City Coming to Terms with Vancouver Secondary Suites

The report entitled THE ROLE OF SECONDARY SUITES: RENTAL HOUSING STRATEGY – STUDY 4 published by the City of Vancouver’s Community Services Group is about a year old but nonetheless contains some interesting data on the state of Vancouver’s secondary suite rental accommodations. Here are excerpts from the executive summary:

The market-rental housing stock is usually divided into two segments – the primary or conventional rental stock, consisting mainly of purpose-built rental apartments, and the secondary rental stock made up of rented houses, secondary suites, individually rented condo units, and units in multiple conversion dwellings and SROs. Over the last three decades, the secondary rental sector has played an increasingly important role in meeting rental housing demand. This increased role reflects the decline in the construction of new purpose-built rental and the redevelopment and conversion of the existing rental stock.

Using 2009 BCA data, this report estimates that there are at least 25,000 properties with secondary suites in the city’s single-family zoned areas. The proportion of properties with suites ranges from 6% in Oakridge to 59% in Grandview-Woodlands. On the west-side as a whole, less than one in five properties have suites; on the east-side, almost one in two properties have suites. Six local areas on the east side account for three quarters of the city’s single-family zoned secondary suite properties.

It’s a fascinating report, highlighting how the concept of secondary suites is starting to percolate more and more onto the west side of the city and into the hearts and minds of city planners who realize that the term “single family home” is becoming outdated. We can look at all RS-zoned properties with secondary suites. It looks like a Vision/NPA civic election voting map LOL.

A few key facts and insights I picked up in the report:

  • Data claim only 21% of homes built in the 1990s have secondary suites. (p13) Hogwash. There is something wrong with the data.
  • There is some natural resistance to secondary suites on the west side because homes are generally of older vintage. That is, it’s less desirable to tear down an older structure that has been well-maintained but not suitable for suiting.
  • The City is coming to terms with its dirty little secret: people are living in illegal basement suites and their permit officers purposefully turn a blind eye to properties with obvious basement suites installed but without the proper permits in place. According to the permit application data, about 20% detached properties are being fitted with legal suites, yet over 60% of new stock have basement suites. The City is well aware of this and looks poised to start the thin edge of the wedge into the dirty underbelly of the City’s basement suite accommodation.
  • “Council also approved a post-occupancy inspection program. Under the program, all new single-family houses are inspected a year after being approved for occupancy. Properties found with unauthorised suites are required to either apply for permits or to close the suites. Despite the changes, the proportion of single-family houses being built with approved suites has remained low.”

I commend the City of Vancouver for making this report public and shows, at least to me, they are aware of the problems illegal suites pose to the quality of life in the city, accelerated depreciation of neighbourhoods with slum housing, and (not least I’m sure) the chance for expanding their permit and inspection business unit!

Feel free to post your Vancouver secondary suite stories, good and bad, in the comments section: have you ever dealt with home inspectors overlooking secondary suites? What’s your most bizarre secondary suite experience, either as landlord, renter, or acquaintance?

134 Responses to “City Coming to Terms with Vancouver Secondary Suites”

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    blueskies Says:
    1

    secondary suites will always be a
    fact of life as the income is required
    by the owners to help pay the
    mortgage, this also causes the
    prices to increase as now there is a
    way to pay for the price increases

    trapped forevermore……..

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    Growing up on the west side we either lived in a basement suite or had a basement suite in almost every house we owned. The only exception was when the family finally built enough equity to move into a nice place without one.

    Most people I knew either had a rental suite or rented a room in the house to students.

    My family started back when an SFH in Dunbar was 2.6x gross annual income and mortages were 25/25.

    If the city is truly concerned about housing values going up forever they should tread carefully: Illegal suites are a significant support of current prices.

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    Anonymous Says:
    3

    I like the new trick of describing a basement suite with indoor/outdoor carpet rolled over concrete slab floor and a furnace in the middle of the "living room" as the "main floor" of the house because its closest to the ground.

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    It is laughable how many home owners think they a living in a SFH (single family house) when they are living in a poorly built multi family house that was designed as a single family house. I would rather live in a condo where at least there is some sound proofing and ventilation is not shared. Anyone who has to rent part of their house out to make a mortgage payment can't afford the house.

    The new trend in the future will be the owners living in the basements with the upstairs tenanted. It will be the only way to make the mortgage payment once interest rates up tick.

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    WOW…..BC eating out at restaurants because we are bored!!! Bad economy, HST, strict liquor laws, higher cost of living, the value we get, etc all have nothing to do with eat out less. It's simply because we are high class/expectation and are just bored with the restaurant scene. Yeap, BC/Vancouverites apparently are the most sophisticated diners in the country and we are dining out less because we are bored with the same offerings from Cactus Club, Earls, and Joey's.

    http://www.vancouversun.com/life/British+Columbia

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    We live in a nice single family home with a basement and NO SUITE. We share our house with nobody. How can we afford it you ask? WE RENT!

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    Best place on meth Says:
    7

    @space889:

    Point #5 clearly shows it's a money issue.

    5. Consumers are cutting back on appetizers, side dishes and dessert. Customer traffic at supper is declining faster than at any other part of the day, but breakfast is growing in quick service restaurants.

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    Here are the end of January 2011 numbers. These are from PaulB's daily reports and so therefore are not official. But they are typically pretty close.

    sell-list-ratio

    1740 4547 38.9%

    For 2001 to 2010, here are the totals and the mean and median January numbers. Was this January 'normal'? You decide.

    January

    sell list sell/list

    2001 1225 3395 36.1%

    2002 2248 3626 62.0%

    2003 1966 3810 51.6%

    2004 1954 3039 64.3%

    2005 1697 3360 50.5%

    2006 1924 3471 55.4%

    2007 1806 4067 44.4%

    2008 1819 4675 38.9%

    2009 762 3700 20.6%

    2010 1923 5147 37.4%

    Mean 1732 3829 45.2%

    median 1871 3663 47.5%

    (Note that the median ratio here is the median of the ratios, not the ratio of the median sell and list)

    Like or Dislike: Thumb up 0 Thumb down 0

    @Best place on meth: And yet the researchers still claim that's because we as consumers are bored, but because we have less money. The high price of restaurant meals or lack of disposable income was not mentioned even once in the article. Heck in value for money isn't really mentioned as a cause either. It's mainly just we are bored and too sophisticated for the current menu offerings.

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    Absinthe Says:
    10

    @Best place on meth:

    Yes – first the article says it's because "we're bored", and then goes on to say that McDonald's is gaining market share.

    McDonald's. Home of the challenging gourmet palette.

