The Friday Rant: Another Tax Is NOT The Answer!

The Friday Rant | November 15, 2019


We all have our “favourite” newspapers and our “not-so-favourite” papers, right?

Of the four major Toronto newspapers, I’m sure you can imagine which ones I lean toward, and which ones I feel see the world through a different lens than myself.

There are many different ways to present news, as evidenced by CNN vs. FOX, which routinely tell completely opposite versions of the same story.

Here in Toronto, I have fantastic memories of the Toronto Star as a child; being up at a cottage in 1989, following the SPORTS section religiously every morning and watching the Toronto Blue Jays climb the standings.  Not to sound (too) old here, but back in ’89, we had to wait until the next day to find out who won the game, the night before..

This institution of Toronto news does have great writers, and it’s so ironic that while I personally consider this newspaper to be, at times, left-wing propaganda, I really like a lot of their writers and columnists.

The Star Editorial Board routinely takes jaw-dropping stances on current events, usually virtue-signalling to the rest of us, and often shaming and guilting society for not taking up each and every possible cause, no matter how small, or how few people are affected, when the rest of us are busy working and leading our lives.

Or, sometimes they just write about a topic from an utterly bizarre standpoint, one that I feel can only be born of hate for anything that doesn’t adhere to their principles of socialism of the twenty-first century.

A prime example:

“Jason Kenney’s Alberta Firewall Is A Giant Distraction”
Star Editorial Board
November 13th, 2019

Honestly, I read this article twice, and it feels like “fake news” to me.  I know it’s an editorial, so it’s not news per se, and rather falls into the “opinion” category, but it focuses on everything but the issue at hand.  It’s like suggesting that there shouldn’t be snow on the ground, but leaving out the fact that it’s January, and not June.

There are two sides to every story, and while I feel the Editorial Board’s side looks at about 10% of this issue, and leads the reader away from the real story, I’d like to present an opposite viewpoint.

I know many of you do not like Rex Murphy, for reasons A, B, or C, but it’s hard to argue with his column from Tuesday, titled, “This Is Not A Standard Downturn And Albertans Are Not Whining.”

Read the article, please.  Then personally email me with your rebuttal, because I don’t see anything I disagree with.

Some excerpts:

The Alberta oilsands produce the one essential product without which every other industry in Canada (or the world) could not function or exist: energy.

I have, from the beginning of the war on the oilsands, never understood why a product that everybody uses, every person, household, business and industry — and uses gratefully — to heat homes, travel, produce goods and maintain the economy, should draw down such blistering hostility on the one industry which supplies that product.

The globalist international movement of apocalyptic climate change has marked Alberta and its oilsands as its chosen target and symbol.

There has never been so concentrated and focused an attack on any industry or project that equals in scale the relentless, propagandist denigration of the Alberta oilsands and the town of Fort McMurray.

Whole continents and countries, whose oil production is exponentially more massive, have been ignored. No demonstrations in front of the great coal plant construction in China.  No “down with pipelines” in Beijing or Delhi. A pipeline in Alberta gets world coverage; oil production in Nigeria will never find the front page of the Toronto Star.

The key element of Alberta’s distress lives in the No. 1, frantically trumpeted, and ever-so-virtuously exhaled policy priority of the Trudeau-environmentalist government. Climate change is its very favourite, top-of-mind, most to be bragged about, highest virtue-signalling issue.

The Trudeau government’s obsession with its fantasy of being a global warming champion is and has been in direct and impassable conflict with the Alberta economy. You can pose as the Galahad of climate change, waltz in Paris and Rio, but only at the cost of damning the Alberta oil and gas industry. The mandarins of central Canada, and the parliamentary caucus of the Liberal government, at best, see Alberta oil and gas as an impediment to, a blotch on, their passionate desire to be the toast of the eco saints.

For SNC jobs, jobs, jobs, Justin Trudeau will dance around the rule of law and risk even his own government. For the billions in capital that have fled Alberta, the companies that have relocated, the tens of thousands of jobs lost — where is his leadership, his voice, his action? Climate change is his bible. Alberta oil, a footnote.

In case you missed it, this perfectly sums up how I personally feel about what’s going on out West, but I digress.

So there you have two news stories about the same topic.

We know how this goes.

I go to CNN and I’m led to believe that Donald Trump is about to be impeached, because there’s “BREAKING NEWS” and all sorts of revelations and incriminating documents surfacing.

I go to FOX News and I’m told that the Democrats are making fools of themselves in a Kangaroo Court, as they have no evidence and the country is laughing at them.

Is this not how news works in 2019?

It’s tough to have any idea what’s going on, anywhere, about anything.

Except that the Leafs suck, Mike Babcock is the wrong coach for the team, and Kyle Dubas really was in over his head.

So far this week, I’ve had one television station and two newspaper columnists contact me about this story:

“How Many Condos Are Sitting Empty In Toronto?”
Mary Warren & Gilbert Ngabo
Toronto Star

You have to read the article, since this is not what you think!

The CMHC didn’t provide vacancy rates.

Neither did Statistics Canada.

From the article:

From the fifth floor of his College and Dovercourt two-bedroom apartment, Jaco Joubert has a spectacular view of the glittering lights of Toronto’s downtown condos.

He’s often wondered why so many people struggle to find a decent place to live, with so many shiny new towers and cranes in the sky.

That curiosity led him to do his own investigation, training his camera on those very lights. What he found surprised him.

“It’s hard to explain why things are the way they are,” said Joubert, a designer, software developer, entrepreneur and city-building enthusiast, who’d heard stories of investors snapping up condos and leaving them empty.

“I basically wanted to answer that question.”

As a side project on his own time, Joubert set up a camera to watch more than a thousand units in 15 buildings at night, taking photos every five minutes from sunset to sunrise over a week, then repeating the process a few months later. Using heat maps and a custom filter, he overlaid images to get a snapshot of light patterns that he believes are a good measure of whether anyone lives in the unit.

His results suggest 5.6 per cent of the units he watched are unoccupied, in the middle of a housing crisis. In West Harbour City, a 36-storey condo tower just west of Bathurst Street, he found 13.5 per cent of units were vacant.

It’s analysis that, given the number of condo units in Toronto, could mean that thousands of potential homes are just sitting empty in the sky, as the city continues to study whether a vacant homes tax might incentivize landlords to rent them out.

“I think it’s an unreasonable state of affairs, to be honest,” said Joubert of his results.

“Some people have such excess that they can have empty units while at the same time our shelter system is overflowing.”

Okay…

So here we have a guy with nothing better to do, who sets up cameras and films people’s units?

That’s not weird at all…

“Joubert set up a camera to watch more than a thousand units in 15 buildings at night.”

Can you imagine if this guy wasn’t using these cameras to help with his pet-project, but rather was watching people shower and change clothes?  What’s the difference here?

My problem with this article (in case you couldn’t tell I have a problem with it…) is not the fact that units are empty in Toronto, but rather that a major news publication gave a platform, as well as presumed accuracy and authenticity to somebody who used such a rudimentary, unsophisticated, error-prone methodology, and both he and the publication are passing this off as fact.

I just saw two people outside my window wearing red.  This leads me to believe that all people wear red.

Come on.

And yes, I take issue with his, and everybody else’s idea on “fairness” in society, as emphasized by this quote:

“I think it’s an unreasonable state of affairs, to be honest,” said Joubert of his results.  “Some people have such excess that they can have empty units while at the same time our shelter system is overflowing.”

What does one have to do with the other?

Herein lays the problem with connecting these two dots.

If somebody has something, and somebody else doesn’t have something, there are those out there that think the simple answer is to take from the person that has.  Look no further than the United States where 100% wealth taxes are being floated by people running for government.  Ignore the economics behind how spectacularly this would fail, but just from that “fairness” perspective people talk so much about, is it really unreasonable to allow somebody to have something?

If two public school teachers work hard, save money, and buy an investment condo, is that wrong?

What if they refinance the condo two years later, and buy a second investment property?  Now they have three properties: their primary residence, and two investment properties.

What’s wrong with that?

Because we’re almost at the point where society has deemed it immoral to own housing.  That’s the root of this entire issue; the issue of owning a vacant condo.

That statement again: “I think it’s an unreasonable state of affairs, to be honest.”

What is?

That units are vacant?

That next quote: “Some people have such excess that they can have empty units.”

Excess.

What?

Define “excess?”

Who’s job is it to define “excess?”

Does the billionaire from China, who flies a private jet and lands on a runway paved with the souls of the unfortunate, who purchases condos in crisp dollar bills, have “excess?”

Do the school teachers who save for years and years to invest in Toronto real estate have “excess?”

I ask again, “Who’s job is it to define ‘excess’?”

The solution for so many in society today is to institute a “Vacant Property Tax” like Vancouver has.  Because it didn’t take long before this peeping-Tom’s “study” caused Toronto city councilors to clamour about fresh blood, er, tax:

“Councillor Calls On City To Mull Vacancy Tax After Man Does Own Study Of Empty Condos”
CBC News
November 12th, 2019

I will argue, to nobody’s surprise, that yet another tax is not the answer.

