July 25, 2021 | Cracking heads

A few days ago many, many, many Toronto cops moved in on an encampment of “people experiencing homelessness” to boot them out. Heads were knocked. Horses were involved. Lots of cameras, shouting and a few arrests.

The illegal campers had received a month’s notice and the city had indoor rooms awaiting them. For free. Most were pretty calm about the whole thing. However, several hundred young protestors (not homeless) emerged, tore down police fences, erected barricades, linked arms, chanted, resisted, recorded it all on their phones and caused the chaos that was their goal.

Of course, parks are parks. They’re for everyone. The mayor later explained programs for kids had been cancelled because of the encampment, which sucked just coming out of a pandemic lockdown. Nobody gets to build a dwelling in public green space, pee in the bushes or live without water in a city of millions where trees and grass are precious things.

Expect more of this. The encampment battle formed part of a social movement that may affect everyone. It’s related to the “Keep Your Rent” movement that blossomed during the Covid months; to the actions by provinces to end evictions and squeeze landlords; to legislation pushing Airbnb into the dirt; to the vacant home and anti-outsider taxes in BC, Ontario, Van and TO; and now to organized rebellion against real estate investors and governments.

About the time the Trudeau Libs will call the next election (the second week in August, for a vote in late September) there’s a multi-city protest planned by the Canada Housing Crisis warriors.

Tens of thousands of pissy, house-horny, angry prospective homebuyers have joined this online rabble during the pandemic – when property values climbed by about a third. The Reddit-fuelled rallies are planned for August 14th in Vancouver, Toronto, Ottawa, Hamilton and K-W. Meanwhile the group crowdfunded a few snarky billboards with messages like, “Can’t afford a home? Have you tried finding richer parents?”

What do they want?

Cheaper houses, of course. “We want to show politicians that we’re serious. We have to stop being polite about it. Housing is a right,” says a group spokesperson. “We’re here, we’re angry, we need a solution and we can’t stand by.”

The group is formed around five key initial actions, most of which are based on punishing people who buy properties which become rental properties. (Apparently the kids don’t understand a lot about supply and demand, thinking that by reducing rental stock they can make houses cost less. Huh?) Down payments should be doubled for investors, they say, while owners can still buy with 20x leverage. Capital gains taxes should rocket to 70% for people selling real estate they don’t live in. More taxes should heap upon those renting properties short-term or not enough. Plus they want an end to blind auctions (that’s good) and more housing data made public (also positive).

Fundamental to the social homes-for-all movement is the conviction housing is a human right. In Canada, thanks to Mr. Trudeau, it now is. But “housing” does not mean “real estate.” And nobody has a basic right to own any. Nonetheless, there are 10.4 million voters between the ages of 25 and 44 in Canada. That eclipses the number of GenXers and early Boomers combined. Plus it’s greater than the entire Boomer cohort.

And, yes, this is the crew that has kept T2 in power for the last six years.

Protest theme: landlords are the real enemy

So what happens now?

Well, the economy will reopen quickly over the next year. Immigration levels will be restored and enhanced to make up for the pandemic curbs. Urban rents will quickly climb back to 2019 levels as newcomers arrive and renters employed in the service industries flood back into town. Universities and colleges will be open again for in-class learning, adding tens of thousands of tenants to cities like Toronto, Waterloo, Ottawa and Vancouver. WFH will steadily erode for a big hunk of the five million who lived in sweats and jammies for 18 months. Urban flight will reverse. Condo prices are already rising in expectation.

This likely means more pressure on housing. Interest rates will be creeping higher in 2022 further hurting affordability. Meanwhile owners don’t sell because they fear having to buy again (and can’t afford to) so listings stay scarce and competition intense.

This mess can only be solved in the long-run with structural change. House profits should not be tax-free. The state should not be encouraging twenty-times leverage or backstopping all of the risk lenders take. Politicians shouldn’t goose demand and encourage debt with tax credits, subsidies, free RRSP withdrawals, or by sharing mortgage costs. And renting should be made more attractive by encouraging investors (not taxing the poop out of them), allowing rents to decline and choice to increase. And as long as we’re letting owners harvest unearned, windfall housing gains we should probably give renters shelter credits.

Anyway, here’s the point. The kids are arguing for the wrong stuff. But they’re gaining the ear of those who pander to their votes. Nobody in power wants to see heads busted in the park, shelter protests in the streets or to be trashed on social media – now the strongest influencer of ballot intentions.

Change coming.

Garth Turner July 25th, 2021

Posted In: The Greater Fool

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