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    120 and Going Strong Says:
    11

    For 2001 to 2010, here are the totals and the mean and median January numbers. Was this January ‘normal’? You decide

    ****

    Uuum yup!

    Looks pretty normal to me, and prices are sure to be up AGAIN this month for what will be like the 120th month of price increases in Vancouver.

    Oh, and watch West Van and Van West sales and price increases this month.

    Try discounting those non-existent Chinese buyers bidding up prices in the million dollar plus homes. Just try this month bears.

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    Best place on meth Says:
    12

    @VHB:

    Now we're in February, which during the boom years averaged 150 sales per day, but last year was 120.

    With the rush to beat the deadline we should see sales somewhere in between those 2 numbers.

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    Patiently Waiting Says:
    13

    "The average eater’s bill in a full service restaurant in B.C. is 11 per cent higher than anywhere else in the country."

    There you go, say no more.

    Actually, I'll say more. We are in no way the "culinary apex of the country". When I lived in Halifax, eating out was less of a risk. Sure I had less choice, but the odds of getting of decent plate of food was better.

    The only thing worth mentioning about Vancouver is good, affordable sushi if you know where to go.

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    pricedoutfornow Says:
    14

    http://www.cbc.ca/fp/story/2011/01/31/4199182.htm

    Reduce CMHC role in mortgage insurance: CD Howe

    "According to the report by Finn Poschmann, vice-president of research at the CD Howe Institute, the CMHC now backstops mortgages equivalent to more than 30% of Canada’s gross domestic product.

    That’s left Canadians exposed to “large, ill-defined risks,” said the document, which argues that Ottawa should crank back the CMHC’s presence in mortgage insurance and allow more room for private sector insurers."

    Oh really….you think?? Too late now!

    Like or Dislike: Thumb up 0 Thumb down 0

    @space889:

    Not often you read a Sun article and the comments section is UNANIMOUS in their agreement. It's essentially the MONEY STUPID. A lot of people comment how expensive housing and the city in general is. You can only get so much blood from a stone. I will never understand why people think having the most expsenive housing market in the western hemisphere is a good thing. We are starting to see the results, aside from the housing industry, it destroys the economy eventually.

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    Without these secondary suites the rental rates would be even higher because the reality in Vancouver is that our government cannot and will not provide enough affordable rental housing stock to meet the current demand. So for those renters who criticize these single family homes with suites be careful of what you condemn.

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    Best place on meth Says:
    17

    Whistler, the dog murdering capital of the world has made the international news.

    http://www.bbc.co.uk/news/world-us-canada-1233102

    Should be a great image booster.

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    Anonymous Says:
    18

    Taxes for the homeowners for the secondary suites are coming from both fed and local governments.

    Like or Dislike: Thumb up 0 Thumb down 0

    Patiently Waiting Says:
    19

    @carlk: Perhaps if suites were less common, there would be more pressure to build real housing.

    I did my time in a basement suite – wrote about it previously and want to leave it behind me – and I'd rather live in a small, normal apartment any day.

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    superduperbulltime Says:
    20

    Bear BC unemployment rate lowest in country and lumber industry taking off like hot balloon. Yeah restaurant traffic down because renter broke after spending all cash on drug and alchohol over christmas crying in corner of basement suite but once credit card paid down renter loser out party again.

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    Best place on meth Says:
    21

    @superduperbulltime:

    That's two blatant lies I've read from the worthless cheerleaders today.

    Like or Dislike: Thumb up 0 Thumb down 0

    @carlk: Nothing to do with criticizing. City hall is getting hungry for revenue, and they will come knocking on those doors soon enough. The feds will probably come snooping before long too.

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    GF Armstrong Says:
    23

    Best place on meth Says:

    February 1st, 2011 at 11:03 am

    @superduperbulltime:

    That’s two blatant lies I’ve read from the worthless cheerleaders today.

    ******

    He is a troll grad school boy….don't they teach you that in your university

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    Anonymouse Says:
    24

    I'm bored of paying $70 for a bottle of wine in a restaurant I could pick up at a liquor store for $20.

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    Anonymous Says:
    25

    @Devore: I often wondered how much income tax is "lost" due to non-reporting of rental income of tenants in the basement. It must be substantial. Kind of makes a renter think that if there were ever a problem with a landlord, one call to CRA should do the trick…lol.

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    @space889: Downturn due to boredom not finances, but consumers move to lower cost meals and cut out the expensive supper out? Oh yeah, that quick service breakfast is the culinary pinnacle. Vancouver doesn't even have a Cora's. The article is complete bunk, but there's some good reading in the comments section. Just another perfect example of the disconnect between what MSM reports and what regular people are observing and living.

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    @Anonymous: It must be quite substantial. Take $1000-1500 a month (that's $15,000 a year) and multiply by hundreds of grey suites across Vancouver alone, that could easily justify a few extra staff at CRA. In the US, where government budgets have been getting squeezed at all levels, IRS is hiring like gangbusters, and audits are way up. As Harper boards the fiscal responsibility bandwagon before the election (or at least the budget) I would expect similar actions in Canada in the not too distant future.

    Like or Dislike: Thumb up 0 Thumb down 0

    @carlk: "our government cannot and will not provide enough affordable rental housing stock to meet the current demand."

    The reality is a large portion of secondary suite rental income goes unreported. Why not give some back to support affordable and livable housing?

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    Anonymous Says:
    29

    @Devore: It wouldn't really take extra staff. More like computer cross matching of addresses on income tax returns. A couple of different names at the same address should justify a letter or a phone call. That, IMHO, should be enough to start the ball rolling.

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    pricedoutfornow Says:
    30

    @Devore:

    "It must be quite substantial. Take $1000-1500 a month (that’s $15,000 a year) and multiply by hundreds of grey suites across Vancouver alone, that could easily justify a few extra staff at CRA."

    But when you take into account the fact that when someone reports the income from their suite, they are also allowed to deduct the related expenses (say 50% of the interest paid in the year, repairs, property taxes etc), how much tax is really lost here? Just wondering if it's really worth it.

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    Best place on meth Says:
    31

    I propose a special monthly "suite" tax on ALL secondary suites that the city could use to promote development of co-ops and other forms of affordable rental housing.

    It would be similar to a gas tax that supports public transportation.

    Let's start off with 5 cents per square foot per month.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Devore:

    It must be quite substantial. Take $1000-1500 a month (that’s $15,000 a year) and multiply by hundreds of grey suites across Vancouver alone, that could easily justify a few extra staff at CRA.

    It's not that substantial, since you can claim mortgage interest on the portion of the home that's rented. The net is that the taxable income would likely be pretty low for most mortgaged homeowners.