First and foremost, what is the number of vacant units in the city of Toronto?

Our friend from the Toronto Star article, who videotaped people’s condos, seems to think it’s quite high!  Has he taken into account that newer buildings, in the “occupancy phase” of ownership, may not allow rentals from non-owners?  Or that occasionally there’s price-fixing from condo developers that make it impossible to rent out your new unit?

Or how about that the investors, who are looking to sell once “occupancy” is through and “registration” has taken place, have chosen to keep the unit empty and bleed money each month so they are able to sell the unit upon registration without a tenant that they can’t evict?

Or how about the fact that he conducted this “study” in the fall/winter, when many retirees are away?

I am of the opinion that the number of downtown condos, kept deliberately vacant, for prolonged periods of time, is miniscule.  It is a rounding error, at best.

What evidence do I have of this?

As much, or as little, as our friend from the article above.  I’ll rely on my sixteen years in the business, and my standing as one of the top one-hundred agents out of fifty-five thousand, which assuredly gives me some credibility.

Now my second point would be in reference to the who, which is to say that I do not believe, except for the case of “occupancy to registration,” any domestic owner of real estate is keeping it vacant.

You, me, and/or the person sitting in the cubicle next to you are in no way able to own a vacant condo.

If you or I purchased a 1-bed, 1-bath condo for $550,000 tomorrow, to forego the $30,000 per year in rent would break us.

There’s no point to keeping a condo vacant!  That is what the above article is missing.  That is what everybody who talks about “vacant condos” is missing.  Nobody in their right mind, and/or of standard means, buys a condo and keeps it vacant, when vacancy rates in Toronto are less than 1%, and when rents are at an all-time high.  The appreciation in condos is not enough, on its own, to justify the investment.  Not even close.

So who buys condos to keep them vacant?

Those who can afford to.  Those who have F-U money.  Those, who you might assume, are attempting to take money out of their politically-unstable countries, with suspect banking systems, and keep it in Canada in the safety deposit box that has become condominiums and houses.

There is a house on my street that sold for an unGodly sum of money last year, which is now vacant.  Yes, this massive house, the most expensive house to EVER sell in this area, almost doubling the previous record, and it’s vacant.  It’s owned by people who may be of foreign-origin, and I have seen them once in six months.  The lights are off every single night, and all the neighbours are talking about it.

Those people can afford a vacancy tax, I’m sure of it.

So do we tax them?

You might think the obvious answer is “yes,” but it depends on why we’re instituting the tax in the first place.

I ask you, is the purpose of the tax to:

a) Raise revenue
b) “Incentivize landlords to rent out vacant units,” as per the Toronto Star article above

If it’s the answer, (a), then why are we having this conversation at all?  Just bring in the tax, and ten more like it.  Then twenty.  Then thirty.  This tax, that tax, every tax.  The government spends money like it’s water, has no plan to reduce the deficit, and despite promises for “free this” or “free that,” nothing is, in fact, free, and anything presented as “free” is actually paid for by naive tax-payers who don’t understand taxation to begin with, by a government who is bribing them with their own money.

If the answer is (b), then you’re kidding if you think taxing people with F-U money is going to incentivize them to rent out their units.

This is something I have a huge problem with.

Denial ain’t just a river in Egypt,” said Stuart Smalley, a famous Saturday Night Live character who now probably would be considered offensive by kids on college campuses.

People choose to deny the reality that a “Vacancy Tax” would create revenue, but would not actually result in a greater supply of available real estate.

The people who can afford to keep real estate vacant, will continue to keep real estate vacant.  Do you really think a 1% tax will move the needle for these people?

So I’m calling out this so-called “solution” to  sham that it is: a tax grab.

And let’s remember that if, for argument’s sake, the government brought in an additional $30 Million in “revenue” from a tax, it does NOT autmatically go toward building affordable housing.  That’s how how government, or taxation, works.  That money is simply added to the pile.  There will never be a direct correlation between a tax and affordable housing.

I was supposed to appear on a Toronto morning show this week to discuss this story but after the pre-interview, I was told that my answers didn’t really “fit” the story they were looking to tell.

How is that for manufacturing news?

Happy Friday, folks!

Now I’d better step down off this soap-box and take a cold shower…

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127 Comments

  1. Pingback: The Friday Rant: Another Tax Is NOT The Answer! | Real Estate News Group
  2. Bal

    at 6:42 am

    But there should be come control on house prices….realestate agents…keep buying good properties and holding them…..showing inventory is low…pushing the price and selling on higher prices…..real estate agents….speculators are ruining the market…people like me trying but how much we can stretch ourselves…..i think if the person have more than one house..there should be 50% on the second house….some people have 10 homes and some cannot afford one due to the prices…i think only thing back sanity back to market the higher rates…as soon as rates start to go up…every thing standstill…and when down..everyone starts to run to buy…pushing price higher…crazy system….who got a good deal at right time..
    They are laughing and who don’t like me are crying

    1. Bal

      at 6:47 am

      But there should be come control on house prices….realestate agents…keep buying good properties and holding them…..showing the inventory is low…pushing the price and selling on higher prices…..real estate agents….speculators are ruining the market…people like me trying but how much we can stretch…..i think if the person have more than one house..there should be 50% tax on the second house….some people have 10 homes and some cannot afford one due to the prices…i think only thing bring back sanity to the market is higher rates…as soon as rates start to go up…every thing standstill…and when down..everyone starts to run to buy…pushing price higher…crazy system….who got a good deal at right time..
      They are laughing and who don’t like me are crying….i don’t know if the tax or what….all I know that I work hard…save but still unable to afford a house in this market…it becomes a money making trend…..

  3. TT

    at 8:40 am

    “Toronto city council makes policy decisions around guy with camera”

    That should be the headline. Ana Bailao is terrible so none of this is surprising.

  4. Appraiser

    at 8:47 am

    Regarding Jaco Joubert’s laughable photographic “research” on vacant condos. It astonishes me that so-called newspaper journalists and editors, almost all of whom hold university degrees, spend four or more years learning about the scientific method at venerable institutions of higher learning, and promptly toss it all out the window in favor of anecdotes and junk science.

    As for prominent climate change denier and paid oil company shill Rex Murphy, his constant Trudeau-bashing and whataboutisms (China’s coal plants and SNC Lavalin, really?) grow ever more tiresome. Rex is well past his best-before date.
    https://www.nationalobserver.com/2016/02/11/opinion/nasty-nattering-climate-change-denier-rex-murphy

    1. Chris

      at 10:19 am

      How would you suggest we accurately measure the number of vacant units?

      1. condodweller

        at 10:28 am

        CRA has our home addresses and they also have the address of every income earning property (that is declared). How about putting two and two together?

      2. Jennifer

        at 2:29 pm

        water, hydro, gas use? take your pick or all as applicable.
        CRA only has the home address as declared by people and as you note not everyone declares income…easily manipulated or inaccurate.

        1. Chris

          at 2:34 pm

          Per the City of Toronto:

          “The City of Toronto cannot use information from water or hydro bills to identify vacant homes because of privacy laws.”

          The laws could be changed, I suppose. At this point though, I do think the issue needs to be investigated more rigorously, whether through CRA data, utility usage, or some other method.

          1. condodweller

            at 9:05 pm

            Yes, various government agencies need our permission to share data. This is why they ask on each tax return if they can share our data for census purposes. But since the CRA already has the home address along with any declared investment properties it should be straight forward to generate a report. Mind you, they would have to share that report with another agency so it still might not work.

            WRT declaring properties, I would think most people do this as not doing it amounts to tax evasion which is a serious crime.

  5. Marina

    at 8:51 am

    A true politician will exploit any opportunity for a tax. It’s like a rule or something.
    But yeah, this will do nothing.

  6. Bijan

    at 8:56 am

    Lots of places in the world to get oil from at cheaper prices and with less damage to the environment. Doesn’t make sense to spend billions on infrastructure to get Alberta oil that is barely profitable at current prices. That’s just my two cents, not living in Alberta, and not having any skin in that game.

  7. KYle

    at 8:59 am

    This “study” of vacant condos is as ridiculous as Bitter Dwellings “study” of vacant homes based off (or should i say off-based) of Stats Can’s regularly occupied dwelling statistic.

    To be crystal clear all this “study” actually proves is that certain condos did not have lights on during the times he was filming, that is all.

    What it does NOT prove:
    – That these units are owned by speculators
    – That these units are owned by Foreigners
    – That these units would be available for rent, if there was a tax
    – That even if these units were available for rent that it would actually be a material shift in the supply and demand profile
    – And most importantly, that these units are even vacant to begin with

    Nevertheless those that wear bear-goggles will unquestioningly lap it up and demand government action.

    1. Chris

      at 10:25 am

      Most people are simply asking for better quality data on the topic.

