Category Archives: Uncategorized

Long road to completion

Posted on by
Reply

The City of Winnipeg will take a step toward fulfilling a 43-year-old plan to build an inner ring road with the opening of the eastern extension of Chief Peguis Trail this morning.

Following the conclusion of an 11 a.m. political ceremony, motorists in northeast Winnipeg will be able to travel between Henderson Highway and Lagimodiere Boulevard on a $109-million roadway that serves as another link in a “suburban beltway” originally envisioned by transportation planners in 1968.

At the time, a report called the Winnipeg Area Transportation Study recommended the construction of a ring road inside the Perimeter Highway to carry both passenger and commercial vehicles. A strip of land between Henderson and Lagimodiere was reserved for the North Kildonan component of this road — and finally used when construction began in 2010.

“It was held and now it’s built,” said North Kildonan Coun. Jeff Browaty on Thursday before city officials were taken on a tour of the new roadway, which is expected to relieve the burden of traffic on east-west streets in northeast Winnipeg, such as Springfield Road and McLeod Avenue.

These narrow arteries were not designed to handle high volumes of traffic, both in terms of width and durability, said Brad Sacher, Winnipeg’s public works director.

In contrast, the Chief Peguis Trail extension was built like a highway, with a deep base of granular material covered in a layer of asphalt, Sacher said. On a high-volume roadway with a granular base, it’s cheaper to maintain an asphalt surface over the long term, he said, adding concrete still makes more financial sense as a surface for lower-volume roads.

Originally slated to open next fall, the new roadway is ready now because of sunny weather this summer and a seven-day work schedule employed by construction consortium DBF2, the city’s partner in the project, Sacher said. Under the terms of a private-public partnership, the city will pay the consortium $8.2 million a year for 30 years for the design, construction and maintenance of the roadway.

Ottawa contributed $25 million to the project, using a fund set aside for public-private partnerships. Manitoba also redirected $9 million from existing budgets after the scope of the project was increased to $109 million from $65 million to include the cost of an underpass at Rothesay Street.

The new roadway also features remodelled intersections at Henderson and Lagimodiere, a new signalized intersection at Gateway Road, street closings at both Raleigh Street and De Vries Avenue and a bike-and-pedestrian overpass at the Northeast Pioneers Greenway, one of the city’s busier active-transportation corridors.

The city has long-term plans to extend Chief Peguis Trail west from Main Street to McPhillips Street and eventually to Route 90, as well as east from Lagimodiere to the Perimeter Highway. According to the city’s Transportation Master Plan, this will be accomplished by 2031, when the city is supposed to complete the inner ring road.

The price tag for completing the ring road is $670 million in 2011 dollars. Transportation advocates say the City of Winnipeg won’t be able to afford it without raising the money through funding mechanisms such as road tolls, gasoline taxes and property-tax increases.

“At the end of the day, the political will has to exist. Otherwise the plan is just a plan,” said Chris Lorenc, a former city councillor who regularly appears before the current council to argue in favour of more investment in infrastructure. “We can not simply sit around and wait for someone to drop a pile of money on the City of Winnipeg. It’s not going to happen.”

http://www.winnipegfreepress.com/local/long-road-to-completion-134896743.

Vancouver Auto Financing
Winnipeg Mainstay
Puerto Morelos Cancun Mexico day excursions
www.crossfireconsulting.net

Comments flow after running-water story

Posted on by
Reply

Two developers are going back to the future to help make it easier for some Winnipeggers to buy a downtown condominium.

The developers behind the heritage-building conversions at 111 Princess St. (the former Penthouse Furniture Building) and 128 James Ave. both plan to offer a rent-to-own option when they begin marketing condos within the next few months.

In the case of 128 James, James Avenue Holdings Ltd. plans to give prospective buyers the option of signing one-, two-, or three-year leases. A portion of each month’s rent, which will be set higher than they would normally pay, will be put into a special account for use as a down payment on the purchase of the unit when the lease expires.
Taurean Global Properties, which is converting the Penthouse building into 60 condos, hasn’t worked out the details yet for its rent-to-own package, which will be administered by an outside party.

Both James Avenue Holdings president Kurtis Sawatzky and Taurean Global spokesman Alf Kaech said the idea is to give people who can’t afford a condo right away an opportunity to save up money and purchase one a few years down the road. “It definitely gives them some options,” Kaech said. “We’re excited to be able to offer it.”