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    Anonymous Says:
    33

    @Anonymouse:

    I’m bored of paying $70 for a bottle of wine in a restaurant I could pick up at a liquor store for $20.

    Or you could pick up that same bottle in Seattle for $7. Vancouver: "The Most Overpriced Place on Earth".

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    @Patiently Waiting: "Perhaps if suites were less common, there would be more pressure to build real housing."

    I've always thought suited and laneway houses is a non-ideal method of increasing density in detached neighbourhoods. Unfortunately Vancouver standard lots are long and thin, making the application of European-style row/carriage housing more difficult. Nonetheless, there is opportunity there for some creative city planners; the alternative is the City turning more and more into amateur landlordsville, which I think takes time away from people enjoying and properly contributing to the city's culture.

    AgentWill had some cool ideas on facilitating non-strata row housing on 122' deep city blocks.

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    GF Armstrong Says:
    35

    It’s not that substantial, since you can claim mortgage interest on the portion of the home that’s rented.

    Wow! One more benefit for homeowners eh bears?

    First, no capital gains tax on primary residences and then you get to deduct mortgage interest (just like the US) on the rented portion of the home.

    Do you ever think that maybe people have suites because they can deduct half of their mortgage interest every year as opposed to needing them to pay for their house?

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    @GF Armstrong: "It’s not that substantial, since you can claim mortgage interest on the portion of the home that’s rented.

    Yeah and they get capital gains when they sell. Thanks for playing.

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    Anonymous Says:
    37

    Thanks for the monthly numbers VHB.

    The closest comparison for 2011 is 2008. This year we have about 5% less sales and nearly the same listings. I'd be happy with a continuation of a 2008 pattern combined with higher interest rates instead of lower ones. 1-2% more isn't going to affect my purchasing power on a monthly basis. Rather, I hope weak sales and higher rates will deflate prices and psychology at the same time.

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    GF Armstrong Says:
    38

    @GF Armstrong: “It’s not that substantial, since you can claim mortgage interest on the portion of the home that’s rented.

    Yeah and they get capital gains when they sell. Thanks for playing.

    ******

    Not when it is their primary residence, hence the owner occupied house with a rented basement suite. Thanks for playing.

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    @Troll:

    "It’s not that substantial, since you can claim mortgage interest on the portion of the home that’s rented. The net is that the taxable income would likely be pretty low for most mortgaged homeowners"

    But if that's the case and they are writing off expenses and interest then I beleive the house is no longer 100% capital gains free. No free lunch, you will have to pay the piper at some point.

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    Anonymous Says:
    40

    @GF Armstrong: Doesn't work that way. Capital gains kick in on the rental portion of the the property. Deemed disposition I think is what it's called. You never get to have your cake and eat it too. Whatever the case, it will open a huge can of worms for the homeowner with the possibility of being red-flagged with CRA. Not fun. They will always get their pound of flesh.

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    @DaMann: "But if that’s the case and they are writing off expenses and interest then I beleive the house is no longer 100% capital gains free."

    Generally there are no cap gains as long as you don't include CCA, don't mod the property for being more suitable to rent out, and have a reasonable expectation of profit (i.e. you get income). If semi-legal suites are required to be brought up to code, that's technically a mod. CRA doesn't usually check but suite income should be included in tax returns. @GF is right, but it won't always stop CRA if they think you have undeclared income.

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    GF Armstrong Says:
    42

    CRA doesn’t usually check but suite income should be included in tax returns. @GF is right, but it won’t always stop CRA if they think you have undeclared income.

    *****

    Booyacka bears! These are the benefits of owning that you are unaware of in your rented pads. I know I know – its another unfair advantage of owning over renting, and another demonstration of how the tax system favours the owner in Canada. But hey, owners take the risk. Not every homeowner renting their basement needs the income – many do it for the tax benefits.

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    The CRA Rental Income Guide, T4036, states that if all of the following conditions are met, you will not be considered to have a change in use:

    - the part of the home used for rental purposes is small in relation to the size of the whole property,

    - you do not make any structural changes to the property to make it more suitable for rental purposes, and

    - you do not claim any capital cost allowance on the part you are using for rental purposes.

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    fixie guy Says:
    44

    @27 Devore Says: "As Harper boards the fiscal responsibility bandwagon before the election (or at least the budget) I would expect similar actions in Canada in the not too distant future."

    I wrote elsewhere that Harper will maintain artificially pumping RE as long as possible, until either they secure the next election or are able to pass a full fledged disaster (a la Bush) to the next government and spend the next four years blaming them for the fallout. That he's making election noises now, along with backing away from policies formerly trumpeted as a miracle 'Action Plan', signals to me he sees the train at the end of the tunnel and is scrambling.

    Here it comes.

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    @Troll: "The CRA Rental Income Guide"

    You still need to declare the income. I am certain that's not happening with some homeowners in Vancouver.

    A guy named David Ingram is claiming even with this guide, a property is still capital gains exempt even when a large % of the structure is rented out, citing the Fedel Saccomanno case (1986). It seems, on first glance, the issue in that particular case was the property could not be properly segmented into owned and rental sections. If I get around to it I'll read the case to find out the judge's rationale. Laneway houses, which are separated from the main structure, could be treated differently.

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    patriotz patriotz Says:
    46

    @pricedoutfornow quotes CD Howe Institute:

    That’s left Canadians exposed to “large, ill-defined risks,” said the document, which argues that Ottawa should crank back the CMHC’s presence in mortgage insurance and allow more room for private sector insurers.”

    That is completely laughable, private sector insurers (I mean real ones, not Genworth etc. which are 90% taxpayer backstopped) are not the slightest bit interested in offering MI in Canada today. They know full well a bust is coming.

    They're not even interested in the US market where 99% of MI today is done by FHA/Fannie/Freddie.

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    patriotz patriotz Says:
    47

    @jesse:

    I actually owned a house with a rental suite some years ago, declared all revenue and expenses from the start, and was able to get the PR exemption on the whole house when I sold.

    I never claimed CCA on the suite because I knew that would disqualify me from claiming the PR exemption.

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    @Troll:

    "the part of the home used for rental purposes is small in relation to the size of the whole property,

    "

    Well I stand corrected.

    However that's a HUGE chunk of grey are right there. What is small? 49% of the total sf of the house or 25%? Does anyone here honestly think the tax man won't care if someone is pulling in $2k a month from a basement suite as opposed to $1000 a month. There is a big difference. We all know the CRA can be bastards. Just like your principle res is tax free. HOWEVER the CRA has in the past successfully gone after people for continually flipping their Prim res. CRA argued it was now an income stream far greater than your "day" job.

