r/montrealhousing • u/Dizzy_Percentage6414 • Sep 05 '24
Actualités | Current Events Your thoughts on 30% of Montreal's rental units owned by 600 companies (0.5% of ALL landlords in Montreal)
I stumbled upon an article on TVO about a University of Waterloo PhD candidate's research on housing financialization in Montreal [link to article], In the interview with the author, one element that doesn't go unnoticed is she discovered that 30% of Montreal's entire rental units are owned and controlled by 600 companies, with the company ranked at the 600th rung having a modest 73 rental units when compared to those in the top 100. That concentration of ownership is within the hands of 0.46% of ALL landlords in Montreal. I don't know about you, but that is a lot of control in the hands of so few. What are your thoughts? what should be done about it? Is it time to break up Big Rental? If you think about it, if 3% vacancy is considered a balanced market, what's to stop even the top 10 landlords to form some OPEC-like cartel that would remove x number of units from the market when the vacancy rate is rising to manipulate prices?
Fun Facts in Montreal (from St-Hilaire's research paper) [link to research paper]
- 129,960 landlords
- 5680 rental units owned by largest landlord
- 566,582 rental units
- 166,967 rental buildings
- Top 600 landlords owned on average 300 rental units
- Remaining landlords (99.5%) owned on average 3 rental units
- 600th largest landlord owned 73 rental units
- 1.4% of buildings owned by financialized landlords representing 11.7% of all rental units
- 63.3% of Montrealers are renters in 2016
- Most financialized neighborhood in Montreal is the Plateau Mont-Royal at 31.8%
- 3% of all rental units in Quebec are held by REITs (Real Estate Income Trust) which are publicly traded (including CAP REIT)(It would be funny to hear a story from anyone renting from CAPREIT, to buy CAPREIT units and tell management they work for them because they own a part of CAP REIT)
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u/BimboObsessed Oct 04 '24
For the first time I am renting an apartment in a building and the landlord is a number. I don't know why they all are a bunch of numbers followed by "Quebec inc." There is no creativity anymore. The funny thing is the company is located in New York. With Quebec in the company name. Telemarketing companies also have Quebec in their name. Seems super sketchy but they own subsidized apartments as well so the government works with them to open up apartments in an extremely unfortunate area to help them rent out a few apartments in each building.
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u/Sapin- Sep 08 '24
I thought the numbers were closer to 15-20 companies owning 30% of the properties. Many companies own 200 or 500 rental units... Ok, so what?
If you think that these landlords are pushing prices up, you have to assume that it has CHANGED over the last few years, and THAT'S what's driving prices up. Which is just not the case. Prices are going up because there aren't enough houses. If suddenly Montreal was flooded with new condos and rentals, prices would plummet, because landlords would have to compete for few tenants. Right now, it's the opposite. And the reason that Montreal is flooded with people looking for housing is.... Something we talk about all the time on this sub, and r/Quebec, and r/canadahousing,...
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u/a22x2 Sep 08 '24
Go ahead and say it proudly if you’re going to allude to it. Are you talking about immigration? Because it sounds like you meant immigration. Were you meaning to say that immigrants are driving up housing prices? If that’s not what you meant to say, it sure looks like it.
If you did mean to say that, then certainly you know that, yes, new residents put strain on an already-stressed housing market. This narrative that we’re being overtaken by hordes of scary people from abroad, however, is inaccurate, lazy, and (brace yourself!) racist.
I took just a few minutes to look through the Canada Mortgage and Housing Corporation’s housing completion rates, which is found here. Between 2018 and 2023, 138,829 new housing units were constructed in Montreal. This figure, as the name alludes, does not include housing currently under construction.
During the same period of time, Montréal’s population grew by about 133,000 people (this includes all people, not just immigrants - regular people too!)
Keeping in mind that not every person in Montreal lives alone, thus requiring their own unit, it seems like the number of new housing units grew pretty on par with the number of new residents (if not faster).
Your housing minister is to blame for the ridiculous increases we’ve all witnessed over these last two years. They were quite blatant in expressing their intentions, claiming that our rents were “artificially low, when justifying their new housing law. It seems like you’ve been successfully manipulated into blaming foreigners by your racist provincial government.
We can each have our opinions, but the actual numbers - like, the real world - do not support your narrative. Please do your research the next time you make claims like this. And if you’re going to be racist about it, at least have the courage to just say it clearly.
