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Friday, April 21, 2017

Rent Control returns to Ontario

Ever since 1991 there has been a loophole that allowed the owners to set and change rents as they saw fit, which meant they could gouge renters for more money if they wanted to.

Rent control still applied to buildings that were built prior to 1991, guaranteeing that rentals could not be increased annually by any amount above and beyond the rate of inflation - and was capped at 2.5% even if the rate of inflation was more than that.

But new buildings that were built in 1991 or after, did not have rent control.

The loophole was created in 1991 in order to encourage property developers to build more rental units. Rent control was considered to be cost prohibitive, ie. not profitable enough. Building rental units made no sense to someone meaning to make a profit, as it would take significant time to finally get back their investment in building the property.

So to remedy the problem, the province got rid of rent control for all new buildings that were built after 1991.

Unfortunately the industry took advantage of the situation, built lots of condos instead, and then rented them out.

And then more recently, renters would see their monthly rent skyrocket to double to whatever they were paying before.

eg. Valerie Bruce, a renter living in Liberty Village, recently received a notice saying her rent would double from $1,600 to $3,200, so she decided to move.

And she was not alone. Many other Torontonians saw their rent double within the last year, as they are quite literally being squeezed out of the market.

Part of the current problem is that vacancies right now are really low. It is currently 1%, the lowest vacancy rate Toronto has seen in 7 years - not since 2010 has it been this low.

And when availability is low, prices tend to go up because the demand is high.

However doubling the rent on people who already are living in a particular place, well that is just ridiculous. It is that kind of flagrant disregard by landlords that has basically given them a bad rep and caused the provincial government to step in and put a stop to this nonsense - see the Ontario Fair Housing Plan below.

So it is the fault of landlords for getting greedy in the first place.

It is also the fault of real estate developers for taking advantage of the 1991 loophole to build condos between 1991 and 2017, when they were supposed to be building affordable apartment buildings. The purpose of that 1991 loophole was so they would build more affordable apartments, but they didn't build more apartments, they built condos instead - some of which ended up being used for high priced apartments by investors. There was nothing affordable about it at all.

The Ontario Fair Housing Plan
  • Expanding rent control to all units, including those built after 1991.
  • Annual rent increases for existing tenants can be no higher than the rate of inflation. 
  • Rent increases will be capped at 2.5 per cent, even if the rate of inflation is higher.
  • A standard lease will be developed in multiple languages.
  • Tenants will be adequately compensated if asked to vacate for "landlord use."
  • Change becomes effective as of April 20, regardless of when legislation is passed.
That last part means landlords will not be able to raise rent by more than 1.5 per cent this year — the annual provincial rent increase guideline for 2017, which was determined based on the inflation rate in 2016.

However, a landlord can raise rent by any amount in between tenant residencies. For example, if one tenant paying $1,600/month chooses to move out of their unit, the landlord can charge the incoming tenant $2,000/month or more.

It is also theoretically possible for renters to get in a bidding war if multiple people end up vying for the same unit at the same time.

Thursday, February 16, 2017

Toronto in a 1980s Style Housing Bubble

Bank of Montreal economist Doug Porter says Toronto is the midst of a housing bubble, and is making comparisons to the housing bubble of the 1980s - which ended in a collapse and a recession.

"There’s nothing tentative about the red-hot housing market in Toronto and neighbouring areas," says Porter, in a note out Monday.

Porter is referring to the 22 per cent price appreciation of existing homes over last year's prices. He is now predicting a 19 per cent increase in condo prices in the Greater Toronto Area (during 2017) and says to watch for double-digit gains in the Greater Golden Horseshoe.

"An apparent influx of foreign wealth, coupled with record-high demand and a shortage of detached properties, are driving the frothiest price increases since the late 1980s. Prices are even accelerating in segments and areas without shortages."
 
"Admittedly, condo supplies in the GTA are down sharply from prior elevated levels, but a record number of units are now under construction…so why the froth?" asks Porter.

Porter also notes that Montreal and Ottawa have entered a lengthy period of stagnation, that Alberta is stabilizing.

And that there should be "some further softening in Vancouver’s prices", compared to last years 33% increase in Vancouver prices.

The national average price for homes sold in January 2017 was $470,253, up only 0.2 per cent from a year ago and carried mostly by sales in Toronto and Vancouver.

However if you ignore Greater Toronto and Greater Vancouver, the average price of a home in the country is reduced by almost $120,000 to $351,998.

Counting adjustments for inflation and the lack of increases in housing prices across most of Canada, the cost of homes across most of Canada is actually going down comparatively. The GTA and GVA are inflating the national average and skewing the results. Which is similar to what happened in the 1980s. The average prices across Canada stagnated and went down first, while Toronto and various cities experienced a real estate bubble.

And then the bubble burst, economic chaos and a recession resulted. The stagnation across Canada was basically the canary in the coalmine, warning of the impending disaster.

2010s Vs the 1980s, What is Different?

Toronto and Vancouver's real estate bubbles are now mostly driven by foreign investors. That is what is driving the prices to ridiculous heights. That means that the rest of the country could go into a recession and as long as Toronto/Vancouver's prices continue to balloon upwards, the investors will just keep investing.

In British Columbia, Vancouver is trying to curb that by introducing a 15% land transfer tax on foreign investors.

In Ontario, Toronto has rejected the idea of a land transfer tax and has embraced the status quo for now...

