Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

I would blow Dane Cook: Dec 26, 2008

quote:

Why can't interest rates be negative?
LEON BERKELMANS 5 DEC, 9:55 AM 12
ECONOMY GLOBAL NEWS

Overnight, the European Central Bank once again opted for timidity, with interest rates remaining unchanged. The scale of the deflationary threat Europe faces is awesome. However, with no appetite to engage in quantitative easing, I fear that the bank is not willing to do 'whatever it takes' to save the single currency, as someone once said.

This reluctance appears to be fed by a distaste of government debt purchases. If only there were a way to loosen policy without crossing this monetary Rubicon, perhaps the political constraints to quantitative easing will be freed. Well, there is. It is radical, but inevitable. To soften you up to this radical alternative, let me tell you a story that, legend has it, took place in a British bathroom in September 1931.

A British Treasury official was taking a bath when apparently an aid burst into the room proclaiming 'We're off the gold standard!' In reply the stunned official said, 'I did not know that was possible'.

We look back patronisingly at this official � of course a currency does not need to be tied to gold. And going off gold was a good thing. When the US went off gold, industrial production grew at its highest rate ever. Keynes called the gold standard a 'barbarous relic'. I think we have another one today, namely the zero lower bound on interest rates.

As things stand, interest rates can't go too far below zero because if they did, institutions and individuals will prefer to hold physical cash. This preference will cause problems. Banks will withdraw the money they have on deposit at the central bank, transferring it into cash. The consequences of this transfer for the interbank market, through which monetary policy is implemented, are uncertain but likely inimical. Moreover, if banks themselves start to offer negative interest rates to depositors, these depositors will also transfer to cash and banks will face a funding squeeze.

How do we get around this problem? Ken Rogoff of Harvard University has suggested completely abolishing physical currency. This may be feasible in some economies, but even in an economy as sophisticated as the US, vast swathes of the population are unbanked. That problem would need to be dealt with before abolition.

Miles Kimball of the University of Michigan has another idea: have paper money (or in Australia�s case, polymer money) trade at a discount to electronic money. In other words, one dollar in your pocket would no longer be worth one dollar in the bank, so there will be an exchange rate between paper money and electronic money. Then when interest rates are negative, the exchange rate could be set so that physical currency will depreciate in value over time, and there will no longer be an incentive to stuff money into a safe.

In other words, one dollar in your pocket would no longer be worth one dollar in the bank. Then when interest rates are negative, the exchange rate could be set so that physical currency will depreciate in value over time so that banks and depositors will no longer have an incentive to stuff money into a safe.

Kimball's solution has the central bank setting the price. An alternative is to set the quantity of physical cash in the economy and let the market set the price. I quite like this idea, because then the speculators are speculating among themselves rather than against the government, just like in floating foreign exchange markets.

I've heard many objections to the idea of a paper money price. I'm not convinced by them. Will people get angry about having two different prices for their morning cup of coffee � a cash price and a card price? Probably less angry than a 40 per cent youth unemployment rate, which they face in Italy. Besides, in many cases we already receive a discount if we pay cash instead of using our credit card. Will it confuse people? We see exchange rates every day in the news. This would just add one more. But it's too radical! So was going off gold, at least for some, but the world did so and we were better off.

I think the benefits of breaking the zero lower bound are manifest. The immediate applicability to Europe is obvious, but we are kidding ourselves if we think Australia will forever be immune to these problems. One day we will have the systems available to implement negative interest rates, hopefully soon. Kimball has been taking his ideas around to many central banks, and apparently has received encouraging responses.

Nonetheless, any transition involving a paper money price will, to be sure, require transitionary arrangements. We can't just flick the switch and have this happen tomorrow. If the government sets the price, careful thought is going to be needed on what the price should be. If the government sets the quantity, then various market conventions will need to be worked out. For example, how is the barista going to figure out what discount to give customers who pay in cash? Presumably the barista's bank will provide a rate, but there may be other ways.

These are all interesting questions, and there are answers, we just need to get out of the bath and think about it.

Dr Leon Berkelmans is Director, International Economy program at the Lowy Institute. Originally published on Lowy Interpreter. Republished with permission.