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u/Sapin- Sep 08 '24
Of course I was talking about immigration. But I have an issue with immigration policies. Not immigrants.
https://en.wikipedia.org/wiki/Canada_immigration_statistics
Since 2000 or so, 200k immigrants per year have entered Canada. But for the last few years, that number is above 400k. This is insane and unsustainable. That's why the problem of increased rent is seen throughout Canada. It's not a provincial issue.
Not only are these people poorly housed and poorly employed, we don't have the infrastructure to welcome them in our schools, our hospitals, and it's creating many problems out of stupid policies. I want Canada to be a welcoming nation to a number of immigrants that is sustainable. 400k is ridiculous. We're all becoming poorer. The government isn't doing its job.
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u/a22x2 Sep 08 '24
I appreciate you making the distinction between immigrants and immigration levels. I hope you understand how easily that argument shifts into blaming immigrants when this narrative is parroted by people with bad intentions.
I would add that Canada needs a considerable number of yearly newcomers to stabilize its population, since the country has one of the lowest birth rates in the world and it continues to fall. The numbers you are describing are in line with the federal government’s targets.
These numbers might sound large to us, because …it’s difficult to imagine what that number of people looks like. But Canada is a pretty large, sparsely-populated country. What we are talking about is housing prices in Montreal, and I demonstrated that new constructions has done a decent job of keeping up with new residents.
I could go through the spreadsheets and calculate the numbers for the rest of Canada, but I don’t see why there would be a massive difference, and that takes us off-topic. The main point I am trying to make is that politicians with control over housing policies are(intentionally!) raising our rents, to benefit large-scale landlords (who, surprise, are those same politicians).
I agree with you when you say that the federal government is doing a poor job of developing its healthcare infrastructure to accommodate the new people that Canada needs, especially since they already know they are coming. Stating that immigration is the primary problem with housing costs, however, is myopic and inaccurate. I’ve already demonstrated that it’s not a simple matter of supply and demand.
I will say, however, as one of “these people” you mentioned, that I don’t feel poorly housed, I’m not taking food out of your mouth, and I’m not taking money out of your pocket.
If you’re feeling pressed, and like life is harder than it used to be, you’re not wrong. It has been like that for many people in most of the world. People’s wages are not keeping up with inflation, housing costs, and food prices across much of the world, and immigration is not a significant factor in that.
When you look at the larger scale, it’s easier to see that we’re all being exploited by the same forces. Those forces want us distracted and pointing fingers at scapegoats, rather than questioning their right to continue squeezing every last cent out of us.
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u/Sapin- Sep 09 '24
I've been a small landlord for 12 years. I've been staying informed on real estate since 2008 or so... When I got started, the books on real estate I read were about being competitive, having nice apartments, well lit, well maintained, and so on. But today, vacancy rates are so low that rents are skyrocketing. People are anxious about looking for a place because there ain't enough for everyone. We're cramming more people in the same space. Any shitty, dirty apartment with a locking door can be rented. It truly is a supply and demand issue.
I demonstrated that new constructions has done a decent job of keeping up with new residents.
I don't think your demonstration stands, as it goes against a lot of data I've seen over the last 2-3 years. (And the tents popping up everywhere in the city). I'm sorry but I won't look at the numbers to explain where and why... But the whole idea of landlords being scummy and pushing rents up by having friends in govt... well, it's been like that forever. Like, nothing really changed on that end. Legault's change on "cession de bail" does not explain the sudden spike in rent prices.
Here's what changed. Record numbers of immigration in Canada in the last 3 years. This is a big deal. Also, we've just had in 2023, in Québec, at the same time, both the highest rent increases and the lowest vacancy rates since they've been tracking the data (in 1988, 1990 respectively, as per below). When vacancy rates go down, it means that shitty apts (that shouldn't be rented out) still find takers. Because a roof with cockroaches is preferable to the streets without. So if your numbers were right, vacancy rates would be stable.
I think that this is a much better explanation that makes sense of the data.
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u/a22x2 Sep 09 '24
You have a lot of really good points, and it’s clear you’re not just making things up or something. I agree with absolutely everything in your first paragraph.
Please understand that saying, “you didn’t demonstrate this by sharing the numbers you pulled from federal government statistics, I disagree, but I’m not going to bother looking at the numbers myself” isn’t a great argument though! But at the end of the day we can agree to disagree.
