REIT Spells Rental Rip Off

There are renters in Alberta to be exploited yet through rent gouging.

Alberta's CEO Ed Stelmach refused to bring in rent controls as advocated by his appointed public committee on housing, because it might impact the 'free market'.

His in-action on the rental crisis in Alberta has influenced the market, in favour of the REIT's and against the interests of those he is elected by the worker/consumer/taxpayer/citizen.

GE snaps up Dundee's eastern properties

LORI McLEOD

Globe ad Mail, Print Edition 05/06/07 Page B4

Dundee Real Estate Investment Trust is selling two-thirds of its properties to a division of General Electric Co. for $1.5-billion, amid a wave of consolidation of Canadian real estate trusts and assets.

The trust decided to sell its Eastern Canadian assets in the belief that properties in Western cities such as Calgary, Edmonton and Vancouver will continue to perform well. For example, Dundee expects to raise rents in Calgary by about 50 per cent when they expire, compared with 20 per cent for the current portfolio over all.

Dundee is the second largest REIT owning and profiting from apartment and real estate investment, behind Boardwalk. And like other REIT's they are busy transforming exiting apartments into Condo's they can sell off in the Alberta's hot market.

This is the Income Trust business transforming itself once again back into a private capital enterprise.

Income Trusts are a ponzi scheme where upon private capital moves into the public market, profits in barely legal schemes in that market, and then when it is no longer to their advantage they return again to the shadow world of private equity hedge funds.

Just how questionable these schemes are can be told in the Dundee offer which changed in the headlines in a few hours. Prior to the article above an earlier edition of the Globe and Mail carried this headline; GE buys properties from Dundee REIT for $2.4-billion

Which is a lot more than $1.5 Billion apparently finally settled on. Which may explain this;Investors question Dundee's asset sale

PROPERTY REPORT

REIT watch

June 4 close

Weekly change

Y-to-d total return

Dundee

$39.96

4.10%

5.80%

REITS success relies upon their making steady earnings distributions to their shareholders. Those earnings are made off the back of renters.

And it is clear that thanks to Ed Stelmach the Canadian REIT's look at Alberta as the sole base for their business in Canada. Which is scary for working families in Alberta as we have found out this past year.

The changes made by Stelmach in only allowing a rent increase once annually, with no cap on its size means that the REITs look forward to even bigger profits next year when they can charge 50% mark ups on their rent like they did this year.

The smart real estate money is heading West, which is not to say that GE fumbled the ball by snapping up Dundee REIT’s Central and Eastern Canadian investment properties for $2.4-billion, including debt, but rather Dundee’s decision to keep its bricks and mortar located primarily in Alberta.

For that reason, Desjardins Securities analyst Jeff Roberts is recommending Alberta-centric real estate stocks like Melcor Developments Ltd., Mainstreet Equity Corp., Genesis Land Development Corp. and Boardwalk REIT, all “top pick” rated.

For investors who like distributions and dividends, his “top picks” include Boardwalk REIT, with a 34 per cent total 12-month expected return; Calloway REIT, offering a 33 per cent total return; and First Capital Realty Inc., 26 per cent.

This is the so called free market, which you can regulate, the Alberta Government as usual just doesn't want to be bothered because after all they are partners with business. And business calls the shots in their partnership.

So no one should be surprised when Dundee REIT looks forward to raising rents 50% next year, thats the regulation the Ed Stelmach created for them.

See:

Income Trusts

Housing




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And New York Has Rent Controls

Unlike Alberta, but once again what is good for the big Apple appears to be good for Alberta. This is what globalization looks like, the neo-con agenda writ across the globe. The current housing crisis in Alberta mirrors that of New York City.

Developmentalism in the Big Apple

Cost of living has skyrocketed in New York, but under fatcats Giuliani and Bloomberg, the working man’s wage has not

By Steven Wishnia

Rent in New York City costs 10 times more today than it did 30 years ago. Working-class wages haven't followed suit.

