“Sky Rocketing Real Estate Prices In Desirable Areas Creating Enclave For Super-Wealthy”

Well, if this isn’t the biggest piece of socialist BS ever published, then I don’t wanna know what is!

The premise of this article is basically, “People with more money can afford to buy more expensive houses…..and that’s not fair!”

It’s also not fair that I’m not married to two super-models, that I can’t fly, and that I’m no longer able to spit fire.  I wonder if there’s a media outlet that wants to write an article about that?

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By: ANNA MEHLER PAPERNY
The Globe & Mail

Growing up the northwest end of Toronto, Irma Baldanza aspired to live in a place like Lawrence Park.

“I remember driving through areas like Forest Hill and Lawrence Park, where my Dad would point out and say, ‘Look at these beautiful houses,’ that sort of thing,” she said. “Once I got married and we started thinking about owning a home, this is one of the areas we looked at.”

The couple started out with a relatively affordable house on Yonge Street and Blythwood Road in the mid-1980s, moving in 1990 to a red-brick Georgian house they could add on to over the next several years, accommodating a growing family. In the past two decades, Ms. Baldanza has seen the treed neighbourhood become increasingly attractive for wealthy families – and, more recently, developers and investors – drawn to the larger lots and green spaces.

In a city where property is increasingly at a premium, the rarity of a neighbourhood of large lots just blocks away from a major transit artery makes for dramatically increasing property values. It helps to have good schools – both public and private – and engaged residents eager to pitch in for fundraising and beautifying initiatives.

Local real-estate agent Cheri McCann said a new house that would have sold for $2.4-million eight years ago is now going for nearly twice that. Even 10-year-old houses are selling for as much as $3.5-million.

This prized slice of city just southwest of Lawrence and Bayview avenues is the area of Toronto where average individual income has grown the most – relative to the city’s average – in the past 35 years, according to a report that came out last week from the U of T’s Cities Centre. That report found the city is being increasingly polarized between rich and poor neighbourhoods.

“The entry level at Lawrence Park is getting higher and higher,” Ms. Baldanza said. “I wonder where it’s going to end. Obviously, people are going to be buying these homes, so I don’t know if there’s just a lot of wealthy people out there.”

It’s harder for Ms. Baldanza to judge the tone of the neighbourhood now that her grown children aren’t at school nearby. But as a member of the Lawrence Park Ratepayers Association she’s familiar with the pride residents take in preserving the local green space, ensuring trees are planted to replace the aging canopy that lends the area its name.

“It’s a source of pride for our neighbourhood, and we like to keep it clean. … I think that all contributes to the attractiveness of the neighbourhood.”

Councillor Jaye Robinson, who defeated incumbent councillor Cliff Jenkins in October’s municipal election, views the shift to super wealthy as a cause for concern.

“There has been this trend – an unfortunate trend, because it is affecting the character of the neighbourhood,” she said. “The price point of homes in Lawrence Park is going up because of these bigger houses.”

From Ms. Robinson’s perspective, it’s indicative of a need for development that “shifts the decision-making power back to residents.”

While the city’s added pockets of wealth are an economic boon, pricing out all but the highest bidders for in-demand areas can help drive income polarization in neighbourhoods across the city.

“You get this kind of cascading effect of giving even a small group of people a windfall of growing disposable income,” said Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives.

It’s an inevitable result of basic supply and demand. But in situations of unequal income growth, the polarizations created by pricing people out of the real estate market are sharper.

“One of the challenges is that we are ending up with a city where you don’t have people of different income levels living together and that has an impact in a number of ways,” said John Campey, executive director of Toronto’s Community Social Planning Council. It can mean sharply divergent access to services – even public ones such as schools, where parental fundraising in affluent neighbourhoods can make a huge difference in the quality of programming.

One of the most visible characteristics shared by the city’s most desirable enclaves is access to transit: The majority of the city’s richest neighbourhoods are on or very near subway lines; only 19 of the city’s 68 subway stations are within or near low-income neighbourhoods.

This is one reason why discussions around income disparities keep coming back to transit: That’s what helps make affluent neighbourhoods desirable, and that’s what policy makers keep hoping will aid areas of the city that risk becoming no-go zones because there’s nowhere to go (or no way to get there).

