Sandy Garossino – “I want to tell two stories from the campaign trail…”

“One of them was a childcare worker in her forties, making less than $11 an hour, caring for children of 3 families in her home on the East Side. Rents are going up but her income is not, and she is being forced out. Despite having a job, she has no security and is hurtling toward disaster.
Another day I was meeting seniors in the west end. A group gathered and were telling me that they spend on average 60-70% of their monthly income on rent. Most had saved for decades for a comfortable retirement, and were now eating into those funds every month just to survive. All of them live with ice in their bones for fear that they will be evicted from apartments they have lived in for decades, and most believe that no landlords will take them because their monthly incomes are so low.
One woman told me that she will be through her savings in three years, and then she doesn’t know where she’ll go or what will happen to her. She worked hard and saved for 47 years, and blinked back tears as she choked on the word ‘homeless’.”

– Sandy Garossino, Independent Candidate in the recent Vancouver civic elections, at her website votesandy.ca 22 Nov 2011

52 responses to “Sandy Garossino – “I want to tell two stories from the campaign trail…”

  1. Very sad.
    Oh, but on a happier note, “continued low interest rates make housing “slightly” more affordable”. Right.

    Read more: http://www.vancouversun.com/business/Continued+interest+rates+make+housing+slightly+more+affordable/5766607/story.html#ixzz1ejLfGDFG

    • “Most had saved for decades for a comfortable retirement, and were now eating into those funds every month just to survive.” … “One woman told me that she will be through her savings in three years”

      The result of those low interest rates.
      Prudent previously self-employed retirees have been done a grave injustice.
      (But they’re a minority, so why should the politicians care?).

      • “But they’re a minority, so why should the politicians care?”

        Because retirees actually vote?

        But in reality this was a non-election, in both the municipal and federal elections. No one campaigned on the “I am against negative real interest rates” platform.

      • Yes, unjust, very good point. I hope more attention will be focused on this issue and I’m glad Garossino brought it up.

      • Acceptable collateral damage, in the parlance ‘o TheMoney. Regardless, not all all BC seniors are taking it ‘lying down’…

        [G&M] – B.C. seniors arrested for alleged drug trafficking

        …”The two suspects facing charges are aged 79 and 75 years. Cpl. Craig Douglass said a similar case earlier this month involved two men aged 81 and 75 and that they too are accused of running a trafficking operation out of a home.”…

        http://tinyurl.com/dxb5p3n

  2. Yeah, that elderly lady can thank Mark Carney for keeping the BOC rates at 1% while inflation runs at 3%… She’d be lucky if she can get a GIC which pays her 2.5%. Inflate housing prices, jack up rents and impoverish savers and people on fixed income.
    This is economic plan has been brought to you by Goldman Sachs…

  3. Agree, inflation isn’t always fair. Families first and all that, trickle it down through solid investment from the 1%.

    If that doesn’t work institute a cake tax. Cake is yummy.

  4. Off topic..
    #324: A Financial Adviser Bets The Housefrom NPR: Planet Money Podcast

    Financial planner Carl Richards tells us how he got sucked into the financial mess just like the rest of us and shares what it taught him.

    [audio src="http://podcastdownload.npr.org/anon.npr-podcasts/podcast/510289/142531832/npr_142531832.mp3" /]

    this is a great episode, only 17 min, I highly recommend it.

  5. Off thread:

    How much cash payment would you require to have no access to credit for the next seven years? You can answer as a percentage of income if you like.

    I think I would take $20k. Now what of this famous Canadian recourse?

  6. Sorry, I want to honour Garossino’s comments by going back to that thread.
    It is heartbreakingly cruel, but the retired probably need to learn to love cheaper cities. My parents thought it would be cool to live near their grandchildren, but that can’t happen at this point in the cycle. Unfortunately the cycle may easily take us into their teens, so grandparents and grandchildren alike will miss the most magical people through the most magical period in their lives.