From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present
By Kim Moody
New Press · $26.95

Noxious New York: The Racial Politics of Urban Health and Environmental Justice (Urban and Industrial Environments)
By Julie Sze
The MIT Press · $24.00

Thirty years ago, you could easily find a one-bedroom apartment in a middle-class neighborhood in New York City for $150 a month. Today, it would cost more than $1,500—more than what Yankees slugger Reggie Jackson, then baseball’s highest-paid player, paid in 1977. His Fifth Avenue apartment with a balcony overlooking Central Park cost $1,466 a month. And the minimum wage hasn’t gone up to $27.82 an hour.

How we got to this point is the subject of Kim Moody’s From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present (The New Press). Moody analyzes how New York’s business elite exploited the ’70s fiscal crisis to destroy the city’s “social-democratic polity” and impose the neoliberal agenda that has dictated “restraint on social spending, privatization, deregulation, and most importantly, the reassertion of class power by the nation’s capitalist class.”

New York City Housing Bubble - 'The BIG Picture'

See;

Housing

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Tax Subsidies vs Rent Control

Ok explain this one to me. The Stelmach government refuses to adopt Rent Controls since that would of course be socialism and interference in the 'free market'.

On the other hand giving developers cash bribes aka tax breaks, socialism for the rich, is of course not interfering in the free market.

Premier Ed Stelmach is refusing to put rental caps to a free vote in the legislature.

He said his government is studying incentives for developers, including tax breaks

Developers like Boardwalk REIT which raked in massive profits last year and in the first quarter this year because of Alberta's overheated housing market.

And who are rubbing their hands with glee at the profits they will continue making without having to build a single apartment building.


See:

Just Say No

No New Apartments in Alberta

Inflation In Alberta

Housing


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Rent Control Filibuster

The Liberals and NDP filibustered the Alberta Legislature last night when the Tories tried to sneak their toothless rent control bill through the Legislature.

Tories refuse rent debate

Marathon debate over soaring rents keeps Alberta legislators up all night

Canadian Press

Published: Thursday, May 10, 2007

EDMONTON (CP) - An overnight debate in the Alberta legislature over new housing legislation had NDP Leader Brian Mason ordering pizzas and Liberal members stashing food.

Mason says he felt like a kid at a sleepover as he ordered fast food for his NDP colleagues and shared food with security staff. Liberal Leader Kevin Taft didn't join the marathon debate about whether rent controls should be brought in, but his members stashed food in the assembly to keep up their strength.

Government whip Frank Oberle said rent controls would stifle construction of new housing units, so the legislation that eventually passed second reading did not include them.

It instead limits rent increases to once a year, increases fines for landlords who ignore the rules and give tenants more notice when their apartments are being converted to condos.

Opposition politicians say that's sadly inadequate for thousands of people facing huge rent hikes, forcing some to leave Alberta in search of cheaper housing.

Rent legislation debate goes overnight (9:35 a.m.)

edmontonjournal.com

Published: Thursday, May 10, 2007

EDMONTON - In a rare move, the Alberta legislature sat all night to debate the Conservative government's controversial rent legislation.

The New Democrats introduced an amendment about 8:30 a.m. today to bring in rent guidelines. The amendment is still being debated.

Liberal-sponsored amendments to the legislation - Bill 34, the Tenancies Statutes Amendment Act - were passed early this morning.

The legislation will limit rent increases to once per year and require landlords to give tenants a year's notice before turning their buildings into condominiums.

But the government has steadfastly refused to include rent controls in the legislation even though a committee recommended rent-control legislation.

The Liberals said in a prepared statement today one of their amendments doubles the fines for landlords who violate the rules on condo conversions.

The debate was continuing this morning. Live video of the legislature is available at http://media.assembly.ab.ca/livevideo.

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Just Say No

The Alberta Tories continue their war on.....affordable housing and rent controls....delegates at the Alberta PC AGM reject rent controls.

"Rent controls and all other sorts of initiatives are sort of like a drug," delegate Jon Lord, a former Tory legislature member, told delegates prior to the vote. "They're very addictive, and they're difficult to get off of once you start down that road."

So having access to affordable housing makes you like a junkie. Under the Tories you can go join all the other folks who have addictions living on the street.

But of course the fact is we have had rent controls in Alberta before, and yes they were brought in however reluctantly by this very same PC party. But of course lets not let the facts get in the way of the myth of the free market.

