Friday’s blog comments were very interesting to me.
Don’t get me wrong, I never write a blog expecting that 100%, or 0% of people will agree with me. In fact, the most interesting discussions are those were voices and opinions are split 50/50.
In years’ past, I would have labelled this blog post a “Friday Rant,” but with the way the market and the industry today are, just about everything I say is a rant of some sort.
Friday’s theme continued into the weekend, where I had additional delusional bully offer experiences. I continued to spend the weekend wondering why so many agents lacked the ability to properly transact in this market.
Then I sat down and read the comments for Friday’s blog, and one provided me with a stirring answer to that question.
A reader said:
Well, I suppose this reader kind of has me pinned to the mat.
Ignoring where I am in the industry, perhaps this reader is correct in asserting that if I constantly lament the lack of proper knowledge and skill among the “average agents,” while at the same time, expecting things to work differently, then I am guilty of being naive.
Naive, and a little foolish, perhaps. I’m like a child staring at the electric burner on the stove, watching it heat up, then touching it, and complaining about the pain.
Another reader asked, “Is there no mentoring system in the RE profession when new agents sign on with a broker?” I responded in kind.
Then another reader complained about agents, blamed them for high housing prices, and said that “Everybody has a duty to act honestly.” I found this interesting because while I’m inclined to agree about honestly, and I have modelled my entire career about being the honest, real-estate insider, there is going to be a massive difference in opinions about what is honest, and what is considered “negotiating.”
This reader took issue with the fact that I said if I received an offer on a property with a May 1st closing date, and my clients wanted a May 1st closing date, that I might tell the buyer agent we wanted a different date, so I could eventually faux-concede that tenet of the offer, and build leverage for myself and my seller elsewhere.
This, in its very most basic form, is called “negotiating.”
The Toronto Maple Leafs have several unrestricted free agents this summer, some of whom they may elect to re-sign, some they may not. Let’s say that defenceman Ron Hainsey is offered a contract by the Vancouver Canucks. And let’s say Ron Hainsey has zero desire to play in Toronto next season. Perhaps Ron Hainsey tells the Canucks, “My heart is in Toronto, and I really want to stay there,” in attempts to build leverage.
With respect to the commenter, her version of “negotiating” exists only in a fantasy-world with the proverbial rainbows and unicorns.
The world is a brutal place. Absolutely brutal, in its realities. Some don’t see that, and personally, I envy them.
I wish that people could agree on everything, everywhere, all the time. But that’s unreasonable. And, if I might us a word that was use to describe myself above, unrealistic.
I’ve had the topic of “Renovictions” in the blog queue for about three months now, with four articles from the major newspapers hitting my reading-list.
Renovictions are problematic, no doubt about it. On their own, or as a microcosm of our large-scale housing issues.
But as I always say, there are two sides to every coin.
Ask any layman in Toronto, and he will tell you that “Tenants have far more rights than landlords in the city.” Disagree if you wish, but those in the know wouldn’t hesitate stake the same claim. After the Liberals introduced the Fair Housing Plan in 2017, it essentially created the concept of a “lifetime tenant.”
With landlords no longer being able to legally evict a tenant unless they, or a member of their immediate family, were going to occupy the property for residential purposes for a minimum of twelve months, it meant that a tenant could essentially stay forever, if he or she chose, provided that the landlord did not want to occupy the property, or did not want to sell the property with the tenant attached, to a buyer who also wasn’t moving in him/herself.
This was an absolute game-changer in the real estate industry, and it made landlords choosier than ever. I would argue that this plan backfired in some ways, since the so-so tenants that landlords might have taken a chance on in the past, would find it far more difficult to gain approval today, with landlords knowing that they can never get the tenant out.
One of the only doors left open to landlords in the new rental frontier is a “renoviction;” a word that has a negative connotation to tenants and tenant advocacy groups, but is actually just a term used to describe a legal eviction on the grounds of plans for a large-scale renovation.
These renovictions are supported by some, and not others, and that too goes without saying. As I mentioned at the forefront of this blog, the best discussions on TRB are those for which there is no consensus of opinion.
The issue I see with renovictions is that it’s all a matter of perspective.
The opinions, and conclusions, are based on the narrative that’s being used.
For example, consider this headline:
That sounds awful, right?
There’s no case to be made that bankruptcy is a good thing.
Except that, as those of you who choose the article will see, the bankruptcy is not only the result of the “evil” renoviction, but rather the choice of a person to borrow money from a predatory lender, in order to rent a subsequent property of their choosing.
The article is looking to connect several dots toward a pre-determined conclusion.
Like I said; it’s all about perspective.
Consider the photo I used as the feature for today. A refresher:
Did I choose that photo to subconsciously lead the readers to believe that all “renovictions” are for properties that are falling apart?
We know that there are all kinds of dubious renovictions, many unethical, some borderline illegal.
But that photo gives the perspective of a property that needs to be renovated, and thus might lead a casual reader to have a more favourable opinion on renovictions right from the onset.
So what if I used this photo:
This photo shows an empty room, which was where I was initially going with the theme.
An eviction leads a property to be vacant, so I searched for “vacant property” and this photo came up.
It looks like a nice picture, it’s appealing, and so I added it to the queue for consideration.
