Toronto Fog and Tall Buildings

Foggy today. Passed by the new building south of College and Yonge... It is so tall you cannot see the top on a foggy today. Huzzah for skyscrapers in Toronto!

Antoine Berthelet Avenue in Montreal / The Mafia in Canada

The photo you are looking at above is a Google Street View photo of Antoine Berthelet Avenue in Montreal.

The reason why is because the homes on this quiet looking street are home to many of the Sicilian mobster families in Canada - which incidentally make a lot of interesting real estate deals thanks to corrupt government officials and dirty politicians.

The street is basically Canada's mafia headquarters - and they are filthy stinking rich, so they should have some pretty interesting houses right?

The Sicilian families who live there - all part of the Rizzuto family syndicate - own the whole street. So lets look at some of the nicer houses on the street and see what kind of houses known criminals live in. (You can do this yourself on Google Street View sometime, it is really fun.)

So I shall post some photos of the houses I think look best and then we can talk about their houses and later the role of the mafia in Canada's real estate industry later.

Interesting Factoid - Montreal Godfather Nicolo (Nick) Rizzuto was shot and killed with a sniper rifle through the kitchen window of his house (I don't know which house is his, but I am guessing it is one with nice big kitchen windows). The hitman whom the police believe did it was Toronto's Salvatore (Sam) Calautti, working for a rival family, was gunned down by a hitman working for the Rizzuto family in Toronto in July 2013. [Read more, Toronto Star article.]

Note - Vito Rizzuto, Nicolo's son and the Montreal Godfather since his father's death, was released from an American prison in October 2012 and has since ordered a killing spree of hits on the family's enemies. He is currently living in a very high security apartment in Montreal because Antoine Berthelet Avenue is now considered too dangerous for enemies to just waltz into and start shooting at him.

I was surprised there was no walls around the homes. Canada's mafia likes to blend in.

I like the hedges and its castle-like qualities.

Not very wheelchair friendly, but impressive never the less.

Very small windows on this house, and it looks scary.

I like the different architectural styles. You can definitely feel some Italian architecture slipping in.

The bars on the windows are interesting, as is the gardener carrying a large bag of something to his truck.

Some of them are even really modern looking. A surprising change.

Feels a bit like the White House, complete with gardener's truck. I have a hunch he gardens for the whole neighbourhood.

Kind of boring looking, and those windows are freaking huge. If anyone wanted to shoot through them it would be easy.

There is no doubt a lot of history on Antoine Berthelet Avenue in Montreal. And I am not just referring to the assassination by sniper bullet on November 10th 2010 through the kitchen window.

I would not be surprised if the RCMP had agents lurking around the neighbourhood regularly trying to get surveillance footage and audio evidence which could help lead them to major busts. If you ever wanted to see a mafia hit happen, you could just hang out near this street and wait to hear gunfire.

Anywho.

The Role of the Mafia in Canadian Real Estate

Did you know that quite a few politicians are easily corruptible and take bribes from "re-election donations"? No! Say it ain't so! That can't be true!

It is like a complete stereotype that politicians - and also civil service government workers - take bribes on a regular basis. Bribing a civil service employee is a crime after all, but it is one that rarely gets caught.

Lets say for example that you want to build a whole new suburb in the north end of a city. You bought the land already, but you need to get city approval to start building and then selling the properties. And if possible, you can also get city funding - and overcharge them a lot for "unforeseen costs" that balloon easily. And if anyone refuses to play, you bribe them, intimidate them, or arrange an accident for them. After all, when you have hitmen at your disposal you can make a lot of money off perfectly legal land deals by making illegal bribes, coercion, death threats, and making examples of people who don't play along.

And the city is stuck with funding part of a land development designed to make the mafia lots of money, it is all legal on paper, and the spending problems are handled by local taxpayers.

So yes, if you live in a city that sees a lot of land development going on and there is an organized crime presence in your city, guaranteed you are being robbed via your municipal land taxes by the mafia.

And if you live in Ontario or Quebec, a lot of that is controlled by the Rizzuto family in Montreal - whom many of them live on Antoine Berthelet Avenue. How quaint. Your taxes helped pay for those houses you saw above.

Now the beauty of the mafia in Canada is that they rarely get caught. As in practically never get caught.

