Real Estate

Socialism is bad except when it helps ME!

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Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto

Socialism is bad except when it helps ME!

I peruse these fora from time to time - very entertaining. I'm from the GTA originally but now live out of the country.

The latest theme here seems to be that rent control, FBT, and other measures are BAD because they are SOCIALISM.

It's interesting that the RE perma-bulls don't seem to mind socialism when it benefits them :

1) CMHC : why is the government backstopping the banks' mortgage bets? This is the most egregious example of socialism in the Canadian housing market. Let the banks shoulder the burden of the loans they make to prospective home buyers.

2) Capital gains exemption : why is the government exempting one type of investment but not others? It's a sort of asymmetrical socialism. Either exempt all or none (or allow a maximum lifetime exemption on profit derived from many investment types, including stock/bond sales).

3) Greenbelt : I don't have a problem with preserving natural areas, but it's still quite socialist to block a massive swath of land to development, further constraining supply

4) Lack of transparency for buyers : with the realtor monopoly on sold data (recently struck down in court, now being appealed by the RE industry), buyers are at a disadvantage; boost the "free" in free market by allowing easy and free distribution of data on price history, list price (including subsequent revisions), and sold price, rather than having to go through a RE gatekeeper to access it. I guess this isn't strictly socialism but it does have the effect of protecting realtors and sellers.

5) Historically low interest rates : pretty clear that the only reason the BoC won't raise rates, even while the US is raising, is to save indebted homeowners from their own irresponsibility. Why is a Crown corporation (for that is what the BoC is) saving profligate citizens from their own poor decisions? That's socialism!

6) Massive immigration : Canada has the highest per capita legal immigration intake in the Western world. For comparison, it is 3 times higher than the US intake per capita. Many consequences of this government-mandated influx, including higher RE prices in Toronto/Vancouver.

Can anyone think of other examples of socialism for home owners? Let's compile a long list.
113 replies
Deal Guru
User avatar
Sep 8, 2007
10978 posts
14468 upvotes
Way Out of GTA
Way to spin encouraging homeowners and policies as such as socialism. Conflating the two as some sort of hypocrisy is Toronto Star level comedy.

Home ownership being part of private property rights is anything but socialism.

The only long list that's gonna happen here is bitter priced out renters who won't take steps to improve their standing in life by buying, or moving to a place they can buy. So instead that time is spent on here compiling lists. If a bunch of the rental crowd on here put their efforts into getting a better job, hanging out with an onward and upward group of friends, etc they'd be a lot further ahead.

BTW, did you move to Venezuela?
Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto
cartfan123 wrote: Way to spin encouraging homeowners and policies as such as socialism. Conflating the two as some sort of hypocrisy is Toronto Star level comedy.

Home ownership being part of private property rights is anything but socialism.

The only long list that's gonna happen here is bitter priced out renters who won't take steps to improve their standing in life by buying, or moving to a place they can buy. So instead that time is spent on here compiling lists. If a bunch of the rental crowd on here put their efforts into getting a better job, hanging out with an onward and upward group of friends, etc they'd be a lot further ahead.

BTW, did you move to Venezuela?
It seems any post highlighting the cognitive dissonance of those screaming "socialism!" at pretty mild policies like rent control brings out personal and/or presumptuous replies from the perma-bulls ("bitter priced out renter", "Venezuela", etc).

Btw, partisan politics aside, the Toronto Star usually shills for the RE industry so I would think it's in your good books?

But to stay on topic : who else thinks that the government backstopping the banks' housing bets is free market capitalism at its finest?
Penalty Box
Aug 11, 2005
4175 posts
1432 upvotes
Very very well said.

Home owners cry about rent control but things like controlling the prices of electricity, clean water are totally fine!
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Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto
Luckyinfil wrote: Very very well said.

Home owners cry about rent control but things like controlling the prices of electricity, clean water are totally fine!
Well in fairness, electricity prices and clean water benefit everyone : renters and landlords alike.

I'm thinking more of government policies put in place specifically to benefit homeowners or, through their implementation, disproportionately benefit those who choose to put all their money in one asset (RE).