Even Coun. Terry Cavanagh, who once had the job of phasing out provincial rent controls, urged Stelmach to look seriously at bringing them back.

Alberta introduced rent controls in 1975, when inflation soared. Coun. Terry Cavanagh was chairman of the provincial rent decontrol board that oversaw the phase-out of the controls between 1977 and 1980.

Cavanagh said Sunday that Stelmach should consider rent controls again, regardless how delegates voted. Its something the province has to look at, when you have people whose rents are going from $550 to $1,100.

Their wages arent going up 100 per cent, he said. Its going to be difficult for them to pay.
The Conservative convention heard rent controls are addictive and, once begun, are hard to end.

Cavanagh said controls phased out in an orderly fashion when he ran the decontrol board. Landlords were allowed limited annual increases so that, once an apartments rent exceeded a certain amount, controls came off.

That way the pricier units, presumably occupied by higher-income tenants, came off controls first, he said.

You might wonder what time period the PC's are stuck in....Rick Bell in his Calgary Sun column says the chosen people who attended the AGM come from the time of Howdy Doody...that glorious post WWII boom period which had no inflation....

Talk about the blind leading the blind. The majority of the Tory party are like the Beverly Hillbillies next to Unsteady Eddie's Green Acres cabinet.

They are a good cross section of Alberta ... in 1962.

Remember they didn't even know there was a boom until last year. Their crowd has been in power so long they don't care what mere mortals think.

That's why we are treated to the illogic of Lovable Lloyd Snelgrove, the power behind the Tory throne with the fancy handle of President of the Treasury Board, shamelessly thinking if he limits gouging to once a year instead of twice annually, it's "a good start."

Lloyd is the guy who doesn't make much sense when he defends scuttling the government's own task force's idea of two-year guidelines: inflation plus 2% plus more for added expenses, hardly a draconian design.

Then he says temporary rent controls won't encourage investment in new housing. Lloyd, read the affordable housing report. A cap on rent hikes is seen as a short-term deal.

Besides, without rent controls, where's all this supposed building of rental units now?

Yep during this long boom with no rent controls we have actually seen apartment construction decline in Alberta.

So if there are no rent controls what will the government do instead to stop the gouging?

"Gouging? Landlords are gouging? That's news to me" says Honest Ed the Chief Tory Salesman

Guess he missed the Stats Can Report on housing, and all the articles published in Calgary this past year.

Stelmach must have thought he looked compassionate when he talked to reporters about how upset he is with landlords gouging tenants with huge rent increases.

"I've heard about these absolutely astronomical rent increases that really are un-Albertan," Stelmach said in advance of his speech to the Tories' annual convention in Edmonton. "We have to look after the vulnerable. A thousand- dollars-a-month increase is beyond reason."

The $1,000-a-month increase was a reference to the story, raised by Alberta's NDP during question period on Thursday, of a 74-year-old widow in Edmonton facing a tripling of her rent from $595 a month to $1,595.

Indeed, for a few moments his message was all about compassion and how his government was angry with unscrupulous landlords. And he hinted that maybe his government will revisit its opposition to rent controls depending on what happens during debates at this weekend's convention.

But then some Calgary journalists began poking at Stelmach. Why was he so upset with the story of one Edmonton woman? Didn't he realize Calgary tenants have been hit by huge rent increases for months?

That's when Stelmach unwittingly unholstered the gun and took aim at himself.

"I wasn't aware of anybody getting a $1,000 increase," he said. Bang.

The Calgary journalists were gobsmacked. They have been writing stories about Calgarians being hit by $1,000 rent increases since last August. There have been so many of those stories that journalists have stopped reporting on them and have moved on to heartbreaking tales of tenants being gouged by $2,000 a month rent hikes.

And here's Stelmach saying he's not aware of what's going on in Alberta's largest city. He tried to look compassionate but ended up looking clueless

So the Tories solution is to meet landlords and tell them gouging, whatever that is, is not nice. And then threaten them...with rent controls.....I can see Boardwalk REIT shaking in their boots right now.....