Had I used this photo, the reader would have been more likely to think about renovictions as unnecessary, in that they really just serve to “jack up” the prices of rentals, as the CBC article above noted.
So what if I used this photo:
Somebody with their hands out, that’s never good.
“Renovicted, now in need. Please help.”
That’s what the photo says, and if it were used at the onset of this blog, again, a reader might begin reading in a completely different mindset.
So then what does this photo say?
I think you get the idea.
But truth be told, I usually look for 3-4 photos before each blog post, often with differing themes, and then pick one for the feature photo.
Any of these could have been used.
And they all would have shone a different light on a subject merely called, “Let’s Talk About Renovictions.”
The point I’m making is that the term “renoviction” already has a negative connotation, even though it’s legal. So then when we write an article linking bankruptcy to renovictions, in a cause-and-effect manner, we’re straying even further from the existing reality.
With respect to the author of that CBC article, the idea that renovictions cause bankruptcy is ridiculous. There’s no cause-and-effect. There’s the legal renoviction, the tenant’s choice as to where to go, and how to find his or her way there, then the choice to borrow money at a predatory rate, and then the effect of, potentially, at some point, going bankrupt.
A cause-and-effect between a renoviction and bankruptcy, by the same logic, would excuse somebody for robbing a bank because he needed money.
This is all coming off as very harsh, I get that.
But my issue here isn’t so much with the renovictions, as much as how they’re being portrayed, and the message that articles like the above are sending.
Case in point, this article as well: “Not Sure Where I’ll Go;” With A Renoviction Looming, This 79-Year-Old Renter Is Urging Local Governments To Act Now
That’s absolutely heart-wrenching.
The headline is awful, but the photo of this kind old lady is tear-inducing. I can’t help but picture my mother in a decade, and wonder, “Why aren’t her kids looking after her?”
Nobody wants to see this, and yet I’m caught somewhere in between feeling sorry for this woman, and ignoring the obvious slant on the story by the author and the publication, and realizing that renovictions are legal and, in many cases, beneficial.
And that’s problematic for those that want to paint them all with the same, evil brush.
An adventure in the nature of trade is not evil. It’s not uncommon, it’s not unusual, and it’s something the government welcomes with an associated tax rate.
If an individual engages in commerce, purchasing a residential building, and then at some point down the line wants to renovate the building to increase the rents, this probably falls into the most basic category of “keeping up the value of an asset.”
This is basic commerce, and while there are all sorts of opportunities for this to go awry and become unethical or predatory, on its basic merits, it’s merely commerce.
If and when the individual, who took on the associated risk of the adventure in the nature of trade, decides to put, say, $300,000 into the property, to increase the asset value, and the income stream, then that $300,000 goes back into the economy.
This isn’t a bad thing, is it?
Architects, lawyers, accountants, electricians, plumbers, carpenters, general contractors, drywallers, flooring installers, window installers, sheet-metal workers, concrete mixers, roofers, landscapers, day-labourers, and dozens of other gainfully-employed individuals will be provided with paid work during the course of this renovation. And in the end, the government will make money from taxing their wages, as well as likely making more money on a higher property tax base for the newly-renovated property, not to mention the higher income stream.
Everybody wins, except for the people who were evicted.
So how in the world are we to distinguish between those renovictions that are “okay,” and those that aren’t?
The Toronto Star article above showed no less than three photos of that poor old woman with her canes, struggling to get up stairs at one point. Should we feel bad for her, but not the professional pot-smoker living in a Queen West dump who’s landlord wants to overhaul the property?
This merely opens the door to discrimination, or selective emotion.
The truth is, I have no idea how we police this. I never said I did.
I do, however, see the economic benefit to renovating old properties, and as I would argue against the union who wants to keep assembly-line jobs in lieu of groundbreaking technological advancement, I would also argue that we can’t outlaw renovations and subsequently renovictions, just because it displaces people.
The person that worked hard to purchase a property and rent it out gets absolutely zero sympathy in today’s society. Maybe from 70% of the TRB readers, but not from the folks outside these Internet walls, no way, no how.
So what in the world do you do about this?
If the individual who owns that century-old, carved-up, run down property wants to tear it down and build anew, should he be able to?
If it means displacing existing tenants, should he be able to do as he pleases with the property?
I think he should be. If all the tenants are on month-to-month agreements, and there is no legally-binding long-term lease, then what’s the problem?
Now what if the owner wants to “spruce up” the place.
That is where we fall into a grey area.
Don’t get me wrong, there are a whole lot of folks out there today that would argue the individual owner should NOT be permitted to evict the tenants to tear down the house and build anew, or build a ferris wheel, or put up a hot-dog stand. You will never convince those folks otherwise.
But as for the grey-area, consider that the owner of the property described in this article is actually looking to keep the property as a rooming house, but wants to do major work, and thus raise rents when the work is completed.
There is no grey area according to the law here. This renoviction is permitted.
But it’s grey because it just has that shady feel to it. That’s not exactly a scientific definition, but neither is “the smell test,” and that’s simply how this feels.
I feel as though the entire discussion about “renovictions” as an unethical practice simply masks the larger issue in our city as it pertains to our housing crisis. Call it a microcosm if you want to, but I see it as a textbook example of the laws of supply-and-demand working in full force.
Except for the cases, when it’s not.
Hmmm…see how we have a problem here?