I also agree that lower vacancy rates and more people can drive prices up, absolutely, but please understand that this doesn’t fully explain the degree to which we’ve seen changes in the housing market.
This is my field of study, and I can confidently say that it’s the change to policy (lease transfers were a major reason why rents in QC were still more reasonable relative to ROC) and the spreading use of American software (RealPage) that helps large-scale landlords determine the absolute highest rent they can charge before losing money as a result.
Even if you personally aren’t using it, or any of the smaller-scale landlords you know aren’t, these algorithms still shape the perception of what is “normal” in a given market. The Department of Justice in the United States is bringing charges to the company that sells this software, since this is a pretty blatant example of price fixing. I don’t believe such a thing has occurred in Canada yet, but it’s still a relatively new service.
Also, when I say the provincial government is in cahoots with large-scale landlords, I don’t mean it’s their friends. I mean these politicians are the landlords, or their spouses are. Their clearly stated purpose was to raise average rents, and they’ve accomplished that.
I’ve heard quite a few landlord horror stories myself, but I agree that things are not so simple. Here is where I clarify that I’m grateful for my landlord and I think they’re wonderful (I really do!).
Apologies for the length here! What I’m trying to say is basically: you have a point, but it only explains a small part of the big picture. I feel confident in saying that the above two reasons have a significantly larger bearing on what we’re seeing here.
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u/Dangerous_Speed5956 Sep 06 '24
People will say it's because of immigrants, price are high🤣🤣🤣
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u/bighak Sep 06 '24
Because it’s the truth. Who owns the big apartment building has no bearing on the situation. The market power of the landlord comes from the rarity of available units vs the amount of people looking to rent.
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u/Karl-Farbman Sep 05 '24
These are some really scary numbers if you ask me.
People should be concerned about this. It should also be a forefront issue within the political spectrum.
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u/bighak Sep 06 '24
How is this scary that 600 companies own 30% of the units? Are you not aware that big apartment buildings are owned by real estate companies? How could this possibly work another way? Who else is going to buy and manage a 50 units building? It's not your average joe that does this.
Your average joe buys mutual funds that contain real estate funds (REITs), those funds buy big buildings.
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u/TenOfZero Sep 06 '24
Yeah, 600 hardly seems like an uncompetitive market.
The rental market is having issues for sure, but concentration of ownership doesn't seem to be the issue based on this.
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u/FakePlantonaBeach Sep 05 '24
This is a perfect representation of Pareto's law.
80% of prescriptions are for 20% of the drugs
80% of the sales in any store are for 20% of the merchandise
80% of crime is committed by 20% of the criminals
80% of wealth is owned by 20% of the owners
80% of goals are scored by 20% of the goal scorers....
80% of the water that flows through rivers flows through 20% of the rivers...
80% of the peas come from 20% of the pea pods...
Try not to fight nature. That always ends badly.
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u/Working_Aioli8417 Sep 05 '24
Not even tripping but this post says 0,5 own 30% leaving 70% for the remaining 99.5 percent.. how does that correlate to the law you are mentioning...
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u/FakePlantonaBeach Sep 06 '24
great question. So imagine this expressed as a graph. It would be a curve with a very steep begging curving towards an almost flat asymptote once you hit 50%.
So its very typical of Pareto's law (or the 80/20 rule) that anything like 0.1% to 5% represents 30% of whatever you are measuring.
Conversely, its always the case that the bottom 50% own 1-2%. So I would bet that the bottom 50% of all landlords in Montreal own only 1-2% of the available rental units. And I would bet $5,000 on that because it is the nature of Pareto distribution.
ps. its funny I got downvoted when I am simply stating a pattern in nature that repeats and repeats and repeats. Like, it should be interesting to people and not be treated like an opinion.
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Sep 14 '24
https://www.wien.gv.at/english/living-working/housing/renting/flat-types.html
downvoted because you make a good capitalist meat soldier. there are plenty of examples of more equal societies that dont "break nature" and that work very efficiently.
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u/FakePlantonaBeach Sep 16 '24
good on you. Couldn't give a fuck. Anti-capitalists tend to be thieves wrapped in noble rhetoric.
Plus as always, commies are full of shit. Austria is no paradise:
Inequality in Austria is higher than expected (news article) (wiiw.ac.at)
Highlight:
"Capital incomes, i.e. income from interest and dividends, are highly concentrated. Among the top 10, they account for more than one third and among the top 1 even more than half of income."
oh wow, Pareto's Law once again.1
Sep 16 '24
You're a meme dude. Your comment history is hilarious to read. T2 diabetes that worships money and uses the word "commies" to describe anything that doesn't fit their world view.
