“Eye-Watering” Homeownership Costs In Canada Hit 30-Year High, RBC Says

Bank of Canada Gov. Stephen Poloz including “home prices” on his list of risk factors that “keep me up at night”, which he shared with an audience of economists at the prestigious Canadian Club earlier this year. But Poloz’s words of caution have not stopped housing costs for Canadians form climbing to precarious new highs. Signs of this stress are already apparent – for example, in Vancouver, where a chasm between bids and asks has caused the local housing market to grind to a halt.

The latest warning about an impending implosion in the Canadian housing bubble comes courtesy of a quarterly RBC report, which found that the aggregate costs of homeownership in Canada, a category that includes mortgage fees, interest, property taxes and utilities and other miscellaneous costs, have reached their highest levels since 1990.

The most alarming aspect of this trend, according to the bank, is that rising mortgage costs, not home prices, have been the biggest contributing factor over the past year, with mortgage rates rising in each of the last four quarters.


Rising mortgage rates have, of course, been spurred by the BoC’s rate hikes. Today, the average Canadian would need to spent roughly 54% of their income to buy a home. That’s up sharply from 43.2% three years ago.


But in Canada’s most unaffordable housing markets, these figures are considerably higher.

“From overheating to correction to the onset of recovery, we’ve seen pretty much everything in the past three years in Canada’s housing market,” economists at the Toronto-based bank said in the report. “Yet an eye-watering loss of affordability has been a constant.”

In Vancouver, Toronto and even Victoria, RBC’s index of home prices relative to average income has reached 88%, 76% and 65%, respectively. The bank’s data includes costs for condos and detached single-family homes.


Courtesy of Bloomberg

And with the BoC widely expected to continue raising interest rates…

“We expect the Bank of Canada to proceed with further rate hikes that will raise its overnight rate from 1.50 percent currently to 2.25 percent in the first half of 2019,” the report said. “This will keep mortgage rates under upward pressure and boost ownership costs even more across Canada in the period ahead.”

…its analysts have warned that a momentous housing implosion looks increasingly likely. Adding a dash of irony to this scenario, the BoC has expressed caution about the housing bubble and cited raising interest rates as a necessary measure to combat it.

Read the whole report below:


2018.09.30rbcreport by Zerohedge on Scribd


Is Global Warming A Significant Contributor To America’s Wildfires?

Via Cliff Mass’ Weather and Climate blog,

During the past several summers there have been major wildfires in Washington State producing a lot of smoke.  And many people have been asking an important question:

To what degree is anthropogenic global warming contributing to Washington State wildfires?

If 90% of the blame for Northwest wildfires is due to anthropogenic (human-caused) global warming and 10% is due to fire suppression, poor forest management, or people starting more fires, then the logical response is to put most of  our efforts into reducing atmospheric CO2.   A climate-dominated problem.

If 90% of the blame is due to past fire suppression, forest mismanagement, invasive species, and human encroachment, then we should put most of our efforts into fixing the forests and other non-climate measures. A surface-management problem.

And yes, the percentages could be somewhere in between.

Supporters of the carbon fee initiative (1631) are suggesting that the recent wildfires are mainly the result of anthropogenic climate change and using the fires to push their carbon fee plan.

And Governor Inslee has stated explicitly that the fires have been made much worse by climate change.

In contrast, others, including a number of folks in the forestry community, have suggested that poor forest practices are the main cause of most of the wildfires over the eastern side of the state.

It is important to note that relative role of global warming in influencing the threat of wildfires may change in time.  For example, global warming could be relatively unimportant today for wildfires, but of great importance later in the century when temperatures will be much warmer.

The Need for Better Information

There is actually very little limited quantitative information on the role of global warming on Washington State wildfires.   Which is kind of strange considering the importance of the issue and the authoritative statements being made by some.  A lot of hand waving, but not much data.

So let’s examine the issue in some depth, using a more quantitative approach than most.  But before I do so, let me give you the bottom line.

Human-caused global warming has played only a minor role regarding  Washington State wildfires through today, but will become much more important later in this century.

Now let me provide some evidence for this conclusion.

How Has Global Warming Changed Washington’s Summer Climate?

Before we look at the correlation of global warming and wildfires, we need to know how much Washington State climate has changed during the past half century or so, and then  estimate how much of that change is due to anthropogenically forced increases in greenhouse gases. To gain some insight into this, I secured the official NOAA/NWS climate division data averaged over Washington State for summer (June through August).

