True Patriot Love - Canada’s Affordable Housing Illusion Exposed

00:00:00.000 today on true patriot love i am lucky enough to have mike wixon with me and we are going to talk

00:00:10.120 about housing and specifically affordability of housing you know for years we've seen the

00:00:16.560 decline in housing prices and we've seen the market shift and now with tariffs people say

00:00:22.720 oh my goodness housing is further gone because of the tariffs and that's total hogwash mike

00:00:29.800 it really is and you know it's interesting we went through the budget and we took a look at

00:00:35.140 affordable housing and we took a look at all the the numbers for the budget and it looked in the

00:00:40.800 budget when you when you looked at the budget it looked like the government was going to spend

00:00:45.260 a ton of money building houses and uh the pbo um the parliamentary budget officer he came out this

00:00:55.580 is the gentleman uh uh uh jason jock he came out and he uh said the budget wasn't sustainable he said

00:01:05.800 the budget's you know not going to work um right away they posted his job it was within days the

00:01:12.220 guy's job was up for grabs yeah yeah they they put it out you know uh we need someone who's different

00:01:17.800 than this guy right yeah that was the right that was a requirement anyone who can replace but then

00:01:22.180 what he did next is pretty admirable actually okay you're getting rid of me yep he wrote a housing

00:01:27.460 report yeah okay before i get out of here yeah yeah yeah by the way i'm going to write a scathing

00:01:32.920 housing report now this is interesting so and i didn't catch this to tell you the truth because

00:01:37.980 you know when you look at the budgets you you see a bunch of old programs and then you see a bunch

00:01:44.120 of new programs and they tend to highlight all the new things coming in so you know at the back last

00:01:49.480 pages on page 493 they have the current programs so but he's smart enough because he's doing it every

00:01:56.400 day he went through and he takes a look at what programs are disappearing and what are not and so

00:02:02.160 it's interesting so i'm just going to read this from his report uh federal plan spending on housing

00:02:08.260 programs is set to decline 56 percent from 9.8 billion in 2025 26 to 4.3 billion in 28 29 due to

00:02:19.980 the expiry of funding for the existing programs and cuts set out in the budget 2025. so we're looking at

00:02:26.780 what he's saying is we're looking at the combined budget of old money yep and new money right now that

00:02:32.480 looks really impressive but in a couple of days the old programs are going to expire and we're going to

00:02:38.240 be left with yeah only what's being applied in this new budget exactly and so then you know in the

00:02:45.520 in the budget they actually were creating build canada homes so that's the antibiol group you know 0.73

00:02:51.520 the former candidate for mayor of toronto uh you know they made a big big hoopla about she was coming

00:02:57.460 in and she's going to build a lot of homes so they basically said you know uh we're going to give her 1.00

00:03:03.480 7.3 billion um to build a bunch of homes uh through 2030 okay so that's what they did over a

00:03:12.800 five-year period four-year period really yeah they're going to execute these billions of dollars

00:03:18.360 and turn them into affordable housing exactly so and the interesting part is uh out of that 7.3

00:03:25.460 billion dollars 625 million is to help community housing uh uh providers acquire rental apartments

00:03:34.000 1 billion in contribution towards transitional and supportive housing and 5.4 billion in grants

00:03:41.300 contributions loans concessions for the supply of affordable housing so that makes up the 7.3

00:03:50.320 billion and then she's also on top of that going to build uh 26 000 uh let's call it low rental rental 0.98

00:04:00.980 facilities or apartments uh over five years which only when you're all done when it's all said and done

00:04:09.780 is only going to represent 2.1 increase in housing completions relative to the baseline well this is

00:04:18.420 what i wondered as you read that out to me what i heard was okay the this is not just money being handed

00:04:25.140 out to build homes these are subsidies concessions and discounting basically and development probably

00:04:33.340 development fees waived or whatever but it is not cash in the hands the developers correct me if i'm

00:04:39.600 wrong if you're a developer a builder of any sort you still have to do the math the math still has to

00:04:44.840 work whether you're getting it in the form of a loan or whatever the case is the math has to work

00:04:49.800 on affordable housing i don't see any developers lining up for this option well she is going to

00:04:55.420 build so here's the interesting thing she is going to build on her own this is going to be i don't know

00:04:59.460 how this is going to go because quite frankly that's not easy she is going to build 26 000

00:05:03.380 homes now she's going to try to with the 7.3 billion the additional monies she is going to try 1.00

00:05:09.880 to loan it out there to your point you know and whether or not anyway so this is a very interesting

00:05:15.280 thing so so we're going to do government housing essentially yes which is never going to be built

00:05:20.140 at the right spec and the right price i'm sorry but well and there's quite we were i think the the studies

00:05:26.320 that came out before the budget we were short 670 uh thousand homes so this is really a drop in the

00:05:34.880 bucket that's not going to make a difference at all which is what the pbo said so the pbo came up

00:05:39.680 which was very interesting because i didn't really hit honestly i was moving along after the budget

00:05:43.900 really not paying attention to it and then this came out i thought this is a very interesting article

00:05:48.220 i wonder where he's going with it so then i i started looking at it and i dug into it and then a few

00:05:53.420 days later uh anna bayul and you know the the prime minister chimed in and everyone got involved

00:05:59.680 and they started doing interviews and uh she was going across canada and she was soliciting input

00:06:07.220 from developers so saying like what can we what can i do to make you know this work for you and was

00:06:14.040 doing several interviews and in her interviews she started talking about using these monies to

