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Have you ever heard of “Competitive Eating?”

It’s a sport.

A sport, in the same way that chess is a sport, but a sport nonetheless.

This sport is no slouch, either.  The sport has competitions, it has fans, it has a league (“Major League Eating”), and it has a regulatory body – the International Federation of Competitive Eating, or IFCE.

You just haven’t lived until you’ve seen Joey Chestnut eat hot dogs on the fourth of July.

Not only is this event filmed and documented, but it’s broadcast live on TV.

Live on, say, on some random channel that nobody subscribes to?

No.

Try ESPN.

Complete with commentators, analysis, and statistics on pace of eating.

Think I’m kidding?

Watch this – or at least part of it:

A few years back, probably six or seven if I’m guessing, I saw a “competitive eater” interviewed on a late show, Jay Leno, David Letterman, or one of the others.

The audience could barely take it seriously.

The late-night host couldn’t stop laughing.

Everything the guest said was just so outrageous, especially because he was the only one who seemed to be taking it seriously.

Finally, the host simply put his cards on the table, and made a point that was seemingly indisputable:

“This ‘sport’ makes no sense to me.  We have people literally starving all around the world, and you guys are up on a stage, jamming food in your faces, trying to eat as much as you can, even though you don’t need the food – all for sport and amusement?”

Wow.  No arguing that point, right?

Amazingly, the guest responded, very calmly, very eloquently, and said,

“The only thing in the world that might rival a food shortage is an energy shortage, specifically oil and gas.  But every Sunday, you’ve got hundreds of cars in Indy, NASCAR, Formula One, driving around and around in circles, wasting millions of dollars of gasoline, all for sport, and amusement.”

Damn!

That guy was prepared!

And if the world was truly about efficiency, reducing waste, and supplying each and every Human being with only that which they truly need, then neither competitive eating or auto racing would exist.

But the world isn’t like that.

It’s not within our genetic makeup.

Human beings are selfish by nature, and I believe that’s a trait that has evolved out of necessity, as we evolved from caveman and fought for survival.  Perhaps the selfishness has subsided over the last decade, century, or millennium, or, perhaps as the world has become more complicated, we’ve found new and improved ways to be more selfish.

Take your pick.

But in philosophical discussions about the fundamentals of capitalism, democracy, socialism, communism, et cetera, I’ve always maintained that true organic equality could never exist, because of the human nature that spawns desire, wants, self-preservation, and self-interest.

If a town of 100 people existed, and they all got along swimmingly, each contributing to the greater good, whether that’s paving roads, teaching children, or hunting/gathering, sooner or later, there’s at least one person that will want more.  And then either that person will want even more, or a second person will want more.  Or both.

That is human nature.

So is it really so unrealistic to expect that (gasp!) individuals across the world look at Housing as an investment?

I’ve read multiple comments on my blog over the past couple of years about how housing should not be viewed as a commodity.

I’ve also seen this theme written about in major newspapers, and read about it in many, many letters to the editor, or op-ed’s.

Certain individuals in society would liken the purchase of housing as an investment, and a commodity, as a stab in the back to fellow mankind.  A house is for living in, not investing in.  A house is not a piece of gold, or an imaginary share certificate of a company, where hundreds of millions of other identical certificates exist.

A house is a home.

You don’t live in a share of stock, or a bar of gold.

I’ve even seen somebody, right here on this blog, compare the commoditization of housing to the illegal organ trade.

But even that trade can be debated, no?

I mean, are you not allowed to sell that which is yours?

Your kidney is yours, and nobody else’s.  Why can’t you sell it, if you so choose?

Now take that argument a step further: why is prostitution illegal?

Prostitution is the single-oldest industry on the planet.

Why is it illegal for a man or woman to use that which is theirs (body, mind, soul) for business purposes, specifically if a skill or other unique, valuable trait is used?

Personally, I believe that prostitution became illegal over time for two reasons: 1) the government is (or was at one time) the moral authority for every person in the state, who acts in the best interest of those people, and perhaps part of this decision stemmed from religion, 2) the act(s) generally go untaxed, and unregulated.

Morals change over time, and taxation evolves.

Prostitution is legal in many places in the world.

Marijuana is legal in Canada as of September.

I won’t be able to sell you my liver any time soon, but I believe part of the objection to a legal organ sale have to do with “fairness,” in that a poor person can’t afford $50,000 for a liver, and most governments do strive for equality.

So at the risk of this conversation becoming really weird, let me tie this all together.  There are many products or services which are illegal, many which are legal, and many that have been either/or, back-and-forth.  To some, the idea of housing as an investment is devilishly selfish, and to others, it’s common sense.

And as is often the case, when a product or service becomes more/less socially acceptable, the thoughts on the particular uses of that product or service change with public sentiment.

Until 2017, I had never heard anybody say, “Housing should not be allowed as an investment.  It should only be for living.”

But go back in time and tell a weary railroad worker in the 1880’s that one day, prostitution would be illegal, and he’s spit tobacco juice on your boot.

As real estate markets around the globe continue to get more expensive, and price more people out of the Market completely, public sentiment surrounding housing as an investment will continue to shift.