First, consider daily mean temperatures from 1930 to today..  Very little warming until the mid-70s and then perhaps 2°F overall during the past 40 years.

Summer average maximum temperatures have similar  pattern of change–again roughly 2F warmer since the mid 1970s.

There is a substantial research that suggested that the radiative effects of increasing CO2 in the atmosphere became significant for climate forcing something around the 1970s.   And there was an important shift in a mode of natural variability, the Pacific Decadal Oscillation (PD0) during the mid-70s:  a shift from the cool to warm phase of this oscillation, which would have resulted in warming over the Pacific Northwest.

Now the question is how much of the recent warming shown above is due to anthropogenic global warming and how much is due to natural variability.

A group of researchers at the UW (including myself) are working on this question, using the most sophisticated approach applied to date:  an ensemble of high-resolution regional climate runs forced by the best global models.  This is the gold standard for such work.  We started with global climate models driven by the most aggressive increase of greenhouse gases (RCP 8.5) and then ran a high-resolution weather prediction model (WRF) driven by several climate models over time (1970-2100).

I don’t have this output interpolated to the exact boundaries of WA state (working on this now), but let me show you the projections for summer max temperatures from the high-resolution model for two sides of the state (Hoquiam, HQM, and Spokane, GEG) forced by several climate models (see below in colors).  I also show the observed temperatures during the contemporary period at these location).  Virtually all of our simulation show greater warming at Spokane then along the coast, so let me show you that first.

Between 1970 and roughly 2000 there is very little change in observed or modeled temperatures at Spokane, and roughly1.7F warming between 2000 and now in most of the simulations.  Since natural variability will differ between the simulations, the 1.7F average of all of the runs is a reasonable estimate of the impact of global warming until now.   And note how the warming revs up later in the century if the aggressive increase in greenhouse gases continue s(about 7F warming!).

At Hoquiam, near the WA coast, the warming is less for both the recent decades and into the future.  Perhaps 1F of warming through this year.

Now, I could show you a lot more material, but my conclusions from looking at a lot of high-resolution model data is that anthropogenic global warming due to increasing greenhouse gases may well have warmed up the state as a whole by roughly 1-1.5F during the past half-century, with any additional warming coming from natural variability (e.g., the PDO).   I really doubt that there would be much disagreement about this estimate from members of the atmospheric community.

What about changes in precipitation?

Summer (June to August) precipitation has always been relatively modest (4-5 inches) in our state (our summers are very dry), and there appears to be a modest wetting trend through 1980 and some drying since the late 1990s (see below).  In contrast, annual precipitation has been very constant (also below)

Summer Precipitation for WA State (1930-2017)

WA State Annual Precipitation

What do the climate simulations suggest about precipitation trends?

The annual precipitation will slowly increase according to the models (not shown), but what about summer?  Spokane summer precipitation has always been low (around 2.5 inches typical for June through August) and will remain low.  Any decline is small–a half-inch at most.  The recent dry years look like natural variability.

Let’s compare that to Seattle on the western side of the State.   Summers are equally dry as Spokane, but there is a more clearcut drying– by roughly 2 inches by 2100, and perhaps .5 inches during the past years.  These results are consistent with previous studies by the UW climate impacts group and others indicating a slow increase of total annual precipitation, but a small downward trend in summer precipitation over our area.

So to summarize.   Looking at past climate data and the best model information, one concludes that increasing greenhouse gases may well have warmed out state by 1-1.5F during summer (June through August) over the past half century, had little impact on annual precipitation, and perhaps dried an already very dry summer by perhaps .5 inches.

But how did global warming impact the recent wildfires in Washington State? And how will future warming impact them?

We are now ready to answer this question.

But first we needed a list of the annual area burned and number of fires in Washington State over time.  It turns out this is a difficult information to get–which is surprising considering its importance.  I was able to get an Excel file from Josh Clark of WA State DNR with the fire information from 1992 to the present.  The prior period has not been digitized, with fire information in cabinets somewhere.  Oregon and California has done a better job in creating a long-term digital record of their fires.

OK, we will use what we have.  Here is the number of acres burned by wildfires over WA state since 1992.  A very slow trend upward, except for the HUGE peak in 2015, the year with the big ridge and crazy-warm spring.