First comment:

quote:

Anonymous, December 5, 2014 10:57
This is an example of why one shouldn't take drugs before publishing articles.

# ? Dec 6, 2014 12:26

Adbot: ADBOT LOVES YOU

# ? May 27, 2024 12:44

Saltin: Aug 20, 2003; Don't touch

Cultural Imperial posted:

Scotia Bank profit slips 14%
http://www.bloomberg.com/news/2014-12-05/scotiabank-profit-falls-14-on-job-reductions-venezuela-costs.html

masturbates furiously

Yes, BNS only profited 1.44 Billion dollars last quarter.

Never bet against Canadian banks. Even when the wheels come off the housing market, they will be fine.

# ? Dec 6, 2014 14:51

Rime: Nov 2, 2011; by Games Forum

Jumpingmanjim posted:

First comment:

Dictators of the 20th century would have been climbing over each other to recruit a mind like this. :stare:

# ? Dec 6, 2014 15:20

MiddleOne: Feb 17, 2011

Saltin posted:

Yes, BNS only profited 1.44 Billion dollars last quarter.

Never bet against Canadian banks. Even when the wheels come off the housing market, they will be fine.

More like they'll crash horrifically and will have to be bailed out with that sweet taxpayer nectar. :fap:

# ? Dec 6, 2014 15:42

Saltin: Aug 20, 2003; Don't touch

Xoidanor posted:

More like they'll crash horrifically and will have to be bailed out with that sweet taxpayer nectar.

Canadian banks aren't as exposed to mortgage debt as you'd imagine. Especially the low quality debt. Taxpayers are exposed to most mortgage debt through CMHC. Also yes, you can count on the banks getting bailed out if poo poo really does go sideways, which is why they'll never lose. You can get upset about it, or you can get busy owning your own little piece of it. If you can't beat em.....

Saltin fucked around with this message at 16:35 on Dec 6, 2014

# ? Dec 6, 2014 16:33

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Saltin posted:

Canadian banks aren't as exposed to mortgage debt as you'd imagine. Especially the low quality debt. Taxpayers are exposed to most mortgage debt through CMHC. Also yes, you can count on the banks getting bailed out if poo poo really does go sideways, which is why they'll never lose. You can get upset about it, or you can get busy owning your own little piece of it. If you can't beat em.....

Totally agree. I've seen posters here and elsewhere simultaneously decry the CMHC's lax policies and predict doom for the banks. You're free to advocate either one, but if you advocate both... I'm questioning your comprehension and logical faculties.

# ? Dec 6, 2014 16:50

etalian: Mar 20, 2006

Xoidanor posted:

More like they'll crash horrifically and will have to be bailed out with that sweet taxpayer nectar.

It owns how CMHC went from social housing program for WWII vets to basically a way for banks to shift their bad mortgage risk over to the tax payer.

To use a US mortgage analogy canadians don't have to worry about PMI since even if you can't make a 20 percent downpayment, don't worry the government will cover the risk!

It's also important to note that the CMHC also does do the old securitization of mortgages similar to what happened in the US. Basically buys up bank mortgages and then bundles them to investor as bonds. Said bonds are seen as low risk safe investments for fixed income investors since it's a government backed investment vehicle. Since the baml offload their risk to the government via the bond conversion, it gives them the ability to make even more loans since the notes are technically no longer on their books.

http://www.macleans.ca/economy/business/a-mortgage-monster/

quote:

It the end of 2009, the CMHC insured roughly $473 billion worth of mortgages (it expected that figure to rise to $519 billion last year, though updated figures haven�t been released), which is nearly the entire mortgage insurance market in the country. The CMHC also assists the financial sector by buying pooled mortgages and reselling them to investors as bonds, giving banks and other institutions an immediate source of cash that they can re-lend. As of 2009, the CMHC had securitized $300 billion worth of mortgages. So critical is this function that Ottawa relied on the agency to prop up the country�s big banks during the financial crisis, giving the CMHC permission to buy $66 billion worth of mortgages.

