The Financialization of Housing

[Nick Danger]

Big Property Company Tells Investors Its Business Strategy Focuses on ‘Essential Workers’ in Provinces Where There’s ‘No Rent Controls’

"One of Western Canada’s biggest rental companies says it is building up a tenant base of “essential workers” in Alberta and Saskatchewan specifically because the two provinces do not have rent control."

>snip<

“They were the renters by necessity, not the renter by choice,” Jogia explains in the video. “They ultimately were a group of residents that were making $15 to $50 an hour, but could afford to pay rent probably higher than what mom and pop (landlords) were charging them.”

>snip<

"Dr. David Hulchanski is a housing and community development professor at the University of Toronto. He says Avenue Living’s expansion on the prairies is part of the broader trend of housing financialization that has grown across Canada and around the world, turning property into a “hyper-commodity” over the last 25 years.

As a Real Estate Investment Trust (REIT), Avenue Living uses pools of wealthy investor money to buy properties from local “mom and pop” landlords and raise rents to generate returns for those investors, Hulchanski explained to PressProgress.

“We’re talking about big money. A firm like Avenue Living can’t do what they’re doing without having a lot of money.”

“You go back 20 or 30 years, or just before Avenue Living came to those little towns, a bunch of individual people owned flatland, right? Now you’re going to have these pools of investment funds owning it. They care about the return on their investment, not anything else.”

“There’s almost nothing good in this for renters,” Hulchanski adds."

Press Progress

While the subject is open to "the chicken or the egg" debate, there is no disputing that housing costs, for renters and purchasers alike, have grown considerably in recent years. Even the most cursory of investigations into today's investment sector will put real estate investment near the top of the pile for projected returns, and chief among those are the REITs, or Real Estate Investment Trusts, actively managed pools of rental properties both residential and commercial. It doesn't take a crystal ball to see once again, that profit becomes the chief concern over people as the bottom line in the fictionalization of housing is to maximize rental income. This in turn, places limits on renters' ability to save money for a purchase of their own, purchases that continually grow out of reach. Housing prices are skyrocketing around the world, incomes are not.

 

[taxslave]

Of course the object of owning rental housing is to make money. What do you think, people invest their money to go broke?

 

[Nick Danger]

Of course the object of owning rental housing is to make money. What do you think, people invest their money to go broke?

True, but is there an ethical line being crossed when someone is trying to monopolize the housing market in areas where there are plenty of renters "ripe for the plucking" ?

 

[Jinentonix]

Of course the object of owning rental housing is to make money. What do you think, people invest their money to go broke?

Problem is, there's a FUCK TON of empty housing the owners want to remain empty because the property itself is treated as an asset. You see, investment groups have bought LARGE into housing. Not to provide it, just to monetize it and use it as an asset. The value of their real estate holdings is twice the GDP of every country on the planet combined!
And while house flippers are a noticeable part of the problem as well, it's interesting that that's who the govt is now clamping down on, not the investment groups who, it seems, are the biggest problem when it comes to housing of any kind, let alone affordable housing. Then again, your average house flipper doesn't make big contributions to political parties.

So once again our govt screams and cries about a problem and then does as little as it can to fix it so as not to upset their own little piggy trough.

 

[Tecumsehsbones]

True, but is there an ethical line being crossed when someone is trying to monopolize the housing market in areas where there are plenty of renters "ripe for the plucking" ?

Tax don't think there are any ethical lines for corporations or rich people.

And he has a point. At least down hereabouts, a corporation passing up a chance to make more money can be sued by its shareholders.

Ethics need not apply.

 

[Tecumsehsbones]

Problem is, there's a FUCK TON of empty housing the owners want to remain empty because the property itself is treated as an asset. You see, investment groups have bought LARGE into housing. Not to provide it, just to monetize it and use it as an asset. The value of their real estate holdings is twice the GDP of every country on the planet combined!
And while house flippers are a noticeable part of the problem as well, it's interesting that that's who the govt is now clamping down on, not the investment groups who, it seems, are the biggest problem when it comes to housing of any kind, let alone affordable housing. Then again, your average house flipper doesn't make big contributions to political parties.