      “There are relatively easy ways to estimate how many vacant condos there are in Toronto, but governments are doing nothing and are leaving it to private citizens to research.” – John Pasalis

      “Given this, our public institutions should be doing more to determine what this vacancy rate actually is across the city — and our city leaders thinking about whether anything should be done about it.” – Jaco Joubert

      Except for one long-time noted real estate perma-bear, who does seem to be in support of government action on the issue:

      “I’ve done a 180 on the vacant unit tax given Vancouver’s success (we could work out the kinks).” – Ben Myers

      1. Appraiser

        at 10:43 am

        Junk science is not better than no science. Still, it is remarkable how the bears eat it up.

        Seems there always must be someone to blame for a strong market (you know, the sinister investors, foreigners, mythical hordes of rich people who can afford to leave properties vacant, CMHC, mortgage brokers, realtors etc.)

        Oh, and the plural of anecdote is not data.

        I note that Mr. Pasalis does not offer any examples of “relatively easy ways to estimate how many vacant condos there are in Toronto…”

        1. Chris

          at 10:49 am

          Again, I ask, how would you suggest we accurately measure the number of vacant units?

          1. Appraiser

            at 1:41 pm

            Appoint a Royal Commission.

            Hire a retired Supreme Court Justice to preside.

            Spend at least $50 million on the 500-page report.

            And get to the bottom of this mythical tragedy.

            That’s how!

          2. Chris

            at 2:13 pm

            Well, unfortunately for you, you’re but one vote in a city of almost three million. And it seems that most support a vacant home tax.

            In a 2017 City of Toronto survey, 73% of respondents indicated that they support a vacant home tax, with another 8% somewhat supporting it.

            https://www.toronto.ca/city-government/budget-finances/city-finance/property-tax-policy/vacant-homes-tax-public-consultation/

            Given public sentiment, you’re likely to find yourself on the losing side of this one.

        2. Daniel

          at 9:54 pm

          The hypothesis being posited by the vacancy tax people is that vacant units are a major driver of our housing crisis. If this were true we should expect to see a couple things: the rate of empty homes increasing and/or the rate of empty homes being higher than elsewhere.

          The count of empty homes is tracked, using a different methodology, by the government. Using that approach the number of empty homes has been stable at about 4% of the housing stock since the early 90s. Also, toronto has one of the lowest rates of empty homes. Hotbeds of foreign speculation like Saskatoon and red deer have rates of empty homes that are twice as high.

          There’s a few potential conclusions you can draw from this: there’s a “natural rate” of empty homes that is above zero, because the incidence of empty homes is stable over time in toronto it is unlikely to be the explanatory variable driving our housing crisis, and given that toronto has one of the lowest rates in the country we have likely eliminated most of the ‘easy’ vacant units already.

          1. condodweller

            at 6:26 pm

            “Hotbeds of foreign speculation like Saskatoon and red deer have rates of empty homes that are twice as high.”

            Is this for real? What’s the strategy, fly under the radar?

            You do realize that a constant vacancy rate of 4% does not mean that the number of vacant units has not increased, right? That’s like saying RE commissions have not increased since the 60’s because it’s still 5%.

      2. Kyle

        at 10:50 am

        None of that has to anything do with the fact that this study is actual garbage.

        Agree the data could be better, but to what end? Why do we need to know how many are vacant anyway? If someone owns something and decides not to use it or rent it out, why is that anyone else’s business and why should the Government be trying to dictate (other than the obvious to grab taxes and appease the vocal people who want something they can’t afford)?

        If the problem that you’re trying to fix is affordability we should be telling the Government to get the hell out of the way, so that more supply can be created. Or better yet, they could be filling the gap by creating and facilitating more affordable housing. Problem solved.

        1. Chris

          at 11:02 am

          “None of that has to anything do with the fact that this study is actual garbage.”

          I disagree. The study is not meant to be a complete census of Toronto real estate, but it is effective in highlighting that there may be a discrepancy between CMHC’s vacancy rate, and the reality of the situation, at least in the buildings observed. Further, given his limited resources, I think Mr. Joubert’s methodology is pretty decent.

          “Why do we need to know how many are vacant anyway? If someone owns something and decides not to use it or rent it out, why is that anyone else’s business…”

          You’re entitled to your opinion on this, but personally, I align more with Mr. Joubert’s stance:

          “While not everyone agrees that empty condo buildings are a problem, many see a high number of vacant units as being a challenge to our collective desire to build a livable and inclusive city. ”

          We frequently tax behaviour that we wish to discourage, such as smoking. If we, as a society, decide we would like to dis-incentivize purchasing real estate and leaving it vacant, a tax on this behaviour seems like a logical place to start.

          1. Appraiser

            at 2:47 pm

            People are always in favor of taxes that they will never have to pay.

            In that respect, I’m surprised the percentage of people who support a vacancy tax isn’t much higher.

          2. Chris

            at 2:57 pm

            81% support for this tax should make it a political no-brainer.

            Argue against it, claim it is much ado about nothing, dismiss research into it as junk science, etc., but personally I wouldn’t bet against such a tax coming into effect.

        2. Appraiser

          at 1:35 pm

          Much ado about nothing…but it gives the bears something to cling to.

          “If only we look under every rock, we are sure to find the culprit and ye shall be named” ~Appraiser (2019)

          1. Chris

            at 2:07 pm

            Yes, Ben Myers and John Pasalis are notorious perma-bears.

          2. Appraiser

            at 3:10 pm

            A popular tax doesn’t make it justifiable, or even profitable, which it probably is not, given the added administrative costs for such a small capture rate.

            More like scape-goating.

          3. Chris

            at 3:17 pm

            We elect our government to implement laws, regulations, taxes, etc. that follow the popular will.

            We also have many programs that are not profitable, but exist for another reason such as to discourage or prevent undesirable behaviour. The Toronto Police Service does not generates a profit either, but we accept that as the cost of discouraging bad behavior.

            Profit generation is not and should be the sole measuring stick by which we measure the success or failure of government initiatives.

          4. Kyle

            at 5:45 pm

            “Much ado about nothing…but it gives the bears something to cling to.”

            “Until it proves fruitless, then they will simply find something else to pin hopes to.” – Kyle “2019”

  8. Verbal Kint

    at 9:13 am

    Local guy believes in the demand curve, except when he doesn’t.

  9. A Grant

    at 9:34 am

    A few thoughts regarding Rex’s piece (and thoughts will be a bit wide-ranging to reflect his scatter-shot approach to his rant)

    • I’ve never understood the prevailing view amongst the right/West that Trudeau is against the pipeline … when he went ahead and spent $4.5B of taxpayers money to BUY it. Kinder Morgan indicated that it had suspended work on the pipeline due to the lack of certainty with respect to the pipeline’s construction. Even taking that explanation at face value (which I do not), I’m not sure what the right/West expected the Federal Government to do. Force BC/First Nations to accept construction of the pipeline? Ignore the rulings of the Federal Court of Appeals? Similarly, the right/West are against applying a cost to carbon pollution. But if doing nothing to tackle climate change isn’t a realistic option – and conservatives dislike costly regulations and subsidies – what’s left to consider? After all, carbon pricing is effectively a “market-based” approach that simply recognizes that greenhouse gas emissions impose genuine costs.

    • From an environmental standpoint, I’m against the oil sands because it is the dregs of oil extraction. It’s a sign that we’ve become so desperate for cheap fuel that we’re scrapping the bottom of the barrel. Bitumen oil is embedded in sand and clay, which must first be filtered away with the use of machinery and chemicals, then mixed with lighter crude oil to make it flow. Not only is it extremely environmentally damaging, but the process itself is uses almost as much energy as it produces. The energy “return on investment” for light crude (i.e. the type of oil extracted via through oil wells) is 25:1. Meanwhile, heavy crude oil produced via the tar sands is only 5:1 (with steam-extracted tar sand oil being the worst at approx. 3:1).

    • From an economic standpoint, I’m against the pipeline because the market for Canadian heavy crude extracted from the oil sands is questionable at best. Last I checked, Western Canadian Select heavy crude was worth approx. $14 a barrel, with light crude hovering around $55 a barrel. The market for our heavy crude simply isn’t there and hasn’t been since 2014. This is reflected in Kinder Morgan’s share prices, which have dropped from a high of $40 in 2015 to $20 today. In fact, when Kinder Morgan pulled out of Trans Mountain, their share prices were at $15 – which makes me believe that their decision to pull out was not uncertainty related to its construction, but a sound economic choice based on the new reality of heavy crude prices. The free market has spoken and – without significant government subsidies, there is little economic benefit to pursuing the pipeline.

    • And Rex’s concerns re: the lack of environmental interest in China and India? Let’s not forget that their cities are now bearing the real-time consequences of their oil/coal dependency. And in response, China has set a goal for clean energy to meet 20% of its needs by 2030, including a $367B investment in renewable power generation by 2020. The race for clean energy is on – and we’re falling further and further behind.