The number of fires (see below) have been nearly constant in the long term, with some ups and downs

But now the really interesting part.  Let’s plot the acres burned against warm season (June through September) temperatures (see below).

This is really fascinating.  A very slow increase of fire acres with temperature, with considerable scatter,  showing that acres burned is not that temperature sensitive.  The one big year was the warmest.. 2015 with 61.4 F and nearly 1.2 million acres burned.

Now, let’s put a regression line on this plot and see how much of the variability is explained by increasing temperature. Temperature only explains 22% of the increase in acres burned…so 78% is explained by something else.

The bottom line of all this is that warming temperatures can explain only a small portion of the variability in Washington wildfires.

What about precipitation?   Here is the plot of WA state precipitation for May through Sept since 1992.  A very slight downward trend, with the big fire year (2015) not showing anything anomalous.

Another “scatterplot”, this time of acres burned versus precipitation, is presented below.  Very poor relationship, with the suggestion of a decline in burned acreage with greater rainfall.  And the precipitation only explains about 2% of the variability of acres burned!  This is not surprising because our region is naturally dry during the summer and being a little drier doesn’t make that much of a difference.   Like being a little more dead.

The Essential Message Here

Climate/weather changes do affect wildfires over Washington State.  Warmer temperatures and lesser precipitation correlate with increasing acreage, but the relationship is not a strong one.  The correlation of summer precipitation with wildfire acreage is very, very weak and summer temperature only explains less than a quarter of the variability in wildfire area.  

Then we look at the look at the amount of climate change produced by human-caused greenhouse warming so far, and we find it is relatively small. Perhaps 1.5F for WA State temperatures and a slight drying over the summer.

You put the lack of sensitivity together to temperature/precipitation with the small climate changes due to global warming and one has to conclude that human-caused climate change is undoubtedly NOT a major driver of the increased wildfires and wildfire smoke we have seen during some recent years.

Based on my extensive reading on the wildfire issue, discussions with forestry experts at the UW, and a number of seminars/meetings I have attended, my conclusion is that the real culprits for our invigorated fire/smoke situation include:

1.   Nearly a century of fire suppression and poor forest management that have produced unnatural, explosive forests, particularly on the dry side of our state.

2.  Huge influx of people into the urban-wildland interface and forest areas that help initiate fires and make us more vulnerable to them.

3.  Invasion of highly flammable, non-native species like cheatgrass.

And we should not forget that fire is a natural part of our east-side forests.

Claiming the climate change is the big villain in the current wildfire situation, may be a useful tool for some ambitious politicians and for those searching for arguments to support climate-related initiatives, but the truth is probably elsewhere.  In the FUTURE, as temperatures warm profoundly (particularly during the second half of the century), the influence of human-produced global warming on our wildfires will clearly increase substantially.

Only by a sober, fact-driven approach, such as thinning, debris-removal, and proscribed burning of our east-side forests, with will be able to improve the health of our forests and reduce the potential for megafires and big smoke production.  Even if we could stop anthropogenic climate change in its tracks this year, we still need to  deal with the issues of forest management, human initiation of fires, and human changes at the surface.

PS:  Although we had considerable background smoke from Canada, the really extreme smoke periods (August 21-22 in Puget Sound) was associated with fires over NE Washington, not Canada.  Same thing in 2017, with WA fires resulting in ash falling on Seattle.

PSS:  Some folks might bring up the Pine Beetle issue.  I have read several papers and talked to experts in UW Forestry that suggest that rather than lack of cold temperatures, unnaturally dense east-side forests and lack of fire allowed the Beetle kill.  In any case, peer-reviewed papers suggest that pine beetle infestation does NOT contribute to fires.

*  *  *

A local forest landowner named Michael August has written a very interesting perspective on NW forests and smoke, found here.

“Largest Ever Homeless Camp” Suddenly Appears In Minneapolis

The Associated Press (AP) has revealed a troubling story of the largest ever homeless encampment site mostly made up of Native Americans has quickly erected just south of downtown Minneapolis, Minnesota.

City officials are scrambling to contain the situation as two deaths in recent weeks, concerns about disease and infection, illicit drug use and the coming winter season, have sounded the alarm of a developing public health crisis.

“Housing is a right,” Mayor Jacob Frey said. “We’re going to continue working as hard as we can to make sure the people in our city are guaranteed that right.”