Their money-laundering is often done via bogus charities and other sophisticated and unsupervised outfits - and sometimes even government run operations, like the recent Canada Revenue Agency cheque for "Nick Rizzuto" for $381,737.46... even though he owed CRA $1.55 million at the time (for legitimate business deals, which is often real estate in the case of the mafia because real estate deals are often a good way to launder money). [Read more about this story from the CBC.] The cheque is labelled "income tax refund" and is dated Sept. 13, 2007.

Events like people noticing a CRA cheque for $381,737.46 to a now deceased mafia godfather are certainly a rarity.

Now if you read the CBC article you will note the cheque was noticed by a veteran auditor and that he couldn't figure out how such a big cheque, made out to someone who was a known mafioso, let alone someone who owed CRA $1.55 million managed to get past the internal controls which monitors large cheques like that.

It means that someone at CRA was definitely on the mafia payroll and probably got a chunk of money themselves for arranging that rather large fraud.

So it isn't just real estate deals that the Canadian mafia is stealing money from the general public via taxes - they are evening robbing the Canada Revenue Agency, which is Canada's largest tax collector. Which means you are also getting robbed via the HST and income taxes.

Now admittedly Canada's population in 2007 at the time of the theft was approx. 33,115,000, so stealing $381,737 is only about 1.15 cents per person in taxes that the rest of us pays... but if you add in the $1.55 million Nick Rizzuto owed in taxes, it is really more like he stole $1,931,737.46 - roughly 6 cents per person.

But hey, why quibble over pennies and nickles right?

Well, did you know the mafia is deeply invested in real estate construction companies too? Including those that build nuclear reactors in Canada... and now you know why the building or refurbishing of nuclear reactors often costs 10 to 20 times more than what the estimates are. If the estimate for construction is $10 million, by the time it is done it will have ballooned to $100 to $200 million - and guaranteed the mafia took a cut during the process because they own a construction companies in Canada. Legitimate businesses everyone, but the difference is that once they are a government payroll all they have to do is bribe the right people and costs can be inflated dramatically.

Here is a fun article to read... Inside Montreal's Mafia Wars. In it you will see the following lines.

A top city hall engineer has admitted to taking almost $600,000 in kickbacks from construction companies. And the city’s former manager has been accused of pocketed $300,000 in bribes.

And lots of other interesting details about the mafia in Montreal and their role in construction companies, city bribes, etc.

Here is the shortened version, narrowed down to real estate related items (with my notes in parentheses).

#1. The article starts off by how the mafia rigs construction bids for government real estate projects, which led to costs being 30% over what they should have been - an extra cost paid by Montreal taxpayers.

#2. The RCMP ignored the real estate fraud, because they wanted to catch Rizzuto for drug smuggling operations. (The RCMP have forgotten that mafia members can be much more easily be caught for simple tax evasion. Which is how Al Capone was caught in 1931.)

#3. The construction companies under Rizzuto received approx. $500 million worth of city contracts during the four years of 2006 until 2009. (That is roughly $125 million per year, and assuming that they are jacking the price up 30% regularly to gouge the city, that means the mafia was robbing Montreal taxpayers by roughly $37.5 million per year. Montreal's 3.6 million people were getting robbed for roughly $10.42 each - every year.)

#4. Then the bit about the top city hall engineer admitting to taking almost $600,000 in kickbacks from construction companies. And the city’s former manager being accused of pocketed $300,000 in bribes. And then the mayor's assistant Frank Zampino taking at least $500,000. (With a name like Zampino, do you think he might be connected to the mafia? Not to get into profiling, but his name sounds like a James Bond villain...)

#5. And then there is the allegation that there is 3% kickback on all construction contracts went to the mayor himself, via a scheme that used construction workers union as a way to funnel cash back towards the personal coffers of the mayor.

#6. One of the people deeply involved in the real estate scandal and accepted bribes managed to get away with it and now works as a policy adviser to Prime Minister Stephen Harper. Ha!

With Montreal Godfather Vito Rizzuto released from American prison in October 2012 he has since gone on a killing spree using hitmen - killing many of the enemies of the Rizzuto family who harmed his family during his 5 year stay in the US prison system. When he is done killing his enemies and resecuring their family's supremacy in the mafia underworld, he will no doubt turn more of his attention back to making lots of money via real estate construction fraud.

