Today's discussion:

The Canadian dream of homeownership is dying

Locking young people out of home ownership is bad for the political fortunes of incumbent governments and bad for the economy. It is also a threat to the social stability of Canada. Governments cannot afford to wait for new supply to come onto the market to address the dying dream of homeownership.

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Al Raftis

The author makes some good suggestions in the short term. However, our country faces a fundamental problem of lack of growth in wealth. Our economy is stagnant. Businesses are not investing in Canada. Without economic growth, the free market doesn’t work well. Government interventions are rarely helpful – often hurting real investment. I’m afraid we need to get back to basics. Get educated, get a job, get married, have children, focus on good old family values. Governments should support this culture. Mr. Trudeau’s government has done the opposite

19th March 2024 at 8:42 am
Kevin Scott

Here is a concept derived from my own situation. I live in one of those post ww2 bungalows. Yes, the closets are small, but at 1200 square feet , and with new insulation and windows, it is cheap to heat, maintain and easy to live in. Instead, these bungalows are being torn down and in their place, two million dollar , 3 story infills. How is this going to help the housing? Driving out to Cochrane on the IA, 4 story houses, row on row are on my right. 4 Story?? Really? Bring down the cost of homes by bringing down the size.

19th March 2024 at 10:45 am

I am with you Kevin. Part of the problem is the expectations that people have. My husband and I retired early to a very small town on Manitoba. Not everyone can do that, as people still have to be able to find work. However, we bought a small house, did renovations and live very happily in under 800 sq ft. We don’t have granite countertops or hardwood floors. We don’t have a storage unit full of stuff we never use. Our vehicles are over 10 years old. We have stopped keeping up with the Jones’. Growing up, my family of 5 had a 1000 sq ft split level, and we were happy. We didn’t need a 3000+ sq ft house. We have the money, we just choose not to spend it on “stuff”.

My husband worked on an affordable housing project in Calgary a couple of years ago. It had cobblestone streets! How does that help affordability? There doesn’t appear to be a good mix of smaller affordable houses, without all the bells and whistles, and the grandiose homes that cost a fortune to buy. Is that a supply or demand issue? You would think with the complaining about the cost of getting into a house, people would be willing to use less expensive materials (I am mainly thinking of finishings here).

19th March 2024 at 11:29 am
Michael F

My guess is builders build what the buying public want. And I would also guess that the land cost and labour make up a big chunk of the price of a house. Putting some fancier materials in probably doesn’t change the equation that much

19th March 2024 at 11:59 am

What you see driving by can be misleading. In many markets, average home sizes for all new builds are actually falling as more of the market shifts to apartments and other multi-unit housing, even as detached homes get bigger. This is more about detached homes shifting to be a luxury market than everything getting bigger. (Although sure, most young people would love for detached housing to stop being a luxury market and the mid-range option to be a house instead of an apartment.)

19th March 2024 at 11:29 am
john hartley

We should all recognize that the current dysfunctional housing market in Canada is not new. It has been around since at the very least 1974 when the Ontario Government felt impelled to introduce not only The Land Speculation Tax Act, but Land Transfer Tax and Rent Controls, all because of exactly the phenomena we are observing today. The magnitude of the issue has transformed into a monster. Fed by the increasingly profitable development industry that is sucking resources from all other sectors in a classic illustration of the misallocation of resources that occurs in such economic conditions. The Canadian economy has obviously suffered while home ownership, at traditional foundation of our society and economy has been eviscerated. The folks that have gorged on this short term boom are the Laurentians buoyed up by every increasing property values whilst beggaring society as a whole. Virtually every single so called expert in the field is effectively bought and paid for by the industry which has not only captured the governments at Local, provincial and federal levels but has a big hand in any mainstream media left in the country. If there is any hope of derailing this jaggernaut – it is the rage that young adults express and the all too evident emergent social issues. The challenge will be to in some way influence that vestige of the Family Compact that is so very pleased with the present state of affairs, as all to well reflected in all levels of government and all parties none of whom express any real wish to interfere.

19th March 2024 at 7:59 am
Kim Morton

Your first two sentences are basically right. Then you lose it. Due to a variety of government policies, both Federal and Provincial, housing and the taxpayer financed infrastructure required due to massive immigration is about the only industry we have left. And, ultimately, it is not sustainable.

19th March 2024 at 9:54 am
john hartley

Correct as far as it goes. But your sustainable is not the same as those who are benefitting. The property classes are very pleased. This from a dedicated capitalist, from a time when the social contract at least nodded to noblesse oblige. We have an incredibly amount of nobless and very little oblige, currently

19th March 2024 at 10:46 am
Paul Attics

The first half of your comment seems a reasonable take on the roots of our housing shortage.

How is it that the “Laurentians” are able to exclusively “gorge” on this situation? Are “non-Laurentians” simply shut-out? Don’t take advantage due to moral objectives? Not savvy enough to exploit? Not rich enough to buy-in? It seems to me that those with the money and wherewithal, regardless of label, will follow the incentives created by chronic poor policy.

To me this seems like chronic bad policy and poor policy alignment between the various levels of government is the cause. Those with the money/property of course general use their outsized political influence to nudge the laws and regulations ever slightly more in their favor, which, over time, creates a dire situation. A dire situation in a market, housing, that is an essential basic for every citizen. A recipe for societal unrest.