It�s a familiar-sounding story to American ears. �The Canadian government mortgage apparatus echoes uncannily our experiences down here with Fannie and Freddie� says Jim Grant, author of the widely read Grant�s Interest Rate Observer newsletter. �CMHC has distorted the housing market by making homes, especially ones that are on the pricier end of the spectrum, more affordable and encouraged a lot of people to get in over their heads.�

Grant and other critics argue the CMHC�s balance sheet looks strikingly similar to both Fannie and Freddie if you compare the mortgages the agency insures against its equity. Using the CMHC�s 2010 forecasts, it insures $519.1 billion in mortgages against $9.9 billion in equity, which works out to around 1.9 per cent (although the CMHC says it has another $6.7 billion in �unearned� premiums that could be used toward future claims).

By comparison, in 2007, at the peak of the bubble, Fannie Mae backed up US$2.7 trillion of mortgage-backed securities with US$40 billion of capital, or 1.5 per cent equity against its overall exposure. But the CMHC says its capital levels are double what the Office of the Superintendent of Financial Institutions requires of mortgage insurers (though the CMHC is not regulated by the OFSI). But such assurances in the absence of transparent disclosure offer limited comfort. As C.D. Howe researcher Finn Poschmann wrote in a recent report: �Parliament and the voters to whom it answers have no formal documentation of the way these exposures are calculated or managed.�

Also the VP of the CMHC

quote:

Serr� declined to comment directly on Macdonell�s remarks. �I�m not exactly sure what low or poor credit is,� he says. �But I want to make clear that our mandate is not to get people into home ownership, our mandate is to provide the housing of choice. The last thing we want, as a government insurer, is to get people in a position where they can�t manage their debt.�

etalian fucked around with this message at 17:02 on Dec 6, 2014

# ? Dec 6, 2014 16:51

namaste friends: Sep 18, 2004; by Smythe

To support Lexicon's argument, read this paper: http://www.bankofcanada.ca/wp-content/uploads/2013/12/fsr-december13-crawford.pdf

tl;dr, if you're a Canadian taxpayer, you're gonna keep this bitch from burning down. I'd say if you were a housing bull having doubts that prices will keep going up, read this paper as it provides supporting evidence that there's nothing wrong with the lending market in Canada.

namaste friends fucked around with this message at 17:56 on Dec 6, 2014

# ? Dec 6, 2014 17:54

ductonius: Apr 9, 2007; I heard there's a cream for that...

Jumpingmanjim posted:

[quote="
LEON BERKELMANS - ECONOMY GLOBAL NEWS"]

[/quote]

"Guys! Guys! Guys! Hey guys! You know what would fix the economy? We need to find a way to force poor people to give up their money, and we can punish them if they don't! It will totally work! It's for their own good, you see. If we don't their already futile job search will become even *more* hopeless." - LEON BERKELMANS - ECONOMY GLOBAL NEWS

:catdrugs:

indeed.

# ? Dec 6, 2014 17:58

sauer kraut: Oct 2, 2004

Regarding CMHC, who gets stuck with the house in case of a secured mortgage default?
Does the bank have an obligation to try and auction it off it at 'market rate', and for how long before the insurance kicks in?

# ? Dec 6, 2014 18:02

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

CMHC gets the house after paying creditors 'fair market value' whish is drastically below what the house originally sold for. They then turn around and turn the house in to government owned rental property.

Repeat until most family dwellings are government owned and rented out at better rates and less loving over tenants than private rentals.

Now we have a Vienna model and banks and investors are the ones that bore the losses of doing such.

loving brilliant.

Too bad it won't actually work that way.

# ? Dec 6, 2014 18:15

Kafka Esq.: Jan 1, 2005; "If you ever even think about calling me anything but 'The Crab' I will go so fucking crab on your ass you won't even see what crab'd your crab" -The Crab(TM)

Cultural Imperial posted:

To support Lexicon's argument, read this paper: http://www.bankofcanada.ca/wp-content/uploads/2013/12/fsr-december13-crawford.pdf

tl;dr, if you're a Canadian taxpayer, you're gonna keep this bitch from burning down. I'd say if you were a housing bull having doubts that prices will keep going up, read this paper as it provides supporting evidence that there's nothing wrong with the lending market in Canada.

One of the co-writers of that paper is Cesaire Meh. That's a great name.