    Finally, am I the only one hearing a bit of a dog whistle anytime Rex mentions a conspiracy driven by the “international globalist movement”?

    1. Anthony

      at 9:48 am

      Trudeau bought the pipeline to shut it down. Or to control it. Or to delay it. Or…

      The private sector always runs a company or a project or a piece of infrastructure better than the public sector. Kinder Morgan must have thought they’d died and gone to heaven when Trudeau offered to get them out of this mess. Now taxpayers are saddled with the debt of a pipeline that will probably never be built, but also won’t make money like it would if the private sector were still running it.

      1. Bijan

        at 10:05 am

        Politically this makes no sense. It probably cost him a bunch of votes on the left. And clearly didn’t win him any votes out West. It’s possibly Trudeau majorly miscalculated.

        As with most nationalization/privatization transactions, I’d bet on shady backroom dealings. There’s just so much cash involved…

      2. A Grant

        at 10:05 am

        Setting aside your blanket statement re: the private sector for the moment, other than “control it”, all of Trudeau’s goals mentioned above could have been achieved by NOT buying the pipeline. So I think it’s safe to say that the government bought it with the intention of seeing it built (and their intention is to still see it built by the private sector BTW)

        1. condodweller

          at 10:47 am

          My understanding is that the reason the feds bought the pipeline was because the approval process and resulting legal actions for the private sector was a nightmare to the point it would never be approved. This suggests the government does want it built. The reason given was that the feds have the right to over rule provinces and special interest groups in order to get it built within a reasonable time.

          I guess the quality of comments even on this forum quickly degenerates when stray from real estate.

          It is also my understanding that the reason our oil is so much cheaper is in fact due to the fact that we don’t have the pipelines to supply our own country. We are selling the oil produced in the West losing billions each year while we are buying oil from our “friends” to the South at market price.

          How long would this be allowed to go on in the US?

          Note that I’m using the phrase “it is my understanding” because I’m going by information I distill from the media and do my best to filter out fake news which can only be done to a certain level using logic.

          WRT empty units any system is going to have a margin of error. Some false positives have been mentioned but what about the false negatives? Do you think anyone who keeps an empty unit might use a timer to randomly turn on lights?

          I think it would be a wroth while stat to have and once we have a grasp of how many units sit empty the entire year we can start to think about what we want to do about it.

          I agree that local investors would not keep them empty and I also agree we are over taxed and the government wastes a lot of it. Having said that I think if it was determined that even 5% of units were vacant the majority of which I assume would be owned by foreigners then I would have no problem with them being taxed a healthy amount that would put tax $$ in our coffers. Hopefully this would reduce, err, slow down the rate of increase of the taxes we have to pay.

          1. condodweller

            at 10:51 am

            Just to clarify (we really need edit capability in this forum) We sell Western oil to the US at below market value and buy US oil in the East at or even above market value. All this because or infighting.

          2. Bijan

            at 11:20 am

            I’m not an expert but some of the price difference (maybe just under half) is due to transportation costs, but the rest is due to light vs heavy oil (and light being worth more). If transportation was improved then it might be a wash in terms of US vs Alberta oil out East, as the East could pay less for Alberta oil which is in fact actually worth less. So mainly of benefit to Alberta.

            https://open.alberta.ca/dataset/5e6f425a-e1c7-441a-9aa0-64890e4ecade/resource/b7080f88-f748-45f0-8294-81d32a7a834c/download/13-Explaining-oil-price-differentials-formatted.pdf

          3. A Grant

            at 11:57 am

            The proposed pipeline isn’t to supply our oil to our own country. Heck, even “TransCanada Energy East” wouldn’t supply tar sands bitumen to Canadian consumers. Because we have limited to nil capacity to refine it.

            In fact, it’s worth noting that only 16% of Canadian consumption of refined petroleum products is imported to meet Canadian demand

            The main reason why tar sands bitumen costs less is because it is less desirable. It is low-grade, riddled with impurities (namely carbon) and low in hydrogen. To refine it requires a coker unit to heat the bitumen at a higher temperatures and for longer periods than a conventional oil refinery. And a single coker unit is a multi-billion dollar investment for an existing refinery.

            These costs add up – to the point where it is generally agreed that the shale oil industry is entering a bust cycle in the U.S. simply due to the fact that the cost per barrel is so much lower than the cost to extract and refine it.

  10. Pragma

    at 9:56 am

    Remember how a few years ago every agent and real estate agency was saying that foreign money in Vancouver was not a problem, that it represented such a minute portion of the market. Then at the same time they were all up in arms about a foreign buyers tax. But if it wasn’t a problem, why would you care about the tax?

    Same thing is happening now. Our society does not benefit from empty condos. We should treat residential real estate like a natural resource. If the city wants to bring in a vacancy tax, why does it bother you? Why does it bother anyone? It’s a great idea. Whether the vacancy rate is 5% or 10%, it doesn’t matter!

    Regarding this guys methodology; it’s actually pretty good. We don’t really have better data, and just like the Vancouver case there are a lot of people with vested interest in keeping it like that. “We don’t have a problem because there is no data to show there is a problem”. He took a series of pictures over months and created heatmaps. If lights were never turned on, it is very safe to assume that they are not occupied. Not perfect, but pretty damn good.

    1. Chris

      at 10:32 am

      “It’s funny, when people in our industry confront government about this issue they either say: “you’re wrong” or “you have no data” sometimes they say both

      So thanks for proving there are empty condos

      The government will NEVER address the obvious until it’s too late”

      – Ron Butler of Butler Mortgage

    2. Kyle

      at 11:17 am

      Pragma, there are lots of reasons to care, even if we are not the owners of vacant units. It is called principles. Why is it ok for the Government to walk all over property rights, when it comes to real estate?

      There is no societal benefit to under-utilized property of any kind, so why shouldn’t this be applied to everything else. Should the Government tax everyone who has more than one pair of shoes?

      The methodology is garbage. He came up with a number of 5.6%, much of which could very easily be explained away by many valid reasons, many of which David already listed, but some other very obvious reasons are: some people do rent out their place, but could be between tenants, some units could be under renovation, some people spend entire months down South, some Developers have units that are not yet sold, some companies buy properties to house visiting staff and guests, and crazy as it may sound some people actually work night shifts.

      1. Chris

        at 11:41 am

        “Why is it ok for the Government to walk all over property rights, when it comes to real estate?”

        “The Canadian Charter of Rights and Freedoms does not directly protect property rights… [the Bill of Rights] recognizes various rights of the individual. Unlike the Charter, it protects a right to the “enjoyment of property, and the right not to be deprived thereof except by due process of law.” The Canadian Bill of Rights is not a constitutional document, however, but merely a federal statute that applies only to the federal government. Its purely procedural protections can be legally overridden by another Act of Parliament. Furthermore, the courts have held that the due process requirement is satisfied if a law is passed that authorizes the infringement…Canada is a signatory to the 1948 Universal Declaration of Human Rights, which recognizes that “[e]veryone has the right to own property” and provides that “[n]o one shall be arbitrarily deprived of his property”. This obligation is generally accepted as binding in international law, but because it has not been implemented by legislation in Canada, it is not binding domestically.”

        “There is no societal benefit to under-utilized property of any kind, so why shouldn’t this be applied to everything else.”

        Because that is impractical. We tax cigarettes and alcohol, but we don’t tax/fine people not wearing a helmet when riding a bicycle. Both behaviours are potentially harmful, but one is more practical to tax than the other. Just like taxing a vacant home is more practical than taxing an unused pair of shoes.

        “The methodology is garbage.”

        Again, this is your opinion. I disagree. By taking photos at night for a full week, and doing so at intervals months apart, it decreases the chances that the unit is between tenants, undergoing renovations, vacant due to vacation, or for night shifts (not many people work night shifts 7 days in a row). It is not going to be perfect, but Mr. Joubert doesn’t make any claims that it is.

        However, to have such a gap between his calculated vacancy rate, and CMHC’s stated rate, raises questions. Theses really should be answered by a better and more thorough collection of data on vacancies by government, rather than a private citizen and his camera.

        1. Kyle

          at 12:03 pm

          I asked why it’s ok, not whether they could, but thanks for that.

          Let’s talk about hypocrisy now, so the argument about societal benefit was great when it applies to things bears want but can’t afford, but not great when applied to things the bears already own. So instead now it’s about practicality of taxation?

          You can believe in his numbers as you wish. Fact still remains 5.6% can easily be explained away but a multitude of factors even months apart. There are as many reasons for those condos to have their lights out, as there are condos with lights out. Hell many of the people i know spend or have spent long periods of time away from their home at various points in their lives. Many of the couples i know, have started as two dwelling singles, but at some point moved in together while still owning both properties. I’ve worked with many Consultants, who spend months away on projects and engagements. I know ex-pats who have basically relocated for stints, but come home a few times a year and keep a place to stay. Frankly i’m surprised the number wasn’t actually larger.