“We’re just trying to be a little innovative in what we do,” Sawatzky said. “It’s just another wrinkle in our marketing approach.”

Bill Thiessen, the Re/Max Professional Realty agent who expects to begin marketing the James condos within the next few weeks, said rent-to-own isn’t new. He remembers hearing about it when he started selling homes in the 1980s.
But it hasn’t been used much in recent years, he said, adding he isn’t aware of any other local downtown developers offering the option.

Thiessen, one of the most active agents in the downtown condo market, said he expects some tenants to jump at the chance to rent for a few years before buying.

“It’s basically a forced savings program, which can help you make the transition from renting to owning,” he said. “Sure your rents are going to be higher, but very quickly you’re going to create this pool of equity.”

Thiessen said the lease can also stipulate what the purchase price will be at the end of the lease, “so it takes away all of the unpredictable parts of it.”

Sawatzky said he plans to sell three of the 10 condos in the James building and to rent out the rest. He’s also willing to rent out some of the units month-to-month in case prospective buyers want to see if they like living downtown before committing to buy. The only catch is if the unit is sold, they will have to move.

He said rent-to-own is best suited to people who are already committed to living downtown because they won’t get their money back if they change their mind.

That’s because his company will be holding the unit for them and will be paying the property taxes and other costs during the leasing period.

Sawatzky said most of the rental units will have two bedrooms and range from 976 square feet to 1,138 sq. ft. The basic monthly rent will be $1,450 to $1,695, depending on the unit. They haven’t decided yet what the additional premium will be for the rent-to-own program.

Kaech said Taurean Global will likely set aside 10 to 12 units for its rent-to-own program. The rest will be sold.
The James project is one of two condo developments Sawatzky is involved in. Another company he partly owns — Stonebridge Development Corp. Ltd. — is converting the former First Church of Christ, Scientist Church at 511 River Ave. into 46 one-bedroom condos.

The company has spent the last two years preparing the building for redevelopment, but has now started construction with a goal of having the condos ready for occupancy a year from now, he said.

Stonebridge had originally hoped to have that project completed before the end of 2009, but Sawatzky said it took longer than expected to obtain city permits and to complete the design and financing.

But that’s all done now, the interior has been gutted, and they’re starting to pour concrete footings in the basement for the new support beams that will hold up the four new interior floors.

http://www.winnipegfreepress.com/opinion/columnists/condo-living-in-core-made-easy-a-look-at-three-condo-developments-in-winnipeg-134579708.html

Winnipeg Mainstay Hotels
Vancouver GMC
Vancouver Auto Financing
www.crossfireconsulting.net

Winnipeg homebuyers have something to smile about

Posted on by
Reply

The gods were smiling on Winnipeg homebuyers in the third quarter of this year, according to a new housing affordability report from RBC Economics.

The bank said Friday Manitoba saw some of the country’s biggest improvements in housing affordability during the quarter that ended Sept. 30.

Not only did mortgage rates decline from the second to third quarters, but selling prices also did an about-face, declining across the board after racking up some record-breaking gains in the second quarter.

The bank said the biggest retreat was in the price of a standard two-storey home, which declined by 2.4 per cent to $282,000. The average selling price of a detached bungalow fell by 1.6 per cent to $263,700, while the average price of a standard condominium dipped by 0.3 per cent to $157,700.

That news may come as a surprise to Winnipeggers who have grown accustomed to double-digit price increases for much of the last eight years.

But Peter Squire, residential market analyst for the WinnipegRealtors, said it’s not unusual for average selling prices to bounce around from month to month or quarter to quarter because of seasonal variations in the marketplace. He noted, for example, there tends to be more sales and more upward pressure on prices during the spring and summer than in the fall and winter.

But if you compare prices on a year-over-year basis, which is what the WR does in its monthly market reports, it shows the average selling price for a single-family, detached home in Winnipeg is still 7.4 per cent higher than it was in the third quarter of last year — $253,163 versus $235,822, he said.

Robert Hogue, senior economist for RBC Economics, said while selling prices are higher than they were a year ago, they’ve cooled a bit in recent months, and he expects them to remain fairly stable through to year-end.

Hogue said affordability in Manitoba remains near historic norms, “which is a telltale sign that home ownership in the province is reasonably achievable.”

RBC’s quarterly Housing Trends and Affordability report measures the affordability of housing in 13 Canadian markets by calculating the proportion of pre-tax household income needed to service the cost of owning a home at the going market value.