    And I know from personal experience, there are a lot of people who don't even claim any income at all from basement suites. That's a lot of back pay and penalties if they are investigated by the CRA That won't stop the city though, they are looking for a way to grab income from the extra suites, and so they should.

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    @Troll:

    "you do not make any structural changes to the property to make it more suitable for rental purposes"

    One moree question about this point. Does that mean a simple reno of the basement suite? What is structural exactly? The rules couldn't be any more vague.

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    Best place on meth Says:
    50

    I wonder how many owners of these suites have an annual business license as is required by law?

    So many little things that the city could crack down on if they so desired.

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    patriotz patriotz Says:
    51

    @Best place on meth:

    A business license not required if there is only one unit rented out per property, whether that be the whole property or a suite.

    Don't confuse that with the authorization which is required to legally rent out a suite in "SFH" zoning.

    I don't know what the threshold is, i.e. if you need a license for 2, etc.

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    Best place on meth Says:
    52

    @patriotz:

    Step #6 is incorrect then?

    http://vancouver.ca/commsvcs/licandinsp/complianc

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    GF Armstrong Says:
    53

    We all know the CRA can be bastards. Just like your principle res is tax free. HOWEVER the CRA has in the past successfully gone after people for continually flipping their Prim res.

    *****

    Lol – Vancouver homeowners don't care because they know no one is declaring the income. And the chances of CRA going after them are one in a million.

    Homeowners know there are better odds of winning the lottery than getting a CRA audit.

    And if you really think anyone is going to clamp down on basement suite income, you will be waiting a very long time.

    Besides, if they get caught, most Vancouver homeowners can claim that they failed to declare income because of a lack of "cultural understanding." You would be surprised at how many people get off citing language and cultural barriers.

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    @jesse:

    You still need to declare the income. I am certain that’s not happening with some homeowners in Vancouver.

    Both true statements. But I still stand by my statement that it probably doesn't represent a lot of lost tax revenue (because of the writeoffs), hence probably why the CRA isn't going after a lot of these folks.

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    painted turtle Says:
    55

    What about illegal bedrooms?

    A friend lives in a townhouse which had two fire exits: the entrance door at the front and the garage at the back.

    They transformed the garage into a bedroom for the kids (no window, no exit door). So the kids sleep in a room with no fire egress (!!!) but the bedroom door.

    I am wondering how many homes are not to code anymore in Vancouver.

    I am also wondering about the resale value of the unit since the strata does not know about the garage conversion.

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    @Troll: "I still stand by my statement that it probably doesn’t represent a lot of lost tax revenue"

    Not declaring the income is illegal, which means p-e-n-a-l-t-y. There still must be some residual revenue: only interest and maintenance is deductible. Add undeclared income over, say, 7 years and it could easily be enough to warrant an audit, especially if penalties are added in.

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    patriotz patriotz Says:
    57

    @Best place on meth:

    Well I guess I'm out of date. You didn't need a business license to rent out a suite back when I did, it looks like the requirement was introduced along with the suite legalization program, obviously to raise more revenue.

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    Bubble? What bubble?

    http://www.yattermatters.com/2011/02/vancouver-av

    Like or Dislike: Thumb up 0 Thumb down 0

    - the part of the home used for rental purposes is small in relation to the size of the whole property,

    Yes like a bedroom – not a basement suite or close to half the house.

    - you do not make any structural changes to the property to make it more suitable for rental purposes, and

    Yes like adding a basement suite.

    Sounds like it could be up for debate whether taxes are due or not. All it takes in one bureaucrat to decide to go after the home owners with suites and half of Vancouver could be looking at some back taxes and fines. Better get a good lawyer.

    The gov at all levels will be looking for new tax revenue. Home owners will be a target. As taxes increase on properties that is directly extracted from the property value. Just another prick in the bubble coming.

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    patriotz patriotz Says:
    60

    @Renting:

    Do keep in mind that given the proliferation of suites over the last decade, a great many residences with suites will inevitably be sold at a capital loss (if you believe that prices will eventually return to normal) due to their inflated cost base.

    That means that there is both an upside and downside to the suite CG issue in terms of tax revenue.

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    Patiently Waiting Says:
    61

    Once CRA busts a tax-evading landlord, I bet they can't claim expenses after the fact LOL. I hope that's what happened to my former landlord who I reported-on to the snitch line.

    He was renting out a whole house with two units. He sold the house a few months after my report and I assume had to pay the appropriate taxes, thanks to my efforts. I wonder if he was audited.

    It was revenge for not helping me with the bullying drunken upstairs tenant, failing to maintain safety standards and trying to steal my damage deposit.

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    BULL VICTORY - FOR T Says:
    62

    The average price of a detached home in Vancouver recorded $1,144,537 – a new record high that surpasses October 2010′s $1,058,578.

    yatter matters

    *******

    LMAO…

    VANCOUVER PRICES UP UP AND UP….

    We don't even need to discuss a balanced market because once again, prices are up – for what the 121st month bears…

    Holy shit – how do you bears put up with year after year ass kickings from all those uneducated realtor bulls who have made more in a few years that you will in a lifetime (even with all your hypothetical stock gains and war chests)?

    How do you deal with all these uneducated industry shrills telling you that low interest rates will be around for many years, when your own bearish gut and "analysis" says that it should spike up like in 1982? With a projected hike of 1% this year and 2% next year, it looks like realtors will have been right with 5 YEARS of low interest rates. Hmmmm….buying in 2008 with low interest rates, seeing your house rise every year, and renewing at low interest rates again. Yes, that was a bad decision – lol.

    It is becoming quite sad that each time the government looks like it will introduce something to deflate a supposed bubble, your cheer and end up with an unintended consequence of prices rising.

    It is becoming quite sad that you cheer inventory parties which fail to lead to price drops.

    It is becoming quite sad that you overanalyze and pontificate on every little RE news story or statement, thinking that it will herald the demise of the Vancouver RE market.

    For any lowly bears taking comfort in the bear analysis and seeking validation of their decision not to buy, don't listen to these guys.

    These posters seem to know the fundamentals, and can analyze to death a useless report, but they cannot even predict their way out of wet paper bag.

    Holy crap – you guys need to give up. But wait, I know – the crash of 2012 is just around the corner….lol

    Like or Dislike: Thumb up 0 Thumb down 0

    Record prices.

    I think its sales mix, market hot in richmond and westside. elsewhere (ie. coquitlam, new west, north van, west van, east van, burnaby, etc.) try getting a record new price….its just sales mix and the lack of buying at the entry level of the market, but if you want to believe the data and think it points ever higher, than all the power to you….