The hikes are making a mockery of Stelmach's promise to do what's right for all Albertans. In a free enterprise economy, the kind the Stelmach government supports, he's doing what's right for all Alberta landlords. The only thing guiding the economic tiller is Adam Smith's invisible hand. The problem is this hand is steering the government towards the rocks.

Stelmach has ruled out rent controls as un-Conservative. Without rent controls, however, some landlords are jacking up people's rents so high that Stelmach has complained they're "un-Albertan."

So, what's a government to do when hoisted on its own ideological petard?

It goes behind closed doors and threatens landlords that unless they stop exercising their rights in a free market economy -- the very rights that the government purports to support -- the government might have to take drastic action against landlords, including, say government sources, the possibility of rent controls.

Lots of folks are coming to Alberta to work, lots of Alberta businesses need workers, but workers have nowhere to live. One would think that this simple equation workers = renters would sink into the troglodyte Tories tiny dinosaur brains.

Housing a priority for eastern jobseekers

Which means that once again we have a government that has no plan for dealing with the boom and the resulting housing crisis. Except to repeat that famous Klein line; "let the eastern bastards freeze in the dark."

See:

Housing

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No New Apartments in Alberta

Boardwalk REIT claims it would have to raise rents to $1650 a month in order to have enough cash to build new apartments in Alberta, thus its opposition to rent control. However Boardwalk has not built any apartments, as a REIT it buys up existing properties.

Meanwhile the Stelmach government ignores the recommendations of its own public committee to implement rent controls. Claiming it would discourage apartment construction.

Except all current conversions and construction of multiple person dwellings are not apartments but condos, cause thats where the money is.

Developers have not been building rental units in Alberta, even without rent controls. Despite the rapid growth in the Edmonton area, there were 5,050 fewer rental units last year than in 1987, according to the Canada Mortgage and Housing Corp.

See:

Inflation In Alberta

Housing


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Inflation In Alberta

As reported in a couple of the Edmonton Sun columns by their token Left Winger (wink, wink) Neil Waugh, inflation in Alberta was up again.

The sharp jump in wages was almost matched with a 4.5% increase in consumer prices.

But it was not due to wages increasing nope, it was due to the over heated housing market, which keeps going up.

The continued strength of Alberta's energy-based economy resulted in Edmonton's housing market outperforming expectations, making it the hottest market in Canada in the quarter. During the first quarter, the price for a standard two-story house rose 54.4 percent in Edmonton and 27.4 percent in Calgary, Alberta, while the average national rise was 11.8 percent.

And considering the price of the mythical single-family dwelling has increased 16.5% in the first three months of 2007 - and now stands at $398,476 - that's either good news or bad news, depending on what side of the deal you're on.

If you'd bought or sold a year ago, the price you would have to pay has increased by an incredible 55.6% since then. Needless to say, it's a year-to-year record, as are all the other March stats the EREB keeps.

So far in 2007, board realtors have cleared $2.14 billion in sales, which is 80% higher than last year's pace. And that was hardly a recession year either.

In fact the "threat" of another huge spike in house prices has "sparked an early rush for new and resale houses," the ComFree monthly report cautioned.

Earlier this week the Calgary Real Estate Board revealed 3,939 combined residential sales in March (a new record) and the average sales price inched up 5.6% from February.

But that's a 27% year-to-year increase from last March. CREB president Ed Jensen called it an "interesting" month. No kidding, Ed.

But he also reported a 32% jump in listings over last year, which may mean that folks are trying to cash in on their windfall equity before it disappears like campfire smoke.

ComFree reports its average house price also bumped up 8% in March to $350,300.

And of course inflation is caused by those who exploit this hot housing market. Now usually when inflation increases workers wages are blamed and you can expect interest rates to climb or bosses to fight for claw backs. But when it comes to inflation caused by housing costs, well no one yet has implemented the solution; Rent controls.

But even down at the legislature last week the Alberta Tories were beginning to feel the heat over inflation.

Especially when Alberta NDP leader Brian Mason grilled Premier Ed Stelmach over when the PCs' affordable housing report will finally be released. It contains recommendations to put a clamp on soaring rental rates.