An affordability rating of 50 per cent means home ownership costs, including mortgage payments, utility bills and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income. So the higher the rating, the more costly it is to afford a home.

The bank said Manitoba’s affordability rate declined in the third quarter for all three housing types. For bungalows, it fell 1.2 percentage points to 35.6 per cent; for two-storeys it dropped by 1.5 per cent to 37.9; and for condos it fell 0.5 per cent to 21.4.

Vancouver and Toronto had the two least affordable markets, with affordability ratings for a benchmark detached bungalow of 90.6 per cent and 52.1 per cent respectively. Other examples are 40.9 per cent for Montreal, 40.8 per cent for Ottawa, 37.6 per cent for Calgary and 33.2 per cent for Edmonton.

RBC said most of those markets also saw the affordability of bungalows improve from the second to third quarters. The lone exception was Calgary, which saw an erosion in affordability.

http://www.winnipegfreepress.com/business/winnipeg-homebuyers-have-something-to-smile-about-134525028.html

Puerto Morelos Cancun Mexico day excursions
Playa Del carmen Dental Vacations
Puerto Morelos Rental Apartments
www.crossfireconsulting.net

Manitoba’s housing affordability improves noticeably in the third quarter: RBC Economics

Posted on by
Reply

Manitoba’s housing affordability experienced some of the most noticeable improvements in the country during the third quarter of 2011, according to the latest Housing Trends and Affordability Report issued today by RBC Economics. Homeownership costs in the province fell, as mortgage rates eased and home prices reversed some of the record-breaking gains made in the second quarter.

“Manitoba’s affordability levels continue to stand near their historic norms – a telltale sign that homeownership in the province is reasonably achievable,” said Robert Hogue, senior economist, RBC. “Homebuyers took advantage of this more affordable market in the third quarter, pushing home resales higher by 5.3 per cent.”

RBC’s housing affordability measures for Manitoba, which capture the provinces proportion of pre-tax household income needed to service the costs of owning a home at the going market value, decreased across all housing types in the third quarter of 2011 (a decrease represents a gain in affordability). The measure for the benchmark detached bungalow in the province fell to 35.6 per cent (a decrease of 1.2 percentage points from the previous quarter), the standard condominium to 21.4 (down 0.5 percentage points) and the standard two-storey home to 37.9 per cent (a decrease of 1.5 percentage points).

RBC’s housing affordability measure for the benchmark detached bungalow in Canada’s largest cities is as follows: Vancouver 90.6 per cent (down 1.5 percentage points from the previous quarter), Toronto 52.1 per cent (up 0.1 percentage points), Montreal 40.9 per cent (down 1.3 percentage points), Ottawa 40.8 per cent (down 0.6 percentage points), Calgary 37.6 per cent (up 0.5 percentage points) and Edmonton 33.2 per cent (down 0.6 percentage points).

The RBC Housing Affordability Measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market in Canada. Alternative housing types are also presented including a standard two-storey home and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that the homeownership costs, including mortage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-taxed income.

http://www.newswire.ca/en/story/884395/manitoba-s-housing-affordability-improves-noticeably-in-the-third-quarter-rbc-economics

Puerto Morelos Dental Vacation
Puerto Morelos Cancun Mexico Vacation Rent
Midtown Ford Winnipeg Facebook
www.crossfireconsulting.net

Canadian real estate becoming more affordable, RBC says

Posted on by
Reply

The affordability measure captures the proportion of pre-tax household income that would be needed to service the costs of owning a certain type of home. In the third quarter, that index fell for all categories of housing.

“Housing affordability levels are quite good in most parts of Canada and will pose little threat to overall housing demand,” said Craig Wright, senior vice president and chief economist. “The Vancouver area market continues to be a major exception, with sky-high property values in upscale neighbourhoods making it both extremely unaffordable and the most at risk of a downward correction.”

The uncertainty affecting the global economy, with Europe mired in a debt crisis, is helping to keep interest rates close to historic lows. Rates are unlikely to rise until the middle of next year and even then only gradually, RBC said.

The cost of owning a detached bungalow dropped in most major cities in the third quarter, with the exception of Toronto and Calgary, which ticked higher.

Although overall affordability improved slightly in the three months to September, housing costs in Toronto, Montreal and Ottawa are also in an “uncomfortable” range.