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    a great many residences with suites will inevitably be sold at a capital loss

    I agree prices will plummet, but most of the people who are at a loss will not sell. They will not be able to come up with the cash to pay off the mortgage, therefore they cannot sell.

    Most sales will be either foreclosures or those who bought pre bubble.

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    BULL VICTORY - FOR T Says:
    65

    record prices…its just sales mix and the lack of buying at the entry level of the market,

    ******

    YAWN…been hearing that "explanation" for well over a year now…time for the next weak explanation that makes you sleep at night knowing the crash is around the corner

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    fixie guy Says:
    66

    #64 Renting Says:"I agree prices will plummet, but most of the people who are at a loss will not sell."

    How's that working out in the US?

    Like or Dislike: Thumb up 0 Thumb down 0

    The average price of a detached home in Vancouver recorded $1,144,537 – a new record high that surpasses October 2010′s $1,058,578.

    Hang on yesterday we could not be in a bubble because prices were flat. Today we cannot be in a bubble because prices are increasing.

    Increasing prices just means more credit tightening and higher interest rates which will make the correction that much more severe.

    A fool and his money are soon parted. Too bad the money is all borrowed.

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    patriotz patriotz Says:
    68

    @Renting:

    Me: a great many residences with suites will inevitably be sold at a capital loss

    I agree prices will plummet, but most of the people who are at a loss will not sell.

    ALL houses get sold eventually. Isn't that self-evident?

    Like or Dislike: Thumb up 0 Thumb down 0

    BULL VICTORY - FOR T Says:
    69

    Increasing prices just means more credit tightening and higher interest rates which will make the correction that much more severe.

    ****

    YAWN…that one is sooooo 2009..

    Be sure to add, "the more fools that jump in the bigger the crash and the cheaper the price"

    Lol

    Like or Dislike: Thumb up 0 Thumb down 0

    @fixie guy:

    How’s that working out in the US?

    Most sales in the US are either foreclosures or sales people still have some equity in.

    I guess you missed that part: "Most sales will be either foreclosures or those who bought pre bubble."

    That is exactly what is happening in the US.

    How does someone with no money sell a house they are underwater on? They can't unless someone else lends them unsecured money which is unlikely.

    Like or Dislike: Thumb up 0 Thumb down 0

    “the more fools that jump in the bigger the crash and the cheaper the price”

    True

    Like or Dislike: Thumb up 0 Thumb down 0

    ALL houses get sold eventually.

    Yes, but obviously the timing will determine if there is a capital loss or gain. Eventually there will be a capital gain even if it takes 30 years or more. There will be many people stuck in their houses for 30 years waiting until they have either paid enough off or prices have gone back up due to inflation before they can sell.

    Like or Dislike: Thumb up 0 Thumb down 0

    fixie guy Says:
    73

    #67 Renting Says: "Today we cannot be in a bubble because prices are increasing."

    Yatter uses average prices, which statistically aren't exactly the best measure. The Teranet benchmark numbers show a different picture, 'Van' column is percent change relative to mid 2005, 'M/M' is percentage monthly increase:

    Date——–Van——-M/M

    2009-12 149.000 100.00%

    2010-01 150.390 100.93%

    2010-02 151.240 100.57%

    2010-03 152.160 100.61%

    2010-04 153.400 100.81%

    2010-05 155.230 101.19%

    2010-06 156.480 100.81%

    2010-07 155.970 99.67%

    2010-08 155.370 99.62%

    2010-09 154.840 99.66%

    2010-10 154.970 100.08%

    2010-11 155.900 100.60%

    YOY 6.900 104.63%

    $6900 and $4.63 percent YOY. Woo-hoo, bust out the Baby Duck. Note that unlike the story spun by some of the industry mouth-breathers here, a truer measure of prices showed very mild declines mid-year.

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    @GF Armstrong: Tax evasion! Great business plan! What next?

    Like or Dislike: Thumb up 0 Thumb down 0

    9% increase from December? Wow. Even if you don't like averages, this is a surprisingly strong number. 9% in one month. Wow. The MSM is going to be all over this one, enjoy talking to your in laws at the next family gathering bears!

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    fixie guy Says:
    76

    #70 Renting Says: "Most sales in the US are either foreclosures or sales people still have some equity in."

    Foreclosures were 25% of US sales in Q3 2010, I don't know how you'll support the second part. Also, lumping all foreclosures into 'unable to pay' ignores 'unwilling to pay', capable owners walking away from severely upside-down mortgages. Your initial point was owners will buckle down and make payments no matter what happens, softening market impact, so it's back to "how is that working out in the US"?

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    Best place on meth Says:
    77

    @BULL VICTORY – FOR THE 121ST MONTH IN A ROW:

    That was a lot of wasted typing as I didn't read any of your shit.

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    @fixie guy:

    Your initial point was owners will buckle down and make payments no matter what happens, softening market impact

    No that was not my point. The market impact will be severe mainly due to a lack of buyers. There will always be sellers. For those who are underwater they will not be able to sell as they must pay the mortgage off to sell.

    Anyway, please explain how someone (in Canada or the US) sells a place they owe significantly more than the net sale price without defaulting?

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    @Renting:

    "How does someone with no money sell a house they are underwater on? They can’t unless someone else lends them unsecured money which is unlikely"

    Its called a Short Sale: Bank has to agree to forgive negative equity, hence the term "short". That's how underwater people sell their homes.

    These sales take longer to process, all the meanwhile, the seller is still making payments.

    Don't worry, it can't possibly happen here…can it?

    Like or Dislike: Thumb up 0 Thumb down 0

    @fixie guy:

    ‘unwilling to pay’

    That works in some states in the US with no recourse on mortgages. Doesn't work here unless your income is below the poverty line. You will pay willing or not.

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    Best place on meth Says:
    81

    @fixie guy:

    I couldn't care less about average prices, but does that chart look like a blow-off top or what?

    Like or Dislike: Thumb up 0 Thumb down 0

    Its called a Short Sale: Bank has to agree to forgive negative equity

    Yes which is defaulting.

    How many banks will be willing to do that here with CMHC insured loans? None. It will be CMHCs call.

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    patriotz patriotz Says:
    83

    @Renting:

    What I should have pointed out is that the adjusted cost base of a suite (assuming it's subject to capital gains) is based on the market price of the property at the time of conversion, NOT the price that was originally paid for the house. That's also true when a whole house goes from owner-occupied to a rental, i.e. the ACB is based on the market price at that time, not the purchase price.