00:06:20.840 incentivize foreign entities to come in and invest in our housing programs or in this affordable housing

00:06:28.020 program um to make it work and i'm thinking okay so we went from we went from you know building some

00:06:34.900 homes and then we're now going to use that money to go abroad get foreign money bring it in give them

00:06:41.900 and you know she's uh in her meetings across canada she's having several discussions about uh providing

00:06:50.100 tax breaks to foreigners so there's no uh withholding tax so there's no issue of of uh tax breaks

00:06:58.020 to get them to bring their money into canada and invest to build homes and i'm like okay what why

00:07:03.400 are we why aren't we giving those tax breaks to existing canadians developers already suffering

00:07:09.220 right now yeah and so i'm like that's kind of odd so um and you know and she talks about it quite a bit

00:07:15.300 and she is that because developers in canada are flat out saying look your plan does not work

00:07:20.560 at a profitable in a profitable way for my corporation to go and build these homes for you

00:07:25.860 that's what it sounds like to me yeah well you know so housing in canada right now is is a mess

00:07:32.960 so you know coming into covet we saw the prices increase on everything and you know like everyone

00:07:38.600 was you know there's a supply demand issue here because of covet therefore you know we need to

00:07:43.880 uh you know charge this for a two by four uh steel's gone up you know roofing everything went up

00:07:50.240 it never went back no it's funny that you say that uh during covid even just prior to covid lumber went

00:07:57.720 through the roof yeah right through covid it it continued to climb it has never got we're the

00:08:03.280 largest lumber provider i think in north america never went back and it never went back yeah even

00:08:08.780 even like you say aluminum and steel the same things that are put into these structures at the base

00:08:13.340 level just at the structural level all of those went up in price and they haven't come down and now

00:08:18.620 we're hearing that tariffs are the reason for that well they never started to come back the other way

00:08:23.020 prior to the tariffs the the housing decline started three years ago so the peak pricing and the drop

00:08:29.700 down for housing started three years ago it's been a gradual fall for for three years you know this is

00:08:36.740 interesting so um we we come out of this you know and we have this discussion about you know we're

00:08:42.280 going to go provide foreign uh tax incentives we're going to try to find ways to get people to come in

00:08:48.620 they realize so after they make the statement they realize that they have a crashing condo market

00:08:54.300 so i don't know how they didn't join the two together and that most of these people that um the

00:08:59.540 prime minister you know and he's doing these tours abroad he's talking to people he's trying to get

00:09:04.020 them to come in and spend money in the country most of the people he's talking to are saying to him

00:09:10.260 well i tried that already really i came in investing canada i have you know and you and i were just up in

00:09:15.640 ottawa you know i i bought 10 000 condos or 5 000 condos and i've been trying to sell them and i'm

00:09:21.480 stuck with them in canada right now no one's in them rents are dropping there's no return why would

00:09:27.000 i come to your country and put money into rental properties where the rents are dropping because the

00:09:34.900 value of your real estate is dropping so no the roi is not there i mean that's that's that's the biggest

00:09:41.820 challenge i think that we have and then the other thing is when you bring in that money

00:09:45.900 it's competitive money it's it's not money meant to be supportive yeah it's competitive money so

00:09:52.500 if a developer comes in from another country they're looking for profit they're not looking

00:09:56.880 to house canadians no no they're not it's not it's not a gift it's not charitable no you know

00:10:02.580 they're better to go and buy a u.s treasury bond than they are to build housing here so you know so

00:10:07.760 she's going around so she's having all kinds of these discussions and the funny thing is this is

00:10:12.220 where i don't really understand this i understand it now sorry i shouldn't say i don't understand

00:10:15.960 i understand it now how do you drop a budget put the group in place and not have a plan

00:10:22.780 well yeah you start down that road and you're you're soliciting input like and this is kind of

00:10:30.540 the criticism that we're hearing about a lot of programs right now whether it be mining or whatever

00:10:34.680 hey you you know you're the leader you have to have a plan now on housing housing's not going to

00:10:41.040 magically turn itself around and people aren't going to magically start to build homes unless

00:10:47.060 you come up with a plan and execute it it's funny but when we were in ottawa somebody i can't remember

00:10:52.060 who said it but i love this phrase it uh this was the longest uh the longest tour or the yeah the

00:10:59.080 longest to arrive rush budget anybody's ever seen yeah it took so long to get there and then so much

00:11:05.240 was really missed in the way of forecasting it feels like everything was made to just satisfy 2025

00:11:13.980 2026 on the books until we lose our attention from it justifying old programs and doing really nothing

00:11:21.040 for housing when you say we're going to build 26 000 homes paul i have to be honest with you i don't

00:11:26.800 see it i don't see it happening in a timely timely fashion no i don't see it being done efficiently

00:11:32.440 that's over five years yeah even so well you can do it you know our housing starts are roughly

00:11:38.900 you know they range uh let's say 250 000 a month like when the times were good we we during covid we

00:11:47.160 went up almost to 400 000 so we're building homes like crazy we're we're that's it that's in the

00:11:53.060 commercial in in the um private sector right right yes so now i don't know if you've noticed how long

00:11:58.920 it's taken to get a a light rail subway built in in uh toronto oh yeah but it's five years past

00:12:04.400 yeah it's over budget we don't even know how much it's over budget we don't even know what the

00:12:08.600 completion date will be i'm sorry but i i can't see this being any different yeah so i have to

00:12:14.400 limit from my mind as a canadian i have to limit eliminate that from the plan okay then what's left