I would argue that real estate construction fraud might actually be more profitable than drug smuggling. Think about it.

Drug smuggling there is lots of competition and the smuggler really is only the middle man. So while the cartels make money, the smugglers make money, the bribed cops make money to look the other way, the low level drug dealers on the streets make money, and there is really only a small percentage going to the kingpins demanding their cut. How much? Who knows.

But if there is so much competition from rival drug smugglers (who are a dime a dozen) then it probably isn't going to be that profitable. After all there is all the different gangs running their own smuggling operations, and they don't need to go through the Italians at all. They can get it from the Russians, the Irish, whatever gangs they happen to work closely with.

In contrast the Italian mafia owns many of the construction companies in major cities across Canada - Montreal and Toronto are the two big cities that the Rizzuto family controls. There is no competition. Some of their business is even legitimate, which means they can pass easily as being unimportant and stay under the radar.

Which is just how the mafia in Canada likes to stay. Low key. Unobtrusive. Stealing from your pocket when you don't even know they are stealing from you.

If you asked the average man from Montreal what they would do if someone punched them in the nose and then stole $40 from their wallet and give them three options.

#1. Punch the thief back and get back your $40.
#2. Let them go.
#3. Call the police and by the time you finish the call the thief has gotten away.

Most Montreal men would probably say #1.

Next you tell them that between 2006 and 2009 the Rizzuto family stole over $40 from each Montrealer (man, woman and child) via their land taxes then they would be upset.

And they should be. Because Canadians are being robbed blind.

Not just in Montreal either. Toronto and many other cities across Ontario and Quebec are being defrauded on a regular basis. And not just cities either. Road works, bridges, hydroelectric dams, nuclear plants, basically any kind of construction work is vulnerable to jacked up prices and real estate construction fraud.

And you might think "Oh but I don't pay land taxes because I rent." But your landlord pays land taxes, so it amounts to the same thing.

So trust me, unless you are living homeless on the streets (not paying any land taxes at all) then you are getting robbed via your taxes by the Montreal Mafia.

Capiche?

Worst condo sales in a decade in Toronto, August

The number of new condos that sold in the Greater Toronto Area during the month of August 2013 dropped to a mere 633, making it the lowest level for that month in a decade, according to RealNet Canada Inc.

That is a 18% drop from the dismal 772 sales in August 2012. And way below the 1,923 sales in August of 2011.

Toronto’s condo market is cooling so fast it has policy makers in Ottawa worried that if the condo market collapses, the housing market might go too - and thus dropping Canada into the biggest recession we have seen in decades. (2007-2009 will seem like a minor blip).

The Finance Department and Bank of Canada are justifiably concerned.

Finance Minister Jim Flaherty expressed concern in 2012 that too many new condo units were being built, a phenomenon that will ultimately lead to a crash - especially since so many were being built on credit borrowed from Canadian banks. The Bank of Canada has said that such a financial crash will pose a threat to the country’s broader economy and possibly even hurt the US economy too as many American investors are amongst those investing in Toronto condos with the intention of flipping them for a profit.

Real estate agents, brokers and pundits (myself amongst them) say the warnings have already been having an impact on the market, by causing some buyers to think twice about getting in to the Toronto condo market. But is it enough to prevent a crash by warning people not to invest? Doubtful. Most of the investors are Americans or from overseas, and they're borrowing Canadian bank money to make the investment - so if a crash happens and they lose their investment, it will be Canadian banks left holding the bag because the foreign investors will just pull out and ignore any legal threats from afar. (Because if you hold a foreign debt it really isn't that big of a deal if you just avoid that country for 7 years or so.)

For his part Mr. Flaherty has tried taking a number of steps to cool the real estate market, most notably tightening the mortgage insurance rules 14 months ago. One of the changes he made was to cut the maximum length of an insured mortgage to 25 years from 30, a move that took a number of first-time buyers out of the market (and first time buyers are more risky) and cooled it down a bit.

But such moves won't deter the overseas investors, who see Toronto's real estate market as being stable and think they can beat the odds and make a killing in profit BEFORE the market collapses.

But looking at the sales records, it is obvious the market is slowing and will stall sometime in the next year or so.

The total number of new homes, both low-rise and high-rise, that have sold in the Toronto area so far this year stands at 16,775, making it the lowest year-to-date total of the last 10 years.

