Vested Interests Meet Over Hors d’Oeuvres – “Only the best booze and culinary treats were good enough, to ensure another year of rubber stamping developments.”

“This may be a little off topic, but I found out that the Richmond Developers were wining and dining Richmond City brass last Friday.
Only the best booze and culinary treats were good enough, to ensure another year of rubber stamping developments.”

- Real Estate Tsunami at VREAA 17 Dec 2012 10:36pm

Not off topic at all. A central thread to the whole speculative mania has been the confluence of the interests of all the different parties who benefited from the run up in prices.
Note that this is not to suggest any form of elaborate or sinister or illegal collaboration. It is simply to point out that many local entities together benefited from years of debt-fuelled RE spending: government and lenders; developers, realtors, owners; advertisers & media; retailers; all sorts of individuals & organizations that experienced short-term benefit from the immense amount of capital flow that resulted from buyers taking out large mortgages and spending the proceeds. It is completely natural that all of these parties would work together to perpetuate a situation from which they were all gaining short-term benefits. Humans are like that. This is why speculative manias burn so bright for a period; so many come together to fuel the flames of the same fire.
- vreaa

30 responses to “Vested Interests Meet Over Hors d’Oeuvres – “Only the best booze and culinary treats were good enough, to ensure another year of rubber stamping developments.”

  1. Perhaps Dean Schaffer et al should open a development permit kiosk/consultancy…

    “Like, this is no existence, you know?” – Dean Schaffer

    [CBC] – Couple who lived in B.C. garden shed still homeless

    …”[Schaffer et al] has been spending their days on the sidewalk with cardboard sign on their shopping cart saying “desperately need place to rent.” There is room for the couple at a local shelter, but not for the dogs. But Schaffler said he’s not giving up on his animals, even if it means sleeping outside as the coldest months of the winter approach.”….

    http://tinyurl.com/cvzr2gp

  2. When I sold high end German cars, a couple of my investment banker clients told me that whenever they went to an IPO presentation they were quick to judge the relative merits of the scenario at hand, by appraising the quality of the food and beverages.

    If the wine was top notch, and the event was catered by a 5 star chef, their interest in being there dropped by 50%…….if they were offered only bottled water and spreadsheets, they had their full and complete attention.

    FWIW………….

  3. It’s not the booze and food which greases the development wheels… it’s the campaign contributions, free trips, hockey tickets and envelopes of cash. Don’t think that sort of stuff only happens in Quebec.

    • By my rather conservative estimate, 63% of all corporate donations and 42% of total donations to Vision Vancouver came from the development industry. (Conservative as I did not count donations donations from the building trades unions.) Is it any wonder that Vision serves that constituency?

  4. Kinda reminds me of us doctors getting wined and dined by pharm companies. I haven’t gone to a drug dinner in a long time, but apparently, despite all the new rules, they’re still quite lavish.

    • No, I think those days are long gone.

    • Harry 'O' Holistic

      yup, long gone. A friend of mine with a long term Sinus problem was prescribed ‘Horseradish’ the other day. He went to the grocery store to get it filled, not Big Pharma.

      • I’m not an ENT guy, but from what I recall, saline (or even water) flushing and irrigation is the best treatment for chronic sinusitis.
        On a related note, I have a patient who makes his own anticoagulant (blood thinner) to save money. Basically he dilutes rat poison, been doing it successfully for years, always keeps his INR in range. No big pharma for him either!

      • I’d cautiously argue that some things are best left to the professionals.

      • Real Estate Tsunami

        Horseradish!? HA!HA!
        How does he apply it. Up the nose?

      • “I’d cautiously argue that some things are best left to the professionals.”…

        “When the going get’s weird, the weird turn… ”

        [TeeHee!]

        [NoteToEd: I have never attempted to concoct HorseRadish at home. On occassion though, I have vigorously self-medicated - it's excellent with Tartare, ya know. Had some tonight... GoatRadish, actually. I have a clandestine 'connection' on FantasyIsland.]

      • UBCghettodweller

        allen, warfarin is warfarin, my concern for that guy would be that the synthesis or formulation of the rat poison would contain other toxins.

        There has to be a generic form that is much cheaper? Warfarin has been around longer than many MDs have been alive.

      • Hi UBCgd. Yes, we’ve been through all the options, but at the end of the day, we are each free to make our own choices.