00:12:19.780 a bunch of loans for developers who don't want to build who aren't going to build it so really what

00:12:24.720 we're saying which and i agree with you mike i'm not disagreeing with you what what you're saying is

00:12:30.140 kind of where i ended up after looking at all this affordable housing is not on the radar no it's of

00:12:36.320 no interest no it's a talking point it's a talking point but quite frankly there's it there's no uh

00:12:41.680 uh follow-up there's no backup there's no support for it and quite frankly you know i kind of dug in

00:12:47.320 i thought where did where did the word affordable housing pop up and it looked like it popped up

00:12:54.560 during the election it looked like it's one of these election you know these brand concepts that

00:13:00.640 come out of elections where people start to grab onto you know i'm going to build affordable housing

00:13:05.440 so i can get the votes of the you know the younger uh canadian i start to talk about affordable housing

00:13:13.120 i can get the votes of their parents because then they think they're kids and and we did a good job

00:13:18.320 actually brainwashing everyone to say okay we need affordable housing well build canada strong

00:13:22.900 the first word is build yeah it gives you the impression something's being built well and you

00:13:28.540 know affordable housing something then in the uk quite frankly they've done forever and and it really

00:13:33.900 is you know uh social rented and intermediate housing provided to specify eligible households

00:13:41.640 whose needs are not met by the market so and in in australia it actually is affordable housing as

00:13:52.860 housing that is reasonably adequate in standard and location for lower and middle income households

00:13:58.100 and does not cost so much that the household is unlikely to be able to meet the basic needs on a

00:14:05.560 sustainable basis so they do an evaluation of your income yes against where you work how you're

00:14:14.660 employed what you can actually afford and then they make an evaluation that says paul we need you

00:14:21.260 working in south etobicoke i know it's unaffordable to you here's something that will match in your price

00:14:26.800 point yes and and the interesting part is they set a they set a percentage of gross income that has

00:14:33.640 to go towards housing so what they do is they do a mock budget and they say i have to build housing at

00:14:39.080 this level so when the people get into it they're only going to use 30 or 40 percent of their income

00:14:44.380 for rent or housing so they work it backward from here's how this person can survive in this market

00:14:51.140 at this time okay how do we build housing let's go backward and build accommodation that works

00:14:57.740 appropriately and that's how they do it in those countries wow yeah well that sounds reasonable so

00:15:03.120 we're touring across canada asking a bunch of developers how we should do it when quite frankly

00:15:07.500 other countries are doing it yeah let's just go get the advice from them well we're not interested

00:15:11.980 quite interested you know and it is a little bit of a it's a pr campaign so we're going across we're having

00:15:19.160 these conversations about affordable housing we're not going to build affordable housing right if

00:15:23.240 affordable housing the the lack of affordable housing was an outbreak if it was covid what would

00:15:29.480 our reaction be to that we would get advice from other countries we would get the experts who have

00:15:35.900 already had successes we would keep an eye i don't see any evidence of that i don't see somebody from

00:15:41.360 australia coming here and saying okay here's how we set this up here's how you budget here's how you

00:15:45.320 work with developers here's how you actually put a hole in the ground that makes more sense but so

00:15:51.100 here's what it was so this is you know in my opinion so this is a this is one man's opinion on how this

00:15:57.380 all plays out given that i've done a bunch of stuff in the market through covid and after covid

00:16:02.480 on the housing side we created this affordable housing and it was a great branding concept we sold

00:16:10.740 it to everyone it theoretically it makes sense right we want to get housing for younger people

00:16:15.140 we want parents not to have kids in their basement too long they want to retire you know our our baby

00:16:21.160 boomers of the age you know they're retired and quite frankly um they're looking at inheritances and to 0.98

00:16:27.600 the millennials and such so you know it's a good buzzword to use then all of a sudden we're coming out of

00:16:34.620 covid then we started layering on we need affordable housing therefore we need all of these bylaw

00:16:40.320 changes yeah that's something that you've seen certainly in toronto well we've seen it on the

00:16:45.040 federal level because most of the toronto uh programs are supported by the federal housing

00:16:51.260 ministry yeah not the provincial housing minister the provinces tend to go mute on all this they don't

00:16:56.500 want to they don't want to lose votes right so what they do is they kind of play the icky and they

00:17:01.200 say well the feds are telling us you know we need to build six plexes you know you can well it's true

00:17:05.640 they they did do that they promised a huge amount of money the city of toronto i think took almost a half

00:17:09.780 billion dollars yeah uh half of it was paid and then the city decided well we can't really do that

00:17:15.840 yeah they never met their targets and and they never gave the money back by the way right um well

00:17:20.540 that's sitting out there right there's still there's still i think they're going to still do an end run

00:17:24.700 and try to get some of those bylaws passed citywide again because they only got so many jurisdictions but

00:17:30.840 but you know as far as multiplexes duplexes uh you know the fact that you can do retail beside you in

00:17:37.100 your most subdivisions in toronto right now someone can build a retail shop right beside you if they

00:17:44.040 want to convert their home you know uh you have small apartments how does that help housing that's

00:17:49.360 wild in itself well replacing a home with a business is totally yeah contradicts the process

00:17:55.980 yeah why would you enter into a neighborhood if you're going to have it's like the old days remember

00:17:59.320 downtown when they used to build on every corner uh convenience store and you know used to walk

00:18:04.100 yeah yeah the guy lived above used to walk over and used to get milk from sam who ran the convenience