“We expect to see further slowing in the pace of home price increases next year, as housing demand levels out,” said Wright. “These factors will set the stage for a period of relative stability in affordability trends in Canada.”

According to the index, the higher the reading the less affordable it becomes to own a home.

For example, an affordability reading of 50% means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50% of a typical household’s monthly pre-tax income.

The index in Vancouver stands at 90.6%, Toronto 52.1% and Montreal 40.9%.

http://money.canoe.ca/money/business/canada/archives/2011/11/20111125-123132.html

Puerto Morelos Dentist Crowns Implants Cancun Playa del Carmen Mexico Cosmetic Dentistry
Puerto Morelos Rental Apartments
Cancun Dental Vacations
www.crossfireconsulting.net

Homeowners see lower costs with lower rates: RBC

Posted on by
Reply

Canadian homeowners caught a modest break during the third quarter as mortgage costs receded slightly, reversing a two-quarter trend in which affordability decreased.

A new report from RBC Economics says the driving factor was low interest rates, which helped reduce fixed mortgage rates across the country.

As a result, the bank says it was more affordable for Canadians to own a standard condominium, two-storey home or detached bungalow in the third quarter, though not by much.

The following RBC statistics include the total mortgage, utility and property taxes incurred by Canadian homeowners:

Owning a condo cost 29 per cent of median pre-tax household income at the national level, a drop of 0.2 percentage points from the previous quarter.

A two-storey home also became cheaper to own, but still costing 48.8 per cent of household income. That was down by 0.6 percentage points.

Finally, a detached bungalow ate up 42.7 per cent of that same income, a decrease of 0.7 percentage points from the second quarter.

In terms of a regional picture, RBC says Vancouver remains the most expensive housing market in the country.

In a statement, RBC Chief Economist Craig Wright said the Vancouver-area has “sky-high property values in upscale neighbourhoods making it both extremely unaffordable and the most at risk of a downward correction.”

On the other hand, RBC says Alberta is among the most affordable provinces in which to buy a two-storey home, detached bungalow or condo.

RBC also says that the Manitoba market “showed some of the more significant improvement in affordability among the provinces in the third quarter.”

Daryl Harris, a Winnipeg-based mortgage professional with Verico One Link Mortgage and Financial, said he was surprised by the RBC report’s analysis of the Manitoba market.

“Affordability generally follows one of two things, either lower rates or a decrease in house prices and I have seen neither in our market,” Harris told CTVNews.ca in a telephone interview on Friday.

Looking ahead to 2012, RBC believes housing prices are unlikely to soar any time soon.

“We expect to see further slowing in the pace of home price increases next year, as housing demand levels out,” said Wright.

“These factors will set the stage for a period of relative stability in affordability trends in Canada.”

Puerto Morelos Dentist Crowns Implants Cancun Playa del Carmen Mexico Cosmetic Dentistry
Puerto Morelos Rental Apartments
Cancun Dental Clinic
www.crossfireconsulting.net

Owning a home in Winnipeg became easier: RBC Economics

Posted on by
Reply

It got easier to own a home in Winnipeg in the third quarter of this year, according to the latest housing affordability report from RBC Economics.

The bank said today that Manitoba’s housing affordability experienced some of the most noticeable improvements in the country in Q3, as mortgage rates eased and home prices reversed some of the record-breaking gains made in the second quarter of the year.

RBC’s housing affordability measure represents the proportion of pre-tax household income needed to service the cost of owing a home at the going market value. An affordability reading of 50 per cent means homeownership costs, including mortgage payments, utility bills, and property taxes, take up 50 per cent of a typical household’s monthly pre-taxed income. So the higher the affordability measure, the more costly it is to afford a home.

The bank said Manitoba’s affordability measure declined in the third quarter for all three key housing types — detached bungalows, two-storey homes and standard condominiums. For bungalows, it fell 1.2 percentage points to 35.6 per cent; for two-storeys it dropped by 1.5 per cent to 37.9; and for condos it fell 0.5 per cent to 21.4.