    Which begs the question of who will look after the kids while we both work at professional jobs to accumulate enough wealth to de-risk potential home ownership (we can still do that, we’re young). Right now the answer is our awesome home daycare. Her revenue doesn’t cover the cost of her basement-and-garden space, but it’s okay because she bought the place a while ago. She can bleed out her RE gains through years of subsidizing me to go to work. If we lose her we might suddenly have to pay market price for the service. Market price is substandard facilities or care, because they can’t actually charge $2500/month: no one would go to work!

    • The real tragedy is that the grandparents get older, lose their drivers’ licences, increasingly need help to shop, get to the doctor and the children are in another town. The children start to get middle of the night phone calls from the elderly parents who are increasingly becoming confused and want help from their children. At the end, someone has to move.

  7. Is there a difference between being robed at gun point or by government policy via manipulation of asset markets? Its one and the same and we should not put up with it.

  8. I will keep harping on this until something changes:

    In the meantime, Chinese investors are buying condominiums and houses worth more than $2 million at unprecedented rates in two pockets of Vancouver. This group accounts for roughly 20% of the overall sales in the city and is the main the reason prices are so high there..

    Let us not be fooled into complacency that foreign buyers is not having a huge impact on the local market, including modifying the expectations of local buyers..

    http://money.canoe.ca/money/business/canada/archives/2011/11/20111118-121542.html

    • “Let us not be fooled into complacency that foreign buyers is not having a huge impact on the local market, including modifying the expectations of local buyers.

      You mean a bubble. Let’s call it an actual and expected earnings “delta”

  9. Well these type of stories will only fuel bull’s argument of you NEED to buy RE. If this retirees bought 30 or 40 years ago, they are looking at a goldmine/lottory of at least $2.5M! Sell the house, down size to an apartment, and still have a million left over to retire on. Frankly I’m shocked that none of the resident bull has commented on this yet.

    The real causes I think are first inflation, followed by a tripling or more in taxes we pay, and finally by the low interest rate of the last 3 or 5 years? These three combinations are simply killing the retirees who probably started with like $10K/year jobs and never made more than $60K/yr for most of them.

    Yes I know you can say they should retire to cheaper locations but look around Canada, most cheaper locations have tons of snow in the winter and retirees are not going to be able to clear that. Hiring people will be costly. As well with health concerns, most will want to live near good health care rather than places where the emergency doesn’t even open 24/7. Finally, why shouldn’t people who work and live in a place for 40+ years have to move to retire? seriously! That just sound wrong to me. Thank you for contributing to the local economy and society for 40 years but now since you are old, don’t make money, and need support, please leave?? That’s just heartless in my books.

  10. offthread2:

    i don’t monitor the msm too heavily but i sense a shift from the home ownership ideology to blame the filthy foreigners. how much press is being given to the role of cmhc in all this? through actions rather than rhetoric, it is plain to see that your govt is bought and paid for because it busies itself in creating, promoting and operating entities such as cmhc, carbon copy to the us fha.

    what does it do? by guaranteeing mortgages, it transfers the risk of default from issuer (bank) to the taxpayer. at the point of contract origination, concerns about collateral quality, borrower risk, debt/equity, etc. are muted down. issuers and clever specs can lever up as their risk is borne by others. however, ‘it takes 2 to tango’, a queue of willing participants, or unsuspecting dupes – hence the fervent broadcasting of ownership ideology. think about that: RE speculation in van backed by can taxpayers the country over. and who is running the casino, serving up the drinks? every ham $ multiplied (5X? 10X? 20X? i don’t know). this is a major factor at least as great as foreign inflows and like far greater, imo. the realtor revenues are a sideshow. the mortgage market where the big bucks are made.

    – of course this is not as wild and crazy as the us version but in some ways, it is even more perverse –

    if there is going to be popular activism, it should at least be directed somewhere closer to the mark. demand that cmhc be cut loose and privatized. then, it represents a huge under-capitalized counterparty risk to the issuers. next, over-leveraged individuals should take whatever measures necessary to protect their other assets from bankruptcy claims. if/when cmhc is to be bailed out, it will surely not receive the same amount of msm press. filthy foreigners, while they may exist, are simply a convenient goat – they have little voice.

    • good points about attacking CHMC. many Jerichoa entities need to be Joshua’d.