So once again our govt screams and cries about a problem and then does as little as it can to fix it so as not to upset their own little piggy trough.

Got a problem with capitalism and free enterprise, tovarishch?

 

[Jinentonix]

Got a problem with capitalism and free enterprise, tovarishch?

Nope. I consider both to be basic rights. However I also firmly believe that like any other rights, there needs to be reasonable limits on them. Letting housing sit empty just so they can be used purely as re-sellable assets is a perversion of capitalism.

Rights without reasonable limits is anarchy. Capitalism without reasonable limits is oligarchy, or a plutocracy. Do you like the idea of being ruled by a tiny handful of wealthy elite, kamerad?

 

[Tecumsehsbones]

Nope. I consider both to be basic rights. However I also firmly believe that like any other rights, there needs to be reasonable limits on them. Letting housing sit empty just so they can be used purely as re-sellable assets is a perversion of capitalism.

Rights without reasonable limits is anarchy. Capitalism without reasonable limits is oligarchy, or a plutocracy. Do you like the idea of being ruled by a tiny handful of wealthy elite, kamerad?

So. . . you don't believe in the right of property owners to do as they please with their property if the State is of the opinion that it could be put to a better use? That's a "reasonable limit?"

There is an eminent domain process the government could use. . . maybe they could seize all privately-owned housing and reallocate it according to the government's assessment of what people need.

With payment to the former owners of whatever the government considers fair compensation, of course.

 

[Nick Danger]

So. . . you don't believe in the right of property owners to do as they please with their property if the State is of the opinion that it could be put to a better use? That's a "reasonable limit?"

There is an eminent domain process the government could use. . . maybe they could seize all privately-owned housing and reallocate it according to the government's assessment of what people need.

With payment to the former owners of whatever the government considers fair compensation, of course.

I'll be keeping an eye on Germany. Their recent election also included a referendum on whother or not to allow the government to expropriate property from corporations owning more than 3000 rental units. It passed.

 

[Tecumsehsbones]

I'll be keeping an eye on Germany. Their recent election also included a referendum on whother or not to allow the government to expropriate property from corporations owning more than 3000 rental units. It passed.

I'm willing to accept that it may be a necessary limitation. But thank you for that bit about Germany, I'll look it up. I'm apparently in the minority on this board in that I don't regard Germany as a "socialist shithole."

It stuns me how often I see people here fly in the face of their alleged principles when it comes to an actual situation. It leads me to believe that "t'aint right!" is more a motivating factor for many people than "that's a feature of the principles I believe in. I don't like it, but it's part of what comes with 'freedom' and 'democracy' and 'capitalism' and all that good stuff."

 

[Jinentonix]

So. . . you don't believe in the right of property owners to do as they please with their property if the State is of the opinion that it could be put to a better use? That's a "reasonable limit?"

Are you suggesting that perfectly good housing sitting empty in countries with a major housing crisis isn't a compelling enough reason to make some necessary changes?

Here's what investment companies do around the world, including the US and Canada. They buy up occupied buildings, provide shit for service to essentially force people to move out, renovate the place and then let it sit empty just so they can play financial games with it.
I guess it's your right to fuck with people's lives just to make a few bucks. Great mindset bud.
I mean if you can't say certain words or phrases anymore because it might "harm" someone, then what the fuck are they thinking by letting shit like raider capitalism actually harm people, literally fucking with their lives.?

 

[Nick Danger]

I'm willing to accept that it may be a necessary limitation. But thank you for that bit about Germany, I'll look it up. I'm apparently in the minority on this board in that I don't regard Germany as a "socialist shithole."

From what I've seen in looking at recent events there Germany's political system is a tangle of different parties which tends to lead to governing power resting with a coalition of different parties. The two largest parties sit center-right and center-left, but each of those will ally itself with parties further to the right or left to hold power. An election this past September put a left leaning coalition in power. They have stated that "The most important issues of the coalition agreement are a minimum wage of €12, the climate crisis, restructuring the economy, affordable living, and other improvements for low-income earners and families."

