August 2, 2017

Ontario has scared off foreign home-buyers, but bureaucratic delays still make housing more expensive

Filed under: Bureaucracy, Business, Cancon, Economics — Tags: , , , , — Nicholas @ 04:00

Josef Filipowicz and Steve Lafleur explain why Ontario’s recent crack-down on foreign home-buyers in the Greater Toronto Area still leaves one of the biggest barriers to affordable housing untouched:

The Ontario Legislature in Queen’s Park, Toronto. (via Wikimedia)

According to a recent announcement from Queen’s Park, 4.7 per cent of properties purchased in Ontario’s Greater Golden Horseshoe (between April 24 and May 26) were acquired by foreign individuals or corporations. This in the wake of the raft of measures announced in April including a 15 per cent “Non-Resident Speculation Tax” ostensibly aimed at improving housing affordability.

It’s difficult to say how this portion of the housing market — foreign buyers — ultimately impacts the cost of buying or renting in Canada’s biggest urban region, and it’s far too soon to estimate the effects of the myriad of policy changes the Ontario government is introducing. But what we do know is that the laws of supply and demand apply to housing, and it’s hard to believe that a small percentage of buyers are responsible for the massive appreciation of housing prices in the GTA over the past decade. Rather than focus on a small tranche of buyers, we should focus on ensuring that regulations don’t prevent the supply of new housing from meeting demand.


So what’s preventing cities in the Greater Golden Horseshoe from issuing more building permits?

In short, red tape at city hall. Between 2014 and 2016, Fraser Institute researchers surveyed hundreds of homebuilders across Canada to better understand how government regulation affects their ability to obtain permits. In the Greater Golden Horseshoe, it typically takes one-and-a-half years to obtain a permit in this region, and per-unit costs to comply with regulation amount to almost $50,000. Approval timelines can also be affected by the need to rezone property. Approximately two-thirds of new homes in the region require this procedure, which adds 4.3 months (on average) before builders can obtain permits.

Another deterrent to more supply is local opposition to new homes. Survey results show that council and community groups in Toronto, King Township and Oakville are more likely to resist the addition of new units in their neighbourhoods, effectively preventing newcomers from moving in.

Update, 3 August: Mission accomplished. Toronto home sales plummeted 40 percent in July.

Some troubling early signs from Finland’s UBI experiment

Filed under: Economics, Europe, Government — Tags: , , , — Nicholas @ 03:00

Dan Mitchell says we can’t draw definite conclusions from these early (anecdotal) points, but that it may point toward UBI (universal basic income) not being the panacea it’s been touted to be:

Map of Finland (Suomen kartta) by Oona Räisänen. Boundaries, rivers, roads, and railroads are based on a 1996 CIA map, with revisions. (via Wikimedia)

The New York Times published an in-depth preview of Finland’s experiment late last year. Here’s a description of the problem that Finnish policymakers want to solve.

    … this city has…thousands of skilled engineers in need of work. Many were laid off by Nokia… While entrepreneurs are eager to put these people to work, the rules of Finland’s generous social safety net effectively discourage this. Jobless people generally cannot earn additional income while collecting unemployment benefits or they risk losing that assistance. For laid-off workers from Nokia, simply collecting a guaranteed unemployment check often presents a better financial proposition than taking a leap with a start-up.

For anyone who has studied the impact of redistribution programs on incentives to work, this hardly comes as a surprise.

Indeed, the story has both data and anecdotes to illustrate how the Finnish welfare state is subsidizing idleness.

    In the five years after suffering a job loss, a Finnish family of four that is eligible for housing assistance receives average benefits equal to 73 percent of previous wages, according to data from the Organization for Economic Cooperation and Development. That is nearly triple the level in the United States. … the social safety net … appears to be impeding the reinvigoration of the economy by discouraging unemployed people from working part time. … Mr. Saloranta has his eyes on a former Nokia employee who is masterly at developing prototypes. He only needs him part time. He could pay 2,000 euros a month (about $2,090). Yet this potential hire is bringing home more than that via his unemployment benefits. “It’s more profitable for him to just wait at home for some ideal job,” Mr. Saloranta complains.

So the Finnish government wants to see if a basic income can solve this problem.