One of the province's biggest landlords, Boardwalk Real Estate Income Trust, recently gave the opposition more ammo when CEO Sam Kolias revealed in his year-end report to unit holders how he "maximized return" by responding to what he called "exceptionally strong market fundamentals.

"As occupancy tracked upward due to positive supply and demand forces," Kolias beamed, "rental rates followed suit, resulting in strong revenue growth."

And with 52% of his property portfolio right here in Boom-berta, he predicted his "proactive operating policies" would result in even greater revenue growth in 2007.

Unless, of course, the PCs implement their own report and slap on rent controls.

Meanwhile the average Albertan even with a good paying job cannot afford to buy a home,

Most Albertans think this is a bad time to buy a house -- but a good time to buy major household items. Leger Marketing surveyed 900 Alberta consumers for PricewaterhouseCoopers, in February, asking about the economy.Leger's report noted "the relatively pessimistic sentiment regarding interest rates, combined with the fact that the housing market in Alberta has boomed over the last two years."

So who is doing all the buying? Why speculators of course hoping to flip the house in the market to make money.

See:

Condos The Problem

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Wall Street Deja Vu

I draw my readers attention to this article from the business section of the Saturday Globe and Mail. If you are regular here you will know I have said this exact thing.

Disturbingly, bankers, investors and regulators have seen this movie before. The boom-bust scenario now playing out the market for subprimes – loans to the riskiest borrowers – is remarkably similar to other recent episodes when the basic principles of sound lending were ignored or forgotten, until it was too late. There was the technology bubble of the late 1990s, as well as the trust and savings-and-loan crises of the 1980s.

Then, as now, financial institutions dramatically reined in credit after getting burned on bad loans. Indeed, the flight of lenders from the tech bubble of the late 1990s drove many of them toward the perceived stability of consumer credit – including home equity loans and mortgages.

How the industry got in this mess, again, is a disturbing tale of lending excess.

The simple explanation for why HCL and other lenders made seemingly uneconomic loans is because they could. A thriving aftermarket quickly turns subprime mortgages into bonds, flipping the revenue stream to investors around the world. Most banks no longer keep the loans in-house, so they don't care if homeowners can't keep up with payments. Instead, they make money on lucrative fees and push the risk up the line to an investment dealer such as Merrill Lynch & Co. Inc. or Goldman Sachs Group Inc., which then passes it on to hedge fund and pension fund investors.

American finance, the much touted Wall Street Bull market is living in a consumer driven bubble. There is no real boom, just a growth in credit, loans and party mow pay later consumption. Later comes sooner than the market expects.

What is scary is that folks pensions are tied up in these get rich quick schemes like variable and sub-prime mortgages. Which they weren't when the Junk Bonds and later the Savings and Loans meltdowns occurred.

See

China Burps Greenspan Farts Dow Hiccups

Housing Bubble

Housing

Economy



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Housing Crash the New S&L Crisis

When you build a house the key to the solidity of its construction is a well built basement. When you buy a house the key to its market stability is your mortgage. When you are poor and buy a house using a sub-prime mortgage you are buying on a weak foundation as the market is discovering in the U.S. this week.

As housing prices fall and interest rates increase those who bought over-valued homes in the U.S. on a variable mortgage will find themselves paying more for a home of less value.

And what they thought were sub-prime mortgages, that is below prime rates, are actually variable rate mortgages. The were sold as below prime due to being longer to pay back, but if interest rates increase they will increase to be above the prime rate. It is a classic bait and switch scheme. Already the U.S. is experiencing thousands of bankruptcies and foreclosures.

It is yet another example of business as usual which cheats the poor to line the pockets of the rich. In this case folks with bad credit were given credit by companies that had dubious funds themselves, who in effect once they had enough debt were able to be financed by the big banks looking to sink their profits into the market.

Then the market crashes, and the banks withdraw their funds from the sub prime market leaving the dubious credit companies without financial backing, and their creditors in foreclosure to the same banks that lent their creditors the credit in the first place. But only one of these crooked credit lenders is going to jail. And it ain't the big banks.

