Remember that guy back in high school that was super popular and always got the ladies?

I’m asking the gents in here to remember because my follow-up question is this: did you hate him or did you respect him?

Those are your only two options because, in truth, those were really the only two reactions that most guys had.

If you hated him, why was that?

Is it because he had what you wanted?  I would hate to think this is human nature, but some might say that it is.

Did you make assumptions about him?  He must be a total dick.  He’s not that smart.  He’s really just lucky.

But maybe, just maybe, his blonde hair, chiseled jaw, and baby-blue eyes weren’t the only quality that got him to where he was.  Maybe he was intelligent, thoughtful, articulate, and kind.

Maybe he asked those girls about themselves and how their days were going.  Maybe he said nice things, complimented them, listened to them, and did all the things that other guys didn’t know how to do.

Maybe his mother or his older sister taught him how to be a gentleman.  Maybe he was taught the true meaning and application of the word “respect.”

And while I recognize that the people who choose to see the negatives and turn everything on its head will now say, “David, are you telling us what girls need?  How come you’re feeding into antiquated stereotypes?  And why is it a guy getting the girls,” I’m merely trying to provide an analogy that people can relate to – people who are probably closer in age to me, or beyond…

Many of us would, unfortunately, fall into the camp that chooses not to respect the guy; or guys, plural.  They were all assholes.  Nobody really likes them.  They get poor grades.  They wouldn’t make it in life.  They’d be on skid row in a few years.  And so on.

We would try to convince ourselves that a truly “fair” outcome would be for this person, who has something of value or something we covet, to lose something later in life so everything balances out.

Is jealousy human nature?

Do we respect those who have things that we want, but don’t have, or do we hate them for it?

Over the last year, I have seen such an incredible shift in society toward hating anybody of means.  And when it comes to the subject of housing, I’m constantly amazed at how society’s definition of “fair” is changing.

“Fair” no longer refers to equal opportunity but rather equal outcome.  And if the world’s most brilliant mind were to suggest that it’s not possible for everybody to have the same outcome, in anything, anywhere in life, that person would probably be torn down.  Probably because they’re old.  Or they’re too rich.  Or they’re not the right fit to discuss the subject matter.

A large part of society seems to have a viewpoint that’s unwavering, and anything or anyone that gets in the way is cast aside.

This past week, multiple articles ran in mainstream media about the idea of taxing homes valued at $1,000,000 or more.

The story wasn’t so much about the idea for the tax, but rather a survey commissioned by, of all things, a think tank called “Generation Squeeze.”

Here’s an article from BNN Bloomberg:

“Majority Of Canadians In Favour Of Taxing Homes Over $1M: Survey”

From the article:

The majority of Canadian residents are calling for a surtax on homes valued above $1 million amid high housing costs, according to a Generation Squeeze survey.

A survey released on Monday found 62 per cent of respondents would support a “modest surtax” on homes valued above $1 million, which makes up 10 per cent of Canada’s housing market.

Of those currently living in million-dollar homes, 57 per cent said they would be in favour “putting a modest price on housing inequity.”

If this tax measure were to be implemented, it would raise approximately $5 billion per year in revenue.

Many poll respondents said their support for the tax would increase if the additional funds paid for income tax cuts for the middle- and lower-earners (43 per cent), paid for more affordable housing (40 per cent) or helped slow home price increases (38 per cent).

Support for the surtax was highest in Atlantic Canada (73 per cent), followed by Saskatchewan and Manitoba (72 per cent), and Alberta (68 per cent).

But the report said home prices in these regions are typically “below the national average, and relatively few households own million-dollar homes.”

In British Columbia and Ontario where around 25 per cent of households own $1 million homes, only one in two respondents were in favour of the proposed levy.

–

So this is the solution to the housing crisis?

Tax the rich?

Only, the “rich” aren’t those that own properties valued over $1,000,000.  Not even close.

A person who owns a condo valued at $1,000,000 might have purchased the property for, say, $750,000.  And with a 10% down payment, that person may have merely paid $75,000.

That hardly makes a person rich, does it?

As many of you know, a million dollars in Toronto or Vancouver often buys you a 2-bedroom condo.

You know I’ve never been in favour of taxing our way out of problems, since I’m not a sheep, among other things, but also because I don’t like band-aid solutions that fail to address systemic issues.  But this time around, the idea of taxing property owners who have the audacity to own a “million dollar” asset, as though this is 1960’s Batman and a millionaire is impressive, seems to be rooted more in jealousy and hate than equality.

Oh, how ironic!

The survey says that 57% of respondents are in favour of “putting a modest price on housing inequity.”

But in today’s day and age, it’s impossible to get two people to agree on the definition of inequity.

If one person possesses a quarter and the next person possesses a dime, is that inequity?

What if the person with the dime spent fifteen cents on something else?

What if the person with the quarter is three times the age of the person with the dime?

What if they both originally had a nickel, but one turned theirs into a dime, whereas the other turned theirs into a quarter?