00:18:09.000 store when that's what we did when we came to this trono yeah yeah so max milk so now so now i go

00:18:15.520 change all the bylaws so now all the bylaws you know basically are supporting growth for affordable

00:18:21.940 housing but i'm but i'm not really going to stimulate affordable housing but now what i've managed to do

00:18:28.060 what have i managed to do i've managed to change a bunch of bylaws i've managed to create this

00:18:34.020 thing called affordable housing now i'm like okay great but why did i do it not only that but those

00:18:42.160 bylaw changes sorry but if i'm the guy not looking to renovate my property into a sixplex or a fourplex

00:18:52.600 or a retail place the guy beside me wants to do that these bylaw changes enabled him to do something

00:18:59.520 in my neighborhood i didn't bargain for yeah in fact they probably have devalued my property yeah

00:19:06.080 ah so here we go so now this is interesting so this is where i want to kind of walk you through my

00:19:11.220 paul's opinion on this right so okay canada let's just talk for a minute just high level right so you

00:19:18.320 know we we basically have a population around 40 you know jim and i argue about this he says it's 46

00:19:25.340 million people you know statistically it's around let's say 41 million the people who are recorded

00:19:32.660 you and i always talk about it there's probably 10 more at least that are illegal here because we

00:19:38.380 don't have a good record of who's here so they mostly live in the urban centers so 80 of the people

00:19:45.000 live in larger urban centers of most of them live in the major cities right so toronto montreal so

00:19:51.960 you know ottawa those those places right median age now is higher it's getting 40 plus because we

00:19:58.260 have an aging population i think uh 18 to 20 percent of our uh population about seven and a half million

00:20:05.020 are baby boomers who are you know 70. so you know they're they're we have an aging population and i think

00:20:12.140 you know for the first time in 23 it was greater than our under 18 population that's something right 1.00

00:20:16.820 yeah so it is we saw it coming our fertility rates are really low yeah our immigration as we talk about 0.93

00:20:22.620 on many shows it was super high yeah so going through covid we immigrated a ton of people so now

00:20:28.900 we've immigrated a number of people you got to kind of put this all in context we created affordable

00:20:33.680 housing we immigrated a bunch of people we put a strain on the system we said okay because we 1.00

00:20:38.780 immigrated a bunch of people um because our kids can't get homes we need affordable housing 1.00

00:20:44.820 we changed all the bylaws so we then started changing all the bylaws for density and densification

00:20:50.820 and a small apartment buildings on major streets and and uh large apartment buildings by transit centers

00:20:58.100 you know we went into a flurry of activity which councils do because they don't know why they're

00:21:03.380 doing it no they're just going to react yeah they're not super bright but frankly they tell them

00:21:07.940 that they need affordable housing it sounds like they're going to get votes they start to pass bills

00:21:12.380 and legislation that talks for affordable housing right so now we have a bunch of affordable housing

00:21:17.500 so here we go and you know we have an aging population now interesting about our aging population

00:21:23.820 our baby boomers are kind of at the end so any baby boomer that's holding on to their home in 0.84

00:21:30.380 toronto right now no they cashed out likely on their super property the super value on their property

00:21:37.100 like it's it was so extreme that it actually became the means of retirement for many people

00:21:42.060 who bought a house sure during covid they were they were dropping out if if you uh if you're one of the

00:21:46.780 unlucky ones and you couldn't get your parent to sell their house during covid i feel sorry for you

00:21:52.460 yeah that was a boneheaded decision by your parent and quite frankly anyone who wants to stay in their

00:21:57.820 house and watch the devaluation of their house over the next few years well it deteriorates itself yeah

00:22:04.060 well it falls apart it just was a silly decision so but they did you know and they they didn't exit

00:22:09.340 at the right time so so now you have a bunch of people quite frankly who are probably pretty savvy

00:22:14.380 baby boomers who exited you know you walk around toronto you're not seeing a lot of baby boomers

00:22:19.340 anymore no in fact uh it's funny that you say that even in the neighborhood where we have our studios

00:22:24.220 which is historically the baby boomers ran this neighborhood yeah they're gone they're gone yeah you 0.87

00:22:30.860 don't see them anymore so you do see millennials right you see a lot of you know where i saw baby

00:22:34.940 boomers where from canada mexico oh yeah yeah oh of course yeah sure they do they found a better place

00:22:41.580 to live yeah uh the suits are there and they've got a condo somewhere in north of toronto in the

00:22:47.180 outskirts and they can still afford to live uh their winters out and that was the dream right but what 0.94

00:22:52.780 remains is properties that people are mortgaged to the hilton that the next generation has so much

00:23:00.700 debt just to get into a home or to survive in this market that anything left of them is going to be

00:23:07.180 gone anyway well the interesting part so now yeah no no i'm with you the the baby boomers so they sell 1.00

00:23:14.940 for the most part the savvy ones so yeah so they're moving to other markets so now you see and it's funny

00:23:20.140 how we talk about it now again we don't correlate them because no one wants to really admit what's

00:23:24.620 happening it's it's a very interesting scenario so now you hear st john's uh you know newfoundland

00:23:32.060 uh uh new brunswick charlottetown charlottetown right i was shocked to hear this one yeah yeah

00:23:38.780 they're all growing at eight to ten percent growth in real estate values so they're hitting a boom yeah

00:23:43.340 everyone's like wow you know these small towns of course they're hitting a boom people cashed out they

00:23:48.460 went to smaller towns safer towns right they got out of the the major urban cities with all their money