# ? Dec 6, 2014 19:35

etalian: Mar 20, 2006

Cultural Imperial posted:

To support Lexicon's argument, read this paper: http://www.bankofcanada.ca/wp-content/uploads/2013/12/fsr-december13-crawford.pdf

tl;dr, if you're a Canadian taxpayer, you're gonna keep this bitch from burning down. I'd say if you were a housing bull having doubts that prices will keep going up, read this paper as it provides supporting evidence that there's nothing wrong with the lending market in Canada.

It's also helps that the CMHC over the years has unilaterally loosened lending standards and also lacks transparency in many other ways such as honestly disclosing risk.

Hell just the practice of letting Canadian banks offload their mortgage risk via the securitization process should make people shake their heads.

etalian fucked around with this message at 19:52 on Dec 6, 2014

# ? Dec 6, 2014 19:45

etalian: Mar 20, 2006

lol

# ? Dec 6, 2014 21:27

namaste friends: Sep 18, 2004; by Smythe

etalian posted:

lol

I know right.

When the revolution comes, all the loving autists that came up with this bullshit need to be rounded up and shot.

# ? Dec 7, 2014 01:07

I would blow Dane Cook: Dec 26, 2008

etalian posted:

lol

something something tragedy something something farce

# ? Dec 7, 2014 02:12

namaste friends: Sep 18, 2004; by Smythe

lmao gently caress canada

https://twitter.com/LJKawa/status/541628917065723905

# ? Dec 7, 2014 17:50

etalian: Mar 20, 2006

Cultural Imperial posted:

lmao gently caress canada

https://twitter.com/LJKawa/status/541628917065723905

Basically commodity and real estate focus is a classic example of dutch disease in the economy.

Good thing the price per barrel is expected to be at the lower market rate over the next few years.

It's basically like Australia IMO.

etalian fucked around with this message at 18:03 on Dec 7, 2014

# ? Dec 7, 2014 17:58

Buskas: Aug 31, 2004; ?

Cultural Imperial posted:

lmao gently caress canada

https://twitter.com/LJKawa/status/541628917065723905

2009 seems like a pretty arbitrary and misleading year to use as a base case, given the credit crunch and steep decline in commodity prices, which then spiked in 2010-11. That would be an interesting chart to see in dollar terms and over 20 or 30 years but as is it's next to useless because it tells us nothing about whether 2009 was a normal year for capex in either index.

# ? Dec 7, 2014 20:57

namaste friends: Sep 18, 2004; by Smythe

http://m.theglobeandmail.com/globe-...?service=mobile

quote:

Insolvency filings: Boomers, older seniors showing signs of financial stress

ROB CARRICK
THE GLOBE AND MAIL
Last updated Thursday, Dec. 04 2014, 12:12 PM EST

People retiring today are among the most financially fortunate Canadians ever because they�ve had the opportunity to hit home runs in both the housing and stock markets.

But they don�t have it made. Not with the potential for them to be supporting both their adult children and their aging parents as part of what we call the sandwich generation.

One side of the sandwich, the struggles of young adults, has been documented lately in this column and elsewhere. Some university and college grads have had trouble finding their place in the work force, and parents are helping them with everything from house down payments to monthly bills.

The cost associated with supporting older parents hasn�t received as much attention, but it�s a factor as well. As they age and lose their independence, these parents may require financial help to afford either home care or the cost of living in a well-run retirement or assisted living facility.

We are in the early days of understanding the sandwich effect. Longer lifespans mean an increasing percentage of seniors will themselves have parents still living. The problems of young adults have barely begun to play out in the economy in terms of reduced capacity to spend and be taxed.

However, there are already some signs of financial stress in the insolvency numbers for seniors. Against a backdrop of broadly falling consumer insolvencies (bankruptcies and proposals to repay debt), the proportion of total insolvencies accounted for by seniors rose to 9.5 per cent from 9.2 per cent in 2012 and 9.1 per cent in 2011.

�It appears to be people in their 60s and even 70s,� said Blair Davidson, president and trustee in bankruptcy at BDO Canada Ltd. �They�re often taking care of ailing parents � and have nursing home costs that they�re trying to support. And then they have children who may have student loan debt or are underemployed based on their education.�

Mr. Davidson said there�s usually an event that triggers a bankruptcy � divorce, health problems, having to take time off to care for an ailing parent. Whatever the event, it results in a person exhausting their financial resources.