    • Agreed. CMHC is at the center of all this. (and it is more perverse than the US version)

    • Good start but that’s not enough. Australia privatized its CMHC and has prices as high as Vancouver’s. The root problem is more insidious.

    • Banks may need to provision for counterparty risk but that does little for placating lending standards for lower-ratio borrowers. A bank can make a 5 year loan at 50% LTV with little concern it won’t eventually recoup all its money. Its risk is for fraud, payment timeliness, and a bit on the duration side, but rarely those would garner more than a couple hundred bps spread above risk-free, unless there is significant competition for capital from other investment areas.

      The Canadian government looks to be slowly implementing a change in capital buffer requirements for lenders. I don’t know how soon this will be implemented but will go some of the way to ensuring that bubbles will face stiffer resistance going forward. If there’s a bubble going on right now, look for it to start deflating.

      I’m on the outside looking in when it comes to banking regulation changes but that’s my guess where the next changes will come. Basel 3 is still some years off for full implementation, it looks like the Bank of Canada will be advocating for early adoption on some of the measures to help temper credit growth.

  11. BC Housing seniors rental subsidy has not risen since the 90’s and is capped at $750/month for metro Vancouver. So the difference between true rent and the gov’t subsidy are what seniors are getting hammered for.
    These are some of the consequences of electing a right wing government for 10 years. Lowest corperate tax rate in the western world, lower income tax, lowest minimum wage, least subsidized social programs, decimation of our health care through program cuts, BC Hydro “smart” meters, bonuses to top bureaucrats and politicians lining their pockets with your tax $.
    Ready for a change yet?

  12. “how much press is being given to the role of cmhc in all this”?

    give it a rest already. The CMHC guidelines for qualifying are tighter now than they were when prices were 40% cheaper. CMHC isn’t the problem.

  13. My parents left a bigger city for a smaller town in retirement, and took their own parents with them (who were in their 80s). They soon realized that this was a big mistake, because health care in the smaller centres is just not adequate. Sure, you can see a family doctor no problem, but when Grandpa has a heart attack and needs to see a cardiologist regularly, or Grandma is going blind and needs an ophthalmologist, suddenly it becomes clear that driving 2 hours over snowy mountains to get them the care they need is just not feasible. Sounds idyllic, living in a smaller centre with your cashed-in RE wealth but it’s not for anyone who is going to get older and require the care of a health care specialist. And I sure hope my parents leave their smaller city before they get too old (which they are now seriously considering, giving their experiences with my grandparents).

  14. …..But these seniors don’t appreciate that they live in a city that has a retractable roof on it’s stadium and a fantastic highway to the Whistler ski resort and they live in the “Best Place on Earth”!!!!!!!

  15. This is a really difficult spot for the economies of the west. Higher interest rates would lead to a sharp recession, while the inflation we are experiencing is a result of the quantitative easing by Bernanke and the resulting cost-push effect on raw materials. Not to mention the effects of peak cheap oil, which our economy is reliant on (even if you don’t own and operate a car because oil is essential for bringing goods to you).

    In reality this is a crisis of capitalism itself and there is little Carney can do short term. Everyone is hoping that we magically pull out of this because they have no idea how to fix the system.

    Australia can afford high interest rates (for now) because they are more directly tied to the last growth engine standing, namely China.

    • Royce McCutcheon

      ‘Pulling out’ should never be viewed as a solution.

      Just sayin’.

      • Maybe, but it’s easy to vote with your feet. That way you look after yourself without having to rely on the vested majority. Thousands already are.

      • Royce McCutcheon

        @Airedales: I was making a dirty joke. 🙂

        Agree 100% with your take and am in the very early stages of exploring my options for moving on.

      • “Maybe, but it’s easy to vote with your feet.”

        Agreed. Patriotism is so passe. I have no loyalty to the moronic government who got us in to this mess.

      • Got it now thanks – that’s quite good – been married with kids so long that i missed it on first read.

  16. This is interesting http://www.geog.ubc.ca/courses/geob479/classof06/housing/sale_immig.jpg

    Would suggest that foreign buyers have a small affect, and the real problem is local speculators pumping up prices based on the fear generated.