CMHC and artificially low interest rates are the two big ones, but lots of smaller examples. In BC, Christy Clarke gave away low interest (or was it no interest?) helicopter money to first time home buyers a few years ago. The only people who benefited from that were sellers (who raised their prices to negate the helicopter money), and realtors.
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
If you dont live here, then why the hell do you care?
Deal Expert
Feb 29, 2008
21738 posts
21353 upvotes
Tarrana & The Ri…
Cite examples of people disliking the above because they are socialist? I don't recall reading any of that. In terms of rent controls, I'm OK with it within reason. 1.8% is ridiculous, though. I'm also OK with paying taxes to help those who are less fortunate but there is a limit to that.
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
civiclease wrote: I peruse these fora from time to time - very entertaining. I'm from the GTA originally but now live out of the country.

The latest theme here seems to be that rent control, FBT, and other measures are BAD because they are SOCIALISM.

It's interesting that the RE perma-bulls don't seem to mind socialism when it benefits them :

1) CMHC : why is the government backstopping the banks' mortgage bets? This is the most egregious example of socialism in the Canadian housing market. Let the banks shoulder the burden of the loans they make to prospective home buyers.

2) Capital gains exemption : why is the government exempting one type of investment but not others? It's a sort of asymmetrical socialism. Either exempt all or none (or allow a maximum lifetime exemption on profit derived from many investment types, including stock/bond sales).

3) Greenbelt : I don't have a problem with preserving natural areas, but it's still quite socialist to block a massive swath of land to development, further constraining supply

4) Lack of transparency for buyers : with the realtor monopoly on sold data (recently struck down in court, now being appealed by the RE industry), buyers are at a disadvantage; boost the "free" in free market by allowing easy and free distribution of data on price history, list price (including subsequent revisions), and sold price, rather than having to go through a RE gatekeeper to access it. I guess this isn't strictly socialism but it does have the effect of protecting realtors and sellers.

5) Historically low interest rates : pretty clear that the only reason the BoC won't raise rates, even while the US is raising, is to save indebted homeowners from their own irresponsibility. Why is a Crown corporation (for that is what the BoC is) saving profligate citizens from their own poor decisions? That's socialism!

6) Massive immigration : Canada has the highest per capita legal immigration intake in the Western world. For comparison, it is 3 times higher than the US intake per capita. Many consequences of this government-mandated influx, including higher RE prices in Toronto/Vancouver.

Can anyone think of other examples of socialism for home owners? Let's compile a long list.
1) It's the one system that may have actually helped us from going into recession -- if banks fully back stopped mortgages, CDN banks would have been in far worse shape in 2008 as they would have froze lending like in many parts of the world. It helped to keep lending going and we never experienced the wrath of issues other countries did. CDN govt would have also had to give much more money then it did to the CDN banks to offset all the problems or some of the banks would have gone bankrupt.. it really is a catch 22.

2) cap gains been there for a long time... it's also cause mtg interest deduction is not allowed. Cant have it both ways. If the govt considers the primary home an investment in that sense, then they have to allow for mtg interest deduction. tho it's political suicide for any govt to ever consider scraping the free cap gains... if they want to do it, they would have to grandfather the rules to current owners who didnt benefit from mortgage interest deduction, and allow mtg interest deduction for new buyers... again almost offsets here.

3) almost all countries have rules to restrict development in sensitive areas, even the good ol' united states.

4) you can check the price of any sold home by calling your local real estate agency. also many websites like mongohouse online that show this info.

5) rates are lower cause our growth is lower... you dont raise rates for no reason. US had far more stimulation, their debt is beyond repair at this point.

6) we need immigration cause our birth rate is low.... we need bodies to keep paying taxes so the old farts (I mean that in a nice way) can continue to collect pensions and healthcare... and companies have bodies to hire... too many canadian millennials busy playing fortnite to have kids... so we need to pick up the slack from other countries to bring their children here.
Deal Addict
User avatar
Dec 13, 2016
4527 posts
4056 upvotes
You moved to France.... one of the most communist countries in the world and you are complaining about low interest rates that aren't even Canada's fault?

How much is a condo in Paris? Like this 32sqm dump?