Bearing the costs of supporting adult children or aging parents may put people in a precarious position to begin with. Check out these notes on the cost of caring for a parent from a 67-year-old reader who lives in Southwestern Ontario. She wrote me about her mom, who had a stroke at 81 and passed away a year ago in her late 90s.

The daughter took early retirement from her job, moved in with her mother and covered the cost of utilities, food and clothing so that her mom�s money could be used for her care. Total home care costs in one particular year came to $33,587. When the mom moved to a nursing home, the annual costs in one year came to $26,329.

Some thoughts on personal finance for people who are members of sandwich generation:

The emergency fund is more important than ever

It�s for surprise home and car expenses, and it�s a reserve fund in case you need to back up a parent faced with emergency medical costs not covered by provincial health-care plans.

Add two new angles to retirement financial plans

Can you afford to use a block of savings to help your kids pay off student loans or buy a house? Can you afford regular monthly payments to help your parents with home care, etc.?

Know your parents� financial situation

Don�t assume your parents have the cash flow and assets to cover the cost of home care or a retirement residence. Find out the costs of these services and match them against your parents� resources.

There are estimates that as much as $1-trillion in wealth will be transferred from seniors to their baby boomer children in next two decades. But if the financial stress on seniors seen by Mr. Davidson is any indication, there could be some families where wealth is transferred the opposite way. From children back to parents, in other words.

Mr. Davidson wonders what the effect will be on boomers if their parents don�t have money to pass along. He sees these inheritances as providing a cushion to help people overcome financial obstacles.

�We all have challenges with parents and health and job loss and one thing or another,� he said. �Without the benefit of inheriting a financial nest egg that helps us bear through those tougher times, we could ultimately see increasing rates of personal bankruptcy.�

These same boomers are Canada�s most financially fortunate generation, so they do have resources of their own. But the expenses are piling up.

# ? Dec 7, 2014 21:15

Buskas: Aug 31, 2004; ?

Cultural Imperial posted:

http://m.theglobeandmail.com/globe-...?service=mobile

Can't wait for the boomers to start running out of cash and selling off real estate to fund their retirement, gently caress yeah... :mario:

# ? Dec 7, 2014 22:32

namaste friends: Sep 18, 2004; by Smythe

Buskas posted:

Can't wait for the boomers to start running out of cash and selling off real estate to fund their retirement, gently caress yeah...

Selling their house will be a last resort for most boomers.

# ? Dec 7, 2014 22:36

melon cat: Jan 21, 2010; Nap Ghost

melon cat fucked around with this message at 05:30 on Mar 16, 2019

# ? Dec 7, 2014 22:40

PC LOAD LETTER: May 23, 2005; WTF?!

Do reverse mortgages exist yet in Canada?

Those are huge now in the US as a way for retirees to have some money and have seen a huge increase in use since around 2008-2009. They were apparently around before then in the US but they weren't so common. I hadn't even heard of them until the early 2000's and it was in a 'lookit dis poo poo hahaaha' sort of context. Banks started really pushing them when the bust really got going because that was when it finally became clear to them that the bust wasn't going away and they became desperate for more money.

Lots of unscrupulous poo poo going on with them for a while now but nothing will probably be done about it.

# ? Dec 8, 2014 00:15

less than three: Aug 9, 2007; Fallen Rib

PC LOAD LETTER posted:

Do reverse mortgages exist yet in Canada?

Those are huge now in the US as a way for retirees to have some money and have seen a huge increase in use since around 2008-2009. They were apparently around before then in the US but they weren't so common. I hadn't even heard of them until the early 2000's and it was in a 'lookit dis poo poo hahaaha' sort of context. Banks started really pushing them when the bust really got going because that was when it finally became clear to them that the bust wasn't going away and they became desperate for more money.

Lots of unscrupulous poo poo going on with them for a while now but nothing will probably be done about it.

Yep. CHIP runs ads all the time on CBC to prey on seniors. https://www.chip.ca/

# ? Dec 8, 2014 00:22

melon cat: Jan 21, 2010; Nap Ghost

melon cat fucked around with this message at 05:29 on Mar 16, 2019

# ? Dec 8, 2014 00:51

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

How do they work anyway? You're basically selling your house in installments, right?