“You get rid of, almost, the ghettos we’ve got now where people really are trapped,” Mr. Campey said. “You make more of a mix because you make more of those neighbourhoods attractive, which works both ways: It attracts more middle-income into those neighbourhoods but it also makes it more easy for low-income people to get around.”

Then there are downtown wards that have gone from low-income inner-city neighbourhoods in 1970 to highly prized areas of nightclubs and trendy condos. In Trinity-Spadina councillor Adam Vaughan’s mind, that gentrification has positive potential if the city leverages it properly. In a market hungry for condo development, he’s made a point of trading extra density for a floor or two of rental, below-market or supported-living units. And he’d like to see that become the norm.

“We can do it: We have enough growth in the downtown, and enough hyper-density. I could probably, if I wanted to, on every single building do it. … To get that economic diversity returning to the downtown core.”

__________________________________________________________________________________

I’m so confused by this article.

I guess as a basic concern, I’m wondering: “What is the point?”

What are they trying to say?  How many monkey-scientists did it take to conclude that people with more money are able to afford more expensive houses?

Are we trying to reinvent the wheel here?  Are we saying that people with money shouldn’t be able to cost things that cost more money?  (Let’s not get into a debate about the option of both public AND private healthcare…)

Cuba is always an option.  In a true communist dictatorship, the state controls everything and there is no “rich” and “poor.”  Everybody is equal, and I suppose the poor or the “misfortunate” can inhabit Bridal Path houses while the rich can take their turns living in basement slums.

I read through at least one hundred of the several-hundred comments on the website where the article was posted, and about 90% of them condemn the idea that the hard-working should share their wealth with the needy.

My favourite comment:

“Those of us who were able to save enough to buy homes in areas that have become more desirable over the years shouldn’t be forced by leftist social engineers to slum down our neighbourhoods for the sake of the less fortunate.”

Or how about this one:

Instead of complaining about other peoples successes, why not try achieving it yourselves?  Oh wait…..it’s so much easier to do nothing and trick taxpayers into providing you liberal socialists free money.”

Clearly, the people have spoken.  It makes my job easy.  In fact, I could probably sit back and say nothing at all and not have to take the risk of offending my readers.  But when I have I ever sat on the fence before?

I guess the next logical argument in this Globe article would be something along the lines of: “How come there is no subsidized housing being built in areas like Rosedale, Leaside, or Lawrence Park?  Why are we leaving these areas to the rich?  Why do we continue to build subsidized housing in areas that are already poor?”

It’s a great point.  If your a socialist.  Or, if you are poor.  Or, if you are both.

Or, if you’re a bleeding hard leftist who doesn’t believe in the concept of “rich” and “poor.”  But then again, there aren’t any rich leftists, are there?

Ben Affleck’s character in Boiler Room said: “Anybody who tells you that ‘money is the root of all evil’ simply doesn’t have it.”  It’s so easy to throw the ball onto the other side of the fence, is it not?

Show me ONE major metropolitan area in North America where there are no “good” and “bad” neighbourhoods.  It’s impossible; nothing more than a leftist’s pipe-dream.  Any time, money, or energy we spend trying to uproot the natural order is a waste.

The article talks about “pricing people out of the real estate market” is if there is one person at the controls – or, as if this isn’t the natural result of the free market!  Is this a bad thing?  Should we start giving poor people $4 Million houses?  Should welfare payments now come with a chance at a house on Briar Hill?

I’m confused.  What is the solution, according to this article?

I have a suggestion.  If you are one of these people who walks around wishing you had more, then work harder.  If you work one job, work two.  If you work 40 hours per week, work 60.  If you work 60, then work 80.

How about a return to traditional values such as hard work?  Why is it that every time I pick up a paper, I’m reading about one group or another who is complaining that they’re experiencing hardships, when the irony is, they could have used this time and energy to work!

Our government works in mysterious ways.

While I respect our Canadian government’s social policies, I wonder if they’re not going out of their way to provide liberties to non-Canadians while neglecting people who have been living and working here their whole lives. 

I wonder if they’re catering to people who would otherwise accuse them of not being catered to.