  5. Sold Today…
    Will clear 700+ on the deal… from outstanding balances
    2.5 on what I paid….
    Still pissed….
    had to sell logically…

    now while everyone is watching the housing market canary … you should see what these rising land evaluations are doing to small business margin’s…
    Everyone I know in small business is getting slaughtered by the rising tax assessments
    Property Tax on my business location is increasing at 20-27% a year,
    That is doubling roughly every 3.5 – 4.5 years… now start at the current $24,000 a year and do the compound math over the next 10 years….
    … see when you die financially.I started at $4,000 a few years ago… Remember you have to make 2,4 times that to make a profit and pay federal tax etc,
    …. to replace the funds lost to property tax…
    … so it’s not $24,000 but $57,000.
    I don’t see a doubling in economic out-put and sale’s anywhere do you…

    Idiots like Financially illiterate Mizz Rymer of vancouvers real estate board driven city council told me I deserved to pay higher property taxes as i had “to much undeveloped land… and was depriving people of a home…” not sure how 50′ by 110′ lot works out to to much land…
    Telling me this … while strolling around in her brand new taxpayer funded designer leathers… and twirling around and telling everyone around her how they were local designers cloths…

    Business’s on both side of me sold and are moving over the same level of commentary and taxes from the city council developers.
    Three other friends are considering the same business solution …
    Close down business Cash out…
    And we will stop paying public servant wages,… and start paying ourselves
    … going on vacation with a big wad of cash…
    I would like to see how public servants will create “real money” to “pay their own taxes”… which can then be used to to “pay their overvalued wages…”
    Better yet lets start all “Public Servants”(check out what the words mean… It does not mean Administrator… it means Trustee)…
    …. at the “minimum wage they have legislated” for everyone else, including Training wages and WCB job training wages, UI job training wages, Welfare training wages….Pay them what they deserve…

    Anyway sold today…
    … so with my neighbors sales that’s 1/4 of a city block worth of private business gone, its all development packages now…
    Whewwwww…. sold…. cash rich home poor… hope it was the right decision…
    Now I’m going to be a container/home based Gypsy.
    … and in true Communist form I will taking my Profits and move as needed to the cheapest tax base…one click together box at a time… …having no fixed taxable asset attached to the land …
    Vancouver will get what it deserves…
    Oh by the way… I hope everyone in vancouver “Benefits” from the property tax adjustment we all just gave you… we bought years ago…. and sold well above what was payed… so this will drive up assessment values.
    Sorry for the rant… needed to do it…
    Now back to drinking coffee… and reading….
    I do really like this site though…
    Silver

  6. Central planning #fail

  7. Real Estate Tsunami

    Canada is one of the least corrupt countries in the world.
    What concerns me is, that by accepting these donations and parties as normal, we may starting down the slippery slop, where baksheesh and graft become a normal part of doing business.

  8. Balls to the Walls

    Canada is a weird duck of a country in terms of genetics. You’ve got people from all over the world here. Some from countries with high consanguinity (inbreeding) and some from the opposite side of the spectrum. My argument is not about the pros or cons of inbreeding. But how different people chose to make economic decisions based on genetic ‘sameness’ or ‘diversity’ of the business person opposite them. HAM in Richmond, perfect example. This is a serious study and can be researched here http://hbdchick.wordpress.com/2012/11/08/theorie/

  9. Real Estate Tsunami

    Different cultures are different, because they are different.
    That’s why mixing or trying to integrate different cultures does not work.
    The melting pot of America, and the MultiKulti in Canada and Europe has not been very successful.
    People will be who they are.

    • I disagree with you on this, but that’s probably just who I am.
      People are far more similar than they are different.
      When you stress groups, lines of difference become more obvious.

  10. Back to a discussed topic – developers are desperately trying to ensure that they get another year of rubber stamping developments. If we right in our assumption that there are already massive amounts of the amateur speculators with some of them turned out into the accidental landlords and some of them are just holding the properties hoping to sell – the additional multifamily developments should only increase the oversupply that is already here and we get to see the even more spectacular crash later. So aside of the normal disgust with the corrupted officials why would we care if the developers are engaged in this self destructive play?
    Besides I know for a fact that in some cases developers are tricked by the city hall commissioning studies from the UBC about the awesome projected population growth that will ensure the endless supply of the newcomers for the years ahead so it is hard to say here as who is milking who. I hope that at some point they will be at each other throats.

  11. A while back, saw an article on line by an insider that claimed the Developers had a handshake deal not to compete with each other…like any other Mafia. They cut up the various Metro areas into turfs. you can see this with Progressive Contracting which once had a literal lock on Richmond insofar as raw land..

    Another pattern I have noticed is when a larger area is re-zoned..the Big Developers seem to either catch wind, and develop large assembly swaths, then bail….and leave crumbs for smaller developers.. or guide the City’s hand aka West Cambie should never have been developed for residential, (under YVR flight path ) but the developers twisted the cities arm to change the OCP..

    Wonder what they are up to now

  12. Real Estate Tsunami

    Agreed, Olga.
    This is a symbiotic relationship that could turn ugly once the party is over.

  13. I’ve lived in Richmond for 50+ years…

    I’ve seen a few boom/bustreal estate cycles….but this one is off the charts.

    Tomorrow is the shortest day of the year….look up at the towers..any one of them…my guesstimate is 70+% are pitch dark. That’s your buyers….absentee….that will crush the market sooner than later. Probably gonna do a YoutTube video soon .

    Why are they still building? My guess is dirty money, nothing else makes sense. It appears many of the developers have offshore Joint Venture connections…

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