crisis in Canada.

1. Slow population growth (demand).

2. Intervene on the supply side.

Either way, the situation can only be resolved via government leadership. Otherwise, we'll keep going down the road of increased homelessness, increased resentment from the ever-growing population of the excluded, and increasing hostility towards immigrants.

That's not a recipe for social cohesion.


So where is the leadership?

Affordable housing

I've told this story before.

When my dear father (who just celebrated his 85th, and may God bless him with many more!..) got off the boat back in '56 his first job was shovelling coal. With a hand shovel.

By the time I was in my teens he'd remade himself as a real estate broker. I remember all us kids emptied our piggy banks to be part of the investment syndicate when he bought his first investment property.

I think it was on Barton Street, if I'm not mistaken.

Then we were all corralled into doing whatever we were capable of, from scraping old paint to applying new paint, so he could turn that place around.

The term "flip" had yet to be coined.

Dad was well on his way to joining the pantheon of post-war immigrants who done good in real estate.

And there was a ton of them. Germans, Italians, Ukrainians, Hungarians, and Jews from all over. I got to know lots of immigrants who did very well in the real estate business.

Some of them got seriously rich.

Most of them, and my father would be in this group, never got "rich," but they got seriously comfortable.

As a result of my father's success in that business, I was somewhat drawn to it myself, so I'd pick Dad's brain to get a handle on things.

So how do you know what a property is really worth?

It's worth whatever somebody is willing to pay for it.

What is "affordable housing?"

If somebody bought it, it was obviously affordable... and so on.

OK.

By that metric, when somebody pays five million for a penthouse condo in Toronto, it's obviously "affordable housing."

But that's not the definition of "affordable" that obtains when we discuss affordable housing today.

And that's where the private sector affordable housing model falls flat on its face. A $14/hr minimum wage means you'll never afford decent housing in places like Toronto.

Which is why governments need to get serious about public housing.


That's why we need a robust public housing strategy.