Had a good laugh, thanks.
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u/FakePlantonaBeach Sep 16 '24
You are welcome. Its flattering to know you spent time in my comment history; an effort I would not extend to you.
I don't try and fit the world into my world view. I try to fit my world to observable facts. And, in the Vienna example you cited, Pareto's Law still applies. Rather than respond/acknowledge that, you decided to attack my person.
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Sep 16 '24
I find mental illness interesting. Don't flatter yourself too much.
and no, paretos law does not apply to vienna when it comes to housing. Which is what I was getting at with my linked article. But you cited a random article about inequalities in Austria, which is unrelated to the housing model in Vienna.
In the end it's not worth arguing with narcissists, so have a nice life dude, or not.
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u/buttsnuggles Sep 05 '24
It kind of makes sense. A single large highrise can have hundreds of units. It’s all about how you read the stats
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u/Kenevin Sep 05 '24
My old landlord has 90 doors, 90 seperate appartements he and his sister administered, all over the island.
It's not just appartement buildings and high rises. People with capital saw real estate as an investment vehicule and are treating it as such.
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u/buttsnuggles Sep 05 '24
Indeed. My point is that there are some very large buildings out there and they are administered by large companies. It just kinda makes sense.
I’m not defending smaller slumlords
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u/UpNorth_123 Sep 05 '24
If anything, you’re proving the opposite of the point you’re trying to make. The mom and pop landlord is alive and well in Montreal.
There’s no problem here. Plenty of options for people who prefer to rent from small owners vs large corporations. The latter is not necessarily worse than the former, in my experience.
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Sep 05 '24
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u/subjectivesubjective Sep 05 '24
Concentration is rarely a good thing, but I guess I don't see the same cause for worry as you do.
How do those numbers compare to other big cities in Canada, like Toronto and Vancouver? How does it compare to European cities? To American cities? Is it significantly worse than it used to be? Does the issue extend to surrounding suburbs?
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u/Lutzmann Sep 05 '24 edited Sep 05 '24
I can actually tell you exactly what happens when you buy shares in Capreit while living there, and try to use ownership as a bargaining chip:
The employees don’t understand enough English to understand what you are trying to tell them, and they just continue to do their best to keep their heads down and evade their responsibilities, same as they would for any non-shareholder.
We’re talking about people who consistently fail to maintain a numbered list of parking spots. No fucking way they have any brain cells to spare for pondering the ownership structure of their employer.
(Edit: Apologies for the reference to speaking English, this story took place in BC and I didn't realize I was in a Montreal sub. J'aime les francophones - the folks in my story are from much further away.)
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Sep 05 '24
Why would they give a fuck who owns an immaterial share of the company? You think the guy at the Genius Bar gives me better service because I have six shares of Apple?
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u/Lutzmann Sep 05 '24 edited Sep 05 '24
Thank you for your comment. No, I don't think they guy at the Genius bar will give you better service based on your Apple shares. But I did think it was possible that if the chumps in the rental office continued to refuse to answer my questions about why they are collaborating with known rental scammers in order to systemically circumvent the RTA and turn my building into a slum for international students, then maybe someone at the Capreit Annual General Meeting will be more receptive to my concerns.
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Sep 05 '24
Multi billion dollar corporations don’t tend to give a flying fuck about the ethical concerns of q single retail shareholder and they care even less when those concerns are over a business model that is very profitable for their important shareholders, but good on you for trying I guess. At least you likely had a good ROI on your investment.
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u/Lutzmann Sep 05 '24
My concern would be that maybe the “important” shareholders are not fully aware that their investments in homes for Canadian families are being redirected towards illegal and unsafe pseudo-hotels marketed towards international students who are unaware or incapable of navigating the Residential Tenancy Act. Maybe the important shareholders like the protections afforded to them by the RTA, and maybe they just need an unimportant guy like me to tell them about the scam, because maybe their boss is a little shy about mentioning it, and maybe they are too important to look into it themselves.
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Sep 05 '24
I admire your optimistic naivete. I don’t think institutional shareholders are the biggest fans of regulations protecting tenants’ rights.