But then Toronto Mayor John Tory announced recently that he would be increasing property taxes in Toronto by 2%.

Which gave me an idea.

Don't increase the property taxes for regular Torontonians.

Increase the property taxes for foreign owners of Toronto residential real estate instead. By say... 22%. Or more. Perhaps 27%.

You will note that this would only effect residential investors.  It would still allow for foreign investors in commercial and industrial real estate, which means they are investing in Canada's economy.

If the prices of homes in Toronto are going up by 22%, increase the property taxes on foreign owners of by a like amount (plus maybe an extra 5% to make it 27%).

So if prices in 2017 go up 19%, the property tax for foreign owners should be 19 to 24% higher than people who actually live here.

The thing about property taxes is that it is every year. The land transfer tax is only an one time thing.

Now property taxes are not a huge amount, but those property taxes would mean the mayor wouldn't need to raise taxes on Torontonians (people who might actually vote for him) and only harms non-voters who don't even live in Toronto.

Over time the property taxes on foreign owners could be increase gradually until Toronto's housing market stabilizes to a more reasonable and normal growth. Which means Toronto ends up with a stable and sustainable housing market that can withstand global and local recessions - instead of an ever ballooning market that will burst the moment the local economy hits a recession.

Monday, February 13, 2017

Why you should Schedule an Electrical Inspection

Schedule an Electrical Inspection for Peace of Mind

Having safe electrical equipment and wiring around your home is not something you want to take lightly. If things aren’t right, you could not only be at risk for a personal injury from electrical contact, but you could be risking a fire as well. If there are electrical problems that are causing fire or shock hazards, you will want to know about them so they can be fixed before you find out the hard way that you had a problem.

If you are not absolutely certain that everything in your home is up to code, you might want to schedule an electrical inspection Jacksonville. Companies like Mister Sparky have qualified electricians who can come and check out your entire electrical system. If any problems are identified, you will also have a source for getting things fixed.

Depending on what is deficient after the inspection, you may just need simple things done like installing some new outlets. In other cases, the job may be more extensive. Whatever the problem is, having knowledgeable electricians at your disposal will enable you to get everything in safe working order and up to code.

The electrical code is rather lengthy and can be complicated for people who are not trained in the electrical field. As a result, doing an evaluation is not something you should attempt to do yourself, unless you are an electrician.

There may be times when you need to upgrade your electrical panel. If you live in an older home and your panel has never been upgraded, it is highly likely that it needs to be. Most older homes were built when people did not rely on electricity to the extent they do today. To illustrate, just take a look around the rooms in your home and identify the items that you use on a daily basis that run with electricity. Then think about how many of those items did not exist a generation or two ago. If you have the same electrical panel that was in place then, there should be little doubt that you need an upgrade.

Another time when your panel may need to be upgraded is when you are making additions like building another room. You clearly do not want to overload your existing system. An upgrade is the smartest and safest thing you can do.

Because you can’t actually see electricity, it can be a bit difficult for untrained people to understand. For this reason, you should have your home evaluated by a professional so you can have the peace of mind in knowing that everything is okay.

Sunday, January 29, 2017

Boulder House

This is so kewl we should definitely build more homes like this. Unfortunately boulders conveniently placed like that and huge are pretty rare.


Sunday, January 1, 2017

Project Gridless - Off Grid Home and Other Topics...


Project GridlessA few years ago (Oh wow, that was April 2011. Time flies...) I started an offshoot website titled Project Gridless.

The goal of the new website was to primarily deal with real estate that was "off the grid". Cabins up north, farms that use solar and wind power, etc. As part of that initial idea I also included a variety of posts on various topics connected to the lifestyle of living off the grid.

Topics such as Archery, Bow Making and a Homemade Crossbow that I made dealt with my avid interest in archery and by relation, Hunting Food Off The Grid. Over time I even got into Compound Bow Repairs.

But hunting isn't the only way to get food, so I also explored issues like Farming, Gardening, Fishing Off the Grid, Trapping, and of course Cooking Tips. I even added posts about Veganism for those people who don't like eating meat.

For those people who really love animals I also wrote about Animals / Pets and Falconry. (Sometime I really should do some posts about birdwatching too.)

Because it was still a real estate website many of my posts dealt with things people needed around their home. Thus I wrote about solar, wind, hydro and other ways of getting Electricity Off The Grid. And because this is Canada and we have hot summers and cold winters, I also had posts about Heating and Cooling. And Green Homes / Sustainable Architecture for those people obsessed with the environment. And "modern necessities" like how to get Off The Grid Internet and plumbing, aka Water and Sewer Off The Grid.

For the preppers / survivalists out there I wrote posts about:
But it still was not enough. I also had topics such as:
In April 2017 it will be 6 years since I started Project Gridless and there is still is so much to do. It is an expansive topic that goes beyond real estate and into the realms of being self sufficient, providing your own food, your own heat sources, your own entertainment, and all of your necessities.

My efforts have not been in a vacuum either. Project Gridless is now twice as popular than MSfaH.

Therefore I am putting the call out for more bloggers to join me.

Join Project Gridless and write about the off grid topics that most capture your interest.

To join email charlesmoffat{atsymbol}charlesmoffat.com.

Once you have joined you can post on the above topics to your heart's content, knowing that you are posting to an already popular and successful blog that is currently read by 5000+ people per month.

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