It stuns me how often I see people here fly in the face of their alleged principles when it comes to an actual situation. It leads me to believe that "t'aint right!" is more a motivating factor for many people than "that's a feature of the principles I believe in. I don't like it, but it's part of what comes with 'freedom' and 'democracy' and 'capitalism' and all that good stuff."

Canada has a basically good system, a combination of free market capitalism and social programs. We have some issues though, that have grown over the past forty or fifty years since the onset of neoliberal policy that showed up in a big way with the leadership of Margaret Thatcher and Ronald Reagan. Neoliberal policy promotes a largely unregulated free market that has put a growing measuring of economic control in the hands of the corporate sector. Nows that's all fine and dandy if the corporate sector weilds that power responsibly, but in reality they have not. They act with dedicated self-interest, the bottom line is everything, and everything else is secondary. This has given us an ever-widening wealth gap, a vanishing middle class, jobs being exported to places where labour is cheaper while many of those remaining have become precarious in nature. "All that good stuff" has become concentrated in the hands of a very, very few to the detriment of everyone else. Monopolization is one of the nastier aspects of neoliberalism, a corporation simply buys up the competition to the point where they can charge whatever they like for their product because they have become the only source. Predatory capitalism.

What I'm seeing in Germany is a population saying "enough is enough", a predictable result when the "ruling class" has grown unconcerned with the welfare of everybody else.

 

[Tecumsehsbones]

Yep, a pretty standard parliamentary system. The main players are the Social Democratic Party (SPD, center-left) and the Christian Democratic Union (CDU, center-right), with all the usual horse-trading to getting parties with a few seats to come on board to get a majority. Merkel was unique in that, for a long time, she ran a unity government with no Opposition.

I agree with your assessment of the systems of Canada, the U.S., Western Europe, and the rest of what we used to call the "First World." A mixed economy with flexibility to move toward or away from socialism as the circumstances dictate seems to have, so far, produced more peace, freedom, and prosperity than any other system tried. I just wish we could do it without taking hypocritical stands on absolute principles we're only using for the moment, and will discard in a flash.

In other words, work the problem, people.

You do that, Ron does that. Some others do.

As to the last, from my experience living in Germany, they're actually pretty good at addressing problems while they're still relatively small. And they do a better-than-average job of dealing with what can be the biggest problem of all. . . every "solution" instantly gains a constituency, that proceeds to grow over time, until it demands continuation of the "solution" even after the problem has disappeared or changed so much the solution doesn't work well anymore.

 

[pgs]

From what I've seen in looking at recent events there Germany's political system is a tangle of different parties which tends to lead to governing power resting with a coalition of different parties. The two largest parties sit center-right and center-left, but each of those will ally itself with parties further to the right or left to hold power. An election this past September put a left leaning coalition in power. They have stated that "The most important issues of the coalition agreement are a minimum wage of €12, the climate crisis, restructuring the economy, affordable living, and other improvements for low-income earners and families."

Canada has a basically good system, a combination of free market capitalism and social programs. We have some issues though, that have grown over the past forty or fifty years since the onset of neoliberal policy that showed up in a big way with the leadership of Margaret Thatcher and Ronald Reagan. Neoliberal policy promotes a largely unregulated free market that has put a growing measuring of economic control in the hands of the corporate sector. Nows that's all fine and dandy if the corporate sector weilds that power responsibly, but in reality they have not. They act with dedicated self-interest, the bottom line is everything, and everything else is secondary. This has given us an ever-widening wealth gap, a vanishing middle class, jobs being exported to places where labour is cheaper while many of those remaining have become precarious in nature. "All that good stuff" has become concentrated in the hands of a very, very few to the detriment of everyone else. Monopolization is one of the nastier aspects of neoliberalism, a corporation simply buys up the competition to the point where they can charge whatever they like for their product because they have become the only source. Predatory capitalism.

What I'm seeing in Germany is a population saying "enough is enough", a predictable result when the "ruling class" has grown unconcerned with the welfare of everybody else.