# ? Dec 8, 2014 01:14

etalian: Mar 20, 2006

FrozenVent posted:

How do they work anyway? You're basically selling your house in installments, right?

Yes instead of paying money to the lender for your home, the lender gives you money to buy your home out over time.

# ? Dec 8, 2014 01:25

etalian: Mar 20, 2006

Also the whole reverse mortgage process tends attract lots of scammer and dishonest companies.

# ? Dec 8, 2014 01:25

AVeryLargeRadish: Aug 19, 2011; I LITERALLY DON'T KNOW HOW TO NOT BE A WEIRD SEXUAL CREEP ABOUT PREPUBESCENT ANIME GIRLS, READ ALL ABOUT IT HERE!!!

I could see a reverse mortgage if you have no heirs and you expect not to live past however long it lasts, but it seems like a corner case that is more likely to leave you homeless and penniless than anything else.

# ? Dec 8, 2014 01:31

etalian: Mar 20, 2006

AVeryLargeRadish posted:

I could see a reverse mortgage if you have no heirs and you expect not to live past however long it lasts, but it seems like a corner case that is more likely to leave you homeless and penniless than anything else.

Elderly people are better off selling and just downsizing to a apartment/condo complex IMO.

# ? Dec 8, 2014 01:34

PC LOAD LETTER: May 23, 2005; WTF?!

/\/\/\
Yup.

In a perfect world if everyone did what they were supposed to and were properly informed of the risks and there wasn't any scammers around reverse mortgages could be a legit option.

In the real world where none of that is true they don't make much sense for nearly all the population and they probably do more to enable scammers who prey on the elderly than to help any of them. The few where it would make sense wouldn't be ill served by doing the above (downsize + rent) at all, particularly if it was in a decent retirement community like Leisure World.

Personally I believe if something does more harm than good and the instances where it can do good are at least a bit niche than that thing shouldn't be allowed so I don't like reverse mortgages at all.

# ? Dec 8, 2014 01:54

namaste friends: Sep 18, 2004; by Smythe

I don't give a poo poo if a bunch of loving boomer shitheads lose their shirts through reverse mortgages. gently caress em

# ? Dec 8, 2014 02:01

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

Cultural Imperial posted:

I don't give a poo poo if a bunch of loving boomer shitheads lose their shirts through reverse mortgages. gently caress em

Careful, you are financially on the hook for the boomer's bad decisions. Do you really think politicians will ignore destitute elderly people?

# ? Dec 8, 2014 02:04

Professor Shark: May 22, 2012

on the left posted:

Careful, you are financially on the hook for the boomer's bad decisions. Do you really think politicians will ignore destitute elderly people?

I think that the politicians should create a program where each destitute elderly Baby Boomer is placed with a young person or family that is funding their previous lifestyle and continues to fund them today.

The Baby Boomer gets a place to live, and the young people can benefit from the elderly person droning on about how the young people are doing it wrong!

# ? Dec 8, 2014 02:09

namaste friends: Sep 18, 2004; by Smythe

Professor Shark posted:

I think that the politicians should create a program where each destitute elderly Baby Boomer is placed with a young person or family that is funding their previous lifestyle and continues to fund them today.

The Baby Boomer gets a place to live, and the young people can benefit from the elderly person droning on about how the young people are doing it wrong!

lmao

imagine you drew neil mcdonald or margaret wente

# ? Dec 8, 2014 02:19

sauer kraut: Oct 2, 2004

etalian posted:

Elderly people are better off selling and just downsizing to a apartment/condo complex IMO.

This only works as long as prices in the boondocks or suburbs are inflated like in Canada and Australia right now.

Under normal circumstances grandma's Frankenstein fixer-upper doesn't cover a modern apartment in a desirable and safe/quiet part of a city, preferably with medical and accessibility amenities.

# ? Dec 8, 2014 02:57

namaste friends: Sep 18, 2004; by Smythe

You know how bob rennie et al keep telling us that we need to have vision and start living in micro condos?

WELL I think they lack vision.

http://www.npr.org/2014/12/07/36876..._content=202607

quote:

In Beijing, even the tiniest apartment can cost a fortune � after all, with more than 21 million residents, space is limited and demand is high.