    Now do you see how many properties would be subject to a capital loss on the suite?

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    Anonymous Says:
    84

    Best place on meth

    @BULL VICTORY – FOR THE 121ST MONTH IN A ROW:

    That was a lot of wasted typing as I didn’t read any of your shit.

    ******

    Didn't they teach you how to read little grad school boy? Ah, that explains your teenage angst and bitterness.

    Don't worry, if you missed it here you can see it on Garth's site :)

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    kansai92 Says:
    85

    Hey homeloaners,

    It's time to pay your property taxes. Bend over!

    Like or Dislike: Thumb up 0 Thumb down 0

    @Renting:

    It is not defaulting since the owner is still current with the payments.

    You asked what they were doing in the US, so I am telling you.

    Banks do it because depending on how much short they come up with, it may be better than the alternative which is to foreclose and then try to sell it which means that they will assume all other debt related to the place such as property tax and HOA fees. All the meanwhile, HOA (strata, condo fees), property taxes and other other possible liens can put the place at risk for more senior debtors. So yeah, the bank and the insurer (CHMC, FNMA/FHLMC) would rather see you find your own buyer and make the transaction while you are still up to date with the payments and taxes.

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    Anonymous Says:
    87

    Hey homeloaners,

    It’s time to pay your property taxes. Bend over!

    ***

    Hey renters, its the 1st, time to pay the homeloaners!

    Enjoy the news tomorrow at the water cooler about the 9% increase in average home prices.

    Be sure to tell all your colleagues how stupid they were to buy and be sure to proudly proclaim your renter status when discussing the recent RE gains!

    Oh, and tell them about your great GIC return as well. Good thing you played it safe and were prudent – those taxable 1% interest returns are certainly fast tracking your to riches!

    Like or Dislike: Thumb up 0 Thumb down 0

    patient renter Says:
    88

    Let people go crazy and jump in. It's doing wonders for the rental market. I have a friend who cannot find a renter for his basement suite.

    The day of reckoning will come, and people will look and wish they had not bought. You know it, I know it, and even the most ardent bulls know it. It's just a matter of time.

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    /dev/null Says:
    89

    @Anonymous: Since when is being in grad school considered an insult? Seems like you're the one who is bitter about something.

    (And to answer the question before it's asked: I'm not in grad school)

    Like or Dislike: Thumb up 0 Thumb down 0

    @Anonymous:

    Be sure to tell all your colleagues how stupid they were to buy and be sure to proudly proclaim your renter status when discussing the recent RE gains!

    What gains? Did they sell?

    The only gains real estate owners made last year was in property taxes.

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    @SD92129: Just so it's clear, how common do you think short sales are in the US, and why to you think they were suddenly so common last year? Maybe it has something to do with the treasury-sponsored HAFA program?

    Short sales have propensity for non-arms-length transactions and other forms of fraud, which is why banks are wary of them without a government backstop.

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    Gradumacated Says:
    92

    Since when is being in grad school considered an insult? Seems like you’re the one who is bitter about something

    *****

    When you are still in grad school, you lack real world experience, and/or the ability to even participate in the RE ladder. Your commentary lacks any depth, as you still employ lenses of how the world "should" work, and as such, you often cannot comprehend why something does or does not happen. Your world is one of neat little models and standardized analytics, which unfortunately, don't really work once you leave the ivory tower. Case in point – the market should have collapsed already no?

    When someone spouts off at the mouth while still in grad school, its like taking poker advice from a child on the sidelines when you are playing a high stakes game with the big boys.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Gradumacated: "Your commentary lacks any depth, as you still employ lenses of how the world “should” work, and as such, you often cannot comprehend why something does or does not happen"

    LOL so US grad school student bloggers who accurately predicted the US housing market crash must be geniuses! Mr. Market sure showed them a thing or two, with their lack of "real world experience".

    Like or Dislike: Thumb up 0 Thumb down 0

    kansai92 Says:
    94

    @Anonymous:

    I gladly pay my subsidized rent any day.

    Thanks, homeloaner!

    Like or Dislike: Thumb up 0 Thumb down 0

    Gradumacated Says:
    95

    So US grad school student bloggers who accurately predicted the US housing market crash must be geniuses! Mr. Market sure showed them a thing or two, with their lack of “real world experience”.

    ****

    And these bloggers are where? Any examples?

    Like or Dislike: Thumb up 0 Thumb down 0

    patriotz patriotz Says:
    96

    While we're on taxes, thought you might enjoy this:

    Vancouver, British Columbia, November 24, 2010… Vancouver psychiatrist, Dr. Raymond Ambrose Liang, was fined $85,464 yesterday in Robson Square Provincial Court, after being found guilty on two counts of income tax evasion. The fine represents 150% of the taxes Liang evaded in 2004 and 200% of the taxes he evaded in 2006.

    A Canada Revenue Agency (CRA) investigation determined that Liang had not reported $365, 615 from various property transactions in 2004 and 2006. He sold four contracts for the purchase of pre-construction condominiums, also known as assignments. Liang also profited from the sale of a townhouse which was sold by Kawa Kooksai Enterprise Ltd, a corporation he controlled.

    I buy tree, my huzzba buy four and pay no taxes :-)

    http://www.cra-arc.gc.ca/nwsrm/cnvctns/bc/bc10112

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    @patient renter:

    I have a friend who cannot find a renter for his basement suite.

    You mean you have a friend who refuses to rent his basement suite at the going market rate.

    Just like all those owners in Kelowna who currently "can't sell" their house, and can't for the life of them figure out why.

    As Yoda might put it, "Rent or do not rent… there is no try"

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    @jesse:

    I would not go so far as to say they have become "so common".

    Its usually more complicated than it looks. First of all, the borrower is in the grey area between missed payments and foreclosure notice.

    Also, "homeowners must still meet HAMP’s eligibility criteria (principal residence, first-lien mortgage, serious delinquency, unpaid balance under $729,750, and a mortgage payment over 31 percent of gross income)."

    HAFA pays 1500 relocation to the seller, 1000 to the lender, realtor gets their 6% and to qualify, you have to have been declined HAMP (loan modification) within the last 31 days, loan of less than

    I do not know of anyone doing short sale via HAFA, but I do know people that got scammed by a private "loan modification service" (pay me money and I will help you get your loan modified), advised by the scammer to stop making payments, received angry letter from bank, threats of foreclosure, short sold the property because they did not qualify for HAMP.

    For your convenience:

    http://hafa-program.com/

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    @carlk:

    "our government cannot and will not provide enough affordable rental housing stock to meet the current demand"

    True. But you forgot the most important modal verb, which is "should not." Governments trying to meet demands which must be left to the people (read: markets) is how we got in this mess in the first place. Letting the government get involved in the rental market would only make matters worse.