There were 777 sales of new low-rise houses during August. That is 43 per cent below the 10-year average for the month of August. So the slowdown is effecting the housing market, not just condo sales.

While a growing number of tall condo towers are dotting the city’s skyline, the amount of land that’s available for the construction of new low-rise homes is constrained because of government policies aimed at curbing urban sprawl and maintaining green space. That means that condo growth is the future of Toronto, but it has to be built at a sustainable rate.

The price gap between new high-rise condos and low-rise houses has widened to a record level of $222,149. The low-rise price index rose 8.1 per cent over the past year to a record high of $658,938, while the high-rise price index eked out a mere 0.1 per cent gain to $436,789. What it means is that homebuyers definitely want houses more - and it is driving up prices faster, whereas condos are considered to be more risky despite the lower prices.

The gap between the price of condos and houses averaged about $75,000 between 2004 and 2011, but the gap has been growing at a fast clip during the last two years now that condos are flooding the market and becoming cheaper comparatively.

Many people swear off condos entirely, stating that the maintenance fees are way too high - and this is true for some condo buildings where they have gone overboard on expenses.

The unsold inventory of new low-rise houses now stands at 7,247, RealNet said, while there are 21,028 new unsold condos.

The month of August also marked the fourth straight decline in high-rise inventory, as developers have been bringing fewer new condo units to market of late. But economists say that the number of new condo buildings going up that will hit the market in 2014 - and even more that will be finished in 2015.

So we will see that unsold inventory of condos rise from 21,000 to 30,000 or 40,000 within the next couple of years.

At which time prices should drop significantly, which means people with the money available should be able to buy a condo for a lot less money when the market bottoms out.

Finding a good real estate agent

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This online referral firm specializes in finding top-rated real estate agents, leasing agents and giving you a general idea of all the things you should know about buying and selling a home. Even if you have experience with either, if you haven't been in the market either way for a while, you probably imagine things have changed. Enlisting the help of a qualified and professional agent with a high referral from a reputed agency will ease your mind since your agent will do all the leg work and heavy lifting in the purchase or sale of your home.

Looking for an agent through this performance-based referral service makes your search simpler and more clear cut since real estate agents have to meet Agent Harvest's high standards in the industry. Each agent must have a proven record of success, a detailed and intimate knowledge of your real estate market area, expertise in marketing and pricing homes appropriately and excellent communication skills. It is critical that your real estate agent returns your phone calls or emails in a timely manner, and you should know their statistics on issue this before making any other arrangements. Real estate agents will be working full-time on your behalf, following leads and generating interest in your property, so they should be committed to your success.

The referral agency will look for the top 10 rated real estate agents in your area from which you can choose. Otherwise, the agent must rank nationally or regionally or have received certification or an award of excellence to make the list of qualified real estate agents.

Trump Tower facing financial woes as investors become anxious to sell

Investors in Donald Trump's "Trump Tower" in Toronto are becoming anxious to sell their new condo units.

Why?

Because nobody is buying.

Lots of Trump Tower units are for sale on the MLS for outrageous prices - trumped up prices - and they have been on the MLS for months with no buyers and very few interested parties.

The Trump Tower in Toronto is located at the corner of Bay and Adelaide streets, and has units available for $1.6 million.

But in a recent auction by Toronto-based Ritchies Auctioneers, a bid of $550,000 was the only bid and well below the owners minimum asking price.

The owner of the unit, a local real estate broker who invested in multiple units in the building, commissioned Ritchies weeks ago to sell the suite at a 30 per cent or more discount after seeing about a dozen other units in the building stalled on MLS for months with no buyers.

So now he needs to offload his investment at a reduced price, but even then nobody is buying.

Many potential new buyers are changing their minds and don't even show up to view the condo unit.

What is worse is that the executives at Trump Tower - the building managers, etc - are avoiding the media, cancelling viewings of units at the last minute, changing the venues of meetings, etc.

A media tour was cancelled last Tuesday by the executives without explanation and tried to cancel another tour for potential buyers.

In related news many of Donald Trump's investors in the past have tried to sue him - often unsuccessfully due to legal fine print - because he duped them into making a bad investment, taking the money and then leaving his investors hanging with properties they can't sell at the prices he promised them.

How do you think Donald Trump made his riches in the first place? By ripping people off.