What if the person with the dime had nothing one minute ago?

The problem with “inequality” and “inequity” is that the goal posts keep shifting.  And as house prices continue to rise, more people want to live in sought-after places, and our population grows, the original concepts of “inequality” and “inequity” are so far in the rear-view mirror that they’re completely out of sight.

Why is it that 73% of people living in Atlantic Canada are in favour of the surtax?  Well, I might suggest that if their average property value is $300,000 and we’re talking about a tax on properties over $1 Million, then it’s a no-brainer for them.  But maybe it’s not about the money.  Maybe it’s about culture.  Maybe it’s about self-identity.  Maybe it’s about lifestyle.  Maybe they’re so far removed from Toronto and Vancouver that they can’t understand what $1 Million is in those cities.

Or, maybe it’s that they just don’t care.

If you were sitting in an airport lounge with hundreds of empty seats, and a person came up to you and said, “Do you mind if I sit here?” pointing to a chair four seats over, you’d say, “No problem.”  But if you were sitting in a busy airport lounge, with people standing all around, and a person came up to you and said, “Do you mind if I take your seat?” wouldn’t your answer be different?

If you ask the 99% whether the 1% should be taxed more, what the heck do you think they’re going to say?

Only, with this new surtax for properties over $1,000,000, we’re not talking about those lear-jet-flying, caviar-eating, one-percenters.  We’re talking about 10% of Canada, of which most reside in Toronto and Vancouver.

This tax is aimed at people living in the two largest cities in the country and it’s the complete opposite of “fair.”

I absolutely despise reading about new taxes and how much revenue they raise.  It shouldn’t matter.  If this was a tax about “fairness,” we wouldn’t feel the need to justify it with the mention of the $5 Billion that it produces.

Make no mistake, this tax is aimed at punishing people who own real estate.  There’s just no other way of looking at it.

Earlier this week, I read the following in the Toronto Star:

“House Prices Are Dropping And Real Estate Investing Is Looking More Attractive – Here’s How To Do It Right And Make Money Long Term”

Pretty standard fare, right?

Just another real estate article in the media?

A “how-to,” feel-good story about a wise investor who is trying to share his knowledge and insights with others?

Nope!

The reactions in the comments section were fierce!

Peter says:

It is time to get investors out of housing.

Robert says:

Please just stop

Joe says:

What did I just read!? So forget the middle class and first time home buyers TS? Weeeaaaaak.

Austin says:

WOW. Another tone deaf Star article, we have a housing crisis and you’re giving guides on how to exacerbate the issue even more. Way to spit in the face of your middle and lower class readers.

Matthew says:

Yet another example of mortgage and realty professionals leveraging their advantages to make the housing market worse for everyone

Tim says:

Unbelievable.

Carole says:

Talk about tone deaf… Come on, Star… are you part of the solution or part of the problem?

Janelle says:

So how you too can contribute to the housing crisis…

Robert says:

Real estate investing is why we have a housing crisis. Guys like Brayden Cooper outbid young workers striving in our economy who are then forced to rent at exhorbitant prices and can’t to save to buy their own place.

–

This is how public sentiment has turned.

Once upon a time, being young, hard-working, enterprising, successful, and taking a risk on investing in property, experiencing trials and tribulations, and learning about business was something that was celebrated.

Today, it’s something that is absolutely vilified.

We have turned into a society where people that do not own homes, or can’t afford to own the home that they want, absolutely loathe all things real estate.

We loathe those that own nice houses.  We loathe those that own any houses.  We loathe mortgage brokers, real estate agents, landlords, property managers, and developers.

We loathe anything and everything real estate, because it’s real estate that we so covet.

At the same time, we continue to rework the definition of “fair” to shape the narrative that we’re trying to spew.

Here’s a headline for you:

“High Interest Rates Are An Assault On Young Canadians”

The article argues:

“There is no way that interest rates can rise sharply without a high degree of unfairness in how people are affected.”

Well isn’t this just one small step away from the government having two-tier interest rates?

For the people who fit into this bucket, the Prime rate is only 5.95%.  But if you make over a certain threshold in income, or if you have a certain level of assets, then your Prime rate is 9.95%.

That is one type of “fairness,” right?

And laugh off the suggestion if you want, but do we really think there’s a non-zero chance that this could ever happen?

The tax on properties valued over $1,000,000 is one step away from a knock at your door and somebody from the government saying, “We heard you own four televisions.  We’re here to take one of them away.”

A very refreshing take on affordability appeared in the Globe & Mail two weeks ago:

“For The Sake Of Their Financial Future, Young People Should Leave Toronto And Vancouver”

This was written by personal finance columnist, Rob Carrick, whose opinions and writings I’ve both agreed and disagreed with over the years.

This time around, I whole-heartedly agree with what Rob is saying, but I also know that nobody is going to listen.

From the article:

Two of our biggest cities are an affordability trap for young adults.

