Canadians 'drowning in debt': 47% will borrow to cover costs, survey says

[TheIronMaiden]

Originally Posted by peter12

London, Washington DC, San Francisco, Paris, Hong Kong? I agree that all are broken, but they are just extreme examples of the same structural issues faced in Calgary.

With a notable exception that Calgary has a lot of room to expand. But instead of creating sustainable, and affordable housing the city keeps building layers upon layers of 2600 square feet homes.

[peter12]

Originally Posted by nik-

I'm saying you're trying to use extreme examples as a brush to apply to everywhere and it's ridiculous.

Extreme examples? You're missing the point. Why didn't I list Tokyo or if you want to go down, why didn't I list Seattle?

[peter12]

The Boomer stuff isn't exactly an argument made by resentful Millennials. There are strong arguments to be made that Boomer political choices have harmed the futures of Gen Xers and Millennials.

https://www.amazon.com/Theft-Decade-.../dp/1541742362

https://www.amazon.ca/Generation-Soc.../dp/0316395781

[HockeyIlliterate]

Originally Posted by peter12

Municipalities have to pay for services. How else would you prefer they do it? Especially in a place like Calgary which is essentially built around expensive, sprawling infrastructure.

Federal redistribution is one thought.

Eliminate local and state/provincial taxes (sales, property, fees, etc), and just pay a federal tax (sales, income, etc). That federal tax collection is then redistributed equally to the other government entities on a per-capita basis.

To equalize things on the federal tax collection side, perhaps everyone pays a flat $2,000 in federal income taxes (so that there is no baseline exemption at all), and then an additional amount based on what your income is. There might be some wealth add-on tax if you have a certain amount of assets in the stock market, or if your property is valued at X or above, or the like.

[peter12]

Originally Posted by HockeyIlliterate

Federal redistribution is one thought.

Eliminate local and state/provincial taxes (sales, property, fees, etc), and just pay a federal tax (sales, income, etc). That federal tax collection is then redistributed equally to the other government entities on a per-capita basis.

To equalize things on the federal tax collection side, perhaps everyone pays a flat $2,000 in federal income taxes (so that there is no baseline exemption at all), and then an additional amount based on what your income is. There might be some wealth add-on tax if you have a certain amount of assets in the stock market, or if your property is valued at X or above, or the like.

Unconstitutional.

[nik-]

Originally Posted by peter12

Extreme examples? You're missing the point. Why didn't I list Tokyo or if you want to go down, why didn't I list Seattle?

Originally Posted by peter12

Many Boomers.

This was your point essentially?

All I'm saying is that purely blaming the Boomers is lazy weak bull####. Gen-X is right up there with blame too and guess who else will do the same thing when they start owning in greater numbers?

[burn_this_city]

You mean 100% annualized returns on housing are atypical?

https://www.theglobeandmail.com/cana...-cant-stomach/

My heart goes out to these people, $40k house in 1973 is worth $4MM. They've made $88k a year on their home over 45 years.

[peter12]

Originally Posted by nik-

This was your point essentially?

All I'm saying is that purely blaming the Boomers is lazy weak bull####. Gen-X is right up there with blame too and guess who else will do the same thing when they start owning in greater numbers?

Political and economic choices made by Boomers have had a disproportionately large social effect given a) their unique socio-economic upbringing, and b) the relative large size of their cohort.

[OMG!WTF!]

Originally Posted by burn_this_city

You mean 100% annualized returns on housing are atypical?

https://www.theglobeandmail.com/cana...-cant-stomach/

My heart goes out to these people, $40k house in 1973 is worth $4MM. They've made $88k a year on their home over 45 years.

It actually sucks for a lot of people who can't afford to live in the house they've lived in for the majority of their lives. On one hand it's a good problem to have but on the other it is a bit of an unfair or maybe unfortunate situation.

[TheIronMaiden]

Originally Posted by nik-

There's rising house prices and then there's using Vancouver as your central model for comparison.

It's broken.

I'm not even saying that housing prices are fine, just that it's dumb to be "HURR, BOOMER!" because it's such a simple minded meme at this point. Do you honestly it's Boomers getting into the market now and maxing out their mortgages, buying way more than what they need because the bank will approve them and subsequently inflating the market? There's a lot more at play here than some communities not wanting high density construction. Which is also not just a boomer thing.

