Owning a home in the GTA is completely out of reach for most young people. Generation Squeeze wants to change that.
Have you ever seen Atlantic salmon swim from Lake Ontario through the streams and rivers of the GTA to make a home for their offspring? You can watch them in the fall at Étienne Brûlé Park along the Humber River, or the Lower Don River Trail, among other places.
Salmon don’t take the easy route. They don’t go with the flow. Instead, they swim up river, traversing waterfalls and slipping past bears, to reach spawning grounds.
Few species match salmon for the effort they put in to making good childhood homes for their kids. They remind us that building a home isn’t supposed to be easy. You’ve got to work for it. Sacrifice. Overcome obstacles.
So too should younger Canadians. In response to real estate pressures, we all have to compromise, adapt our saving and spending practices, and revise our expectations regarding home size, number of bedrooms, access to a yard, and distance from work or school.
But as younger Canadians adapt, so must policy makers. They must recognize that our swim upstream is far more challenging now than when today’s aging population started out—especially in the GTA.
Our river is polluted by precarious jobs that pay young people in the GTA thousands of dollars less for full-time work than in 1976 (once you adjust for inflation). Even though we are more likely to have postsecondary education, life starts out with student debt.
The waterfalls are also three times taller, because the average cost of housing has skyrocketed by nearly half a million dollars in the GTA. Homes are less often a house with a yard, and more often an apartment with a balcony.
There are now far more bears along our journey, happy to fatten their savings from rising home prices as foreign buyers, domestic investors, or simply as retirees keen to use home wealth for retirement security.
Whereas it used to take the typical young Torontonian around six years of full-time work to save a 20 percent down payment on an average home in the GTA, now it takes 20 years.
A young adult must work months more each year to pay the annual mortgage on an average-priced home, even at historically low interest rates.
For many, this will crush dreams of home ownership. Instead, Toronto demands that young people work an extra month each year to pay increasing average annual rents by comparison with the past.
That’s what younger generations now need as we try to make a go of it in this worrying real estate market—a step-by-step ladder of policy adaptations by which we can climb up, and over the many obstacles that constrain our ability to make suitable homes for ourselves and our children.
The #CodeRed campaign started in Vancouver, to push back on the out-of-control property market. Prior to the campaign, the B.C. government claimed housing was only unaffordable in a few neighbourhoods. Now the government acknowledges that B.C. has a housing crisis that harms younger generations, and it has changed policy in a variety of ways. Some of these changes have been good; others had good intentions, but poor execution—all of which Ontario can learn from.
Since housing policy cuts across all levels of government, #CodeRed aims also to influence the National Housing Strategy, and municipal governments.
In Vancouver, the mayor endorsed our #CodeRed campaign and is collaborating with Generation Squeeze to keep the city in reach for younger generations. This includes bold changes like his Empty Homes Tax, and priming Vancouverites to adapt single-detached zoning. The latter is critical to grow the supply of suitable, affordable homes on land already zoned for residences, so we maintain complete communities with green space as well as space for industry.
Building on our momentum in B.C., Generation Squeeze now aims to partner with others in Ontario concerned about affordability in order to help Toronto and the province keep home prices in reach. We’re fortunate to have locals Fatin Chowdry and Amara Possian lead this work.
The first step we propose is a principled one: “Homes first. Investments second.”
We need decision-makers to recognize that the primary purpose of our housing market is to deliver an efficient supply of suitable homes that are in reach for what typical people can earn in the region as renters or owners.
Returns on real estate investments are good, but should be a secondary consideration to keeping homes in reach. This means we should channel private capital from investors (foreign and domestic) for public good by creating incentives for them to invest in beneficial types of housing supply, including more purpose-built rental, diverse multifamily housing, and innovative tenure and equity models.
Our Homes First principle provides a strong foundation on which to build several other policy adaptations, including:
- encourage density in land already zoned for residences;
- level the playing field between renters and owners;
- innovate to build more below-market housing;
- revise tax policy to slow down home prices and raise revenue fairly; and
- ensure child care, parental leave, and transit no longer add up to mortgage-sized payments.
By taking these policy steps together, younger Canadians will have a chance to overcome higher home prices on our lower earnings. History shows we can achieve these policy victories. That’s how we’ll make the GTA, province, and country affordable for all generations.
Dr. Paul Kershaw is a policy professor at the University of BC School of Population Health, and Founder of Generation Squeeze. The #CodeRed campaign launch is on March 11 at Steelworkers Hall at 3p.m.