Instead the U.S. economy could tail spin, especially in light of massive layoffs recently announced by Chrysler and Hershey's, and other companies. The result will be massive foreclosures leaving banks and lenders holding declining valued properties that cannot be sold off fast enough to recoup their loses. And then they will come with their hands out asking for taxpayers to bail them out.

The market correction yesterday on news of the sub-prime crash impacted on global markets world wide even as far away as South Africa; US sub-prime crisis batters JSE

Sub-prime worries echo the S&L crisis

DID those troublemaking sub-prime US home borrowers actually know that their mortgage rates could (and in many cases certainly would) go up one day? Were they properly informed by sub-prime lenders? That's the startlingly mundane question at the core of the sub-prime mortgage meltdown, which threatens global markets and may billow into a financial cataclysm to rival the 1980s US savings and loan (S&L) financial debacle.

Both the question - obvious though the answer might seem to most Australians - and the comparison are worth scrutiny.

There is a reasonable chance some of these poor and usually first time home buyers - with loans Wall Street likes to refer to as "trailer-trash mortgages" - didn't understand they were taking out variable rather than fixed-rate home loans.

After all, most US mortgages historically were flat rate - repayments were constant over their 20 or 30-year term, although the mix of interest costs and capital repayments obviously varied.

Just as Australian mortgages became a more diverse mix of fixed and variable rate loans through the 1990s, a minority of the US market has gradually shifted to variable rate loans. And thanks to the exceptionally low level of near-term interest rates in recent years, which made these loans appear stable and cheap, these were often the very loans that sub-prime lenders pushed hardest to less traditional home buyers, such as those in, yes, you already know where they supposedly live.

The S&Ls were pillaged of their best assets by the big Wall Street houses, which quickly figured out that a bunch of dusty Fannie Mae-supported mortgages snapped up at 60 per cent of face value from struggling narrowly based S&Ls in the flyover states could be pooled, securitised and resold as diverse, near federal-quality, mortgage-backed bonds at large profits.

Fears of US mortgage crisis as homeowners face 12% interest

· Shares fall on worries for wider economy
· Research predicts 2.2m defaults on homeloans

Larry Elliott and Jill Treanor
Wednesday March 14, 2007
The Guardian

The US central bank was under pressure last night to underpin the country's troubled housing market as figures showed an increasing number of US homeowners falling behind with their mortgage payments and having their properties repossessed.

The problems had a knock-on effect on Wall Street where the Dow Jones Industrial Average fell 242 points to close at 12,075 amid fears the malaise in the housing market would infect the rest of the economy. There were signs of mounting problems for firms that have aggressively sold home loans to people with poor credit ratings - so-called sub-prime mortgages.

The US Mortgage Bankers Association (MBA) yesterday pushed back its forecast of a rebound in the real estate market from the middle of 2007 until the end of the year after reporting an increase in both late payments and foreclosures in the final three months of 2006. It said defaults had risen for all loan types but were particularly marked for those with sub-prime mortgages with adjustable rates.

Borrowers with loans totalling $265bn (£137bn) are scheduled to have the interest rates on their mortgages reset this year and many of the poorest homeowners in the US could face interest rates as high as 12%. The Fed meets next week to set base interest rates but is expected to leave them unchanged at 5.25% despite the latest mortgage default figures.

Research by the Centre for Responsible Lending has predicted that one in five of the sub-prime mortgages made in the past two years will end in foreclosure, resulting in the biggest crisis for the mortgage market in modern times.

The centre said 2.2m sub-prime home loans had already failed or would end in foreclosure and that the losses to homeowners could be as high as $164bn.

The data from the MBA showed total mortgage defaults up from 4.67% to 4.95%, but sub-prime delinquencies rose from 12.56% to 13.33%.

The problems have most clearly been illustrated by New Century Financial, which is on the brink of bankruptcy without enough cash to repay its own lenders. Its shares have been suspended by the New York Stock Exchange and it has admitted receiving a grand jury subpoena as part of a criminal inquiry into trading in its shares as well as accounting errors. State regulators in Massachusetts yesterday ordered New Century to fulfil its promises on loans in process and barred it from making new loans. It was coordinating its order with several other states, including New York, New Jersey and New Hampshire.