2 ROOMS APARTMENT WITH FIREPLACE AND CONCIERGE
RUE DU BAC – MUSÉE D'ORSAY (PARIS 7°), 32 M², €562,000


Image

http://www.lodgis.com/en/paris,apartmen ... 7.mod.html

BTW, you still trading Canadian securities as a non resident?
Deal Expert
Feb 22, 2011
16505 posts
21843 upvotes
Toronto
Yea I don't think you know what socialism means. The things you listed have absolutely nothing to do with socialism.
Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto
BiegeToyota wrote: You moved to France.... one of the most communist countries in the world and you are complaining about low interest rates that aren't even Canada's fault?

How much is a condo in Paris? Like this 32sqm dump?

2 ROOMS APARTMENT WITH FIREPLACE AND CONCIERGE
RUE DU BAC – MUSÉE D'ORSAY (PARIS 7°), 32 M², €562,000


Image

http://www.lodgis.com/en/paris,apartmen ... 7.mod.html

BTW, you still trading Canadian securities as a non resident?
Why yes, I still hold Canadian securities as a non-resident. I don't really trade them, though I've sold a few and may buy back later this year. Why do you ask?

Also, I don't see what Paris real estate values have to do with this.

I was pointing out the hypocrisy of those who whine about socialism when it helps other but not when it helps themselves.
Deal Expert
Feb 22, 2011
16505 posts
21843 upvotes
Toronto
civiclease wrote: Why yes, I still hold Canadian securities as a non-resident. I don't really trade them, though I've sold a few and may buy back later this year. Why do you ask?

Also, I don't see what Paris real estate values have to do with this.

I was pointing out the hypocrisy of those who whine about socialism when it helps other but not when it helps themselves.
How is mass immigration socialism? How are interest rates socialism? How is private sale data socialism?
Deal Addict
Dec 4, 2016
2011 posts
1030 upvotes
1. CMHC protects taxpayers by regulating mortgage and imposing a tax. Without CMHC, banks would lend mortgage to anyone with a heart beat, with the (correct) assumption that in a housing crash, taxpayers will be forced to bail the out. The bankers pay themselves millions of bonuses, and leave the federal treasury holding the bag. "Let the banks fail." is popular among both socialist and libertarians, but it's just not politically feasible. It's as realistic as going back to gold standard or letting poor people starve to death.

2. Well, it's primary residence. It's called a "home" in English language for a reason. Most democracies have special tax treatment for primary residence. No politician will touch it.

3. Greenbelt of GTA is like the ALR (agreculture land reserve) of Vancouver. It doesn't exactly make sense, but no one wants to touch it. Don't want to disturb the squirrels.

4. I will let realtor association and various tech startups fight this out, similar to Uber vs. taxi medallion owners. I won't let that influence my political decision.

5. I live in Ontario, and happen to know many people working in "dying" industries. Low interest rate keeps the loonie down, and help them keep their blue collar, manufacturing job for the time being. I'm convinced BoC keep interest rate to help manufacturing, not to bail out bulls on RFD.

6. Harper's 10 years saw relatively low immigration. Did you vote for him?
Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto
Sanyo wrote: 1) It's the one system that may have actually helped us from going into recession -- if banks fully back stopped mortgages, CDN banks would have been in far worse shape in 2008 as they would have froze lending like in many parts of the world. It helped to keep lending going and we never experienced the wrath of issues other countries did. CDN govt would have also had to give much more money then it did to the CDN banks to offset all the problems or some of the banks would have gone bankrupt.. it really is a catch 22.

2) cap gains been there for a long time... it's also cause mtg interest deduction is not allowed. Cant have it both ways. If the govt considers the primary home an investment in that sense, then they have to allow for mtg interest deduction. tho it's political suicide for any govt to ever consider scraping the free cap gains... if they want to do it, they would have to grandfather the rules to current owners who didnt benefit from mortgage interest deduction, and allow mtg interest deduction for new buyers... again almost offsets here.

3) almost all countries have rules to restrict development in sensitive areas, even the good ol' united states.

4) you can check the price of any sold home by calling your local real estate agency. also many websites like mongohouse online that show this info.