Come now Nick , that is not even close to reality . A largely unregulated free market , give your head a shake , it takes 4 years plus just to get a project off the drawing board with all the hoops to jump through .

 

[Ron in Regina]

Come now Nick , that is not even close to reality . A largely unregulated free market , give your head a shake , it takes 4 years plus just to get a project off the drawing board with all the hoops to jump through .

Taking a step back from gargantuan projects (railways, pipelines, hydro dams, etc…) to smaller scale projects, if you want to open a restaurant or a small scale small engine repair business out of your garage, or a lawn care business, or what have you, what is preventing you from doing so?

I, myself, am not going to initiate a hydroelectric dam or a natural gas pipeline or build a highway or a nuclear plant anytime soon, but I might initiate a small engine repair shop as something to tinker with (& get paid to play) as something to do as retirement gets closer. I’ve already built the shelving & benches and have been aquiring the tools for years now….& when the day comes that everyone else’s stuff is gone from my garage I’ll install a natural gas furnace and it’ll self-fund a hobby and make a little cash while doing so.

Will the government prevent me from doing so? If so, then I guess they just won’t need to know about it then….& if they don’t then I might even declare some of that income (Shhhhh…).

 

[pgs]

Taking a step back from gargantuan projects (railways, pipelines, hydro dams, etc…) to smaller scale projects, if you want to open a restaurant or a small scale small engine repair business out of your garage, or a lawn care business, or what have you, what is preventing you from doing so?

I, myself, am not going to initiate a hydroelectric dam or a natural gas pipeline or build a highway or a nuclear plant anytime soon, but I might initiate a small engine repair shop as something to tinker with (& get paid to play) as something to do as retirement gets closer. I’ve already built the shelving & benches and have been aquiring the tools for years now….& when the day comes that everyone else’s stuff is gone from my garage I’ll install a natural gas furnace and it’ll self-fund a hobby and make a little cash while doing so.

Will the government prevent me from doing so? If so, then I guess they just won’t need to know about it then….& if they don’t then I might even declare some of that income (Shhhhh…).

Sure but if your neighbors don’t have gainful employment which they get in gargantuan projects among others where will the business come from . We need resourse extraction in Canada at present and most offer high wages . But even getting permitted for building or renovating houses is an onerous process in many cities .

 

[Tecumsehsbones]

Taking a step back from gargantuan projects (railways, pipelines, hydro dams, etc…) to smaller scale projects, if you want to open a restaurant or a small scale small engine repair business out of your garage, or a lawn care business, or what have you, what is preventing you from doing so?

I, myself, am not going to initiate a hydroelectric dam or a natural gas pipeline or build a highway or a nuclear plant anytime soon, but I might initiate a small engine repair shop as something to tinker with (& get paid to play) as something to do as retirement gets closer. I’ve already built the shelving & benches and have been aquiring the tools for years now….& when the day comes that everyone else’s stuff is gone from my garage I’ll install a natural gas furnace and it’ll self-fund a hobby and make a little cash while doing so.

Will the government prevent me from doing so? If so, then I guess they just won’t need to know about it then….& if they don’t then I might even declare some of that income (Shhhhh…).

Could be a problem with zoning. . .

 

[Dixie Cup]

I know that getting permits in my city apparently is an issue as stated in our recent election. But what do we do? We elect Leftists who will likely make the situation worse.

Besides, doesn't everyone know that by 2030 we'll not be allowed to "own" anything? That's the plan anyway. Large corporations will buy up everything (and are buying up everything, especially in the U.S.) & then will rent back to the population so they'll have even greater control over housing than they do now. Watch for it!!

 

[Tecumsehsbones]

Corporations are people too, y'know.

Mitt Romney said so!

 

[Nick Danger]

In regards to an "unregulated free market", there's a distinction to be made between the government telling you what you can and can't do as opposed to them telling you how to do it once you decide to start. Ours is basically a free market, but experience has taught us that public safety and proper business conduct needs to be specified ot unscrupulous business operators may start cutting corners.