Other states, however, were reluctant to take action that could contribute to a lender filing for bankruptcy, leaving borrowers stranded.

US banks face sub-prime note inquiry

The fallout from America’s mortgage implosion continued yesterday when the state of Massachusetts said it is investigating the possibility that Wall Street firms had issued unrealistically upbeat research notes on leading “sub-prime” home loan makers to safeguard lucrative investment banking business.

William Galvin, the state’s commonwealth secretary, has subpoenaed Bear Stearns and UBS Securities for documents about their analysts’ recommendations of New Century Financial and other troubled lenders of high-risk mortgages made to people with the lowest credit ratings.

Mr Galvin said he was concerned that some investment banks may be violating terms of a 2003 global research settlement, reached in the wake of the bursting of the dot-com bubble. Under that agreement, investment banks paid fines and agreed to isolate their analysts from other businesses after regulators accused them of publishing biased research to win investment banking work from companies they covered.

Mr Gavin said: “Recent revelations that research analysts issued positive reports on mortgage lenders to those with less than solid credit ratings even as those companies faced more and more defaults suggests that the commitment of 2003 has not been met.”

See

China Burps Greenspan Farts Dow Hiccups

Housing Bubble

Housing

Economy



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Condos The Problem

In Alberta rents are rising 400% in Calgary. Edmonton is just as bad. Rent controls are needed. But of course the Alberta Government opposes rent controls.

In an interview Friday, Service Alberta Minister Lloyd Snelgrove said rent controls are a no-go."It just discourages landlords from building any new (units)," Snelgrove said. "It might seem a good thing for the person in that apartment at the time, but for the 2,000 people that are moving to town next month, there will be no buildings.

What a lot of blather and bullshit, landlords have not built any new apartments in years, the developers are all building condo's or transforming existing apartments into condo's.

While big property companies buy up existing apartments and slap a coat of paint on them and up the rents. Forcing renters to now become homeless.

Calgary based Boardwalk bought up many independent rental properties across Canada, making itself one of the largest rental monopolies in the country and one the largest REIT Income Trusts.

   Commenting on the Trust's Q3 2006 results, Sam Kolias, President and
C.E.O., said
"We are pleased to report a strong third quarter for our Trust. Excellent
market fundamentals aligned to produce positive effects on the Alberta rental
market. After the strong summer we just enjoyed, our Trust is positioned to
end 2006 on a high note. We anticipate a solid winter and remain confident in
meeting or exceeding the majority of objectives detailed in our 2005 Annual
Report.
"The rental market remains robust in Alberta, as substantial net
provincial in-migration, high home prices, exceptional industry growth and
record low unemployment combine to generate solid demand. Our Alberta market,
which makes up in excess of 50% of our total portfolio, saw its already low
vacancy decrease still further through the third quarter."
"Current average monthly market rents in Alberta increased by
approximately $328 in the first nine months of 2006, from $817 as at
December 31, 2005, to $1,145 at September 30, 2006. Even as rents increase,
however, the gap between home and condominium ownership costs versus the cost
of renting continues to widen still further, pricing many would-be homeowners
out of the market. Given the 45% gains in house purchase prices seen across
Alberta in the past year, rental rate increases prove to be substantially more
affordable than home purchase. In fact, increasing home purchase prices make
renting the best value in accommodation available in Alberta today. These
market fundamentals continue to bode well for Boardwalk's future."

As this unplanned, unorganized, uncontrolled boom continues renters in Alberta suffer from housing flips and speculation. Proving once again as Proudhon said; property is theft; when landlords deny possession of property to renters.

Should the government adopt rent controls to level the playing field for the working class. Of course. Business always calls for the government to regulate in order to avoid a monopoly and to 'level the playing field', so why should rent controls be any different. They allow the government to cool down an overheated market that is exploiting an artificial lack of rental properties to gouge and screw renters.

Rent controls would be a solution, condo's and housing flipping are the problem.

A h/t to Werner Patels.

See:

Housing

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Twisters and Trailer Parks

What's with Tornados and Trailer Parks?

When Edmonton was hit with its first ever Tornado it took out Evergreen Trailer Park.

Last weekends three Florida Tornadoes took out Trailer Parks.