00:23:54.140 now so let's talk about a little bit demographics a little because i gotta you know we forget

00:23:58.860 sometimes where the wealth in canada sits that's true right so you know the and i you know not to

00:24:06.460 depress everyone who's still here in toronto but the wealth in canada quite frankly uh 20 of the

00:24:12.940 population in canada make up 67 of the net worth of people's holdings for canada so so the wealth sits

00:24:23.660 in a very small group which you know i looked at it the other day because there's not a lot of

00:24:27.660 stats they go back as far as uh 2023 and then they update them in these periodicals once in a while but

00:24:35.820 you know that only makes up and it's a small small group of people so if you look at uh families so i'm

00:24:43.820 trying to find the families here you go if you look at the families that makes up about 3 372 families

00:24:51.340 right make up about 11 trillion dollars so that's family what oh sorry third three sorry 3 million

00:24:59.100 372 000 make up families families make up that that make up 67 percent of the net worth of canada

00:25:09.180 okay right so that's a very small percentage of the population so if you look at it say four people per

00:25:15.900 family you're talking about 12 million people out of 40. so that's where your worth sits so

00:25:21.100 you know the rest of it and then you go down and you go to 40 percent uh is just the middle income

00:25:26.140 people they make uh there's uh six million seven hundred and thirty nine thousand families okay so

00:25:34.140 that's the next and then you have the lower value the lower tier 40 percent which basically there's

00:25:39.580 the same there's six thousands there's six million seven hundred and forty thousand families so the

00:25:45.980 majority of the wealth in this country is held by 20 percent of the population yeah it's like a funnel

00:25:52.220 this way right so it's it's like a like an inverse funnel so or like a regular funnel so and that's how

00:25:59.020 wealth is distributed in canada so the majority of them have left left when i mean left they've sold

00:26:05.500 off in the major cities yeah because remember baby boomers make up 20 of the population the majority

00:26:12.620 of wealth sits with the baby boomers and that's the mistake we make so as we talk about um you know 1.00

00:26:19.420 condo market crashes which we're going to talk about in a minute people think oh they're it's going to

00:26:23.580 rebound back who's who's going to buy who's coming in to buy yeah you know and that's the funny thing

00:26:29.100 because uh you know when you look at these charts it's not foreign investment because it can't turn a

00:26:33.580 return no the baby boomers wanted out they want their cash to live on yeah they've already exited 0.99

00:26:40.700 i don't know i don't know who buys the condos well i guess you can get slack rock yeah well yeah i guess

00:26:47.980 so you what you get is some investment companies come in as they devalue yeah so you know and not to

00:26:54.380 be i'm not trying to depress everyone but you right now have 30 000 condos sitting empty in canada

00:27:00.300 10 000 of them being in ontario i know you know they write stories which i showed you before about

00:27:06.860 how you know that's not going to cause a crash in this well the banks are saying that it's not going

00:27:10.940 to cause a crash in the system because the banks benefit from the purchase of these uh financing banks

00:27:19.660 like you pointed out to me i think that the last time this happened what did the banks in canada

00:27:24.860 do that were profitable they went and bought other banks yeah well they so the mortgage meltdown we

00:27:30.380 were we were one of the few countries during the mortgage meltdown that uh did very well so we had

00:27:36.300 very stable banks and we came through very very well and we uh went out and actually we spread our

00:27:42.780 wings and we went into the us we bought uh other banks you know we diversified ourselves which at the

00:27:49.340 time it seemed like a good idea banks were devalued in the us so we went in and bought like you know

00:27:54.860 uh harris bank right td got harris there's some big banks that they picked up in the us which i think

00:28:00.540 was a you know a decent idea at the time it increased their exposure but you know not all i always remind

00:28:08.220 people a lot of the condo sales like a lot of people who are in the condo townhouse which there's

00:28:14.460 roughly 30 000 let's give or take 30 000 empty condos on the on sale right now in canada there's roughly

00:28:23.180 the same amount of townhouses oh right that are sitting empty no one's picking them up so you

00:28:29.820 know and they fall kind of in the same category right a lot most townhouses are condo or if they're

00:28:36.140 even if they're freehold townhouses yes they are part of a a communal fund yes yeah but a lot of those

00:28:43.260 people so the interesting part of that a lot of those people that actually got those condos in those

00:28:48.540 townhouses got them through a mortgage broker and went to private equity right so we don't talk

00:28:55.260 about that a lot so forget the major banks because i think the major banks you know probably did a good

00:29:00.140 job they probably evaluated the loans yeah really well a lot of the private equity guys who've got a

00:29:06.460 couple more uh interest points they're struggling those were the banks that came to the floor when

00:29:12.940 people didn't have enough money in their existing credit to go out there and participate in the

00:29:17.740 flurry of buying during covet yes so they're kind of they i guess if you hang a small bank out or a

00:29:25.340 private private equity bank uh it's a big deal when when somebody hands in the keys every time somebody

00:29:32.540 can't or they default that takes a heavy it's not a major bank well it has a heavier effect i would imagine

00:29:38.540 you know and not to knock you know this is uh this is a and i'm how do i say it in a nice way over

00:29:46.940 after covet and uh when we were all getting back into the swing of things i would go to events and

00:29:54.060 events with my wife and other events and you know there'd be two three hundred people celebrating that

00:29:59.100 we were all back after covet and i remember going to three events in a row that were 300 plus people

00:30:07.340 and i i said to my wife on the way home i said god you know what i'm noticing i'm noticing a lot of