I guess the future holds only two groups of society: those with family money, and those who don’t want to work for anything.  The latter group will in-turn consist of those who will suck it up and work for it, and those that will complain until the government subsidizes their lives.

So much for not showing my true colours…

30 Comments

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  1. Eric says:

    WEB’s comments are right on and quite balanced. Success is a combination of luck and hard work. The proportion of each will vary from case to case, but luck is usually there to a significant extent.

    LC, I’m glad that you are someone who has succeeded entirely because of your own hard work and without the benefit of good fortune. That is a testament to several of the more admirable aspects of our society — social mobility and merit-based rewards.

  2. WEB says:

    LC….

    I never said that I did very little work. I’ve worked very hard indeed!

    I’m sorry that you were insulted by my comments. I was just saying that I felt success was more luck than most people think. I will also say that there are some people who’s success is close to 100% hard work. And it sounds like that is the case for you. I understand that women face significant discrimination in the work force and I think that is outrageous.

    You said you made some smart investments. That is fantastic! The great thing about investments is there is no discrimination. You use your brain and if you are right, you are successful. The stock doesn’t know that you are a woman or you are short or whatever. Actually, in the case of investments, we should be glad that we have weak competition (due to discrimination.) The weaker the competition, the better we can do!

  3. JG says:

    Now that we have digressed slightly …
    In reference to WEB’s comments – i agree with most of the statments you make.

    Children with parents of affluence and influence, have a much higher probability gaining employment, executive positions, careers, etc then children whom come from a lower income family where the parents do not have the same contacts and persuasion.

    However, with this said, what I truly love about Canada in particular, referencing WEB’s statement of Canada being fair, is that anyone with enough courage, strength, dedication, and a bit of luck can find themselves in the top 1% of income earners. It will not be an easy journey, but for those who fight for it, its attainable.

    I come from what can be considered a lower income/lower class family. Single mother raising 3 boys in co-operative housing. For whatever reasons may be, luck, hard work, drive, etc, I was of the few of friends and only brother who went on to finish highschool and graduate University (York U!). I still have friends hanging out on the same street corners from when we were kids! Was it luck for me? Could be. Was it hard work and drive to want to do something more, something different? Could be.
    But what I find of most value here is the opportunity was there for me. It was not the easiest. I did not have parents to pay for my education. I was not able to live on Res because I could not afford it, so the 2hr commute one-way was killing me, but drive forced me to do it.

    I now find myself, through a bit of luck, but no doubt born out of drive to further myself, employed with a Financial Instituion making what can be considered above the Median income for Toronto Proper. I am in no way the top 1% earner, but considering my humble beginnings, I am not complaining.
    And it is my hope in the future to pass to my children the importance of education, networking, proper work attitude, etc. so as to provide them with a few steps further up that ladder from whence I started .

    Canada is fair for those willing to work hard. It is not easy, it may not be fair – Henry Wetherington the 3rd may be given his life to him on a platter – so be it!, with enough strenth of character and some luck, one day you, too, could own that home in Lawrence Park.

    ….

  4. LC says:

    @Dave & Kyle – agree with you both

    @WEB – must be nice to make so much money for doing so little work. I found your comments insulting as a woman fighting everyday for her position in a completely male dominated industry. I work hard and made smart investments which allowed me to purchase a great house in an upscale neighbourhood. And for those things, I will not apologize nor feel “lucky” to be where I am today.

  5. meow says:

    @Dave
    I didn’t really watch it either, only saw bits and pieces. I don’t think they were too hard on you. All I really heard was something about your condo being fine the way it was…..kind of like, you should expect it to look like that….and that you should have to do upgrades yourself because that’s what makes it your own…type-of-thing….

  6. Jess says:

    I agree with WEB on this one. I’m well paid, work in finance and have worked hard throughtout my life BUT I don’t think for a second that my relative success is a result of my hard work alone. I’ll also point out that my version of “working hard” involves sitting at a desk and staring at a few monitors. Dave, your version involves looking at condos, talking and writing. Really, how hard do you work to earn your living?

    Being poor and being lazy are not one and the same. I know plenty of poor people that work much, much harder than I do.