    … the Finnish government is exploring how to change that calculus, initiating an experiment in a form of social welfare: universal basic income. Early next year, the government plans to randomly select roughly 2,000 unemployed people — from white-collar coders to blue-collar construction workers. It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income. The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka? Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? … The answers — to be determined over a two-year trial — could shape social welfare policy far beyond Nordic terrain.

The results from this experiment will help answer some big questions.

    … basic income confronts fundamental disagreements about human reality. If people are released from fears that — absent work — they risk finding themselves sleeping outdoors, will they devolve into freeloaders? “Some people think basic income will solve every problem under the sun, and some people think it’s from the hand of Satan and will destroy our work ethic,” says Olli Kangas, who oversees research at Kela, a Finnish government agency that administers many social welfare programs. “I’m hoping we can create some knowledge on this issue.” … Finland’s concerns are pragmatic. The government has no interest in freeing wage earners to write poetry. It is eager to generate more jobs.

As I noted above, this New York Times report was from late last year. It was a preview of Finland’s experiment.


Maybe I’m reading between the lines, but it sounds like they are worried that the results ultimately will show that a basic income discourages labor supply.

Which reinforces my concerns about the entire concept.

Yes, the current system is bad for both poor people and taxpayers. But why would anyone think that we’ll get better results if we give generous handouts to everyone?

So if we replace all those handouts with one big universal handout, is there any reason to expect that somehow people will be more likely to find jobs and contribute to the economy?

Again, we need to wait another year or two before we have comprehensive data from Finland. But I’m skeptical that we’ll get a favorable outcome.

Argentina vs United Kingdom: Falklands War 2017

Filed under: Americas, Britain, History, Military — Tags: , — Nicholas @ 02:00

Published on 9 Dec 2016

How would Argentina fare if it tried to take the Falklands again? Does UK have enough forces stationed there to defend itself? Watch the video and find out!

QotD: The fundamental problem of the Middle East

Filed under: Government, History, Middle East, Quotations, Religion — Tags: , , — Nicholas @ 01:00

The Western media and intelligentsia don’t seem to have a clue that the issues in the Middle East are not related to competing political ideologies, but to competing religious tribalism.

The ongoing conflicts throughout the region, and in other parts of the world, are not about democracy versus monarchy; or fascism versus communism; or imperialism versus freedom. Or indeed any of the other childish ideologies Western journalists fell in love with during their undergraduate post-modernist deconstructionalist courses by failed ex-Trotsky’s, who simply can’t accept that the last century has proven how appalling and basically evil their over-simplistic ideologies are. (Yes Comrade Corbyn, that’s you and your gushing twitteratti I am slamming!)

In fact the problem in the Muslim world is that they are entering the third decade of the Muslim Civil War.

The Sunni’s and Shia’s are at about the point that the Roman Catholics and the Protestants were at in Europe in the 1620’s to 30’s, and it is only going to get worse. That war was ideological, and paid very little attention to national boundaries. This one is the same. The Christian 30 Years War is about to be repeated in a Muslim civil war, and 30 years might be an optimistic number.

Interestingly the Christian’s split over 3 or four centuries, into Orthodox and Roman, then split again into Albigensian and Protestant etc. Eventually it got to the point, after 14 or 15 centuries of slow development, that major conflict broke out. Is it co-incidence that the Muslims have followed a similar path? Is it inevitable that after 14 or 15 centuries of existence, they too are having a major internal conflict? Or is it just that a century of renewed prosperity and development (largely brought on by Western intrusion into their secular affairs) has given them the semi-educated proto-middle class who traditionally stir up revolutionary stuff they don’t understand?

Whatever the reasons, stupid Westerners are eventually going to have to admit to a few realities:

  1. No matter how much you fantasise about the functionality of republics and democracy, you can’t impose systems that don’t work in places that don’t have the necessary pre-requisites.
  2. No matter how much literacy or free press you do manage to push in, you can’t impose rule of law and understanding of natural law on societies that have very specifically rejected such concepts for 8 or 9 centuries.
  3. No matter how much your secularist ideologies (developed from safely behind 2 millennia of Christian teaching that accepts rule of law and natural law) is offended, you cannot expect a similar acceptance from people whose cultural development of such beliefs is several centuries behind the West.
  4. No matter what you want to believe, the Muslim civil war is happening.

Let’s hope we really are at least half way through the 30 years…

Nigel Davies, “The ‘Arab Spring’, 1848, and the 30 Years War/s…”, rethinking history, 2015-09-19.

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