The AP said approximately 300 people are living in the camp that is situated beside 16th Ave S & E Franklin Ave.

Earlier this month, a team of AP reporters visited the camp and found dozens of tents lining the city street.

To their amazement, most of the residents were Native American.

The homeless camp — called the “Wall of Forgotten Natives” because it lined a highway sound barrier, is in a section of the city with a large concentration of American Indians that are suffering from extreme wealth, health, and education inequality. The AP said the tents stand on what was once considered Dakota land.

“They came to an area, a geography that has long been identified as a part of the Native community. A lot of the camp residents feel at home, they feel safer,” said Robert Lilligren, vice chairman of the Metropolitan Urban Indian Directors.

The camp illuminates the inequalities (mentioned above) that face American Indians in the state. AP provides a shocking statistic that American Indians make up 1.1% of Hennepin County’s residents, but 16% of the homeless population, according to government data from April.

It is also a community that is being decimated by opioids. Minneapolis officials in July sued a group of opioid manufacturers and distributors, alleging their actions to promote prescription opioid drugs, such as OxyContin, have caused an addiction crisis straining the city’s resources.

AP said one end of the camp had been designated for families, while adults — some of whom were high on drugs — were on the other end. In the middle, an organization called Natives Against Heroin, a tent where volunteers handed out bottles of water, food, and clothing. The group also provides addicts with clean needles, and most volunteers carry naloxone to treat overdoses.

“People are respectful,” said group founder James Cross. “But sometimes an addict will be coming off a high… We have to de-escalate. Not hurt them, just escort them off. And say “Hey, this is a family setting. This is a community. We’ve got kids, elders. We’ve got to make it safe.”

With hundreds of people living in close quarters, health officials fear an outbreak of infectious diseases like hepatitis A. Local support groups have started administering vaccines. Earlier this month, a woman died when she did not have an asthma inhaler, and one man died from a drug overdose.

Local government agencies have set up areas to provide medical assistance, antibiotics, hygiene kits or other supplies. There are tents advertising free HIV testing, a place to apply for housing, and temporary showers. Portable restrooms and hand-sanitizing stations had also been positioned around the camp.

The Minneapolis City Council voted Wednesday to move the camp to a 1.5-acre commercial property owned by the Red Lake Nation. The decision came five days after Mayor Jacob Frey and representatives of ten tribes said the industrial site was the best place to relocate the tent city.

The new site at 2105-2109 Cedar Ave. South will not be ready until December because demolition work will take several months, according to David Frank, the city’s Community Planning and Economic Development director.

“We will go as quick as we can to have the interim navigation center operational and ready,” Frank said. “We have our permitting people standing by. We have our housing team, our facilities team and our projects management all lined up to do this work.”

The cost of preparing the site with living accommodations for dozens of people will be between $2 million and $2.5 million, Frank added.

Minneapolis’ homeless explosion comes as no surprise. The much larger trend at play is the nation’s homeless population increasing for the first time since 2010 — driven by housing affordability issues, and widening inequalities. But do not tell President Trump the real economy continues to deteriorate.

In 40 different venues over the last three months, President Trump declared the economy is the greatest, the best or the strongest in US history.

— Trump, in a speech at a steel plant in Illinois, July 26

“This is the greatest economy that we’ve had in our history, the best.”

— Trump, in a rally in Charleston, W.Va., Aug. 21

“You know, we have the best economy we’ve ever had, in the history of our country.”

— Trump, in an interview on “Fox and Friends,” Aug. 23

“It’s said now that our economy is the strongest it’s ever been in the history of our country, and you just have to take a look at the numbers.”

— Trump, in remarks on a White House vlog, Aug. 24

“We have the best economy the country’s ever had and it’s getting better.”

In a recent, Bank of America note titled “The Thundering World,” a major theme in development for the 2020s could be “the epic wealth inequality” that is plaguing the economy.

BofA says quantitative easing amplified income and wealth inequality over the last decade. The distribution of wealth is the widest ever. The top 1% own 40% of the global wealth; the bottom 80% own 7%.

What does this all mean? Well, decades of failed economic and social policies are about to come home to roost. The explosion of homelessness in Minneapolis over a short period, is an example of the breakdown of the social fabric that will strain many more municipalities across the country in the years ahead. The America that we knew will not be the same by 2030.