Without six-figure incomes or well-off parents, anyone in their 20s and 30s has to question whether they have a future in Vancouver and Toronto that includes home ownership.

You can put yourself on a path toward financial success in life with your choice of postsecondary education, your career decisions, and your spending, saving and investing habits. It’s time to add your choice of city to the mix.

Vancouver is geographically awesome and chill, while Toronto is a vibrant, diverse economic powerhouse. If you can afford them, they’re great places to live. If not, living in these two cities in your career-building years could slowly degrade your financial health.

–

This will not be a popular take.

Sorry, let me rephrase: this will be a popular take with anybody that doesn’t live in Toronto or Vancouver, but it will not be a popular take with those that want to live in Toronto and Vancouver, especially those that can’t afford to.

It basically comes down to whether or not access to housing is a right.

Sorry, let me rephrase: it comes down to whether or not the type, size, style of housing a person covets is a right.

It never has been before, but the way we’re going, and if public sentiment is any indication, it seems that many people feel that individuals who want to live in Toronto and Vancouver should be able to do so, and do so the way they see fit.

To these people, until everybody has everything they want, fairness doesn’t exist.  It’s inequity and inequality.

The irony is: people have been complaining about real estate prices since I got into this business almost twenty years ago, and just as many have been predicting the demise of the market.

HERE is a post by the infamous Garth Turner from June of 2009.

A couple of comments from the readers:

Dale says:

Patience is the name of this game, any one feeling pressure to buy in now will get the hair cut of a life time

Dave says:

It’s completely annoying. I’m not someone who comes here for reassurance from Garth that prices of homes will fall, I know they are. I also know that it takes time for the masses to realize what’s going on in a post bubble contraction. By that point asset prices, many of them being leveraged, will have declined dramatically….I know all this.

This goes on, and on, to the tune of hundreds of comments.

But the average Toronto home price is up 170% since then.

So where are people like Dale and Dave now?

Are they admitting they were wrong and taking the learnings to heart?  Are they going to respect those that placed their “bets” on the Toronto market and profited?  Or are they going to call for more “fairness” in real estate?

Dale and Dave could have purchased an average home in Toronto for $403,972 back in June of 2009, which would be worth $1,089,428 today.

So are they in favour of a tax on homes valued over $1,000,000?

Would they be in favour of this tax had they bought a home back when they were calling for the “haircut of a lifetime” or claiming “I know all this” about the impending market collapse?

Where does this end?

Because people are already paying multiple levels of government just to exercise their right to own a home.

Right now, if you were to buy a house in Toronto for $1,000,000, you’d pay $32,950 in land transfer tax.

That’s a lot.  Maybe not to those who believe that a person who owns a million-dollar home is a “millionaire,” but it’s a shit-ton of money to fork over simply for transferring title.

And I might add: capricious, punitive, and arbitrary, but feel free to disagree.

But we also pay property taxes to supposedly pay for things like roads, fire and police, public transit, and education, among other things.

And I think we all know that everybody who doesn’t own real estate and doesn’t pay property taxes will also benefit from public services like those deserved above.

So again, I want to ask about this concept of “fairness.”  What about equality and equity?

I want to share a comment that was written on Wednesday’s blog by regular reader, Ace Goodheart:

Ace is right.

But does anybody want to hear it?

“Affordable” does not mean “affordable to all.”

Was it ever supposed to?

And how much logic is in, “Affordable to a 48-year-old couple and affordable to a 21-year-old who complains about the price of housing?”

Maybe I’m just a realist in a sea of idealists.

Maybe I realize that some people are going to have bread for dinner while others have steak.  It’s been like that since the dawn of time and it always will be.

In the end, you could argue either:

a) We’ve done this to ourselves
b) This was done to us

We are a real estate-obsessed society.  We judge ourselves and each other by what we own, what we bought, where we live, and whether or not our stove has red handles.

Then again, we could just as easily note that our country, provinces, and cities never prepared us for this.  The world’s population is growing exponentially, as is ours at home.  We were never set up to house this many people, and nothing was done in advance to guard against what is now called a “crisis.”

Systemic issues are rarely addressed for no other reason than it’s hard.

And in the case of “addressing housing inequality,” it’s so much easier to levy a tax on houses valued over $1,000,000, which will in turn raise $5 Billion, which likely won’t be spent in the right way.

A new tax on houses valued over $1,000,000 will do absolutely nothing to address housing inequality, and it will likely have the opposite effect: it will make people hate each other even more than they already do.

Housing is creating hate.  It’s pitting one member of society against the next.

A tax on those who own houses over a certain value will simply label those individuals and make them more of a target than they already are.

Say what you want about the Doug Ford government, but at least his stupidly-named “More Houses Whatever Bla Bla Act” is doing something.

More than a new tax, anyways.

But I fear it’s too little, too late.

Public sentiment has turned, and I don’t see it coming back.

What once was respected, celebrated, and held in high regard is now met with scorn by half of our friends, colleagues, neighbours, and brethren in society.

How in the world did we get to this point?