    The article itself doesn’t make any sense. And I do not suggest we start giving out expensive houses to the poor. I do, however, challenge you to re-think some of the comments you made in your response.

  7. Princess Clara says:

    @ WEB – Well said 🙂

  8. WEB says:

    Well…this debate is interesting. When I was in my teens and twenties, my views were very similar to David’s. But as I observed and thought about the world, they moved more towards the center of the political spectrum. I’ll tell you why.

    It is my view that financial success is 60-70-80-90% luck and the remainder is hard work. Before I go further, please note that I am in the top 1% or better income and net worth bracket. Let’s look at myself then. I was LUCKY because: 1) I was born with parents that emphasized education like it was a religion; parents that told me that hard work was important; parents that taught me so many important lessons and philosophies, parents that were intelligent enough, cared enough and wealthy enough to get me subscriptions to investment publications, etc, etc, etc. 2) I was born with an above average IQ; 3) I was born with an innate interest in business and investing (which lucky for me is a field that pays well…too well, in most cases.) 4) I was lucky to have some key teachers that helped me along the way.

    If I truly look at my self OBJECTIVELY, I know that for me, the fact that I earn enough to live in a nice neighbourhood is probably 90% luck. And when I observe and get to know people who work in the financial industry, I’d say that they are even LUCKIER! Most got their jobs because of who their DADDIES are and most of these people are so useless at their job that I wouldn’t hire them to run a lemonade stand.

    I understood all of this for many years but I recently started to read Malcolm Gladwell’s books- Blink, Outliers….he has all kinds of data in those books that will surprise you as to how important luck is in one’s success. And it really is all very simple and logical.

    Naturally, most of those who have done very well in life have worked hard to some extent. And thus these people want to believe that their success is all hard work. It doesn’t feel too good to admit that one’s success is mostly luck. For all of those people who think that luck didn’t play a large role, ask yourself what would have become of you if your father was an abusive alcoholic and your mother was borderline crazy. Furthermore, if your parents were uneducated, poor, had low IQ’s and didn’t understand the importance and thus didn’t promote education. I have a friend who had parents like this and I can tell you that this friend is more intelligent than I am. Yet, his income is consistently in the bottom 1% of income earners.

    This all leads to the all-important question of how to distribute wealth in society. Do we want an everyone-for-themselves society (extreme right) or the opposite? Interesting question indeed. This is how I think about it. Imagine that were are about to be born in this world and someone asks you what kind of world do you want to be born into. Do you want a right-wing world or a left wing world? You choose. But here’s the kicker: you don’t know who your parents are! They could be uneducated and abusive alcoholics who are on welfare or the opposite- perhaps your father is a CEO of a large bank and your mother is a doctor. And they are going to love you, nurture you, guide you, pay for whatever education you need, etc, etc, etc. When you graduate, they will arrange for you to take one of six different job opportunities. (If you think this doesn’t happen…then you have absolutely no idea how the world works.) So what is your choice? Be careful if you choose the right wing world because you could get the abusive parents and then you’ll have a horrible and possibly short life. But also be careful to choose the left world because you may not have the right incentives to work hard and contribute to society. For me, I’d take something in the middle of the political spectrum…..such that if I am hard working and well intentioned, I can benefit to some degree. And such that if I am born into a really horrible and bad situation, I have some chance to pull my way out of it.

    My feeling is that if one sits down and thinks about this and is really honest about it, they will vote for the balanced system. And by the way, I think Canada as it is today, is a very well balanced system. And I feel very lucky to be born and raised here.

  9. David Fleming says:

    @ MEOW

    I didn’t see the show but I was told all about it.

    They asked me if I wanted to “go up against Plazacorp” on the show and I wondered how the hell that would help my business or my real estate investing in any way.

    TV shows make heros and villians through massive amounts of EDITING, and I didn’t trust the producer to save my life.

    I also didn’t think I should “go up against” a developer who holds my fate in his hands – since I’m in the occupancy phase of one of his projects.

    I’m sure the developer had tons of time to prep and I’m sure he gave answers that would satisfy 99% of the viewing public.

    I’m flattered that they used my videos. I’m not sure of the legalities involved, but I don’t really care.

    My only question: did they make me look like a moron?