00:30:13.980 people that we're meeting aren't working but they own five or six properties yeah and they're

00:30:23.580 relatively new in the country so you know we were going to these events and you know if there were

00:30:28.060 300 people 100 people i was talking to mostly everyone because they were family related events you

00:30:33.340 know so we knew them all and we were having these conversations and i you know as i was saying well

00:30:38.140 what are you doing now oh you know i just bought two condos and i have the house over here and i'm

00:30:43.340 like oh that's great what are you what are you working at oh i have part-time work at the restaurant

00:30:47.660 i'm thinking how are you how are you getting how do you have you know and my theory on that one by the

00:30:53.180 way sorry if i may there was so much bad mortgage writing oh crazy i mean insane i couldn't believe

00:31:02.220 i rented a house for a short time i can't believe what they paid for the house i mean it was easily

00:31:07.820 overvalued by a million dollars yeah the mortgage on it was basically being covered by my rent but then

00:31:14.060 they had to put in everything there afterward and in the end what they had to do to make it feasible was

00:31:19.980 they had to subdivide the property when we moved out into seven apartments yeah well that's what a

00:31:25.980 lot of people did right whether they were legal or illegal oh it wasn't legal of course but that's

00:31:30.620 how they're managing because the mortgage they got written didn't match their income didn't come close

00:31:36.060 to matching their income well then and then after that once they get going and they can show income

00:31:40.860 then they can get another one and then they get another one and they can get another one and the next

00:31:44.700 thing you know and that's what we were finding as we were going through it right all these properties

00:31:48.940 were kind of pancaked on each other a lot like the mortgage meltdown in 2008 to one leans back on

00:31:54.620 the other in the dominoes fall exactly so as the market shows the renters go away the students disappear

00:32:04.220 yeah that's another thing in this market right we're talking about affordable housing a lot of that was

00:32:08.940 affordable rental housing for students now we've eliminated an enormous and the colleges are feeling

00:32:14.940 this in a big way we've uh eliminated an enormous amount of the students that will qualify to

00:32:20.780 stay here after they've done their education or can't even afford to be here during that education

00:32:25.580 um that's another group that has left the rental marketplace it's oh yeah rental prices are going

00:32:32.060 to continue to drop i i'm not an expert but every evidence is that that's going to be the case makes

00:32:37.580 it harder to make them profitable so interesting affordable housing we get everyone going we change

00:32:47.420 all the bylaws then we say oh stop we're going to turn off the tap for immigration 1.00

00:32:58.300 seems like the wrong moment to be doing that if i may be honest with you yeah so now we turn off the

00:33:02.540 tap for immigration all of a sudden all those people who have come in and they've done all 1.00

00:33:08.700 those loans and they've got all those condos and they've got everything put together they're done

00:33:14.860 yeah they'll be stranded homes in many places so yeah like i was mentioning 30 000 condos 30 000 house

00:33:22.060 so now they're sitting there and they're like well who's going to take them

00:33:25.100 and to top it off this is the interesting thing coming out of covid which i haven't brought up i

00:33:33.500 was just looking at my notes quickly do you remember the four year foreign buyer exemption oh

00:33:37.980 yeah foreign buyer restrictions restrictions yeah yeah so the foreign buyer restriction was effective

00:33:45.740 january 1st 2023 right and it just got extended i thought it was going to get dropped well you would

00:33:52.220 hope that if we're trying to sell off some of these condos to incite the market but then again

00:33:56.540 that's a political move that is going to sound unpopular oh we've opened up to foreign investment

00:34:02.220 again i thought we're trying to build canada strong nobody's buying the condos we need to do something

00:34:07.260 and by the way if nobody's buying those condos or they abandon those condos the effect on the other

00:34:12.620 condo holders that are owners that are still there that hold their property is that the reserve funds

00:34:19.180 for the condo corporation to fix the roof or fix the plumbing or keep the place nice or even get

00:34:25.020 that's going to suffer so the value the devaluing of these buildings overall is the next thing that

00:34:29.580 happens we forget them forget condo associations and maintenance fees and everything else because

00:34:36.060 quite frankly you're not gonna be able to maintain the buildings no no that's a that's so the people that

00:34:41.580 own them already are those buildings are becoming devalued they'll become less cared for they'll

00:34:47.020 disintegrate which is listen we're just playing this is the florida playbook in 2007 2008 right

00:34:53.900 everyone everyone went out money was free interest was low yeah uh banks were doing uh you know squirrely

00:35:01.100 deals squirrely deals if you want you know the uh they were creating subprime mortgages subprime

00:35:07.740 mortgages weren't based on anything here we are 30 000 condos 30 000 townhouses if anyone says to me we

00:35:16.140 didn't do that i i'm really called yeah it kind of feels like it's been lined up we put ourselves in

00:35:23.980 that position now so the foreign buyers comes on all of a sudden foreign buyers so now that doesn't

00:35:29.740 take the condo industry by storm a little bit it does but custom homes are done so now when the foreign 1.00

00:35:38.940 buyers drop out anything over if you notice if you look at the graphs anything over three million

00:35:44.140 dollars just explodes right wow so you know it's a there's nothing profitable over three million

00:35:52.940 dollars there's no point in building a custom property zero zero and unless we open it up ever

00:36:00.220 again there'll be no custom home business building high-end custom homes and probably we don't need it so

00:36:07.500 if we get when we get to the end of today's show i think people are going to look at it say well