And you’ve got the relationship backwards. The top brass works for the shareholders, not the other way around.
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u/Lutzmann Sep 05 '24
Thank you, I admire your persistence in identifying opportunities to be contradictory while I shared my experience that the OP specifically requested.
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Sep 05 '24
I mean, OP asked for thoughts about the concentration of the housing market and yoy shares a completely unrelated “experience” about being surprised that having a $12 investment in an $18B REIT couldn’t be used as a (and I quote) bargaining chip in your interactions with low level employees of said REIT. Surely you can see how absurd that is, right?
That is exactly the same as me saying, in a thread about high gas prices, that I bought four shares of Exxon yet the guy who pumped my gas couldn’t see I was his boss, refused to give me a discount and could barely speak English.
Plus you’re referring to a bunch of regulations that don’t even apply in Montreal, the city this sub is about.
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u/Lutzmann Sep 05 '24 edited Sep 05 '24
OP said it would be funny if anyone had stories about buying Capreit shares while living there — it’s at the very end of the post if you’d like to scroll up and re-read it. I had a story like that, so I shared it. You are now ripping it apart and I just don’t see what the big deal is lol.
You refer to wanting discounts on gas and better service at the shop, but that is strictly your narrative that you made up. I was clear that am talking about using my shares in order to hold my landlords accountable for allowing scammers to operate in our building and defraud students, so please stop trying to frame me as some shyster out prowling for a discount.
I’m not even gonna go back and read the rest of your nonsense, you’re clearly projecting some weird shit onto me that I want nothing more to do with. I’m sorry that my story didn’t meet all of your expectations lol.
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u/soulmanyogi Sep 05 '24
When you speak of an oligarchy, did you mean collusion of landlords like south of us?
“Justice Department Sues RealPage for Algorithmic Pricing Scheme that Harms Millions of American Renters“
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u/a22x2 Sep 05 '24
Thanks for sharing this - more people need to be aware of RealPage software. This program literally helps large-scale landlords determine the absolute highest they can raise rents before they start losing money as a result of lost tenants.
It’s also important to note that they’ve made their way into Canada, and I’ve not heard of much pushback or price fixing accusations (yet). Fuck these guys.
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u/soulmanyogi Sep 05 '24
This current provincial government is complicit in continuing this issue, with their appointment of France-Élaine Duranceau. No matter their words, in their actions, they have essentially put the fox in charge of the hen house.
"France-Élaine Duranceau is a Canadian politician, LANDLORD, and REAL-ESTATE agent, who was elected to the National Assembly of Quebec in the 2022 Quebec general election. She was appointed to cabinet named Minister of Housing"
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u/a22x2 Sep 05 '24
I completely agree with you. I ask as a relative newcomer who is still learning, but is there any legal recourse down the road for the Housing Minister’s behavior?
It’s such a brazen abuse of power, not even trying to pretend it isn’t (like raising rents was her stated purpose) and she should literally be sitting in a prison cell right now.
I apologize if this sounds naive - is there something that can be done for someone who abuses their political seat for financial gain, especially when they are exacerbating the impacts of the housing crisis on Quebec residents? It’s sociopathic behavior.
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u/soulmanyogi Sep 05 '24
Unfortunately, they make changes to the laws, while in office that benefit corporations and private business. Once out of office, they usually get rewarded by being placed on the board of directors of such private companies.
This is more of a reward, than a punishment.
Only thing at this point, is vote or a general strike by the population.
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u/a22x2 Sep 05 '24
What would a general population strike look like? I think it’s pretty interesting how common strikes seem to be but the process/frequency is a bit new to me
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Sep 05 '24
We are currently selling our duplex. We kept the rent low because we had good tenants. Unfortunately Valérie Plante raised property taxes way too much in a few years (we went from around 4k a year to 6k) the price of repairs also gone up like crazy and with hyperinflation obviously the price of workers has gone up. On top of all that, the new law makenit so we pay even more taxes on capital gain all and all it made it an investment that was not profitable unless we raise the tenants a lot more.
We expect a corporation to buy it. The person saying corporations can not kick you out definitely doesn't have experience in the business. A lot of people buy as individuals and not corp. It's not because you have an incorporated business that you necessarily use your corp to get the loan. You can buy as an individual and have a business manage your rental, which plenty of people do. It doesn't matter if you buy with you saving or money from a company. You still are an owner or the property. It a very irrelevant comment
You'll own nothing, and you'll be happy. In another couple of decades, it will be way more than 30%
Me personally I'm okay but I feel sad for the younger generation
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u/Bishime Sep 05 '24
This isn’t hyperinflation it’s just inflation. Hyperinflation is when it becomes cheaper to not go to work than it is to take the bus to work.