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    SD92129 Says:
    100

    @Gradumacated:

    Most funded graduate school projects come via grant applications that are evaluated by granting agencies that score relevance of the project. So, yeah, most of these graduate students are working on real world problems for their theses.

    So as you throw down on graduate students, you sound like a failed out graduate student who walked with a masters and a chip on the shoulder after spending a PHD and postdocs worth of time in the academic sweatshops.

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    New Listings 350

    Price Changes 57

    Sold Listings 210

    11102

    Like or Dislike: Thumb up 0 Thumb down 0

    @Patiently Waiting:

    I don't think snitching for revenge generates very good karma.

    Like or Dislike: Thumb up 0 Thumb down 0

    @paulb: Boom! Welcome to spring, 2011.

    Like or Dislike: Thumb up 0 Thumb down 0

    Here is the projection for February month-end. I revamped this to do the projections using a 20 day moving average. The advantage is that we don't project out to the end of the month based on just one or two days of noisy data. The disadvantage is that when the numbers are sloping up (like now), the 20 day MA lags a bit in picking that up.

    Let me know what you think about this way of doing it.

    In any case, here are the projections.

    February 2011 month-end projections

    Days elapsed so far 1

    Days remaining 19

    20 Day Moving Average: Sales 100

    20 Day Moving Average: Listings 245

    SALES

    Sales so far 210

    Projection for rest of month 1898

    Projected month end total 2108 +/- 353

    NEW LISTINGS

    Listings so far 350

    Projection for rest of month 4658

    Projected month end total 5008 +/- 414

    Sell-list so far 60.0%

    Projected month-end sell-list 42.1%

    MONTHS OF INVENTORY

    Inventory as of February 1, 2011 11102

    MoI at this sales pace 5.27

    Like or Dislike: Thumb up 0 Thumb down 0

    Best place on meth Says:
    105

    @paulb:

    Wooo! There's the first 300+ listings day.

    And here come the March 18th lemmings to grab what they can.

    Like or Dislike: Thumb up 0 Thumb down 0

    Note that I found an error that affected my January 31st numbers I posted last night. I forgot to add in the Jan 31st sales and listings! Here are the corrected Jan. month end numbers.

    Sales 1876

    listings 4820

    sell/list 38.9%

    MoI: 6.00

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    @Best place on meth: Yeah, I sense that we may see something like what we saw last April, with high sales *and* high listings as both sides rush to get a piece of the action before the CMHC clock strikes midnight on the 18th of March.

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    Gradumacated Says:
    108

    Hey Cali Boy,

    Do a quick review of CANADIAN research agency projects, and you will soon realize that a lot of fluff gets funded. That fluff frequently has a tenuous link to real "problems" at best.

    By the way, have you ever dealt with grad students in your profession? Have you ever participated in their research projects? If you did, you would know that that their projects have a veneer of applicability, and that you frequently have to steer them in the direction of "real world" applicability.

    My professional experience is that the more education one has, the tighter the blinders, and the less useful they are. Hence the old adage that business and academia do not mix.

    By the way, I actually have my doctorate, and bypassed the grad school TA sweatshops as I was on full scholarship. That's the only way to do it, especially if you want to make real money.

    It sounds like you have first hand knowledge of working for peanuts as a researcher/TA/student babysitter. Sorry that you had to experience that.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Gradumacated: "And these bloggers are where? Any examples?"

    I'll do you one better. Lifelong ivory tower denizens like Krugman and Shiller called the bubble and subsequent crash. Their credentials are irrelevant. Their arguments were right, the School of Hard Knocks bulls' were wrong.

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    Best place on meth Says:
    110

    When the headline is worded like this, it makes us sound third world.

    http://news.yahoo.com/s/ap/20110201/ap_on_re_ca/c

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    Anonymous Says:
    111

    @paulb: Boom! Welcome to spring, 2011.

    Boom?

    60% list sell ratio is a bearish boom?

    Wow, standards have dropped already for 2011.

    I guess the crash of 2011 really is going to be the crash of 2020 at this rate.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Anonymous: who said bearish? My 'boom' was referring to *both* the sales and the listings. Get a grip.

    Like or Dislike: Thumb up 0 Thumb down 0

    Here are the median sales and listings totals for February from 2002-2009.

    median 2859 4115 69.5%

    So, 60% is slightly worse than typical. No one should be getting the vapours over the first day of the month's number.

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    Boombust Says:
    114

    "Boom! Welcome to spring, 2011.

    Boom?"

    Yeah, here. What about it?

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymouse Says:
    115

    @VHB:

    "Yeah, I sense that we may see something like what we saw last April, with high sales *and* high listings as both sides rush to get a piece of the action before the CMHC clock strikes midnight on the 18th of March."

    I don't think so. Reducing the maximum amortization by 5 years is quite a small difference. I think something like $34/month per $100,000 borrowed?

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    Anonymouse Says:
    116

    @VHB:

    "MoI at this sales pace 5.27"

    Low sell:list, but MOI dropping – I guess there were *lots* of expires at the end of January?

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    Absinthe Says:
    117

    Craigslist find – Urgent 3 bds apartment for rent

    It appears they're cutting the price to $950 from $1200. Although it's a bit hard to say.

    Squamish is seriously overbuilt. I've been watching the listings get increasingly desperate.

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    Patiently Waiting Says:
    118

    @N: I like to think of it as enlightened revenge. I actually snitched a couple of years after the fact because I wanted some distance and needed time to think about the larger consequences.

    When someone like my former landlord gets busted we, as individuals and society in general, benefit from it. Every abused tenant, honest taxpayer and honest landlord.

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    Vansanity Says:
    119

    Sales are staying pretty strong. See if that remains after March 18.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Vansanity:

    There is always hope. First it was the US housing crash. And then it was rising interest rates. After that, it was high oil prices. And then the economic meltdown. And then it was the Olympics. And then the HST. And now, it's the March 2011 change to mortgage rules.

    Maybe, just maybe…

    Like or Dislike: Thumb up 0 Thumb down 0

    fixie guy Says:
    121

    #107 Gradumacated Says: "My professional experience is that the more education one has, the tighter the blinders, and the less useful they are. Hence the old adage that business and academia do not mix."

    And how is Tsur Somerville doing?

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    Anonymous Says:
    122

    #118,

    people will treat you the way you treat them. your landlord removed you from his place right? you were upset, you reported this guy to the taxman. noone, beside the landlord and the taxman, would know for sure if your former landlord delared or hid his rental income. Did you get laid off at EBay soon after? Karma returns!