5) rates are lower cause our growth is lower... you dont raise rates for no reason. US had far more stimulation, their debt is beyond repair at this point.

6) we need immigration cause our birth rate is low.... we need bodies to keep paying taxes so the old farts (I mean that in a nice way) can continue to collect pensions and healthcare... and companies have bodies to hire... too many canadian millennials busy playing fortnite to have kids... so we need to pick up the slack from other countries to bring their children here.
1) Canada survived the 2008 recession better because it had robust regulations that prevented the kind of subprime abuses seen in the US. Additionally, Canada's system of a small number of very large banks vs. many small banks in the US allowed our financial institutions to better get through it. The CMHC is a disgrace to free market principles in forcing taxpayers to bail out banks that didn't do their homework when granting a mortgage. Socialism, plain and simple.

2) None of what of you said here contradicts the fact that the government is favouring one investment type over another. One person puts his/her savings into buying a house. Another person chooses to rent while investing in financial markets. The first person is exempt from tax when selling the home, the second person is not exempt from tax when selling securities except within a TFSA (with pathetically contribution low limits). I thought anti-socialism people believe that government shouldn't choose winners and losers?

3) Just as nearly all countries have some form of rent control as well as limits to foreign ownership. If you're looking for Canada to emulate other countries, I don't think you'll like what that does to the value of your real estate.

4) And we're supposed to blindly believe what a real estate agents tell us? Have it be open to all without the RE gatekeeper.

5) The US started raising pre-Trump when growth was low (and it's still pretty low anyway, certainly in relation to the 1 trillion in new debt that Trump added).

6) We don't need the highest immigration rate in the Western world. Bring it down to the US level per capita. That would put our annual intake at around 100-125K, which seems about right. Liberals want mass immigration in order to import voters while keeping the RE bubble inflated to appease homeowners.
Deal Addict
May 9, 2017
1261 posts
1393 upvotes
rjg4235 wrote: Yea I don't think you know what socialism means. The things you listed have absolutely nothing to do with socialism.
I was thinking the same thing with the exception of the govt controlled CHMC lol.
Deal Addict
Dec 30, 2012
1098 posts
1147 upvotes
Toronto
BlueSolstice wrote: 1. CMHC protects taxpayers by regulating mortgage and imposing a tax. Without CMHC, banks would lend mortgage to anyone with a heart beat, with the (correct) assumption that in a housing crash, taxpayers will be forced to bail the out. The bankers pay themselves millions of bonuses, and leave the federal treasury holding the bag. "Let the banks fail." is popular among both socialist and libertarians, but it's just not politically feasible. It's as realistic as going back to gold standard or letting poor people starve to death.

2. Well, it's primary residence. It's called a "home" in English language for a reason. Most democracies have special tax treatment for primary residence. No politician will touch it.

3. Greenbelt of GTA is like the ALR (agreculture land reserve) of Vancouver. It doesn't exactly make sense, but no one wants to touch it. Don't want to disturb the squirrels.

4. I will let realtor association and various tech startups fight this out, similar to Uber vs. taxi medallion owners. I won't let that influence my political decision.

5. I live in Ontario, and happen to know many people working in "dying" industries. Low interest rate keeps the loonie down, and help them keep their blue collar, manufacturing job for the time being. I'm convinced BoC keep interest rate to help manufacturing, not to bail out bulls on RFD.

6. Harper's 10 years saw relatively low immigration. Did you vote for him?
1) You're speculating on what may or may not happen were CMHC to go away. I find all the complaining about B20 here rather interesting. It at least brings some balance : if taxpayers are forced to backstop banks' mortgage decisions, then we (the taxpayer, via our representative government) will force the banks to be more stringent in who they approve. Seems a reasonable compromise.

2) I agree no politician will touch it. I never said they would dare. But it's still a form of government intervention that favours one type of financial management (buying a house) over another (renting, and investing in financial markets).

3) Somewhat agree, but I have no problem with habitat conservation. The bulls have turned this into a bragging point without noting the irony of favouring government restrictions where/when it helps them.