Vancouver and Toronto had the two highest affordability measures for the benchmark detached bungalow, at 90.6 per cent and 52.1 per cent respectively.

http://www.winnipegfreepress.com/business/Owning-a-home-in–Winnipeg-became-easier-RBC-Economics–134496428.html

Puerto Morelos Dentist Crowns Implants Cancun Playa del Carmen Mexico Cosmetic Dentistry
Puerto Morelos Rental Apartments
Midtown Ford Winnipeg Facebook
www.crossfireconsulting.net

Blog Traffic Exchange Related Websites
  • Financial Goals for 2009 (part 3) We are looking at financial goals for the New Year. MSN Money lists 6 financial milestones to reach before age 30. If you are already over 30, these milestones are still worth looking into, but...
  • Getting A Mortgage That Works For You Purchasing a home is the biggest investment that you can make for your future and is probably the most expensive thing that you will ever purchase.  Obtaining a mortgage for the home can be tricky...
  • Lender Due Diligence I liked the previous rgf post so much I went and looked up another of his posts...  This one is on Prosper Lender Due Diligence.  The forum thread is here.  Enjoy: Those that have followed...
  • How to Get a Higher Appraisal For Your Home If you’re trying to sell your home in today’s market, you may be faced with a lowball appraisal that could threaten a loan. Even the nicest houses are being downgraded, and if your area has...
  • Should I Buy A House and Take Advantage of Low Interest Rates Every few months, someone wants to know if its a good time to buy real estate. A reader asked an interesting question: Interest rates are artificially low and we won’t see rates this low for...

Burnaby landlord questions city budget, tax increases

Posted on by
Reply

Burnaby landlord Gabriele Cocco couldn’t believe the numbers.

Upset at his increasing property assessments, he started looking at his taxes and making inquiries at Burnaby city hall, including a Freedom of Information request.

The figures he got back in response were, he said, “a little bit astonishing, quite honestly.”

According to the information sent to him by the city finance department, the population of Burnaby increased 15.8 per cent between 2000 and 2009.

During that period the number of city employees grew by 17.8 per cent. But the overall city budget grew from $208.5 million in 2000 to $327.3 million in 2009, an increase of almost 57 per cent.

The city portion of residential property taxes went up 56.3 per cent.

But for Cocco, who owns several light industrial and commercial properties, he was most aghast at the 191.6 per cent jump during that period in property taxes the city received from owners of light industrial properties and the 57.3 per cent jump in the taxes received in the business, or commercial, category. The city saw an almost 30 per cent increase in taxes paid by owners of major industrial properties.

“It’s obscene,” said Cocco. “I couldn’t believe the discrepancy between the consumer price index and the increase in property taxes. There’s no correlation.”

On one of his light industrial properties, at Waltham Avenue and Kingsway, the total taxes went up almost 52 per cent between 2004 and 2011, he said. However, the portion that goes to city hall saw less of an increase, at 27 per cent.

The budget increases “don’t relate to the private sector increases,” he said. “You couldn’t afford to stay in business with these kinds of [cost] increases.”

In the end, Cocco stressed, it’s not the landlords who suffer, but the tenants to whom the tax increases get passed. He’s lost at least one tenant who simply found the increases too onerous.

“I’m a frugal guy,” he said. “I don’t believe just because we’re in our heyday here and there’s a lot of building and a lot of money coming into the city that you should just go out and spend it.”

For his part, Cocco admits he’s raising his concerns now in hopes it will give voters something to think about as they head to the polls on Saturday. He believes it’s important to at least elect some people that could serve as opposition to the dominant Burnaby Citizens’ Association, which currently has a monopoly on council.

Burnaby Mayor Derek Corrigan responded that there were many things that happened between 2000 and 2009 that has resulted in increased operating costs at city hall, including growth in population and in the business and industrial sectors.

The large increases in property taxes collected include not only inflationary jumps but also more money from a growing tax base, resulting from new housing, commercial and industrial developments.

“So our tax base keeps growing … the actual services and the amount of revenue, will keep increasing but it won’t necessarily mean that your average citizen is paying more on their taxes than the normal rates that they expect” of two to 3.5 per cent per year, Corrigan said.

As for the increase in costs, much of it is due to wage increases and the provision of more services, he said.

The wages paid to the city’s RCMP officers make up much of the almost 55 per cent increase in the city manager’s department budget, which includes fire, police and library services.

RCMP officer wages added continuing costs to the operating budget in 2002 ($750,000 per year), 2004 ($600,000 annually), 2005 (24 new officers at a cost of $2.5 million a year), 2006 ($1.5 million), 2007 ($1.2 million) and 2008 ($245,000 for three additional officers plus $850,000 in wage increases). In 2009, the wage increase totalled $2.8 million, plus the RCMP received new mobile workstations at a cost of $450,000 and four new RCMP clerks ($350,000).