          1. Chris

            at 12:15 pm

            “I asked why it’s ok, not whether they could, but thanks for that.”

            It is a reality of life in this country. The government restricts the property rights of licensed firearm owners all the time. And no, I’m not advocating for open-carry or an erosion of our gun laws (nor do I think a handgun ban will solve anything, but that’s a different conversation).

            “Let’s talk about hypocrisy now, so the argument about societal benefit was great when it applies to things bears want but can’t afford, but not great when applied to things the bears already own. So instead now it’s about practicality of taxation?”

            …sorry, but what are you talking about here? You previously seemed to be implying there was some sort of slippery slope, whereby if we tax underutilized real estate, why not tax all underutilized property? The obvious answer is that it is impractical, to the point of impossible, to do so.

            “Fact still remains 5.6% can easily be explained away but a multitude of factors even months apart.”

            This is your opinion, not quite a fact. And some of the situations you’ve given would, in many peoples’ eyes, qualify as a vacant home, which would be subject to taxation. Moving into a partner’s home while retaining your own and keeping it empty and companies keeping units for visitors, for example.

          2. Kyle

            at 12:37 pm

            I’m not talking about the slippery slope – but that too is a point, i’m talking about rationale and justification. Like i said Should the Government tax everyone who has more than one pair of shoes? Not whether it is easier to tax shoes than houses.

          3. Chris

            at 12:50 pm

            I mean, it’s a false equivalence for a number of reasons…

            But, hypothetically, if many people in our city or country were struggling to afford shoes, while others speculated on the future value of shoes and thus bought them up, and for some reason the supply of shoes was not able to respond adequately to this demand, then yes, as a society, we could take steps to discourage certain behaviours to help more people obtain shoes.

            At this point, even most homeless people I see have shoes on their feet, so I don’t really see a need to dis-incentivize other people owning additional pairs of shoes which they do not use.

          4. Kyle

            at 2:18 pm

            Unless you’re saying all the people who are complaining about real estate affordability are literally homeless, then it seems it’s only a false equivalence in the minds of bears. Sure it is a small minority of people who don’t actually have shoes, but it too is a small minority of people who don’t actually have a home. It might not be an owned home, it might not be a prime downtown home, or a SFH, but they by and large have a place to call home, just as even most homeless people have shoes.

          5. Chris

            at 2:31 pm

            No, it is simply a fallacy of false equivalence in general.

            “Despite progress over the past decade to ramp up federal, provincial and local measures, residents continue to struggle to secure and maintain affordable, suitable and stable housing. Particularly hard hit are homeless and vulnerable residents, and lower-income tenants, facing high rents, low vacancy rates – at one percent, the lowest in 16 years – and the high cost of home ownership in Toronto (Canadian Mortgage and Housing Corporation).

            Unaffordability is the key driver of core housing need in Toronto.

            – As of the 2016 Census, 406,070 or 37% percent of Toronto’s 1.1 million households spend more than 30 percent of their before-tax income on shelter (rent, mortgage, taxes, repairs, etc.).

            – Most impacted were tenant households, with 47 percent (over 245,000) of renter households living in unaffordable housing compared to 27 percent of owner-households (over 160,000).

            – Toronto’s social housing waitlist includes approximately 97,000 active households with an average wait time of 10-12 years depending on unit size.

            – Toronto’s housing system is strained to meet growing demand, especially as income inequality grows in the City.”

            https://www.toronto.ca/city-government/council/2018-council-issue-notes/torontos-housing/housing-affordability-availability-repair/

            When similar government reports are published on the lack of affordable pairs of shoes, then the two will be closer in equivalence.

          6. Kyle

            at 2:47 pm

            I agree if you’re homeless or on a social housing waitlist for basic shelter, then you’ve got a right to complain and demand action. Pretty sure that’s not the case for most of you bears though.

          7. Chris

            at 2:54 pm

            Nope, we’ve all got the right to complain and demand action regardless. That’s how democracy works.

            I’ve never overdosed on opioids but I can demand action such as safe injection sites and addiction counseling. I’ve never been the victim of a shooting, but I can demand action on reducing crime and violence.

            One doesn’t need to be directly impacted by it in order to petition for action ameliorate the situation.

          8. Kyle

            at 3:27 pm

            Now, now Chris, let’s not be disingenuous. We’re talking about two different things here. The articles you use as evidence of an affordability problem relate to people on the margins struggling for basic shelter. And i agree for them there is a dire need for action. And if you want to complain and demand action for those people, i applaud your virtue, but you and i both know that need won’t be met by taxing vacant units.

            But more to the point, you and i both know that it isn’t actually the marginalized people you bears have in mind when come onto this real estate blog and talk about real estate affordability and average prices.

          9. Chris

            at 3:40 pm

            “The articles you use as evidence of an affordability problem relate to people on the margins struggling for basic shelter.”

            You mean to suggest that the 37% of Toronto households spending >30% of their income on shelter (CMHC’s criteria of affordability) represents the margin?

            “…but you and i both know that need won’t be met by taxing vacant units.”

            Nope, disagree with you there as well. Apparently, so do those who I have quoted in today’s discussion, such as John Pasalis, Ron Butler, Ben Myers, and Paul Kershaw.

            It will not be a panacea, but as I said to appraiser, there is no reason that government cannot seek to improve supply while decreasing some forms of demand, both of which should ameliorate price and affordability.

            “you and i both know that it isn’t actually the marginalized people you bears have in mind”

            Exactly, it’s 37% of Torontonians. Hardly what any rational person would describe as the margins.

          10. Kyle

            at 4:04 pm

            So really only 1 out of the 6 points that you provided as evidence is actually relevant to this discussion. Good i’m glad we got that squared away.

            Those 37% who pay > 30% of their income whom rational people would say are not marginalized, have the choice to spend less. Worded differently they are spending >30% because they don’t want to live with less, so instead would prefer the Government to intervene. In that sense it is no different than me wanting the Government to make Salvatore Ferragmo’s more affordable to the average.

          11. Chris

            at 4:24 pm

            “So really only 1 out of the 6 points that you provided as evidence is actually relevant to this discussion. Good i’m glad we got that squared away.”

            No, sorry, disagree there as well. Unfortunately, your unilateral proclamation that we’ve got something squared away doesn’t actually make it so.

            “Those 37% who pay > 30% of their income whom rational people would say are not marginalized, have the choice to spend less. Worded differently they are spending >30% because they don’t want to live with less, so instead would prefer the Government to intervene.”

            Sure, they could move out of the city, or to a smaller or less desirable home. But every one of them gets a vote. A foreign owner of a vacant condo gets zero. A domestic real estate speculator gets one.

            If 37% of households are in a situation where their housing is, by definition, unaffordable, and 81% of residents support a vacant home tax, I would bet on that tax being put into place.

            I would suspect such a tax would reduce upwards price pressure in Toronto, as it did in Vancouver, and as Pasalis, Myers, Kershaw and Butler have suggested it would.

          12. Kyle

            at 5:29 pm

            “Unfortunately, your unilateral proclamation that we’ve got something squared away doesn’t actually make it so.”

            No my proclamation doesn’t make it so, but logic does.

          13. Chris

            at 5:47 pm

            Again, no, sorry. You’ve shared opinions and your logic of personal perspectives, all of which you’re entitled to. But equally I’m entitled to disagree with them.

            Hence, we are not “squared away” or in agreement with your opinion that 1 of 6 of my points was relevant. You declaring it so doesn’t make it so.

  11. Christopher

    at 10:24 am

    While I agree with almost everything you wrote, I draw a different conclusion. There are probably very few vacant condos and houses and a 1% tax is insufficient to deter anyone who would buy a property and leave it empty.

    If the government wants to stop this behaviour, which I believe it should based on housing supply and vacancy rates, they should have a higher or an escalating tax. 1% first 6 months, then 5% the next 6 months, 10 % the next 6 months.

    Either implement measures that will work or don’t bother. A 1% tax is a joke, especially when the property is appreciating at 5-10%.

  12. Chris

    at 10:29 am

    “Can you imagine if this guy wasn’t using these cameras to help with his pet-project, but rather was watching people shower and change clothes? What’s the difference here?”

    Is this a serious question? For one, if you’re changing or showering, close your blinds/curtains. If you get naked in front of your condo window in downtown Toronto, well, that’s on you. This comes off like an attempt to discredit Mr. Joubert as some kind of pervert and adds nothing to your argument.

    Anyways.

    “…somebody who used such a rudimentary, unsophisticated, error-prone methodology, and both he and the publication are passing this off as fact.”

    Not really. What the article says is “His results suggest 5.6 per cent of the units he watched are unoccupied, in the middle of a housing crisis… It’s analysis that, given the number of condo units in Toronto, could mean that thousands of potential homes are just sitting empty in the sky” They present his findings of the buildings he observed, and what this would mean IF this were the case across the entire city; they do not state that his findings are concrete fact. And I would agree with Pragma, his methodology is pretty good, given the limited resources at his disposal.