    Now here comes the swearing!

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    SD92129 Says:
    123

    @Gradumacated:

    Nice. Anonymous internet chest beating. Maybe I clawed my way through graduate school or maybe I got a full ride all the way from day one of undergrad to the last day of my postdoc. We will never know.

    One thing is for certain: you are a doctorate with low self-esteem. Are you even practicing your discipline? Does pissing on graduate students make you feel better? Thanks for painting them all with the same brush (of the wrong colour in my opinion). Sounds like university did not did not expand your mind, but taught you to run your mouth.

    Sure, a lot of projects may appear to be fluff, but the big prize goes to the companies and organizations that can see the diamond in the rough and do the translational research to reap the rewards. First hand experience there.

    "full scholarship. That’s the only way to do it, especially if you want to make real money." Are you talking about graduate school? A NSERC CGS is 35K (PGS D are 21K and more common) and these are recently inflated from when we were in school. Sure Big Money! Graduate school should be a stepping stone to bigger things in career.

    http://www.nserc-crsng.gc.ca/Students-Etudiants/P

    Maybe you got your degree in more of a social science. In the physical sciences, engineering and medicine, the training forms a critical foundation for the skill set of scientists practicing in this area. So all the additional training they get makes them invaluable to our innovative research organizations.

    Or maybe you got your degree in an overseas institution and are now driving a cab here. Sorry, but your CV has to match up to the many competing candidates just to get an interview. Have you tried China or India? The contract research organizations out there are grabbing warm bodies off the street and claiming that they have an almost infinite ability to ramp up capacity (much like what they say about their economies).

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    Stooping To New Lows Says:
    124

    SD92129 Say

    Nice. Anonymous internet chest beating. Maybe I clawed my way through graduate school or maybe I got a full ride all the way from day one of undergrad to the last day of my postdoc. We will never know.

    __________________________________________

    Dude, relax.

    I think you actually showed YOUR low self esteem with your all over the map counter rant – cab drivers, warm bodies in China, etc – really? And trying to one up him with a reference to your supposed post-doc? Really?

    I believe Gradumacated was talking about getting through grad school quickly if you want to make serious money. I would agree with him. Pissing away multiple years as a research lackey does no one any good. It is best to get in, get the full ride, and move one, as it is more appealing to many employers in certain disciplines.

    If the guy was talking about grad school money, then you can still make some good money from scholarships, especially the big ones like the Trudeau Scholarships. You also have to remember that for past little while, scholarship income was not taxable here! So if you got 40k, it was 40k after tax. Pretty sweet for a kraft dinner eating student with minimal expenses.

    Its pretty clear that the Gradumacted guy is in the social sciences with his view of the applicability of grad school research. I disagree with him. Plenty of real world research projects get started by medical and engineering students.

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    SD92129 Says:
    125

    @Stooping To New Lows:

    Yeah, you are probably right. Got a little carried away with the untempered rebuttal.

    Not claiming I did a postdoc which is nothing to brag about.

    CRO capacity in China, that you can take to the bank.

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    @N:

    This is great, I'm being voted down by the pro snitching for revenge crowd. Who'd have thought that such people existed?

    Like or Dislike: Thumb up 0 Thumb down 0

    @Absinthe: So desperate he can't even be bothered to post a picture with his listing?

    Like or Dislike: Thumb up 1 Thumb down 0

    "When someone like my former landlord gets busted we, as individuals and society in general, benefit from it. Every abused tenant, honest taxpayer and honest landlord."

    I don't think it has much impact on landlords and tenants. The guy getting busted for taxes is unlikely to make him a better landlord nor to take him out of the landlord business. It just likely to make him mean. And at the same time, it's likely to make you mean. When we do something hostile to another person, we have to justify that hostility, and in doing so, we have to create a model of the world in which it is a good thing for people to hurt each other. That makes us fearful and defensive. The overal impact, especially on ourselves, is negative.

    Now, if I misunderstood and you were saying that you lodged a complaint regarding the specific problems that you had while living there, and the guy's failure to return your deposit, that's another story, as there may have been some positive impact. Standing up for one's rights and trying to remedy wrongs is one thing, but revenge pure and simple usually has few benefits.

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    This is great, I’m being voted down by the pro snitching for revenge crowd. Who’d have thought that such people existed?

    *************

    I am one of them. Sometimes I don't have the patience for karma and I have to help it along :)

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    @N:

    I don’t think it has much impact on landlords and tenants. The guy getting busted for taxes is unlikely to make him a better landlord nor to take him out of the landlord business.

    Oh sure he will. How will he pay his mortgage then?

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    Patiently Waiting Says:
    131

    @N: Well, as I said earlier, he sold the house several months after my report. Enough time for the CRA to have taken action against him which probably caused he him to have to sell. So, in fact, he is no longer the landlord of that property. I don't know if he has other properties, but the CRA probably does now.

    Oh yes, other beneficiaries of my report were the surrounding home owners. Its a large, well-built 1950s house that had been the jewel of the block. I learned that the neighbours were upset with the physical deterioration of the house and several loud parties held by the drunken, bullying upstairs tenant. He was stinking-up a nice, family area.

    At one point we lost electricity for a day. The landlord forgot to pay the electrical bill.

    He never even gave a reason for not giving me the damage deposit (no opening or closing inspections). It was just several weeks of "the cheque is in the mail" until I read him the Residential Tenancies Act (he would have to pay double back). After that he suddenly found his chequebook, the bastard. The world is a better place without him as a landlord.

    Thank you, Mr. Taxman.

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    Well, nothing entitles amateur landlords to tax-free income, even if it is to support their grotesque mortgages. The professionals already do it by the book, they don't need the hassle.

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    Peter Pan Says:
    133

    I'm looking for feedback…

    Rental income could be easily taxed if there was a small tax deduction for residential rent. Here's how to design it…

    1. Allow residential renters to deduct 10% of their rent off their income tax. It could be structured as a non-refundable tax credit.

    2. Renters would have to keep receipts to prove payment. This eliminates "cash" deals fueling the underground economy.

    3. Renters would have to disclose the name of the person/corporation to whom they pay rent. This would allow CCRA to "match" deductions with income. Thus, ensure taxes are paid on that rental income.

    4. The amount refunded to renters would be small compared to the income tax collected. Compliant landlords would have nothing to fear since they already pay income tax.

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    [...] average number of sales for January 2011, as monitored at VCI by VHB. [Jan 2011 sales 1876, sell/list 38.9%, MOI 6.0; Mean for 2001-2010 1732, sell/list [...]

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