  10. sput says:

    Privelege Denying Dude Says:

    “It seems to me……. That living paycheck to paycheck is often a choice”

    Etc.

    http://knowyourmeme.com/memes/privilege-denying-dude

  11. meow says:

    This is unrelated to this post and you don’t have to publish this.

    I just wanted to tell you that they were showing your videos on the Rogers Cable channel real estate show yesterday.

  12. West Sider says:

    There are a few underlying themes in that article that are valid, but they are over-shadowed by the whiny tone of the writer.

    I do see that when every neighbourhood near a subway becomes unaffordable for the “average” family, you get the giant failure of urban planning that is the GTA these days… more families are pushed further and further out into the burbs (which have zero public transit) and the traffic problems multiply. If there was a better plan for density (with smaller but more affordable homes near transit), the traffic in Toronto would be far better. Also, if you had more people on the subways of the TTC (and less on buses in remote areas), you could have higher revenues, and a better transit plan.

    Also, when the neglected burbs start to crumble, and only a few nice neighbourhoods survive, you start turning into a failed city like Detroit or Buffalo.

  13. rock says:

    agree david..great blog..jeff 316 or 666 or wtf ur name is…get a life and some overtime frm ur obvious city union/socialist/left wing job that mayor rob will soon delete!!!ha!!all jokin aside david is right…wecome to democracy..i like that i can work harder at a job i love and keep my money so i can live in the central core..happy holidays everyone…stop whiniiiiiiinnnnnniiiiiinnnnggggggg……..:)

  14. Krupo says:

    An out of focus newspaper article gets an out of focus commentary. Seems apt.

    But really, the Globe’s article was all over the place. Is it about gentrification, economic policy, or absolute randomness?

    Speaking of absolute randomness – try and find Christopher Hume’s vision of Toronto in 2034. “A Brave New World.”

    http://www.thestar.com/specialsections/article/894825–a-brave-new-world

    At least it had a focus even though it was even more zany in some ways.

  15. Chuck says:

    I agree with Jeff316 that this article was slightly out of character… it was just kind of angry without focus.

    But part of putting so much heart into something like this blog is you occasionally put a foot in the mouth. I’ve done it before. Live and learn.

    You still rock, have a great holiday!

  16. XOXO says:

    Did you read Marcus Gee’s article right below this one? It basically contradicted everything that this author had written. I was surprised to see a socialist piece like this in the Globe. Save this crap for the Toronto Star and those bleeding hearts.

  17. Princess Clara says:

    My brother lived in a rich neighborhood in marin county california for a few years not too long ago. My family isn’t rich, and even though he lived in a “rich neighborhood” with monster houses and retired celebrities.. he hated it.

    Why would you want to wake up every morning in your cheap apartment surrounded by people who obviously have more than you? Isnt that kind of a kick in the head?

    I think people strive for these things because they want that status.. like “oh i live in rosedale! that means im rich!” but living in rosedale doesnt make you rich, being rich makes you rich.. and while living in rosedale might be the illusion you want to create for yourself.. by moving more low-income people into rich neighborhoods, they would become less desireable and the rich people would all leave and form a new community of rich somewhere else.

    I guess we can see when regent park is finished how this mixing of different income levels turns out.. lol.

  18. Cleveland.McMaster says:

    David….I wonder if Jeff316 knows how many of your colleagues consider reading your blog part of their daily routine.

  19. Martin says:

    JEFF316 didn’t flush out his thoughts very well either. Lots of complaining, not a lot of explaining. What is your point?

  20. Cleveland.McMaster says:

    Jeff316
    “Not because I’m some quack-pot socialist…..”
    Ah, it is to laugh.
    You are clearly one.

  21. Michael says:

    David I think the problem (if it could be argued that there is one) with your opinion above was that you didn’t flush it out enough! You gave a synopsis of your true thoughts on the subject, and thus people can argue that it’s “simplistic” and “ignorant.” I’m sure if you had the time or wherewithal to write 2,000 words on the matter, you’d be able to prove your point beyond a (reasonable) doubt. I for one would love to read it. Because, as you might assume, I completely agree with what you wrote above. And, it’s not because I live at Yonge/Eglinton. That’s a simple coincidence.

