A lot of people in this thread are claiming that homeowners are not really rich. A bunch are citing some Marxist definition of “rich” or raising the bar to “never having to work again”. OK, fine: they’re “rich enough” to be a problem, then.
The truth is, homeowners in Canada have enormous power, both economic and political, and they have been advocating for policies at every level of government that have both exacerbated the housing crisis and grown their own wealth.
“But they’re working class because they can’t enjoy their wealth without selling their home!”
That’s just not true. Homeowners enjoy enormous privileges at the cost of renters, most notably blocking new developments, which homeowners do with passion. Their mortgages are guaranteed by the government, subsidized effectively at the cost of taxes by non-homeowners, i.e. renters. And homeowners have enormous generational wealth to pass on, which if we don’t address, will cause an economic caste system to permanently root itself. Yes, this is real wealth, causing real social problems. This article is right to call it out!
They are middle class. In fact, there is no middle class, they are working class!! They do not own their own means of production, they are wage slaves like everyone else.
Therein lies the contradiction at the heart of the persecuted property owner: their wealth is deserved, by virtue of their lifetime of hard work and careful planning; at the same time, it’s not fair to tax them in proportion to that home’s staggering value.
So you’ve lived in the same house with the same job for several years/decades, but because actually-wealthy individuals and institutional investors are suddenly willing to pay a lot more for your house, you should effectively be forced to move out? Christ, just tax rental income ffs
No where in the article does it say that homeowners should effectively be forced to move out.
We absolutely coddle homeowners, with preferential tax treatment, subsidized street parking, super low property taxes in places like Vancouver, and, most importantly, outsized power to prevent new development at the cost of renters, young people, and the poor. This is zero sum: homeowners maintain and grow their wealth, in part, at the cost of renters and actual poor people.
Increasing taxes at a higher rate than inflation on a homeowner who is given raises at the same rate as inflation (if that) is effectively forcing them to move out over time.
If the goal is to make everyone a homeowner, then
outsized power to prevent new development at the cost of renters, young people, and the poor.
is the only truly catastrophic problem mentioned so far. Everything else you listed at least incentivizes homeownership. Sure, car-centric urban design is silly and all that, but I kind of doubt most people would prefer the space reserved for parking spaces be occupied by more housing. Green spaces, bike lanes, and larger walkable areas would probably win that vote. Vertical and mixed-use housing are tried-and-true solutions to the density problem.
I would argue that the only other “catastrophic problem” is one we haven’t mentioned yet: institutional investment. In fact, I wouldn’t be surprised if they paid for this article. They’d love to see people turn on individual homeowners, and raise property taxes to the point that only institutions can afford to pay it.
Super low property taxes, besides starving government services and causing renters to make up the difference in fees, is precisely one of the reasons why places like Vancouver have one of the worst housing crises in the world. Economists agree that profiting from the increase in land value is a kind of theft from society, called “economic rent”. (This is why a land value tax has the nickname “the perfect tax”.) That theft is at the heart of our dysfunctional housing market.
You have a lot of concern for the hypothetical possibility of increases in property taxes forcing homeowners to sell. But in reality, annual property taxes on a $3 million house isn’t even the average single months rent on a 1BR. They should be taxed properly, and that money should help renters! We desperately need public housing and co-ops. This is absolutely a class struggle, but you seem to only see the harms of the homeowner class, not renters.
The goal absolutely should not be to subsidize homeowners. That is precisely the problem! When you subsidize a group, non-members pay the cost. That means non-homeowners pay for homeowners! It is precisely this mindset, that homeowners deserve even more from society despite their incredible privilege, that is causing our housing problems. More to the point, institutional investors inevitably benefit from many of these policies, perpetuating the housing crisis.
Or, radical opinion, don’t let people invest in housing. Also, I noticed BC raised their maximum rental increase from 2% to 3.5%. Almost double. So there’s that too 🫠
Ontario got rid of theirs for any newly built/designated residences. Now you also have to look at what year the damn unit was first rented in. If you aren’t careful with that, your landlord could legally hike up your rent by $10,000 or however much they want to, for absolutely no reason. November 15, 2018 is the date to watch out for, specifically. Anything after that is taking on a big risk, imo.
This is all so fucked. Here’s an example of what I was talking about.
My wife and I had to beg, borrow, and move 2 hours outside Toronto to afford our first home. Yes we own our home and yes we are better off compared to 5 years prior, but we are FAR from being wealthy. Even if we look at the average home owners who don’t have a mortgage, most of those people again are better off but not wealthy. I feel like this article is trying to shift the blame away from the top 0.1% and put it on the slightly better off but still struggling population.
There’s no actual dividing line anywhere on the wealth or income curve. I know splitting into tribes is our species’ thing, but this isn’t that kind of problem. People above the very porous median point need to come down (to some degree, somehow), and people below need to come up, simple as.
I’ll just leave this here to further my point.
https://www.readthemaple.com/canadas-top-0-01-of-earners-saw-income-growth-of-30-in-2021/
What does an article about the top 0.1% have to do with home ownership? Are you for real?
