The Rentiers

 You been warned. You've been warned so damn many times.

30 years ago I wrote a newspaper op-ed in an old daily newspaper in Canada, Ontario specifically. It was about price gouging in the real estate market, specifically the rental market. After it was published I was attacked mercilessly by right-wing conservatives who howled about a 'free market' and how profit from investment was more valuable to society that my obvious communist manifesto and my need to be pampered.

These right-wing groups love to use demeaning language as much as possible. In this case they'd talk about me on their forum as if I were someone beneath contempt by saying things like "Allan doesn't like the free market" and "Allan doesn't want to pay market rents" the best one was "Allan wants to live in a socialist state that'll pay his rent for him." I can only guess using that tactic was an attempt to cause as much pain as possible so people they disagree with will quit and go home, so to speak. That was a silly idea in my case.

At the time the internet had barely been born so the conservatives, as is their way, were busy stealing everything they could get their hands on (in a virtual sense) so they republished my column in several newly born conservative websites to mock, demean and slur me both personally and politically. A call from the newspaper's lawyer on my behalf to the lead conservative named on all 3 sites put a stop to it. 

My original basis for that column was built a decade earlier though when, thanks to the United States (again) who crashed the planet's economy (again) by disrupting the world's energy supply (again) by installing the Shah in Iran and then losing Iran to Khomeini which set the stage for 4 decades of wars and economic turmoil (again.)

But I digress. My story here is about rentiers and the evolution of the home becoming an investment vehicle instead of a place where people lived and raised families. It included the complicity of governments at all levels who, like the conservatives from the 1st paragraph, saw housing as a “free market” issue and not a human right. They, government and investors, still see it that way.

Governments, especially the federal government, saw the housing market as a relief to their pension plans and the lack of savings exhibited by Canadians in general. If rising property values could offset the needs of an aging (30 years down the road) population then they could keep CPP (Canada Pension Plan) contributions low and keep their solid outsized pensioned jobs. 

It was obvious, back then, to even the most economically illiterate among us (including me) that the days of well paying pensions were numbered. Corporations, with the help of all levels of government, were breaking unions and had their greedy little eyes on those massive pension funds that unions had built after WWII. As we all know, most of those are gone now into the pockets of the suits, the bankers and the political donor class.

Now to the 1980s; The ridiculous ease the banks had in protecting themselves from stagflation (a marketing term used to make them seem less evil) cost me my two retail stores and a fledgling commercial food service business I'd been busting my hump over for 6 years. And since I cosigned my business loan at the bank they also took my house (on the poor side of Bathurst up by Casa Loma - would be worth well over $1M today) the company van and my car. We (wife and daughter) moved from that nice older 3 bed house to a 2 bed roach filled apartment on Vaughan Road. The bank (RBC) took everything except the clothes on our backs. Good times....

Fast forward to the early 90s. We had left Toronto due to the bad taste I still had (and still have to this day) over the lost business, home and literally everything in our lives and relocated to a smaller city in eastern Ontario. My wife and I had each managed to get fairly decent jobs. I had started writing for the local paper as a part-time gig as well, which had things looking pretty good. But rental prices were soaring and I had a pulpit.

We were still 'persona non grata' at the banks due to multiple hangovers from my business in Toronto 10 years earlier so buying was out. The bankruptcy(s) should have stopped the paper flow, but it did not. I actually found a local Trustee who, after I paid him $500, wrote a few nasty letters to RBC about ending my persecution. Oddly enough, it worked and they did. Kudos.

Anyway, due to our situation at the time we were at the mercy of the growing base of rentiers. They saw profit everywhere and few government controls or even a passing interest by government in reining them in. As I said, government saw property value increases for the individual as a way out of future pension shortfalls without increasing CPP or any other tax base. They pronounced, and still do, profit from renters is a good thing and if a few of the 'poors' get hurt along the way that'd be a darned shame.