David Demar stands in the remains of his mobile home at Lake Mack early Saturday, Feb. 3, 2007 after a killer tornado struck the Paisley, Fla. neighborhood Friday.(AP Photo/J. Pat Carter)

My partner suggested that it is because of location and heat, that is trailer parks are on the outskirts of cities, and that buildings and other urban developments give off heat patterns that do not attract the Tornados.

Mobile homes are cheap housing for the working class, and are not made to the same specifications or building codes as houses.


They are deliberately placed in the path of tornadoes by a sinister conspiracy of capitalists to kill off excess members of the working classes whom they call white trash. (just kidding).

It is actually just that capitalists can't be bothered to build cheap afforable homes, and place them in safe areas.

Picture of the "double tornado" that hit the Midway Trailer Park in Dunlap, Indiana, killing 36.

Here's what some other folks think.

Back in Kentucky, we always called trailers "tornado magnets."

Tornadoes and hurricanes are indeed most frequent in states with many mobile homes. For instance, eight states are in the top eleven for both prefab homes and tornadoes. Furthermore, Florida leads the nation in violent storms and is third in manufactured home purchases.

Statistics from the National Severe Storms Forecast Center in Kansas City show
that from 1975 to 1991 nearly 36% of all tornado deaths occurred in mobile
homes. Tornadoes don't hit mobile homes more often than conventional homes,
but mobile home are just that - mobile.

Is it not within the realm of thinking that the reason trailer parks garner
the most television exposure in regards to tornados, is because
of the higher mortality, and injuries sustained in mobile home vs.
a home of standard construction.
The most significant difference in their construction I would
contend is the "basement", or lack of a basement.

i should also point out that in many places of the southern states, the
water table is too high for houses to have a basement and not have it
flood. in the case of texas, the ground is so hard, u'd need dynamite
and jackhammers to dig a basement. trailer parks and houses on slabs
are more economical to build.

One in 25 Americans live in some kind of mobile structure, mostly in states where there are dozens and dozens of tornadoes each year. Places like the great plains, in general, have lots of folks living in these structures, which are just not built strongly enough to withstand even your run of the mill wind storm, let alone a tornado.

Okay, okay, so if trailers don't attract tornadoes, why do so many trailer parks get hit by tornadoes?
There are probably hundreds(maybe more than a thousand) very small tornadoes that touch down in the USA every year, but are not recorded because they do no damage. However, since a mobile home flips over so easily in even the weakest tornado, trailers probably act as "mini tornado" detectors. This makes it seem like tornadoes are attracted to mobile homes, but that is because trailers are the only things that reveal the presence of what would otherwise be an unrecorded event.

Another reason for trailer homes to pop up as the victims of tornadoes, is that trailer parks are often situated on flat plain-like areas. If you have a valley, more often than not, the trailer park will be situated in its flattest part. Tornadoes also enjoy these same geographical areas.

I don't know about anywhere else, but back in Tulsa, there was a period of time when it seemed like just about every tornado would actually change its path on approach to the city in order to accomodate the position of the trailer parks. Thinking about it later, I realized that it might have been just were the trailer parks are located in the city -- cheap land adjacent to or right near the Arkansaw river. Because of this, you have two contributing factors: 1) the river was on the west side of town and almost every storm (especially tornado producing ones) moves in from the west and 2) the river acted as a barrier against the tornadoes (storms/tornadoes that would tear up towns to the west would effect much less to little damage on Tulsa) so that if a tornado did hit the Tulsa area, the position of the trailer parks ensured that they were set receive a fully powered storm.

I was thinking it could be the history of the areas. Like noone wanted to build houses/buildings in that area because of all the tornadoes, so that made the land cheap enough for someone to start a trailer park there.

Trailer Parks are usually located on flat open ground. Tornadoes travel easier in this type of land. Also trailers are built of cheaper, much less sturdy materials than houses. It does not take nearly as much wind to damage a trailer. Plus most of them have flimsy underpinning. Trailers are built up off the ground a bit. Strong winds can destroy the underpinning and get under a trailer tossing it up and over. The trailer that gets tossed then becomes a weapon when it hits somebody or another trailer.

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