You'd be surprised how many boomers own multiple properties. I know a few families whose entire retirement plan is profiting off of their rental properties. That said, it is a rich get richer scenario, their children will inherit these properties and likely continue to be land lords, and so on.

[nik-]

Originally Posted by peter12

Political and economic choices made by Boomers have had a disproportionately large social effect given a) their unique socio-economic upbringing, and b) the relative large size of their cohort.

And then it was compounded by the behaviours of other generations.

[burn_this_city]

Originally Posted by OMG!WTF!

It actually sucks for a lot of people who can't afford to live in the house they've lived in for the majority of their lives. On one hand it's a good problem to have but on the other it is a bit of an unfair or maybe unfortunate situation.

They've managed to make what the average Canadian would earn in 90 years entirely by living in a specific city.

[nik-]

Originally Posted by burn_this_city

They've managed to make what the average Canadian would earn in 90 years by virtue of living in a specific city.

If they sell and leave.

[you&me]

Originally Posted by blankall

So the young family should just throw caution to the wind and take on a half million dollar debt that they can't possibly afford to maintain unless the interest rates stay the way they are? And they won't go back to historical norms....ever? This basically strips the BoC of their power to regulate the economy.

The fact that our economy is dependent on out of control housing prices, foreign investment, free borrowing, etc... is ridiculous. What a mess.

The whole system also horribly favors high income earners and children of the rich. Perhaps the median family in Calgary can afford the median house, but the wag gap is growing substantially. What about the social worker earning $20/hr? What do they afford?

Originally Posted by burn_this_city

This is where we are at. The BoC really can't raise rates beyond 3-5% without causing a huge drag on consumer spending. Best they can hope for is flat home prices for a decade so wages and real incomes catch up. Anyone in the bottom 40% is going to be hard pressed to afford a home in a major metro area country wide.

Perhaps this hypothetical young family could choose not to participate in the housing market and instead, just rent?

I believe Calgary has among the highest home-ownership rates in Canada (and thereby, the world), so I get that there are social and peer pressures to "join in". However, looking at more pragmatically, if would be difficult make a good argument for stretching your personal finances and affordability to participate in the Calgary housing market at this time. Rents are soft and are often far below mortgage equivalency. The housing market is soft and trending further downward with more and more headwinds, including labour market outlook, property taxes, interest rates and more... We've had posts recently in this thread to the effect of "I've had my $500k house for 11 years and it might be worth that much today"..

The thought of anyone - young family or otherwise - scrimping and saving to barely qualify for their first mortgage that will leave them house-poor because they look at the Calgary market and think: "I want a piece of that" makes my head spin...

[Weitz]

Originally Posted by TheIronMaiden

@DoubleF, you make some very valid points, especially about Albertans and their expectations for homes. I don't know what it is about this province, but people are in love with the idea of living in the suburbs. The expansion of urban sprawl to accommodate the appetite for 4 bedroom houses with attached garages is symptomatic of the conclusion that people need to live in big houses to be happy. The Alberta dream is the suburban dream, and it is unsustainable.

Perhaps people don't like living inner city when they reach a certain age?

I absolutely couldn't stand the last year I lived in the Kensington area.

[peter12]

Originally Posted by nik-

And then it was compounded by the behaviours of other generations.

No, there is ample evidence that Millennials have remarkably different outlooks on culture and economic activity than Boomers. Why do you think we have seen such a strong resurgence of economic and social activity in most urban cores across North America?

You keep on wanting to displace blame, but the numbers don't hold.

[Oling_Roachinen]

In most places though, people being 'forced out' of your 100 year old home is because it's become unsuitable to live in anymore...not because it's skyrocketed to become $4,000,000.00 in assessed value.

[burn_this_city]

Originally Posted by nik-

If they sell and leave.

They could easily capture 75% of their gain by selling and moving into a condo in the same area.

[Scroopy Noopers]

Originally Posted by nik-

And then it was compounded by the behaviours of other generations.

With the expectation that we deserved the same gravy train available to generations prior.

[nik-]

Originally Posted by peter12

No, there is ample evidence that Millennials have remarkably different outlooks on culture and economic activity than Boomers. Why do you think we have seen such a strong resurgence of economic and social activity in most urban cores across North America?

You keep on wanting to displace blame, but the numbers don't hold.

No? No other generations compounded it? That's your stance?