    “First and foremost, what is the number of vacant units in the city of Toronto? Our friend from the Toronto Star article, who videotaped people’s condos, seems to think it’s quite high!… I am of the opinion that the number of downtown condos, kept deliberately vacant, for prolonged periods of time, is miniscule. It is a rounding error, at best”

    It would seem that TREB research also suggests the number is quite high. From their Market Year in Review & Outlook Report 2019, TREB found (through Ipsos) that 33% of homeowners owned an investment property; of those, 18% rent it out but it is vacant, while another 27% don’t rent it out. Seems to align a bit more closely with Mr. Joubert’s findings than it does with CMHC’s vacancy rate.

    “Or how about the fact that he conducted this “study” in the fall/winter, when many retirees are away?”

    Mr. Joubert addresses many of your criticisms with his methodology: “The camera was set up to take one photo every five minutes starting at sunset and stopping at sunrise for one week straight, waiting a few months before repeating the process. My rationale for doing this over two periods was to eliminate the possibility that unit dwellers were temporarily away due to vacations or work trips, etc.”

    “What evidence do I have of this? As much, or as little, as our friend from the article above. I’ll rely on my sixteen years in the business, and my standing as one of the top one-hundred agents out of fifty-five thousand, which assuredly gives me some credibility.”

    This is an opinion, not evidence. While Mr. Joubert’s data is not a comprehensive census of all buildings and rental units in Toronto, it is stronger evidence than an opinion.

    “If the answer is (b), then you’re kidding if you think taxing people with F-U money is going to incentivize them to rent out their units.”

    People respond to incentives. Maybe not everyone, but some will. To simply suggest that everyone who owns a unit and keeps it vacant is so wealthy that we can’t possibly change this behaviour through targeted taxation is defeatist and, I would suggest, incorrect.

    “People choose to deny the reality that a “Vacancy Tax” would create revenue, but would not actually result in a greater supply of available real estate.”

    Seems some disagree with your assessment:

    “If the RE industry was right, that foreign buyers, vacant homes and money laundering is a myth then the BC policies would have no impact on house prices. But they are! BC is the only government that is putting the interests of residents ahead of money launderers & tax cheats” – John Pasalis

    “I’ve done a 180 on the vacant unit tax given Vancouver’s success (we could work out the kinks).” – Ben Myers

    1. condodweller

      at 11:04 am

      I agree with most if not all of this, I just don’t have the time to cut/paste/comment on each point.

      I agree that a high enough tax should be a deterrent. I mean, if it’s proven that most of the empty units are owned by foreigners then why not tax them at say 50% or more? Surely, if the tax is higher than the value of the home, these foreigners will find somewhere else to park their wealth. I think that’s a good middle ground between not allowing foreigners to won real estate in Canada and allowing them to park there money in RE.

      1. Chris

        at 11:44 am

        Agreed, most people don’t accumulate and/or retain F U money by disregarding the taxes and costs involved in their investments.

    2. Pragma

      at 11:36 am

      I completely agree with you. A lot of hypocrisy in David’s comments. For the longest time he was in the whole “no foreign money, vacancies aren’t a problem in Vancouver” camp and himself admitted he was completely wrong about it. But somehow, Toronto is totally different. And attacking the guy Musk-pedo style is a surprising new low for David. I’ve always thought of David as having some minimal level of objectivity, especially for a realtor, but this blog post was quite an erosion of that. He’s just another cheerleader.

      1. Chris

        at 11:48 am

        The “weird, peeping-Tom” comments were absolutely unnecessary. I welcome debate on the methodology, the findings, the imposition of a vacant-home tax, etc. But those comments are just trying to paint the guy as a creep, rather than addressing the substance the articles.

    3. Logan

      at 11:40 am

      I too agree with most of this.

      While Joubert’s methodology is ripe for error, as many have already pointed out, his results also provide one datapoint, amongst a sea of opinions based on no data, or suggestions that better data lies within the CRA’s databases which normal citizens do not have access to. I give credit to Joubert for devising his methodology, and I find his results interesting.

      I live in a high-rise condo, have been in two buildings over the past five years, and I’ve noticed something that could provide a different methodology to provide yet another datapoint for estimating vacant units.

      For all of you who read this column, and live in a condo, the next time you’re in your storage locker, have a look at how many empty storage lockers there are. I’ve noted several empty storage lockers in the buildings I’ve been in, and they’ve been empty for years.

      I asked the strata and developer for both buildings if there were unsold storage lockers, and the answer was “no”.

      Personally, I can’t imagine living in a condo and not utilizing my storage locker. And even if through some miracle I was able to contain all my possessions in my unit, and had no need for my storage locker, wouldn’t I at the very least place a lock on my locker so as to prevent unauthorized use? I see so many storage lockers with no locks. For years.

      Perhaps people are thinking the condo units are rented, and the owners haven’t granted the renters access to the storage locker? Maybe, but if I was a motivated investor, I would rent out both my investment condos and storage lockers separately, because I see frequent notices on my bulletin boards requesting storage lockers for rent.

      I haven’t done any comprehensive data analysis, but I can assure you that the number of empty storage lockers I’ve personally witnessed in my two buildings most certainly does not amount to a “…rounding error…” as David purports.

      1. Chris

        at 11:52 am

        Exactly, I don’t view his study as infallible, but it is more data, which points to the need for a more comprehensive study on the topic.

      2. condodweller

        at 1:04 pm

        This guy is trying to draw the attention to this issue, and provide a data point. The issue is not weather the number is 1% 4% 11% or 20%, the issue is that it does look like there are a significant number of empty units that could provide utility to people where it’s needed.

        This one data point could be added to other methods that might arrive at a surprisingly accurate value. I recall a TED talk where a doctor was demonstrating the diagnosis accuracy of a human and AI. I believe it was analyzing x-rays of lung cancer patients. The interesting part was that each separately was low 90% but combined together it was very close to 100% accurate.

      3. Joel

        at 4:46 pm

        My wife and I rented a condo for about 3 years and never once used the storage locker we had access to..

    4. Maha

      at 11:46 am

      His methodology has a huge flaw for a high rise city like Downtown Toronto. Knowing that people can see in my unit at night, whenever I turn the lights on I always close the blinds at the same time. And I don’t open them again until morning. 100% I live in my unit, and 100% if my condo was in his camera range, dude would have assumed it was vacant. I can’t be the only one.

      1. Chris

        at 11:50 am

        Addressed in the CBC article:

        “Then, he turned the photos into black and white heat maps using a custom filter and overlaid them on each other to create one cumulative image that showed anywhere there was light. He examined the floor plans for each building and the photos themselves to detect patterns.

        “Even if you have black-out blinds, it’s still very hard to not have any light slip out ever,” he said.”

      2. Kyle

        at 7:18 am

        @Maha

        “Even if you have black-out blinds, it’s still very hard to not have any light slip out ever,” said the guy who did the study, and is of course completely unbiased, right?

        I’m with you Maha, his so called heat maps have the resolution of ink blots. You can see them here: https://www.movesmartly.com/articles/condo-units-sitting-empty-in-toronto

        I also find it interesting that the “study” is weirdly silent on the actual periods used to conduct the study, he only says a “few months” apart. Seems pretty purposely vague to me.

        And his sample is very downtown high rise centric, but then he goes on to apply his result over the entire 206392 condos started since 2008 in the GTA, as if the resident profiles in a Mid-Town lowrise are going to be the same as in his sample.

        Like i said, this study is actual garbage. Any rational person can find a dozen flaws with this “study”, but at the end of the day those that wear bear-goggles don’t care.

        1. Chris

          at 9:49 am

          “said the guy who did the study, and is of course completely unbiased, right?”

          It’s his opinion, likely from his experience using light detection on photos. Plus, with your long history of wearing bull-blinders, it’s not like you’re an unbiased arbiter.

          “his so called heat maps have the resolution of ink blots.”

          Any half decent DSLR produces images with significantly better resolution than that. They almost certainly posted lower resolution images for the article than were used for his own analysis.

          “I also find it interesting that the “study” is weirdly silent on the actual periods used to conduct the study”

          Again, this is being shared through an article. Any research being presented in CBC, etc. usually focuses on high level findings, rather than delving into the detailed methodology

          “And his sample is very downtown high rise centric, but then he goes on to apply his result over the entire 206392 condos started since 2008 in the GTA”

          What he says is “If the 5.6% vacancy rate holds across the entire condo stock in Toronto…”, keyword being “if”.

          “Any rational person can find a dozen flaws with this “study”, but at the end of the day those that wear bear-goggles don’t care.”

          Again, his study is meant to highlight discrepancies between CMHC data and what may be reality, not a perfect census. His results also align more closely with what both TREB and StatsCan have found.