00:36:12.220 maybe he's right maybe he's wrong i do believe that quite frankly people will buy nicer homes they'll

00:36:17.420 buy existing nicer homes renovate them update them yeah or they'll they're beautiful homes out there now

00:36:23.580 that are going to be hugely devalued so quite frankly there's gorgeous homes there's guys who spent

00:36:28.620 five six million dollars that five six million dollar home at the end of all this is going to be

00:36:34.220 it was 200 overvalued so it's going to probably go in at three four million right so those still will

00:36:40.140 sit and people will move into those but they'll move into them but they won't build them it'll be

00:36:45.260 more it'll be a more appropriate buyer at the more appropriate price right yeah and what we've experienced

00:36:53.500 is a bubble it is a bubble but then but then the challenge with that home building never comes back

00:36:59.100 back so i think that's the reality and because i think if you actually look at it and you say

00:37:05.260 yourself oh that's very negative but if we're not going to build affordable houses and we don't need

00:37:10.700 affordable houses because quite frankly the equity value of people right now in their homes is diminishing

00:37:19.180 to the extent that those houses we're living in will be the affordable houses you know nobody ever talks

00:37:25.180 about affordable housing in downtown manhattan paul nobody talks about affordable housing in downtown

00:37:31.020 chicago right we don't talk about affordable housing in downtown washington dc right there is something to

00:37:38.380 be said for if you're going to live in a metropolis you need to be rich that's it if you're going to

00:37:46.540 live in manhattan you need to have the means to do it right there's no means to create an affordable

00:37:53.420 approach in those markets and i think maybe this is a separate topic for another day but it is i think

00:37:59.740 that we've made it seem like anybody can live in toronto anybody should be able to live in vancouver no

00:38:06.300 i'm sorry those are like the manhattans of canada you cannot afford to live there well it's funny you

00:38:13.100 know and this is how people grabbed on to this narrative and this narrative is very powerful

00:38:18.380 you know my son should be able to live in in uh richmond hill my daughter should be able to live

00:38:24.540 in etobicoke no no oh you baby boomers you drove the price up what do you expect to happen yeah no they 1.00

00:38:31.180 shouldn't quite frankly they should be like us they should you know they should have to struggle

00:38:35.420 quite frankly if you know i have this discussion i i watched the show you did the other day and the

00:38:39.900 gentleman was driving me a little crazy because i wanted to scream and say like did you get married

00:38:44.940 in your 20s like we had to because we had to get married in our 20s so we had double incomes so quite

00:38:50.300 frankly we could bank some money together with someone else so not only was it you know a love

00:38:55.340 thing but it also was a financial you were smart enough to know that we had to hook up in our 20s

00:39:00.140 and get married so we can put some money aside so we can get a first down payment on a home it wasn't

00:39:06.140 going to be a great home it was going to be a fixer-upper right but quite frankly that's where

00:39:10.460 we were going to go and we were going to start a family there we're going to build our careers and

00:39:14.140 see what happened from there yeah there shouldn't be the expectation you're right about this yeah you

00:39:18.940 know what this is a really good point you shouldn't nobody should have the expectation of anything

00:39:24.700 that entitlement of home yeah needs to disappear well it's kind of like when you meet developers

00:39:30.460 now i should make money so she's you know anybody was going across canada talking to developers you

00:39:35.580 know trying to get their opinion on how they make money why why they don't there's no you know they

00:39:42.780 should make money based on their savvy building skills in the marketplace they should be yelling that

00:39:47.900 the cost of materials is going down yeah the government should be actually trying to meet with

00:39:53.900 the lumber industry with the steel industry and to get housing costs back reasonable so they can

00:39:58.940 build things again i would hope that they are because that's the major that's a huge stumbling

00:40:03.500 i don't know that's a huge stumbling block like okay the developers can't make money so they're not

00:40:09.180 going to do it who can blame them how can we make it possible for them to make money even profitable

00:40:15.340 enough just to support the country you know and i don't i don't think tax breaks loans and

00:40:23.340 deferrals are the way to do it maybe the developers are loving that i don't see them taking it up and

00:40:28.780 i don't see you know we just talked to a builder this morning and what did he say things are really

00:40:33.420 bad now and everybody knows in the new year they're getting worse for people in the construction

00:40:38.220 their hammers down yeah that's what he told us he said listen uh except for a few companies there's

00:40:43.500 no one home building right now right so there's a few of them are going to try to home build

00:40:47.180 but pretty much that's hundreds of people have been laid off in the construction industry yeah

00:40:53.420 thousands hundreds in this one company yeah thousands and thousands of people are being

00:40:57.500 laid off we don't have a building force that is an is activated anywhere in canada well so but but

00:41:03.740 shame on us so affordable housing comes what do we do we we change our bylaws so as as prices are going

00:41:11.180 up we decide to change our change our bylaws we densify so we go to council we densify we decide to

00:41:20.220 do all these crazy uh projects that shut our roads create uh issues with traffic we have traffic issues

00:41:30.460 we basically create rooming houses we do social programs in neighborhoods you know injection sites 1.00

00:41:41.020 all you know all things that cause the value of that neighborhood to decrease yeah so all the

00:41:47.100 policies were changing so we we kind of went okay we went back too far left which then caused the housing

00:41:55.260 industry to start to crumble and the values to go down but still not selling so here's the end because

00:42:03.500 immigration is cut off right so now we have no one coming in to buy we've cut off that immigration uh 0.74

00:42:12.460 tap foreign investments we've jacked up all the bylaws and densification bylaws have increased yeah