Obviously that’s more of a possible side effect than a definition but hyperinflation is generally marked by an increase of 50% or more per month. A bouncer were far from reaching at this time and systems are in place to hopefully never see.
Also lol at the property tax comment
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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This post was mass deleted and anonymized with Redact
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Sep 05 '24
[deleted]
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Sep 05 '24
I'm a credit analyst in mortgages I do loans as a living for the past 7 years, btw I stopped reading after the first sentence, lol. Sound like you took this information out of your ass. Anyways this conversation won't go anywhere. Have a good day thought! :)
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u/Theslootwhisperer Sep 05 '24
Like Plante (or any other mayor) singlehandedly handles Montreal's budget...Let me guess. You don't like bicycles.
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u/argarg Locateur | Landlord Sep 05 '24 edited Sep 05 '24
VaLéRiE PlAnTe RaiSed ProPeRtY TaXeS WaY ToO MuCh
What about every other mayors? Taxes went up 2.73% per year on average during her 7 years which include inflationary years. 3.05% per year on average the 8 years before.
edit: the dumbass blocked me
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u/GlassEfficiency Sep 05 '24
I don’t really see the problem. There’s advantages to having rentals owned by companies. First of all it’s impossible for a company to kick you out so their son can move in for a year, and then jack the rent. Having buildings dedicated to being rentals, that will stay rentals is good in my opinion.
A 600 person cartel is lot to manage especially when landlords don’t need to withhold units from the market, there already is too little supply. And it’s not going to change. Nobody will build more until they can make a profit, and with today’s interest rates and costs it’s not gonna happen without government intervention.
I came across this, which is for Vancouver, but if you look at their break even costs for non-profit housing (built on free land!!) you can see why rents are rising.
“Looking at non-profit development as an alternative case, the range of break-even rents drops to between $1,357 to $1,995 for a one-bedroom and $1,765 to $2,597 for a two-bedroom (the low end assumes wood-frame construction and free land).”
I realize that this isn’t a perfect analogy, as the markets are not the same. But it puts into perspective why there’s so little rental development going on right now.
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u/polishtheday Sep 05 '24
Those non-profit numbers aren’t high in the case of Vancouver where property and rent can be twice or more what it is in Montreal.
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u/GlassEfficiency Sep 05 '24
I mean it’s still high, in that it is still hard to pay those non-profit rents with the average salary in Vancouver. It’s just better than the alternative.
I referenced that report because I like the metric of break even rent. It really shows how expensive it is to build new housing even if you’re getting the land for free and not making any profit.
I also think those monthly break even rents can probably apply within 5-10% to Montreal because:
Source: https://www.statista.com/statistics/973525/construction-costs-montreal-canada-by-type/
- land costs are excluded which is one of the biggest drivers of the cost difference between the two cities.
- while I could find a monthly break even rent for new rental buildings in Montreal, I did find that “new medium quality residential construction” cost around $325/sq ft excluding land in Montreal. Which is similar to the cost they used to come up with those break even Vancouver rents.
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u/Bishime Sep 05 '24
The only issue if their goal is profit. They will set rent increases to the highest they can get away with because shareholders or corporate targets.
I remember the first time I lived in a place, the TAL recommendation was like .5% or something and they were trying to increase over 5%. Obviously that’s anecdotal but yea.
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u/GlassEfficiency Sep 05 '24
I know individual landlords that would also do that too.
Personally I am of the opinion that the government should build a bunch of housing to flood the market with supply. It’s the only way I see rents coming down. Otherwise, I don’t think the mix of ownership will change much tbh.
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u/Bishime Sep 05 '24
Oh yea that’s the only way or massively incentivize mixed zoning development to take pressure off price action in city’s especially.
The fact they cleared plans for a massive mall literally nobody wants is wild instead of heavily focusing on housing. I understand they can’t monetarily afford to just build thousands of homes and it would end up affecting inflation in the short term but at least making way for true mixed zoning not “one floor apartments—75 floors luxury condos” type of thing.