    In fact, there are areas where foreign buying prices is right in line with the local area’s pricing, which suggests that foreigners don’t pay above market value. http://www.geog.ubc.ca/courses/geob479/classof06/housing/immi04.jpg

    http://www.geog.ubc.ca/courses/geob479/classof06/housing/frame.htm

    • Those links are behind a firewall, can’t see them

    • Results are exactly in line with other studies and my personal comments. Immigration and income are the two most important factors in home prices – ceterus paribus. Of course foreign investment is also important but nearly impossible to directly measure – one has to use proxy variables as an indirect measure which tend to open a can of worms. That immigrants don’t pay over market or assessed value is a ridiculous conclusion since assessed value is market based on immigrant buyers set the market (ie. marginal) price. Thanks for the link to a rare public analysis.

      • I contest the “foreign investment” and “foreign capital” will be subjected to the same maths as was done ex post, after the .com burst about the thousands of failed business cases: where’s the money and how much is needed to justify current valuations?

        It’s a big number. Just sayin’.

        This is all hand-waved away by the fact that capital emanating from China is obfuscated from view — since its sources are not easily traced the inference is that this capital might be bottomless, and prices are justified. I know it’s blasphemy, but say that pool has a bottom, capital is finite, and there are a big (finite) pool of investments generating little in the way of earnings. I know working with big numbers is hard and the error bars are big, but maybe a few smart people could give it a shot.

      • So it’s your view that foreign investment does not impact home prices? Or the opposite but in a negative sense?

        Or maybe we are both saying that when foreign capital flows from China dry up and possibly reverse (because the capital both financial and human is generally not limitless), the Vancouver RE market will drop like a stone because all the most important underlying factors (income levels, immigration, etc) will be increasingly negative.

        At the same time, global credit conditions will likely be tightening and this will provide some leverage to prices on the downside. The scene is set – just be patient and watch it unfold over the next decade but I don’t think anyone really wants a front row seat let alone be a leading part in the drama. Best thing to do is get as far away as you can.

  17. Move to the Maritimes. Halifax or Moncton area. Even near to Charlottetown.

    Cheap, cheap, cheap. Plus local, and good, medical care.

    I’m always surprised at people who stick around the GVRD. It’s a complete “damn the torpedoes” mentality that I don’t understand.

    Yes, sometimes people have no option to move at all. But I’d bet that that’s not the case most of the time.

  18. It’s only the images that are blocked from direct linking. The entire project is worth looking over and won’t be blocked.

    http://www.geog.ubc.ca/courses/geob479/classof06/housing/frame.htm

    But here are the images: http://i.imgur.com/4Ehyc.jpg

  19. To earlier posts about the role of the CMHC – is it possible that the gov knows they way overextended on CMHC (and then when they went in and bought the 300 billion of debt mortgages from banks in 2008 and securitized them – not sure who is holding that from the gove selling MBS on the secondary market – could it be offshore? it would actually make a ton sense if it was China or the domestic banks) and now they are between a rock and a hard place – they have to increase investor class immigration and allow a free flow of offshore buying to prop up the housing prices and keep the RE market, a full on fifth of the domestic economy, afloat? (it may have backfired a bit and caused increase in prices though). This means that they will struggle and intervene to go against decline in home prices (which might be considered household wealth through those special economist glasses) even it means alienating the next two generations of Canadians under 45. What I want to know is – because it will be a compelling case against increased immigration at a time when the economy is declining (which has its own economic and social impacts) and will curb foreign ownership leading to froth – are all taxes being paid (federal, provincial, local) in a fair manner by investor class immigrants (I don’t care who they are or where they are from just are they paying their fair share of taxes?) and foreign owners of property in Canada? If it is not, then it is a pure economic case against increasing these bubble inflaters – and this government only understands the economic – they don’t appear to get the social…

  20. Pingback: “Sounds idyllic, living in a smaller centre with your cashed-in RE wealth but it’s not for anyone who is going to get older and require the care of a health care specialist.” | Vancouver Real Estate Anecdote Archive

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