Policing was a big issue in previous elections, said Corrigan. “And we were asked to meet the community desire for more policing. As a result, we have been paying significant tax dollars to enhance our police force over those years.”

Corrigan noted that for several years before this period, RCMP wages were frozen which resulted in the large catch-up increases since then. In addition, RCMP are paid the average for the top three police forces in Canada.

“The problem is we don’t have any choice,” he said. The RCMP contracts are negotiated by senior governments.

Other ongoing cost increases have resulted from four new community police offices opening in 2000 ($750,000), the opening of McGill library branch ($2 million), a new city computer system ($3.7 million), improvements at Riverway Golf Course ($630,000), and the opening of the Tommy Douglas library branch ($1.6 million).

New facilities generally attract more users which creates a need for more staff and expanded opening hours, he said, noting that the Tommy Douglas library saw a 30 per cent jump in users, compared to the old Kingsway branch it replaced, as soon as it opened.

He said it’s expected that the new Edmonds community centre currently under construction, will cost the city $1 million a year in additional staffing, even after revenues are factored in.

There were 10 firefighters added for Fire Hall No. 7 in 2007 ($850,000) and another 10 firefighters and a fire captain added in 2008 ($1 million).

The increase in the city finance department’s budget, which grew by 102.5 per cent from $12 million in 2000 to $24.4 million in 2009, is largely to do with computerization of the city’s operations over that 10-year period, Corrigan said.

The wage hikes of other city workers has also added to the costs, he said, noting CUPE had a four per cent increase in its contract negotiated a few years ago, which is higher than the current rate of inflation. Until contracts come up for renegotiation, the city isn’t able to bring wage hikes in line with inflation.

The 59 per cent increase in the engineering department is largely in the utilities area (almost 97 per cent on its own) which is recouped from taxpayers, said Coun. Dan Johnston, chair of the city’s finance committee.

Those hikes included $7.6 million for watermain replacement, $10.5 million for the cost of water from the regional district, $8.7 million to separate combined sewers (to prevent sewage from accidentally entering local waterways during heavy rainfalls), $2.1 million in the cost of regional sewage services, $2.4 million for yard waste collection, $230,000 in Metro Vancouver garbage fees, $1.4 million for roadwork and $2.62 million for road maintenance downloaded by the province, much of which is recouped from TransLink.

Contracted salary increases accounted for $4 million of the cost increases in the department over the 10-year period.

Johnston stressed that people need to look at both revenues and expenses to get the real picture of the city’s finances.

“I think that you don’t get to be the best run city in Canada in 2009 without having committed to do a lot of things that make for a well-run city,” said Corrigan, referring to the Maclean’s magazine survey,

“You don’t get to where we are without spending some money and certainly that’s been true over the last years. We think that this money’s been a great investment and so far I think it’s proven that’s true.”

http://www.bclocalnews.com/news/133848123.html

Eagle Ridge GM Coquitlam BC
Midtown Ford Winnipeg Facebook
Midtown Ford Winnipeg Blog
www.crossfireconsulting.net

Blog Traffic Exchange Related Websites
  • The Best Billion Dollars You Could Ever Spend Beyond yachts, cars and parties, dare to dream bigger One thousand million dollars. It’s quite difficult to comprehend that amount in terms of usefulness. Say you gain such a fortune, even once you’ve got a...
  • 401k Introduction The original 401(k) plan was created and set into motion by Congress in the year 1978 as a way for people to save up for their own retirement before they had to pay taxes on...
  • 3 Things You Should Know about Old Coin Two and Three Cent Pieces When most Americans think about an old coin made by the United States mints they do not think of two and three cent face value coins. This is because the U.S. has not made coins...
  • Goodbye Penny, Goodbye Dollar (bill) It wasn't long ago that the price of copper started rise to the level where a pound of pennies (about 145) cost more than their face value to produce. The last year a 95% copper...
  • Increase in FDIC Limits? Who Cares? CNBC has highlighted the major pork add-ons in the 2nd bail out bill bumping it up to a slim 400 pages!  There is one that is getting a lot of press, but I am confused why....

Tax breaks

Posted on by
Reply

The statistics show that across Canada, fewer rental units are being built compared to the 1970s, a time of prosperity and growth, fuelled by an influx of boomers looking for apartments. The facts also show the dramatic dip in rental-housing construction coincided with tax reform that cut the amount of capital costs investors could use to reduce income.