In the same way that one would opine it’s unnecessary, selfish, greedy, immoral, and unnatural to waste oil and gas for a NASCAR race during a world energy crisis, or engage in gluttonous competitive eating when children are starving around the world, one might also believe that an individual in Toronto or Vancouver should not be able to own four condos as investments, when there is a housing crisis.

And do they make a bad point?

I spent Monday arguing “wants versus needs,” and nobody needs a second, third, or tenth investment property.  They want them.

As I said, it wasn’t until 2017 when I first heard of the idea of banning housing as a commodity.

I read this Globe & Mail article at the beginning of April, which was ironically right after that insane 3-month run-up in real estate prices:

“Housing Is A Human Right, Not A Commodity”

This was a special piece for the Globe, written by Leilani Farha, the UN Special Rapporteur on the right to adequate housing.

A couple of excerpts from the article:

Housing is now predominantly valued as a commodity, traded and sold on markets, promoted and invested in as a secure place to park unprecedented amounts of excess capital. The view of housing as a human dwelling, a place to raise families and thrive within a community, has largely been eroded. Despite its firm place in international human rights law, housing has lost its currency as a human right.

Ms. Farha refers to places like Toronto and Vancouver as “hedge cities,” and adds the following:

In hedge cities, housing prices have increased to levels that moderate- and low-income residents can barely afford. In the Greater Toronto Area, for example, in the last 30 years (1986 – 2016) housing prices have increased by 425 per cent, whereas in a similar 30-year period (1985 – 2015), average family income has only grown by 133 per cent. Housing prices have increased at three times the rate of income. No longer commensurate with household income levels, housing prices are driven instead by demand for high-end assets among global investors.

The closing statement is an emphatic one:

Whether it is taxation policy, land-use planning, zoning, or broader housing policy, decisions must be guided by the needs of residents for adequate, affordable and secure housing, as opposed to the financial security and gain of investors. Enjoyment of human rights would be the goal.

And so, what is presented as the private market gone mad is, in fact, something far more deliberate: the failure of governments to govern in a manner that is consistent with human rights. The solution requires a fundamental shift – one that prioritizes human interests over economic ones.

Right after this article was published, the Ontario government introduced their “Fair Housing Plan,” and the market cooled, then dropped.  The timing was rather ironic.

WIth the subsequent cooling of the market, does the idea of “housing as a human right, not as a commodity” lose momentum?  Do we only see merit in the idea if the market is red hot?

What if the market crashed across Canada, what then?  Would those in favour of the idea change their tune?  Is the idea only relevant when prices are high, and rising, and buyers are lamenting the market conditions?  What if it were the other way around, and sellers were complaining that there’s no market for their homes, and they only wished that somehow, people could buy houses and condos as an investment, not merely as a primary residence?

I suppose what I’m asking is: can the idea of “housing as a human right, not as a commodity” change over time, in the same way as public sentiment toward marijuana can?

Let’s not forget, we are less than two centuries removed from people as a commodity.  Sentiments change over time, no doubt.

Another argument for the idea of housing as a right, and not as a commodity, is that you can invest in the housing market without owning a house.  Some in the wealth management and financial services sector would actually argue it makes more sense to own a Real Estate Investment Trust.

Boardwalk REIT is a publicly traded trust that owns apartment buildings in Alberta, Saskatchewan, Ontario, and Quebec; almost 40,000 units of housing.  The company employs 1,300 people and was founded in 1984.

This REIT has risen approximately 25% in value in the past 12 months, and pays a 2% dividend annually.

There is no land transfer tax, real estate fees, or legal fees on the purchase/sale of this investment.  Just a $9.99 fee for trading ‘virtual real estate’ online, in seconds.

So would that satisfy society’s demand for “investing in real estate?”

Could the proponents of “housing as a right” argue this as a viable alternative?

I’ve asked many questions above, several for effect, some to get the juices flowing, and some, I suppose, to stir the pot.

I could probably be convinced, to some degree, that “housing as a commodity” is unfair, if comparisons were drawn to the change in societal views on other types of ownership (the aforementioned slavery as an example), but that would exist in theory only.

In practice, I would suggest that, “Real estate has served as an investment for some time, and I don’t see it changing, nor do I see a reason.”

And once, people thought the earth was flat…

I wouldn’t disagree that investors are partially responsible for appreciation in several of Canada’s real estate markets, but investors make up part of the demand pool.  And in any free market, I like seeing as little interference with respect to both supply and demand as possible.

As a proud Canadian, and at the risk of sounding like a populist, I can say that I firmly believe every Canadian should be afforded an advantage with regards to the purchase of housing as a residence, over those who reside internationally.  I won’t get into my thoughts on the foreign buyer’s tax, but I will say that Canada is not in the same league as other countries around the world, and thus our residents can’t play in the same game.  A dollar earned, and owned, by Mike from St. Catharines pales in comparison to that same dollar owned by somebody overseas, of another persuasion.

One might suggest that to restrict “real estate as an investment” to Canadians, fails to address “housing as a right, not as a commodity,” but I disagree.  It is, at the very least, a half-measure, which for many out there should be better than nothing.

I don’t agree with “housing as a right, not as a commodity.”

I never will.

But don’t be surprised to see this idea gain a lot of momentum in Toronto and Vancouver if our markets continue to rise, which I think they will.

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