EDIT: I misunderstood this post. I thought it was somebody calling out the homeowner as rich ( I had just come off another comment and was reeling ). I realized after I posted that the poster was responding to himself.
Re: the title… Yeah no, owners of an expensive property are not only not in the “rich” class, they’re likely working class as much as gig drivers and cashiers. Unless they liquidate this asset and actually go live somewhere LCOL where they can live off of the labour of others, they’re still working class.
If you’re dicing things up that way, there’s no middle class in the first place.
:-) the middle class is the subset of the working class that has no food insecurity but has a lot of social & image insecurity
But like the rest of the working class, the middle class is one or two tragedies away from becoming homeless and marginalized, despite the lack of awareness regarding so
There never has been. You either sell your body and labour, or own enough capital for it to self sustain, or at least be sustained by the labour class.
That doesn’t make any sense. If you have a million dollar house, you can borrow against it or sell it like any other asset. Yes you’re rich.
What if you have already “borrowed against it” and the thing you bought is the house itself? You know, a mortgage. How is a regular family with a mortgage not middle class?
Any age considerations here? 50+ year olds with no pension whose entire net worth is tied up in their home are not middle class?
A retired couple that have a reverse mortgage on their home to supplement their insufficient income are not middle class?
Honestly, even a regular person that busted their ass to pay off their house and who eventually bought a run-down property that they poured all their free time for years to fix up and rent out is not suddenly a member of the 1%.
You know what, I “own” the house my 4 kids call home. I owe pretty close to what it is worth and I can barely afford anything else with mortgage rates where they are ( certainly more than rent would be ). It needs some repairs that are going to force me to borrow from somewhere. I work two jobs ( decent ones ) trying to keep it all going. If I lose the house, I will end up with a net worth lower than a homeless person. And I have dipshits on the Internet lashing out at my wealth and privilege. For the love of God, who are you people?
For the love of God, who are you people?
People who have no idea how mortgages work. People who dont grok that 99% of “homeowners” pay a bank every month just like a renter pays a landlord and can still get the boot if they fail to do so. People who are mad and lashing out in the wrong direction like teenagers.
“Owning” the home my family lives in does not make me rich, it means I took on a huge debt. Now if they want to have a discussion about investment properties then I am all ears.
On the “sell it like any other asset”, you still have to live somewhere, those places cost money. On the “borrow against it”, now you’ve got debt (that costs money to have), I guess your saying anyone with that much money should be able to make more money off it via leverage than they use?
When i think rich, i think doesn’t have to work, but maybe that’s independently wealthy.
We’re using different definitions of the word “rich”. In my definition, the one I personally see as more useful because it aligns with class struggle and shared policy interests, having a bunch of wealth parked in a passive asset is not enough to tip you over to the group of people who benefit from inequality.
That is the point though, if like the article says l, 1/5th of owners have an investment property, they could sell it and still live in the current place and have a ton of cash. or sell both and move to a cheaper city and retire. Compared to people struggling to save for a mortgage in this crazy market.
1/5th of owners have an investment property, they could sell it and still live in the current place and have a ton of cash
That’s fair, and the article goes through a few key points that I agree with. The article title is just clickbait, but annoying because it’s alienating. I don’t think it makes sense to write a headline based on 1/5th of that group being land speculators.
“1/5 of Homeowners Refuse to Accept the Awkward Truth: They’re Rich”
Or
“Multi-property Homeowners Refuse to Accept the Awkward Truth: They’re Rich”
Or
“Multi-property owners Refuse to Accept the Awkward Truth: They’re Rich”
Or
“Landlords and Spectors Refuse to Accept the Awkward Truth: They’re Rich”
Exactly, articles like this are just confusing the meaning of class.
What makes you a member of “the working class” is that you are forced to sell your labour to survive. Fullstop. A tradesperson, and a lawyer, and a burgerflipper are all in the same class from that point of view.
As soon as your accumulated capital becomes large enough that you earn your income only as a result of your capital, then you are no longer working class, and that’s when your interests diverge from the average worker and average homebuyer or renter.
A landlord with no other job, the major shareholders of a profitable business, a wealthy heir, those people make their money by siphoning value off of other people’s work without actually needing to spend their time on work.
Long story short: I have no problem with a 50 year old plumber with a large family who legitimately uses that 4500 sqft house.
My issue is with Karen who used dad’s money to buy 8 properties to airBnB them and insists she get special treatment because her business risks didn’t pan out.
As soon as your accumulated capital becomes large enough that you earn your income only as a result of your capital, then you are no longer working class, and that’s when your interests diverge from the average worker and average homebuyer or renter.
Interestingly, almost everyone in government is a member of the capitalist class, largely because people that sell their labour can’t afford the time, let alone the money, to run for office.
In case you wondered why the interests of labour are grossly underrepresented in government, despite that vast, vast majority of both citizens and voters being of the working class, this is why.