  22. RPG says:

    Please, PLEASE tell me that you won’t stop posting your opinions just because one person didn’t agree with it.

    I agree with everything you said, the only difference is that I’m not sure I have the stomach to publish my thoughts on an open forum. I think you’ve inspired me.

    As for JEFF316 I think it’s obvious at this point that David posts whatever he wants and then takes the business that comes to him. If somebody doesn’t like what he says then they go find another agent.

  23. moonbeam! says:

    ‘Situations of uneven income growth’ — boo-hoo. Yes there are the haves and the have-nots. Such is life in a democratic society. The haves can afford nicer homes. The have-nots must live in cheaper homes. The bleeding hearts & social policy wonks must accept this. They can ‘help’ the poor with our tax dollars…. but Dave is right, this is not Cuba (or Mao’s China)!

  24. Jeremy says:

    What I took from the article is that it’s perhaps a problem that the poorer segment of the population has less access to fast public transportation, which was at least presumably intended to be for everyone when it was built. This may make it harder for people to do that 80-hour work week, when they have to spend 20+ hours a week getting to and from their place of employment.

    It would appear that there’s somewhat of a lag between when a major new piece of public transportation is built and when the property values around it really get high. So if the city continues to build at a decent pace, then there should always be some cheaper real estate near good transportation, and in the long run, everyone wins from having a bigger public transport system.

  25. jeff316 says:

    Well, I should add that if I signed an representation agreement with you then I’d probably be out of luck on my firing wish. 😉

    Look, its nothing personal or even political – I read your blog daily and enjoy it – but when your analysis consists of “work more, work harder, shut up, stop whining socialist hordes” well, that’s so simplistic it’s not even offensive, just sad and ignorant. You’re missing the point, and obviously lack the insight and understanding necessary to accurately assess buyers, sellers and the market and understand the nuances of both shape society.

    And it’s doubly mistifying to see you post something like this when your blog generally sets out to explain the nuances of the real estate market. Can’t sell the house for the amount of money the client “needs”? Well, ok the follow your own advice – “work more, work harder, shut up, stop whining”…no more excuses as per that mentality, no?

    Oh wait, it’s not that simple. Of course, but that goes both ways for all people of all walks of life.

    Anyway, no need to put these two comments on the blog, but just…think a little bit before you post something. We all get excited and make rash judgements but it reflects not only on you but also on your brokerage and your coworkers, whether intended to or not.

  26. Cleveland.McMaster says:

    Thank you, David, for telling it like it is.
    Since when should people feel bad about being successful? We’re constantly encouraged to socialize and equalize. You asked whether we should start giving out $4 million houses with welfare cheques. You wrote this tonge-in-cheek, but it represents the mentality of the leftist culture. Maybe we should tell students to strive for mediocrity (instead of high achievement) because working hard is futile when “everyone” ends up with the same house. Even people who make very average incomes (like me) could read the Globe article and think, “And this is a problem because……??”

  27. Duncan Scott says:

    It’s just like what I teach in class… you can’t walk into a Mercedes Dealership and tell them you want the $70K car but you only have $30K… they are not going to say “Well Mr. Scott you seem to be nice guy so we are going to give it to you for that price.”

    If you can’t afford something now… then set some goals, work harder and save some money. Look Up & Look Forward!

  28. jeff316 says:

    Wow. I’ma big fan of your blog but if you were my real-estate agent I’d pretty much find a way to fire you on the spot after reading this.

    Not because I’m some quack-pot socialist, or because you’re opinionated, but because the opinions you’ve expressed here show a clear lack of insight, analysis and intelligence – three skills that are most necessary to sell a house at the maximum profit to a homewoner.

    I’m surprised your brokerage lets one of their agents post things that make their agents look like mouthbreathers.

  29. Kyle says:

    There’s really nothing new or surprising in these articles. Location, location, location, the areas of the city that are closest to transit, culture, shopping and amenities are the most desirable and expensive, and therefore attract those that can afford to live there. Areas that are underserviced are less expensive and attractive to those who have limited incomes. These articles point out what is obvious to anyone familiar with the most basic of economic concepts. It’s a natural evolution of any large city and has already happened in every other older large city in the world.

TWEETS