          And given that John Pasalis, an experienced realtor who has twice been cited by the Bank of Canada for his own research, and can hardly be accused of wearing bear goggles, was one of the first to share this vacancy data, it lends credibility to the study.

          1. Kyle

            at 11:30 am

            “Any half decent DSLR produces images with significantly better resolution than that. They almost certainly posted lower resolution images for the article than were used for his own analysis.”

            “Again, this is being shared through an article. Any research being presented in CBC, etc. usually focuses on high level findings, rather than delving into the detailed methodology”

            Um no, the link i posted are to the findings authored by Jaco Joubert himself, but those would have made good excuses otherwise.

          2. Chris

            at 12:16 pm

            No, sorry, but what you linked to was his article on Move Smartly. Which is in the format of an article, not a research paper. You’ll notice it does not have an abstract, methodology, results, conclusions, etc.

          3. Kyle

            at 1:38 pm

            No sorry, that is his how he is publishing his findings. Notice how there isn’t any link to something more substantive. There is no research paper with an abstract, etc.

            And IMO (and probably many others, including non-bulls), John Pasalis publishing it on his site to drive more publicity, does not add to the credibility.

          4. Chris

            at 2:05 pm

            “Notice how there isn’t any link to something more substantive.”

            Which does not mean that such information does not exist. He has published it as an article format on Move Smartly, almost certainly to improve readability for the average person. Yet that does not mean that a more detailed methodology is non-existent or unavailable. It does not mean that the images he analyzed were of low resolution.

            “John Pasalis publishing it on his site to drive more publicity, does not add to the credibility.”

            “There are relatively easy ways to estimate how many vacant condos there are in Toronto, but governments are doing nothing and are leaving it to private citizens to research. Happy to see @jaco_says important research covered in the @TorontoStar today” – John Pasalis

            Sounds like a vote of confidence from Mr. Pasalis to me.

          5. Kyle

            at 3:39 pm

            Sure, keep telling yourself those things. Maybe even try putting your fingers in your ears and shutting your eyes really, really tight.

            Here are some of his actual pictures used to do the study:
            https://twitter.com/jaco_says/status/1192436397753405440?s=20

            The actual reason the resolution is so unreliably bad, is because he was taking the pictures from his apartment at Dovercourt and College, through his window, which presumably was not washed every single day, in the dark, through whatever air quality at condos that are over 3 kilometers away.

          6. Chris

            at 4:02 pm

            Kyle, try to stay on topic, please. Your first paragraph really isn’t necessary.

            “Here are some of his actual pictures used to do the study”

            Again, sorry, but that is incorrect. The pictures hosted on Twitter are ~880kb. A half decent Canon DSLR fitted with a 200mm lens will take a pretty high resolution photo, producing a much larger file than that, typically closer to 15-30mb.

            When Mr. Joubert uploads them, the photo size and resolution are almost certainly reduced. Hence, the pictures you linked to are very likely significantly compressed versions of those he used for his analysis.

          7. Chris

            at 4:06 pm

            And no peer reviewed research paper does not mean he doesn’t have recorded dates of the photos. More likely, as he says he took photos of 15 buildings across many months, he didn’t include this in the article because it would be lengthy and not of much interest to most readers.

            The attention it has garnered will benefit Mr. Pasalis’ Move Smartly, but doesn’t detract from the vote of confidence he declared for Mr. Joubert’s study (shared above).

          8. Kyle

            at 5:22 pm

            I’m not disputing that he knows what dates he took the photos. Of course he knows what dates he took them on. I ask why is he purposely vague/silent on what those dates are? He does not mention it in his published research, he does not mention it in any of the interviews he’s done, he does not mention it on Twitter even when someone challenged him on it.

            Seems awfully weird to me, but hey maybe that’s just bull-blinders.

          9. Chris

            at 6:21 pm

            “I ask why is he purposely vague/silent on what those dates are? He does not mention it in his published research, he does not mention it in any of the interviews he’s done, he does not mention it on Twitter even when someone challenged him on it.”

            Sorry, I can’t see where someone on Twitter asked him for the dates, and he didn’t answer? Care to share the link?

            What he does say is that he took photos “pointed at fifteen different buildings in the downtown area.”. He also states that he took them “in the summer period as well. And there were several months between the two weeks of shots”.

            My interpretation of his explanation is that he would take a week’s worth of photos of one field of view, then adjust to another field of view, and so on. After a few months time, he would return to the first field of view for another week’s worth of observation.

            I suppose he could state that pictures of 300 Front St W were taken the week of May 14th and September 21st, for example, but as I said above, that would be quite lengthy to add into an article on the topic.

            If you’re truly interested in the dates, why not ask him? I don’t see any reason why he’d be unwilling to share with someone who is legitimately curious.

        2. Kyle

          at 4:05 pm

          Just to emphasize how utterly ridiculous his statement about being able to pick up the difference between black out curtains and an empty condo is.

          Here’s a picture of where he was taking the pictures from and of the condos he was taking pictures of way, way, way off on the horizon:

          https://images.thestar.com/_CNJky5t4ALhmMyYiMg-9JOTMnY=/1200×797/smart/filters:cb(1573704504852)/https://www.thestar.com/content/dam/thestar/news/gta/2019/11/10/how-many-condos-are-sitting-empty-in-toronto-one-man-investigated-and-what-he-found-surprised-him/jaco_joubert.jpg

          Maha for the win!

          1. Chris

            at 4:11 pm

            Sorry, but I would disagree. With a 200mm lens, photos taken at 5 minute intervals, across a full week, and at multiple weeks months apart, the chances of zero light slipping through and being picked up at any of those points seems slim. Even with blackout curtains.

          2. Kyle

            at 5:11 pm

            Of course you would disagree, if i found evidence of Jaco admitting to blacking out some of the results with a sharpie, you’d still disagree, so don’t think that i’m posting this to try to convince you.

            200mm translates to about 4x the naked eye. Since many of those condos that he was shooting are about 4 km away. It roughly translates to about 1km using the naked eye. Queen St to College St is exactly 1km apart.

            Pretty sure most rational people would admit if they were standing at Queen St in the middle of the night, they would not be able to tell with 100% certainty whether a window on a College St building had no lights on or black out curtains.

          3. Kyle

            at 5:45 pm

            Also not meant to try to convince you Chris, because i can already feel you typing how you disagree with me on this. But when you look up into the night sky from the center of a big, you see very few stars. It’s not because the stars aren’t there (i.e. outer space isn’t “vacant” of stars). There is this thing in the City called light pollution and it’s just as relevant when you’re looking for other forms of light in the CIty.

          4. Chris

            at 6:28 pm

            “if i found evidence of Jaco admitting to blacking out some of the results with a sharpie, you’d still disagree”

            In his photo heat maps, light shows up as black; so if he admitted to blacking out the results with a sharpie, it would indicate more light, and thus a lower observed vacancy rate.

            “so don’t think that i’m posting this to try to convince you.”

            I don’t think there are too many other people following us down a 115-post rabbit hole, Kyle.

            “It roughly translates to about 1km using the naked eye.”

            I think most people, at least with 20/20 vision, would be able to discern from 1km away, with an observation every 5 minutes, for 7 nights in a row, if any light whatsoever emanated from a window. Especially so when the analysis is done using a high resolution still image, and a computer generated heat map assessing for light. That’s quite an advantage over the naked eye.

            “But when you look up into the night sky from the center of a big, you see very few stars.”

            The nearest stars to Earth are 4.2 light years away. That’s quite a bit further than 4km. Seems like another false equivalence.

          5. Kyle

            at 6:32 pm

            Again, only a false equivalence to bears, go out to the country and look up at the sky some time and you will suddenly see all those “vacant” stars.

          6. Chris

            at 7:29 pm

            No, sorry Kyle.

            Detecting light from a condo window 4km away while using a 200mm lens, high resolution photography, and a computer generated heat map for picking up said light is objectively different from seeing the light from stars with the naked eye while standing a minimum of 4.2 light years away (and many of those who’s light you don’t see in the city are significantly further).

            To claim they are similar is a fallacy of false equivalence. Your adding “bears” to the sentence, or humorous terms like “vacant stars” unfortunately doesn’t change that.

          7. Kyle

            at 8:19 pm

            While you may choose to selectively accept when light pollution applies, i can assure you the physics behind it does not discriminate between light coming from a bulb or light coming from a star.

          8. Chris

            at 8:42 pm

            Sorry, you seem to have misunderstood. I never questioned light pollution’s existence. What I stated was that the impact of light pollution on star light from many light years away is on an order of magnitude different from that on light from bulbs 4km away.

          9. Kyle

            at 9:01 pm

            Would you not agree that the wattage of a star is an order of magnitude different from that of a light bulb? Not even a whole light bulb mind you, just the amount of light that managed to get through a blackout curtain.

          10. Chris

            at 10:03 pm

            The luminosity of a star is absolutely an order of magnitude greater than a light bulb. But once you factor in distance (1 light year is ~9.5 trillion km), I suspect many (if not most) stars will have an apparent bolometric magnitude/brightness as perceived on Earth that is less than that of a light bulb at 4km. Even a one mostly blocked by a blackout curtain most of the time.