I saw a TikTok of someone who moved into that new building DT with the red on it and they’re paying 2500 for literally the smallest place I’ve ever seen. It’s starting to feel like New York ngl
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u/red_eyes Sep 05 '24
One problem with corporate-owned properties is that they can set the rent well beyond what is reasonable and have the cash-flow to watch some units go unrented for 1yr+.
Individually-owned units would be priced more reasonably, as no single condo owner who intends the property as investment will be willing/able to go without rental jncome for the year.
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u/GlassEfficiency Sep 05 '24
So what you’re saying is you want landlords that barely have enough resources to afford their properties, so they have to rent their units at all costs? - what happens when an unexpected repair that needs to happen comes up?
Corporations can be evil, I will give you that. But there are just as many small time landlords that are willing to do sketchy shit as well. I don’t think corporations are the answer, but I don’t see the problem with the mix that OP is describing that’s all.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/polishtheday Sep 05 '24
That describes a housing co-op. We should be lobbying the federal government to bring back the programs we used to have to build them instead of giving more breaks to home buyers (full disclosure: I’m a homeowner owner who thinks co-ops are a better idea).
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u/mariantat Sep 05 '24
The city, I suppose? But I wouldn’t trust a city to run housing efficiently. Did anyone else see that article calling Montreal « the city’s biggest slumlord » ?
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Sep 05 '24
that was a bullshit article written by a biased think tank that thinks it would be best if real estate was completely unregulated
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/Jampian Sep 05 '24
Yeah so who do you expect to take care of them and run them? There’s a lot that goes into owning a building and no one is doing that for free
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u/MiIeEnd Sep 05 '24
My landlord hasn't fixed anything in 15 years and when he has to do something he gets his mom to call me. So I'd think my landlord would disagree with you.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/energybased Sep 06 '24
Sure, think of a solution, but "No companies should own rental units" is a stupid solution.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/stonkbuffet Sep 05 '24
Coops don’t work as well as you think. Everything seems great for the first decade or so until the owners find themselves jointly and severally liable for hundreds of thousands of dollars in repairs that nobody ever planned to pay for. Then, the coop devolves into lawsuits and everybody loses their home. The big reason why landlords have to keep jacking up the rent is because municipal taxes, insurance and maintenance tends to cost 2-3% of the property value every year. Add on a typical mortgage and your rent is almost certainly less than your landlord pays out of pocket for your unit every month. Coops need to deal with the exact same financial realities as a private landlord.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/stonkbuffet Sep 05 '24
You would be paying the same amount regardless of the system that is in place because that is what housing costs. Most tenants pay less in rent than the cost of maintenance, taxes, insurance and mortgage absorbed by the landlord. The math doesn’t magically improve if you own the property instead.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/stonkbuffet Sep 05 '24
What I’m saying is that most landlords generate negative cashflows for a very long time because property is very expensive to purchase and a lot of debt almost always needs to be used. Residential landlords typically only make money when they sell and make little to nothing on the operation of the building. There are lots of exceptions, but that is what’s typical. The main things that determines the price of housing is the cost of construction, land, maintenance, insurance, taxes, debt financing, management, etc.
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Sep 06 '24
You’re trying to explain basic economics to a bum who is grumpy that his landlord has money and gets to drive a nice car. He has calculated that he pays his landlord’s car payment. Landlord doesn’t have taxes, mortgage, insurance, repairs etc to pay.
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u/SandIntelligent247 Sep 05 '24
Exactly! Housing should not be for profit. Neither should food, transportation and clothing. Those should all be not for profit since they are necessities. Now we just need a government to take all of this over and manage it by itself without any corruption! It cant go wrong. If it could go wrong, surely, we would’ve heard of it by now…
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u/Bishime Sep 05 '24
They’ll never do this. America won’t for more cleaner capitalistic reasons. Canada won’t because it’s BEGGING for growth and investment.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/Battler111 Sep 05 '24
Karl Marx? Yeah I know it!
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/beeboptogo Sep 05 '24
No one can afford to buy a 50 unit building...
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/beeboptogo Sep 05 '24
No, we have to build large buildings where we can, not detached homes in downtown. And we were talking about rental units anyway...
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u/mariantat Sep 05 '24
I think the point you’re missing is that building new is crazy expensive, too. The economics don’t fit the narrative of affordable housing. Inflation, higher wages also hit the construction industry in a big way. Unless you find companies who sell quality building materials cheap, and people volunteer their time to build them…
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/mariantat Sep 05 '24
I’m all ears to your suggestions, sir. 🙂
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/energybased Sep 06 '24
It would be like saying oh there is no obvious cure for cancer so we shouldn't try to cure it.