Investing in rental property became less attractive. Now developers and affordable-housing advocates are lobbying for a return to the pre-reform tax policies of the early 1970s to spur construction of lower-rent accommodation. But they also want a variety of other tax breaks, including reductions in GST and PST expenses.

Tax reform in the 1970s reduced the amount of a building’s capital cost, whether new or purchased, that could be deducted from investors’ incomes. Today, investors can deduct four per cent, compared to as much as 10 per cent pre-1972. Rental property once could be pooled as a portfolio to maximize the benefit of deductions, but no longer. The federal government has also restricted which investors can use “excess” capital cost allowances to reduce other income.

The federal and provincial governments have begun funding affordable-housing construction again, but this is an expensive way to expand the rental market. The Harper government should consider re-instituting the pre-1972 incentives — giving GST and PST breaks to specific interests sends governments down a slippery slope lined with numerous worthy causes.

http://www.winnipegfreepress.com/opinion/editorials/tax-breaks-133944998.html

Midtown Ford Winnipeg Facebook
Eagle Ridge GM Coquitlam BC
Midtown Ford Winnipeg Blog
www.crossfireconsulting.net

Blog Traffic Exchange Related Websites
  • This Politician Controls Your Tax Agenda - Be Very Afraid Don't let the jovial, goofy face fool you.  This man - Charles Rangel (D. NY) - is scary. Let me explain.  As specified in Article I, Section 7, of the U.S. Constitution, all laws for raising...
  • Taxing the Rich - Will They Bend but Not Break? Mr. ToughMoneyLove is not ready to launch a full-bore rant on the health care proposal that has emerged from the House. I will wait and see what the Senate does first. But it is now...
  • Tax Benefits Of Passive Income Since this is tax season and this site is dedicated to earning passive income, I thought I should post something about the taxation of passive income. From the IRS's point of view passive income is...
  • Income Taxes It is US federal law that income tax has to be paid to the IRS. Knowing the basics, and understanding your own personal situation will help in reducing the risk of overpaying on your taxes....
  • New Rules for the Older Investor I read an interesting article this week suggesting that for the older investor (e.g., baby boomer and retirees), the old investing rules may no longer apply.  Those investing rules of thumb we have heard for...

The house is tumbling down

Posted on by
Reply

Where can I rent an affordable apartment for me and my family? That question haunts 30 per cent of Manitoba renters, and it’s gotten worse for most of the last 25 years. The same story is true for most of Canada, and is worst in Alberta and British Columbia. Manitoba has been spectacularly successful in welcoming new families in the past decade, so our cities and towns are growing, some of them, such as Steinbach and Winkler, very quickly. But the refrain everywhere is “Where can we rent an affordable apartment while we get our feet on the ground?”

It wasn’t always this way. In the later 1970s, Canada produced more than 100,000 units of rental housing per year. Included in this mix were substantial numbers of social-housing units which were affordable for lower-income families and to those with special needs. However, during the 1970s and 1980s, successive federal governments made a host of changes to the taxation provisions affecting private rental housing construction and management.

Many had small impacts, but others were more significant. Cumulatively, they made construction of anything but high-rent units impossible. By the end of the 1990s, fewer than 5,000 private-sector, affordable apartments were being built across the whole country. In some areas, none was built. Many older units have been demolished, and condo conversions have decimated the supply of older affordable apartments in most cities. To make matters worse for low- and moderate-income renters, in 1990 the federal government left the housing field and by 1998 had transferred its interests in the existing public and non-profit housing stock to the provinces. Canada became the only country in the developed world without a national housing policy.

Private developers responded by building condominiums and houses where they could make money on their investment. Housing prices rose sharply and more and more families found themselves without affordable housing. Rent controls were implemented in some jurisdictions to prevent rent gouging, but by themselves, such controls simply put off the crisis for a few more years. In more recent years, existing rental properties have been converted to condominiums at a frantic pace, to the point where many cities now control such conversions to prevent losses of even more rental stock.

Like a slow-moving train wreck, our housing crisis worsened slowly enough that the crash seemed far away. Unfortunately, it’s now here. The greatest number of those affected by this crisis are lower-income Manitobans who want simply to do the best they can to raise their families in decent housing. Without many more affordable rental housing units, our growing cities and towns cannot accommodate modest-income Manitoba families or new Manitobans whose contributions are essential to our economic success.