            Anyways, we seem to have strayed quite far off our original topic. I suspect we’ll have to agree to disagree on this one, Kyle. You think the study is flawed and vacancy figure overstated. I think the study, while certainly not infallible, raises enough doubt (and corroborates TREB and StatsCan findings) to warrant a questioning of CMHC’s data.

            On that note, I’ll probably call a night. Good chat, and have a nice evening, Kyle.

          11. Kyle

            at 8:58 am

            A) We have very different ideas of what black out curtains/blinds are. In my experience they are literally opaque and overlap the window opening, so virtually no light gets in or out.

            B) It does not matter whether a bulb behind behind a black out curtain is brighter than a star (again in my experience it is absolutely not). What matters is that both are going to be very dim relative to the unblocked, closer and brighter sources of light that cause light pollution, such as street lights, head lights, billboards, and lights from occupied homes, etc. And these other sources of light pollution are going to drown out all dimmer forms of light.

            You can disagree all you want and cling to Jaco’s assurance, but Maha’s point is absolutely valid and explains many of the dark windows, while Jaco’s baseless blanket statement is just that a baseless blanket statement.

  13. Appraiser

    at 3:00 pm

    Build, build, build.

    Allow higher density (gentle and otherwise), re-zone where required, convert government owned properties to affordable housing, etc. etc. Asap.

    There needs to be greater supply.

    Stop looking under rocks.

    1. Chris

      at 3:21 pm

      There’s no reason government couldn’t approach the issue from both the demand side and the supply side.

      As Dr. Paul Kershaw of UBC puts it, we should seek to “Dial down harmful demand to give home buyers an advantage — or exclusive access — over investor buyers in the regular housing market (recognizing that in the current housing market, these two activities are often infused into the same buyer). Dial up the right supply, including purpose-built market rentals and missing middle housing, especially in existing single family zones and with an eye to simultaneously advancing climate change goals.”

      1. Appraiser

        at 4:46 pm

        They’ve done quite enough on the demand side with the stress-test already.

        Plus the point is to deploy public policies that are effective and make a difference.

        Another boutique tax is not the answer.

        1. Chris

          at 4:57 pm

          The tax seems to have been effective in Vancouver.

          “Another boutique tax is not the answer.”

          Voters apparently disagree, as do the industry voices I have referenced in other comments.

          1. Appraiser

            at 6:15 pm

            The tax is not solving the supply issue in Vancouver. How has it been effective?

          2. Chris

            at 6:50 pm

            Vancouver MOI in October was ~4.3, lower than 2018, but above 2015-2017.

            “The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $992,900. This represents a 6.4 per cent decrease from October 2018, a 1.7 per cent decrease over the past six months, and a 0.2 per cent increase compared to September 2019.” – REBGV

            “If the RE industry was right, that foreign buyers, vacant homes and money laundering is a myth then the BC policies would have no impact on house prices. But they are! BC is the only government that is putting the interests of residents ahead of money launderers & tax cheats” – John Pasalis

            “I’ve done a 180 on the vacant unit tax given Vancouver’s success (we could work out the kinks).” – Ben Myers

          3. Appraiser

            at 8:15 am

            “Hilarious! Just 163 properties were re-occupied, half of which were tenanted. So we have all this trouble with forms for everyone to fill out and lots of well paid staff to administer the program and it leads to 80+ new rentals to the market? Many of which aren’t affordable. Where are the 10,000-20,000 vacant units the Mayor was sure was out there to crack down on? The Mayor calls this a victory and it is, to low IQ voters who are easily fooled…” ~Al Pereira

            https://www.cbc.ca/news/canada/british-columbia/city-of-vancouver-says-2018-empty-home-tax-cut-number-of-homes-sitting-vacant-1.5008365

          4. Chris

            at 9:00 am

            Are you quoting a random commenter from CBC? What’s next, going to start citing YouTubers for insights?

            What’s the number of vacant properties that were tenanted or sold once it was announced but before the tax came into force? What’s the enforcement of the voluntary declaration, to ensure home owners are truthful? What’s the impact been on demand?

            The stat you shared is but one narrow measure. Here’s another:

            “ James added the government has collected $115 million from the tax so far, and is forecasting revenue of $185 in 2019/2020, money it has earmarked for affordable housing initiatives. A total of 11,783 homeowners are paying the tax.”

            https://bc.ctvnews.ca/nearly-12-000-people-paying-b-c-empty-homes-tax-1.4590585

        1. Chris

          at 10:59 am

          Did you just recently come across Charlie Sheen circa 2011 or something?

  14. Puh-leez

    at 3:44 pm

    Does the billionaire from China, who flies a private jet and lands on a runway paved with the souls of the unfortunate, who purchases condos in crisp dollar bills, have “excess?” Yes, David.

    Do the school teachers who save for years and years to invest in Toronto real estate have “excess?” No, David.

    But then, you know this. You just don’t want to say so, hence your weaselly “Who’s job is it?” cop-out. But by all means, continue to play the “curmudgeon” in your best Don Cherry style. Entertainment. Click bait. It’s your blog, after all.

    1. Andrew

      at 10:09 am

      He has over 80 comments so far. I’d say he knows what he’s doing.

  15. Mxyzptlk

    at 3:52 pm

    “Who’s job is it to define ‘excess’?”

    Some might say it’s society’s job.

  16. Joel

    at 4:32 pm

    Completely agree with a vacancy tax being stupid. Would all of the people here who have a property in Florida be OK with a vacancy tax on that property?

    If you want to end, or slow down speculation then take away the capital gains exemption on real estate. This would cut into profits in a big way for those looking to flip.

    1. condodweller

      at 9:17 pm

      There is no capital gains exemption on real estate. We have a principal residence exemption which does not apply here as we are talking about unoccupied investment units.

      1. Appraiser

        at 10:29 am

        Capital gains taxes for non owner-occupied dwellings are capped at 50%.

        50% of the gain is still tax free.

        1. condodweller

          at 6:17 pm

          Taxes capped at 50% gain for non owner occupied dwellings does not mean tax free correct?

          1. Appraiser

            at 8:19 am

            Correct.

            But there are some who would like to change those rules such that capital gains taxes would be higher than 50% for investment properties.

          2. condodweller

            at 6:19 pm

            I’m sure most who are asking for it have no plans or hopes of ever owning RE for investment purposes. Historically governments have tweaked the inclusion rate, it’s not the tax rate that’s capped at 50% BTW, and it has been between 50% and 75% in the past. This includes all capital gains not just those gained on RE therefore it would not be a good thing even for those who don’t plan to invest in RE.

  17. Mxyzptlk

    at 1:32 am

    “I’ll rely on my sixteen years in the business, and my standing as one of the top one-hundred agents out of fifty-five thousand, which assuredly gives me some credibility.”

    Ah yes, the thoroughly discredited (for centuries) “argument from authority.”

    1. Chris

      at 9:02 am

      “Without data, you’re just another person with an opinion.” – W. Edwards Deming

  18. Appraiser

    at 10:19 am

    Americans own more stock than ever—how will it change the economy?
    https://qz.com/1700958/more-americans-own-stock-than-ever/

    Does anybody else think the stock markets (especially in the U.S.) look a little frothy?

    Real estate is the safer bet for me. Especially with respect to tax benefits. Especially considering cash flow. Especially accounting for imputed rent. Especially for capital appreciation.

    Especially in the GTA.

    1. Chris

      at 11:21 am

      Around this time last year, you were rambling on about how “the stock market is crashing in real time”.

      Now that equities have rebounded strongly (1 year return TSX +12.4%, S&P500 +14.0%, NASDAQ +17.8%, all without consideration of dividends), your tune has changed to one of frothiness?

      Pretty quick 180 you pulled there.

  19. Derwanker

    at 10:52 am

    I am so tired of these left wing nuts trying to make a mountain out of a molehill.

    They won’t be satisfied until housing is nationalized by the government.

    1. Jonathan

      at 12:51 pm

      That’s where all this is heading.

      If the Liberals continue their path and then manage to get a majority government in four years, this country will be unrecognizable.

      Listening to and catering to the people at the bottom end of the totem pole does not lead to progress.

    2. Max

      at 8:13 am

      Taxes, once they arrive won’t ever go away. More government waste on our dollars. No sane investor would buy a $1000+/sqft unit at high ratio and leave it empty. Common sense, enough said. Jacob is a renter, the study is self serving. Enough said.

  20. Geoff

    at 5:22 pm

    Given a choice between a mandatory tax (looking at you, income or primary property tax) and an optional one (owning a second home), I’ll take option two everyday of the week. Not saying I agree with this, but assuming that City council needs cash, I’d rather they look at ones where we can at least opt out a little bit. (I also would never own a second unit ever, so am looking at it through a certain lens).

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