When faced with something stressful or frightening, the human body tends to react with the “fight-or-flight response.” COVID-19 has produced any number of threats, but for millions of Canadians, that physiological reaction is being triggered by a more unusual source of late: home ownership.
Our national obsession with buying, owning and renovating our homes has become an existential threat to the futures of millions of young Canadians. As prices continue to soar out of reach, those who want to buy are being forced to take on ever-larger debts, and sacrifice ever-increasing portions of their paycheques and budgets, to make the housing math work. And that math is diverting time and money away from other parts of their lives — and other aspects of their futures.
And now, thanks to the combination of billions of dollars in federal stimulus funds, ultra-low interest rates designed to shore up the economy and stimulate activity, and the growing ability to work from home, they’re soaring higher than ever. According to a recent report from TD, the average home price in Canada is up 32 per cent from a year ago, and neither governments nor central bankers sound like they’re about to cool it down any time soon.
If you happen to have the good fortune of owning a home, this unexpected housing boom that’s sweeping the nation has been a gift from above. But for the millions of Canadians who don’t own real estate, this is another major setback.
As a result, some are taking flight to less populated cities and regions, either to afford a bigger home or simply afford one at all. Between July 2019 and July 2020, Statistics Canada reported that 50,000 people left Toronto and more than 24,000 hit the exits in Montreal. But that has only served to pour that housing market jet fuel into once-sedate communities like Merritt, B.C., and Tillsonburg, Ont., where prices are up 40 per cent this year alone.
Now, it seems, some young Canadians are ready to fight. In Toronto and Ottawa (two of the frothiest markets in the country), a group of Redditors are using the proceeds of a GoFundMe campaign to put up a pair of cheeky billboard ads to draw attention to the situation. In Ottawa, their billboard will say “Homes Aren’t For You. They’re For the Rich. You Can Rent,” while in Toronto it will read “Can’t Afford a Home? Have You Tried Finding Richer Parents?” As 33-year-old corporate strategy executive and Redditor Greg Murray told Bloomberg: “We’ll be the generation that can never retire because of housing prices. The barrier to entry has never been higher.”
Ironically, the federal government’s efforts to help people like Murray overcome that barrier are only making it higher for others. Take the First-Time Homebuyer incentive, which was introduced in 2019 and expanded earlier this month to further assist buyers in markets like Vancouver, Victoria and Toronto. Under this program, the federal government kicks in between five and 10 per cent of a first-time buyer’s down payment, and then shares in the upside from any capital appreciation. This program and others like it help individual Canadians buy homes, but they also feed the very problem they’re designed to address, as more demand begets higher prices in the absence of more supply.
That supply isn’t coming any time soon. In cities across Canada, from Vancouver to Halifax, adding supply has become the political equivalent of hand-to-hand combat. Every attempt to increase density in so-called “mature” neighbourhoods seems to run into the same fierce resistance from existing residents. Never mind that additional density is good for the climate (by reducing commute times), good for taxpayers (by reducing costly sprawl) and good for existing schools, churches and businesses (by increasing the number of people who can use them). Those arguments seem lost on those who would prefer to keep new residents out of their proverbial backyards.
There’s a certain poetry in these mature neighbourhoods behaving so immaturely, and it’s surely a tempting target for the young Canadians who are looking for a fight on this front. But a better target for their frustration might be the very idea of home ownership itself, and the exalted status it enjoys in Canadian society. This is the soil in which NIMBYism grows most prolifically, and it’s routinely fertilized by the bankers, realtors and other key participants in Canada’s residential-industrial complex.
How could people take the fight to our shared obsession with real estate, one that has resulted in some of the highest home-ownership rates in the developed world? First and foremost, we have to start demanding more and better alternatives. Co-operative housing, purpose-built rentals and other options that offer security of tenure and more predictable costs need to be pursued far more aggressively by all levels of government.
How the young are dealing with Canada's scorching real estate market #HousingMarket #realestate
That security of tenure is the real prize here, one that millions of people in western Europe take for granted. It allows them to save for something other than the roof over their heads, enables them to move around as their professional and personal needs evolve, and helps them plan for retirements that don’t revolve so crucially around the fate of a leveraged bet on a single asset.
The odds of our elected officials deliberately taking action that reduces house prices are just marginally better than the ones of them voting themselves out of office. But the odds of them supporting the development of new alternatives are far better, especially if they don’t appear to crowd out the interests of existing homeowners (and voters). And for a federal government that has made supporting and expanding the middle class one of its key priorities, this should be an easy path to take.
Giving up on a dream that’s been spoon-fed to Canadians for decades won’t be easy. As someone who just bought a house (in Calgary, mind you), I get the appeal. But some dreams are meant to die — especially when fulfilling them can kill so many other ones.