00:42:20.060 uh we have massive amount of traffic issues we have a awful transit system our transit system i was going

00:42:26.540 to add this our transit system does not work for the core for the core of toronto for the core of

00:42:31.420 toronto it's just in shambles right now we went to zero parking so we started telling people you

00:42:37.180 know in order for get to more density we could have no parking so basically that's an issue because no

00:42:42.380 one's on the transit so no one's on the transit so all of a sudden all these things culminate into

00:42:47.820 decreasing values but there's no demand so as the value goes down so here we are we're you know coming

00:42:56.220 out of this you know now and people are saying well this is a blip if you look at the map for the last

00:43:03.020 uh since 1960 we've went through five recessions five or six is that true yeah oh my god uh

00:43:13.740 1960 61 74 75 81 82 90 91 i remember that one and 2008 2000 i remember that one right so five

00:43:24.300 well we're going to hit a bump now and we're going to come back how how we don't this these recessions

00:43:32.300 occurred when the baby boomers were in the market with all the wealth because all the wealth of the 0.90

00:43:39.180 baby boomers now when you look at the breakdown of wealth right where do you think when you look at

00:43:45.340 the chart that shows uh stocks bonds uh like uh pleasure homes a residential where do you think

00:43:54.220 all the value sits majority of values it's in residential must be residential because as they

00:44:00.620 rode the value of their homes up it went into trillions of dollars and that is the mainstay

00:44:06.300 now i wish i had the equity of my home in stock yeah oh yeah like i really do yeah every day i think

00:44:12.620 about this now so now with that going so now that's eroded a huge net worth component so which is

00:44:19.900 interesting if you look at net worth for the 20 i mentioned for the top tier of the wealth in canada

00:44:26.460 was always pretty stable well you know what coming out of cobit it started to dip so when you look at

00:44:32.300 the chart now it's going down down it's a couple percent a year right people are exiting out right they

00:44:39.020 know you see how they're cashing out right as quickly as they can so at the end of it and this

00:44:45.260 is the conclusion that i've drawn paul's opinion of course right the affordable housing they're talking

00:44:50.860 about it's people's home it's true it's the homes that were it's the the exit strategy homes yeah for

00:45:02.620 the baby boomers are tomorrow's affordable housing which means yes somewhere in the middle 0.99

00:45:08.460 somebody lost their shirt yeah yeah it's a whole it's it's a whole generation and group of people

00:45:15.420 that got into the market at the wrong time that will never see any appreciation in their lifetime

00:45:23.340 of their major asset which is their home so now now you tie that together with the fact that a lot

00:45:29.020 of people thought they had significant value in their home yeah and overspent so you know and to

00:45:34.220 drink covet i thought i was on cloud nine you know i was sitting there going i look at all my

00:45:37.660 properties you know they're worth x you know wow i got i'm on you know so i can spend a little money i

00:45:43.740 can buy a nicer car or i can fix up something you know i spend money on because you know i think my

00:45:48.620 value's gone up right it's not so now all that money i spent on all those things was probably a bad decision

00:45:54.700 because your overall wealth scenario actually fell it was never there and it was it was it was on paper

00:46:04.380 okay so let me connect the dots on this one if i may yeah so we changed the bylaws we changed

00:46:09.900 immigration we changed the the the deal on what can be built where and how much i will finance it yep

00:46:17.180 so now if you're if you bought one of the baby boomer homes which i did by the way yep you're stuck

00:46:27.100 all did we're stuck in a home that not only affordable housing hasn't been touched here

00:46:33.820 as best i can tell nothing's no markers moved forward what's happened is we've just quietly devalued

00:46:41.980 everybody's home yeah we look over there we all looked over there at affordable housing

00:46:47.580 and our own equity dropped yeah yeah so affordable housing became us so affordable housing became our

00:46:55.580 own homes thanks but i already paid too much for that then they just all the all the wealth that was

00:47:04.220 accumulated in your parents day that was passed on to you has just disappeared i gotta hand it to jason

00:47:09.980 jacques okay yeah and that was all based on yeah you know what i gotta give him too you know what

00:47:15.260 shout out to jason jock at the end of this because quite frankly i think you know he can only say so

00:47:20.940 much and i i get it i don't think i would have fully got the full scope of that story until i started

00:47:27.500 reading what he was talking about well he put the budget review out there and then the affordable housing

00:47:32.220 review side by side we kind of do owe this uh a debt of gratitude to him because really what we've

00:47:39.260 learned is okay yeah the market adjusted and we all lost our shirts but nobody's talking about that

00:47:44.460 yet that's god we got to get past 2026 this ridiculous budget and all this ridiculous spinning

00:47:50.860 before we explain to canadians not only did we do this to you but we've also devalued your home yeah 0.72

00:48:00.060 next show i want to you know not don't be the grinch on this one next show we're going to go into

00:48:06.060 why and exactly how it got devalued so you know stay tuned you know what paul you're getting coal

00:48:15.340 in your stocking no thank you for sharing this because the truth is in our group you're the guy

00:48:20.780 who actually breaks down the numbers and if you follow the money every time yeah they're the real

00:48:25.740 stories there and the real story here is affordable housing is a pipe dream and the result of trying to

00:48:31.660 do it is just devaluing what we already own as canadians yeah it's cultivating a story to get

00:48:37.580 us to be okay with the fact that our value went down thanks paul thanks

True Patriot Love - December 29, 2025

Canada’s Affordable Housing Illusion Exposed

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