4) Ok

5) There are more homeowners benefiting from low interest rates than manufacturing workers (acknowledging of course that some manufacturing workers are also homeowners). Let's see if Poloz follows the US lead upward or continues to suppress the rate to appease the indebted masses.

6) No, Harper's years did NOT see relatively low immigration. Lower than now, yes, but not lower than the Chretien/Martin years. I did vote for the Harper Tories twice. Doesn't mean I agreed with everything they did, or even most. He should've lowered annual intake by at least a third. And Harper's worst mistake? Appointing Stephen Poloz.
Deal Addict
Oct 21, 2014
1939 posts
2938 upvotes
Burlington, ON
Luckyinfil wrote: Very very well said.

Home owners cry about rent control but things like controlling the prices of electricity, clean water are totally fine!
If there was a law that could really make housing more affordable while respecting the rights of landlords of course any right minded individual would sign it. As much as we vilify the other side of any debate politicians aren't bad people and I actually believe that they do want what's best for Ontario, just their ways of going about it are very different. Same goes for hydro, it's all accounting tricks to bring down it's price at the cost of more debt. Landlords are also not bad people, they're just charging what the market will bear.

Rent control is not producing the effect that was desired, namely to stabilize rent, rents are rising because there are not many vacancies. This issue is complex and ultimately I believe will only be sorted out by building more supply. Lowering interest rates to increase residential real estate cashflow, grants for building rental housing and other measures to increase supply are the way forward.
Deal Addict
Dec 4, 2016
2011 posts
1030 upvotes
civiclease wrote: 1) You're speculating on what may or may not happen were CMHC to go away. I find all the complaining about B20 here rather interesting. It at least brings some balance : if taxpayers are forced to backstop banks' mortgage decisions, then we (the taxpayer, via our representative government) will force the banks to be more stringent in who they approve. Seems a reasonable compromise.

2) I agree no politician will touch it. I never said they would dare. But it's still a form of government intervention that favours one type of financial management (buying a house) over another (renting, and investing in financial markets).

3) Somewhat agree, but I have no problem with habitat conservation. The bulls have turned this into a bragging point without noting the irony of favouring government restrictions where/when it helps them.

4) Ok

5) There are more homeowners benefiting from low interest rates than manufacturing workers (acknowledging of course that some manufacturing workers are also homeowners). Let's see if Poloz follows the US lead upward or continues to suppress the rate to appease the indebted masses.

6) No, Harper's years did NOT see relatively low immigration. Lower than now, yes, but not lower than the Chretien/Martin years. I did vote for the Harper Tories twice. Doesn't mean I agreed with everything they did, or even most. He should've lowered annual intake by at least a third. And Harper's worst mistake? Appointing Stephen Poloz.
1. I agree with B20. Actually I find it puzzling that BC does not extend B20 to credit unions, despite all the housing legislature. Taxpayers in BC are ultimately on the hook in the event of RE crash, so regulating credit unions seems like a prudent move.

6. Harper lowered immigration as much as he could get away with. I don't think Canada will have a government with lower immigration levels than Harper in the foreseeable future.
Moderator
User avatar
Aug 20, 2009
9825 posts
5934 upvotes
"Do as I say, not as I do."

I've made similar points in the past when people were upset about government intervention potentially hurting their speculative activities. Government intervention in the housing market has allowed us to own a home and a rental so I really have no complaints that they're trying to tame an unhealthy market before it crashes or make it more affordable for renters or a newer generation of owners.

I think by using the word socialism you make it too easy for people to dismiss your argument out of hand though.
Banned
Mar 13, 2018
1385 posts
679 upvotes
BlueSolstice wrote: 1. I agree with B20. Actually I find it puzzling that BC does not extend B20 to credit unions, despite all the housing legislature. Taxpayers in BC are ultimately on the hook in the event of RE crash, so regulating credit unions seems like a prudent move.

6. Harper lowered immigration as much as he could get away with. I don't think Canada will have a government with lower immigration levels than Harper in the foreseeable future.
6. Harper increased immigration by substantial amount though. Why do you think he lowered it? He didn't even keep it stable, he increased it because it's sorely needed

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