this post was submitted on 23 Jan 2024
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I'm really in a "don't give a shit" phase because there's valid reasons for WFH as well at RTO and I'd argue those in the extreme on both sides are idiots.
That said, pragmatically everyone needs to understand the complexity of how we got here and no it's not fully "the ruling class" demanding this. If we can't justify commerical retail prices the economy is fucked and I mean that with a capital FUCKED.
Now the reasons for that are multifaceted but how it involves all of us not just the rich, many pension plans around the world have aggressively invested in real estate. Those pension plans are for average people like all of us here. If commercial real estate prices tank there goes social security. There goes your 401k. There goes your RRSP.
It's very easy to blame an elite class but this problem is systemic and a result of how we have built the micro and macro economy.
So to those that are on the extreme on both sides, calm the fuck down.
I’m sorry but I’m not RTO because someone has made a bad investment. That’s between them and their bad investment.
The stone tools market will tank if we start smelting bronze!!!
Think about what it will mean to the economy if people can afford to buy a flat down town, though… it might make people’s lives better.
You realize if you pay taxes there's a high likelihood that bad investment is on your head? If you are Canadian you contribute to the CPP. We have huge amounts invested in commercial real estate globally. If that value tanks there goes old age pensions for everyone. Is anyone ready to own that? Would you vote in someone that would make grandma and grandpa live on the streets? What about you when you reach retirement age?
There are solutions which include divesting in this poison pill but you think anyone can do that overnight?
I seriously question the expectations some people have. Try coordinating a get together with 20 people and see how hard it is then imagine that group exponentially increased. We are lucky we haven't killed ourselves yet lol
The value of commercial buildings doesn't go to zero. They're just cut in half (based on recent sales prices).
Just because the price of an asset goes down doesn't mean the economy crumbles. In fact, buyers / renters are now better off. I'm sure poor Grandmas are in that category.
Pensions are paid off based on the booked value. If the asset you own is worth half of what you paid for it that is a problem. If you bought a house for 1 million and you need to sell it to pay for something else and can only get 500k are you prepared for eating that loss?
Of course I can guess your answer because you probably feel you know better than the vast majority of governments and economists but that's a moot point by now.
I'm not claiming to know the answer because I understand it's complex enough to not.
What I am confident in is that despite what you or I say is but a drop in how serious the issue is. The difference is I'm not wasting energy screaming into the wind.
You really are invested in this topic, it's odd.
No pension fund owns only commercial real estate. If anything, it's like 5% of their entire portfolio. Still, it's not necessarily a problem.
So in your simplified scenario, you have a pension paying retirees that owns 100% of a building. Say few businesses want to lease space in the building, and the value goes down.
They don't have to sell the building. They can just refurbish it and put the retirees in it. That's actually more tax efficient than paying the retirees who then pay their retirement home.
If governments and economists got us into this mess, then yeah, I guess we do know better than them.
My retirement position is 100% in the U.K, where state pensions (pitiful as they are) are pay-as-you-go (ie the contributions of the current labour market are used to pay the current retirees). There is no collective state fund that accumulates and then later pays out. I have a personal pension, like most, which doesn’t have a defined position in real estate (although I’m sure some of the stocks in the fund would be affected by a real estate crash, both up and down).
So yeah, like most people, I don’t want to socialise losses in somebody else’s investment nor do I expect anyone to come and rescue my personal pension if it tanks based on some global change.
LOL I can't believe I just watched someone "both sides" the RTO argument.
This problem is systemic because the rich made it so.