Canadians Overinvested in Their Homes, Says Florida

Richard Florida writes that Canadians great love for homebuying (with a greater home ownership rate than even the U.S.) could be economically instable.
May 3, 2010, 9am PDT | Tim Halbur
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While Florida agrees that homeowners are good for communities, the tying up of all those Canadian dollars in homes means a lack of investment in other markets.

He writes, "A study by the Federal Reserve Bank of Dallas in 1998, well before the boom and bust, found the U.S. had over-invested in housing relative to other forms of capital since 1929. It has drained off capital from productivity improvement, innovation, medical technology, software or alternative energy: sectors that could drive growth well into the future.

Here as well, housing sucks up a huge share of national capital that should go to support innovation and new industries."

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Published on Sunday, May 2, 2010 in The Globe and Mail (Toronto)
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