So I wrote an op-ed, trying, like a damn fool, to put a human face on Ontario renters. The column got a lot of responses but did nothing to change the system or even catch the notice of the local politicians who were too busy patting each other on the back because a handful of investors (relative to the overall population) were deep into our pockets and not theirs.

As a preemptive aside: For those of you who still think rent controls have kept things in line with income – riddle me this. How does a landlord raise their rents by over 50% in less than 10 years if controlled at 2.5% per year? How do politicians bank millions on a $135K income in less than 10 years? They do it the same way, they take it from us. So sit down and be quiet, there's more to come.

As many of you are aware the average rent-to-income ratio was set at some earlier time to 30%. Most government agencies subscribe to that fantasy still. In recent years, in my life and times, that rent-to-income ratio if I were in Vancouver or Toronto, would be closer to 70% of my gross income. In some smaller centers it would be as low as 60%. Let me repeat that “ it would be as low as 60%...”

Update: As of January 2023 if I managed to obtain every available government subsidy, pension and old ager support, rent (1 bedroom apt) in Vancouver would now be equal to 130% of my total income. "As of February 26, 2023, the average rent for a 1-bedroom apartment in Vancouver, BC is $2,595. This is a 18% increase compared to the previous year." Zumper

 Remember the 2.5% rent control? The politicians built in so many loopholes and exceptions those 'controls' simply do not exist. Present gov is doing nothing except raising taxes.

We've all watched, literally in horror, as government after government at all levels, hand over millions of dollars as “incentive” to private for profit builders to do what they would have done anyway – build. These aromatic incentives have some small thin strings attached such as “We'll finance a 40 unit building at subprime and offer tax breaks for the next 20 years if you'll agree that 6 of those units to be rented a little below market value and 2 of them at geared-to-income.” Millions of dollars to control rent on 8 units and free rein to do whatever the hell they wanted to on the others in the same building. Yes, I queried a rental company on a deal just like that. They, of course, thought it a great idea.

This wealth building investment system has several gigantic flaws that become painfully obvious when it takes 70% of an individual or family's income to benefit a few. The first flaw is of course the human part of the equation, the cost. Poverty creates all sorts of additional problems, from health issues to socially driven anxiety to, in some cases, criminal activity and even suicides. 

This one-way profit driven rentier's playground also takes from all other sectors of the economy and favours only them. If 70% of a family's income goes to rent they cannot afford to buy a car or pay for insurance if they have one. They can't buy a new TV set, new furniture of any kind, new clothes, dishes, or go to restaurants, the movies. They can't buy cleaning materials or any of the other 'consumer' items they need because they must buy food and the other real necessities of life. Hell, they can't even stay home and pay for Netflix. The rentiers take too much and they pay their partners at the banks from the profits they take from you and donate money to the local politicians as well who keep the system working for them. A recent and about to happen example of this is the new highway that's about to be built in Ontario. Real estate developers and politicians have been in bed together for the last 40 years in ways that would shame the carpetbaggers from a 100 years ago.

I warned you 30 years ago. I warned you again 20 years ago. I warned you 2 or 3 days ago. In every case I have either been ignored, brushed aside as being a SJW or called a commie. I've been shunned or, given the cesspool that Social Media is, “whatabouted” up the yin-yang. “Let's talk about...instead” arrgh.

Every once in a while, rarely though, you'll see an article about how the 'poors' are surviving on 30% of their income to pay for everything from food to clothing to medicines that are about to cost more and more as conservative provincial governments see profit it them for their donors. Wait until you start paying cash upfront for what used to be routine medical tests, that 30% starts to get awfully small.

There is no one standing up for us, no one. No one wants to upset the profitable real estate investment system that used to use the words “Family Home.” Canada, like most western countries, doesn't give a rats ass about most of its population. It does give a rats ass about who has the most money and how they can get more of it. 

As George Carlin said “ It's a big club, and you ain't in it. You and I are not in the big club.” 

Let the shunning begin. You've been warned. (again)