A Few Thoughts on Week 31

A short one after a busy weekend!

  • The above is a map of the City of Windsor with Community Centres and Arena (Green and Red dots respectively) overlaid on the percentage of population identifying as black.
    • In West Windsor, the old College Ave. community centre was situated in the neighbourhood with some of the highest black populations. The only other West Windsor centres are MacKenzie Hall, which I would argue isn’t a community centre. The fact that landlord-tenant court is held here might make that space not safe for some populations. Meanwhile, home to the only arena in the core and a pool, Addie Knox constantly seems to be fighting against attempts to close facilities.
  • Obviously the big news this week was the FCA deal and the impacts for the Windsor Assembly plant.
    • Much of what I wrote when the Ford deal was announced applies here.
      • A 2024 promise of new product is great but as I stated on Twitter, the retooling could easily become a tool of the next negotiation.
  • The Town of Essex has had their shared service report (funded by the Province from my understanding) up for discussion this week at Council. The “A-word” does appears in the 100+ page report albeit only a handful of times and not in the context of specific services. It is very interesting to see how the town looks at sharing services with their neighbours.
  • Other news this week was that $20 Billion in wealth has been created out of thin air due to higher housing prices. The number is little more than clickbait in my opinion. I inquired on Facebook where the number came from and it was a simple aggregate calculation which is highly misleading for a few reasons:
    • Setting aside that homeownership only benefits a portion of our community (a portion that has strunk). Yes housing prices have doubled, but based on the most recent tax filer data median employment and commission incomes only rose in 2018 by 2.2%. Between 2006 and 2016 median incomes dropped in our community. In other words, our community is quickly being priced out of our own market preventing them from creating wealth. Not something to celebrate.
    • Part of the reason for housing prices having been pushed up is due to external speculation. Once a week I have a letter in my mailbox from someone who will “Buy my house no questions asked! No relator needed, save the commission!”.
      • In the 2006 Census – there were about 29,000 tenant occupied units and 59,000 owner occupied units in the City of Windsor. In the 2016 Census there were about 33,400 tenant occupied units, 58,400 owner occupied units. We added almost 5,000 new occupied unit but most became rental.
      • What is important to remember is that there hasn’t been mass rental construction during that period. What we saw was the conversion of housing from ownership to rental, in many cases by thus shrinking the sale market which in turn constrained supply and drove up prices. I am reposting a chart from last week which shows where some of those units went.
  • As a result of this speculation and the shifting of housing stock appreciation in housing values has not been equally applied. The calculation took an average increase and applied to all single family homes, which is understandable from a simple math standpoint. Unfortunately, housing different parts of the community have appreciated at different rates, in other words wealth isn’t raining equally from the sky, it is being concentrated in certain geographic areas – the rich get richer.
  • An arbitrary 5 year window was used for the calculation, why not go back to 2010 when real estate had bottomed out? In my opinion because housing prices have grown exponentially over the last decade, to calculate that number from 2010 would lead to a laughable large total. My home has appreciated almost 4X it’s value during that period. If we are talking about $80-100 Billion in value, can people comprehend that amount or even feel that they have gotten a piece of it or is that just one of the unreasonably large numbers that people don’t know or care about.
    • Also some people bought into the market within that 5 year window in 2018 as an example, their wealth is only based on 2 years appreciation because someone else walked off with the other 3 years of wealth. We can’t assume that this wealth stayed in our community. You can only count the wealth exists for current owners, not all potential owners during this period as only the present value of the wealth is calculable.
  • Yes $20 billion in “wealth” may have been created, but how much wealth was created in London or Waterloo? Using the logic of from the reporting if their housing prices went up more, they have more wealth than us, meaning relatively, Windsor Essex is worse off. If London has an extra $5 billion what is stopping them from buying our “affordable” property as investments, preventing locals from building wealth?
  • As I wrote about a few weeks ago, I am highly skeptical that the new units that are being proposed downtown will actually lower housing prices or rents. I would challenge the relator who is leading a re-development downtown and taking taxpayer incentives to say how many of those units are going to be affordable? Every apartment that is above the average rents from CMHC, might make him money, but will push up average rents overall, and make things more unaffordable to someone else.
  • I guess my lockdown prediction didn’t come true…. yet.

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