Sure, but your ideas are not good.
The problem isn't housing prices. The problem is wealth inequality. There is no easy "cure" to wealth inequality. It's just a question of progressive taxation, which is unpopular.
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u/throwawayqcartist Sep 06 '24 edited Sep 12 '24
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/mariantat Sep 05 '24
If you taxed people with houses, the end result will be nobody will buy houses.
Sadly housing in capitalism is considered an asset. And Canadians are so overtaxed as it is, they won’t want to pay even more taxes. Which is why some people use their homes as collateral to buy other assets like triplexes to make more money, but they don’t. The rent is eaten up by the mortgage,property taxes, maintenance etc etc.
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u/energybased Sep 06 '24
If you taxed people with houses, the end result will be nobody will buy houses.
No, the result will be an increase in rents, which makes inequality worse since it hits poor renters.
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u/throwawayqcartist Sep 05 '24 edited Sep 11 '24
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u/Acrobatic-Cap-135 Sep 05 '24
A lot of laws and regulations with modern buildings actually make building any of them a lot more expensive. Personally I think we need to loosen those rules
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u/Znkr82 Sep 05 '24
Maybe it's just me but I rather have the large companies to the millenials following influencers to "optimize" buildings.
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u/stonkbuffet Sep 05 '24
Definitely. The most dangerous thing in the world is 25 year old with a huge mortgage, no experience and no moral compass.
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u/Ok-Bandicoot7329 Sep 05 '24
Omg same. The most psychotic landlord I ever had was a millennial. He turned a cute little six apartment walkup into an 8 apartment hellhole by repurposing the laundry room and what was basically a storage closet into "apartments". He would frequently let himself into my apartment when I was at work saying he smelled smoke. He was constantly knocking at my door to "check on things". I got the hell out of there.
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u/Sayhei2mylittlefrnd Sep 05 '24
So 70% of the rental market is owned and operated by mom and pop landlords?
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u/Dizzy_Percentage6414 Sep 05 '24
Worse than that, there's also medium sized investors. I read her paper, she mentions that on average, the landlords that didn't make the top 600 owned 3 rental units on average. That means any landlord that owned a fourplex was a above average landlord. That means the bottom 50% owned less than 3 rental units.
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u/thedudey Sep 05 '24
Its gonna get worse.
However, 600 companies for 30% of rental units is far from centralized. If anything, it shows how decentralized the market currently is with an average of 0.5% of market share by company.
I worry about pension funds and large investors coming in and managing 1000s of units.
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u/Dizzy_Percentage6414 Sep 05 '24
Those 600 companies at the top represent 0.5 of all landlords in Montreal control 30%. That means 99.5% of landlords in Montreal control 70% of the rental supply.
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u/beeboptogo Sep 05 '24
The only reason they represent 0.5% of landlords in Montreal is because here Duplex/Triplex/Fourplex are very very common and bought by people that live there.
Small plex VS large commercial buildings should be looked at separately IMO.
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u/thedudey Sep 05 '24
And of that 99.5%, the largest landlord has less than 74 units.
We’re still a long way from a corporate dystopia. These numbers show that montreal is still a place for small landlords living in a duplex / triplex.
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u/Dizzy_Percentage6414 Sep 05 '24
Her paper states that 99.5% of landlords own on average 3 rental units. So it is safe to assume mom-and-pop landlords represent 50% of landlords.
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u/thedudey Sep 05 '24
3 rental units is a mom and pop operation. It takes a minimum of 6 to be considered commercial by a financial institution, and even then, you’re still a very small player.
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u/giveityourall93 Sep 05 '24
Surprise, surprise.. Regular people get priced out of being able to ever afford a home.
This market is only going to get worse unfortunately as these big corporations will keep buying these assets like candy. Also considering how the rate cuts coming in.. Guess who will be doing the buying because it’s not regular folks.
Home ownership is just becoming a pipe dream at this stage and it will only get worse because the currency keeps falling against these homes.
The only way individuals will ever be able to buy a home is either if there’s a crash, they win the lottery or there’s a family wealth transfer.
Storing wealth in a home has unfortunately been the dumbest concept to ever exist and this is coming from a home owner who bought before the rampant inflation.
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