National organizations across the political spectrum agree we have a
rental-housing crisis across our country. For example, the Conference Board of Canada recently said: “Approximately 25 per cent of Canadians rely on housing subsidies or experience periods where they spend over 30 per cent of their before-tax household income on housing. This negatively affects Canadians’ health, which, in turn, reduces their productivity, limits our national competitiveness, and indirectly drives up the cost of our health-care and welfare systems.” Many organizations that have studied this drastic shortage of affordable private-sector apartments agree on both the nature of the problem and the major solutions. Groups such as the Conference Board of Canada, the University of Calgary School of Public Policy, the Canadian Chamber of Commerce, the Canadian Federation of Apartment Associations, the City of Vancouver and housing advocacy groups such as Manitoba’s Right to Housing Coalition all agree on the two main problems: the taxation environment for rental developers and the cost of new construction.

Together, these two factors have created a gap between new building costs and existing average rents of over 40 per cent. If you are paying $800 a month for a two-bedroom apartment today and want to move into a new one, the market rent would be more than $1,100. Today, it takes a gross income of more than $45,000 to afford a two-bedroom apartment in a new building, using a guideline of 30 per cent of before-tax income on housing.

The good news is there is agreement on how to resolve this problem. First, the industry must apply aggressive cost-control and productivity measures to new construction. Local Manitoba developers have told us that with highly skilled crews reusing the same basic building designs, recycling concrete forms and other productivity measures, total construction costs can be reduced to less than $160 per square foot, as compared to more than $200, which is often seen today. Such units use traditional frame construction, meet all code requirements for energy efficiency and are already being built in Winnipeg in several locations.

The second solution is comprised of a basket of measures that can be enacted by the federal, provincial and municipal governments to reduce front-end and soft costs, improve early cash flow, reduce land costs, defer or change some aspects of taxation affecting rental property, and reduce property taxes in the early stages of a project. Federally, this means reverting to capital cost allowances of the 1970s, treating groups of apartments as a portfolio rather than as individual buildings, changing the application of the GST and other measures. Provincial measures could include PST rebates, while at the municipal level, Tax Increment Financing (TIF) and a simplification of permitting would significantly reduce project costs. Municipal support can include TIF, zoning and density allowances and lower land charges, among other measures.

The changes at the federal level should likely apply to all building projects, while those at the provincial and municipal levels should be available only to qualifying projects. To qualify, developers would have to agree to rents at approximately the current median market rents, with normal rental increases related to operational costs or rental guidelines.

The above measures are all what are called “tax expenditures.” They do not require new funds to be spent, but rather reduce future taxation revenue. Since virtually no such housing is now being built, this “loss” of revenue would be negligible and far outweighed by the revenues from wages and construction materials. Stimulating housing is universally seen as the most potent economic measure available to governments and is especially appropriate when our economy is weak.

If Manitoba wishes to continue to welcome new residents and to make affordable housing accessible for 30 per cent of current renters who spend more — and often much more — of their income on housing than they can afford, we need to make it possible for the private market to once again work for modest-income Canadians.

Ultimately though, Canada needs a robust national housing strategy. One key component of this is making it possible for the private market to supply affordable housing for as many as possible, so the public sector can focus its resources on those who cannot afford market housing of any price.

http://www.winnipegfreepress.com/opinion/westview/the-house-is-tumbling-down-133944833.html

Mainstay Suites Winnipeg
Auto Dealers Pitt Meadows BC
Midtown Ford Winnipeg Facebook
www.crossfireconsulting.net

Blog Traffic Exchange Related Websites
  • Passive Income With Real Estate This post was written by Derek. Have you ever thought about investing in real estate? Do you wonder how profitable it could be? This post was written for you. For those of you that have...
  • Tax Benefits Of Passive Income Since this is tax season and this site is dedicated to earning passive income, I thought I should post something about the taxation of passive income. From the IRS's point of view passive income is...
  • TransUnion Reveals National Credit Card Debt on the Rise TransUnion.com, one of the three major credit bureaus, released the results of an analysis study of the trends in credit card lending specifically for the third quarter of 2008, revealing that credit card debt is...
  • The Day of Debt Reckoning Has Arrived Welcome to Debt Reckoning, home to the chronicles of my personal mission to rid our family of the evils of debt, in all forms. I also hope to insipire others to do the same. Over...
  • Can I Afford It? With holiday shopping in full swing, I suspect over the next few days and weeks many people will be standing in store checkout lines asking themselves, "Can I Afford It?" The "It" could be a...