But it is possible to find more affordable housing. You'll just have to join an estimated 1 million of the city's residents, and look underground.

Below the city's bustling streets, bomb shelters and storage basements are turned into illegal � but affordable � apartments.

Claustrophobic Living Quarters

Annette Kim, an urbanization researcher at the University of Southern California, spent last year in China's capital city studying the underground housing market.

"Part of why there's so much underground space is because it's the official building code to continue to build bomb shelters and basements," Kim says. "That's a lot of new, underground space that's increasing in supply all the time. They're everywhere."

She says apartments go one to three stories below ground. Residents have communal bathrooms and shared kitchens. The tiny, windowless rooms have just enough space to fit a bed.

"It's tight," Kim says. "But I also lived in Beijing for a year and the city, in general, is tight."

With an average rent of $70 per month, she says, this is an affordable option for city-dwellers.

But living underground is illegal, Kim says, since housing laws changed in 2010.

And, in addition, there's a stigma to living in basements and bomb shelters, as Kim found when she interviewed residents above-ground about their neighbors directly below.

"They weren't sure who was down there," Kim says. "There is actually very little contact between above-ground and below-ground, and so there's this fear of security."

In reality, she says, the underground residents are mostly young migrants who moved from the countryside looking for work in Beijing.

"They're all the service people in the city," she says. "They're your waitresses, store clerks, interior designers, tech workers, who just can't afford a place in the city."

Kim says there's a range of units, from the dark and dingy to the neatly decorated.

But it's rare to get a glimpse below. Property owners can be strict about whom they let in.

The 'Rat Tribe'

Beijing-based photographer Chi Yin Sim found a way. She's documented life under the city in a collection called China's "Rat Tribe."

"I started to try and find ways to get down there because I was fascinated by the fact that there was a universe beneath our feet," Sim says.

The first basement-dweller she met was a young woman, a pedicurist at a salon, who lived with her boyfriend.

"I was just like, 'Can I come and visit?' And she was like, 'Sure, come and visit us,' " Sim says.

The couple lived two floors below a posh Beijing apartment complex.

Sim's photos show just how tiny these units really are. The couple sits on their bed, surrounded by clothes, boxes and a giant teddy bear. There's hardly any room to move around.

"The air is not so good, ventilation is not so good," Sim says. "And the main complaint that people have is not that they can't see the sun: It's that it's very humid in the summer. So everything that they put out in their rooms gets a bit moldy, because it's just very damp and dank underground."

Sim says residents adapt to the close quarters.

"At dinner time you can hear people cooking, you can hear people chit-chatting in the next room, you can hear people watching television," she says. "It's really not so bad. I mean, you're spending almost all your day at work anyway. And you're coming back, and all you need is a clean and safe place to sleep in."

Of course, it's not ideal. Sim met a number of people who were too embarrassed to have their photo taken.

Annette Kim from USC says it's especially hard for the older residents, some of whom have been down there for years.

"They're hoping that their next generation, their children, will be able to live above ground," Kim says. "It's this sense of longing and deferring a dream. And so it makes me wonder how long this dream can be deferred."

But despite the laws against living underground, and the discomfort and shame associated with it, Kim says it's still a very active market. For hundreds of thousands of people, it's the only viable option for living in, or under, Beijing.

quote:

And, in addition, there's a stigma to living in basements and bomb shelters, as Kim found when she interviewed residents above-ground about their neighbors directly below.

"They weren't sure who was down there," Kim says. "There is actually very little contact between above-ground and below-ground, and so there's this fear of security."

In beijing, renters are literally considered scum.

# ? Dec 8, 2014 03:29

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

Hey, at least the people who engineered those inhuman living conditions aren't moving to Canada.

# ? Dec 8, 2014 03:43

Adbot: ADBOT LOVES YOU

# ? May 27, 2024 12:44

Bip Roberts: Mar 29, 2005

Cultural Imperial posted:

You know how bob rennie et al keep telling us that we need to have vision and start living in micro condos?

WELL I think they lack vision.

http://www.npr.org/2014/12/07/36876..._content=202607

In beijing, renters are literally considered scum.

C.H.U.D.S. are real.

# ? Dec 8, 2014 03:44

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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