19th March 2024 at 8:46 am
john hartley

Paul you are quite correct in my estimation. However the Laurentians, our property class, have benefitted enormously from this ongoing dysfuntion, at least in the short term. Aided and abetted by the industry and its acoyltes. The lack of any long term vision will comt to haunt us, as incomes fall and social discord rises. All of which is a natural consequence of a classic misallocation of resources. While it may not be long term “sustainable” it has persisted for a very long time already – to our detriment. The great misfortune is that long term wealth which would benefit all immensely, has been deliberatley neglected in favour of policies that encourage this dysfunction. The sale of myths legends and fairy tales in furtherance of this agenda – such as “the shortage of land” “the necessity of densificiation” “the 15 minute city””more density = more affordability”- have all been propagated by vested interests. The astonishing effectiveness of that unremitting propaganda is even more troubling. The effective evisceration of our young adults who are understably enraged is an all too inevitable consequence.

19th March 2024 at 10:43 am
Michael F

Two thirds of Canadians own their home. And that stat puts Canada in the same percentile as many other developed nations. In fact we are ahead of many G7 and EU countries. Is Canada expensive? Yes. So are many other countries experiencing the same affordability crisis we are. There is no magic wand to wave that will solve this issue. It will take years of all levels of government working closely together to make some nominal progress. The Baby Boomer generation is about to start transferring a huge amount of wealth to younger Canadians. This will probably be the biggest form of assistance in helping younger people access the housing market.

19th March 2024 at 12:11 pm

Two thirds of Canadians households live in an owner-occupied home. This includes adult children living with their parents, and people living as a roommate to a homeowner or with other relatives (who are effectively taken out of the denominator because they stop being their own household). This is how they do the stats, but it’s not how anyone in the real world thinks about homeownership rates.

19th March 2024 at 12:46 pm
Kim Morton

I was attempting to do some math on this subject, most of which is above my skills, but roughly comparing what I made as a newly minted trades person in the late 70s, and the costs at the time, compared to today, a trades person would have to make around$65/hr plus benefits, perhaps more to have the same purchasing power today.
High cost of living is mostly caused by higher taxation and regulations imposed by multiple levels of government than anything. Meanwhile, MPs vote themselves yet another raise to keep up with the high cost of extravagant living while pensioners can’t even get a decent return on the money us and our employers were forced to remit for 50 years.

19th March 2024 at 10:01 am
john hartley

The decreasing income is a sad result of our policies. Not so long ago Canadians earned 95% of the income of Americans. We are now down to 78% and on our way down – while the property machine grinds on.

19th March 2024 at 10:48 am

The old us and them mindset has never solved anything, just created more division.

19th March 2024 at 2:53 pm
A. Chezzi

Poilievre and business: Like all populists, he knows how to use what people want to hear. His ability to speak the language of the common person gives him a wide audience. Like all populists, once in office, he will forget his tough talk and move back to what gives him power and influence and monetary gain. He will couch his reversals in language the common person wants to hear speaking of rights and freedoms and benefits for all. He will continue to play on the fears of people while offering them hope which he will hold out like a carrot on the end of a stick. Conservatives and business have always worked hand in hand. Corporations know they have nothing to fear. Poilievre has remained silent on food prices and that is a good indicator of what he will say about business exploiting Canadians……..nothing.

19th March 2024 at 8:57 am
john hartley

Mr. Polievier has said little to persuade anyone that any government he heads will act differently than any other government of the last 50 years.

19th March 2024 at 10:50 am
Michael F

Listen to the recent Canadaland podcast that speculated what a Poilievre government would look like with a panel of pundits. Even the right leaning pundits said he cannot and will not be able to make any appreciable headway on the housing/affordability issue. It’s all just talk.

19th March 2024 at 12:04 pm
Michael B

My parents bought a home in TO for $15 K at 5% in 1954 – north of the Danforth. The house was built in 1917. It was very much a working-class neighbourhood. My father had a steady manufacturing job and moonlighted for extra money, my mother was a homemaker. They raised three kids.
The same house today would cost about $1.3 million. You’d need an income of near $300 K to afford it and forget about the kids.
If I could figure out why that house went from $15 K to $1.3 million during my lifetime I’d be able to explain why younger generations cannot afford housing today. I may even be able to provide a solution.

19th March 2024 at 2:39 pm

Some people need to be able to buy within a few years, but even more need confidence that it’s worth saving and working towards. Those people don’t see the number of other new buyers who have managed to barely claw their way in, they see prices (which might be increased by extending credit availability) and policy (which is tilted towards smaller and smaller units).

Young people can see that governments are restricting the supply of housing (mostly houses and townhouses) that people actually want with no apparent plans to stop doing that, and that when push comes to shove housing affordability is likely going to continue to be put second to other goals like population growth if they conflict. (This is true even if the government is willing to slightly pull back to prevent the very worst effects on demand.) Short-term opportunities to get into the market matter, but so does a longer-term confidence that things will not be allowed to get worse and worse. Despite political rhetoric about a ‘wartime effort’ to build housing, it hardly inspires the same sense of social progress to desperately race to build housing that is worse than the homes most people grew up in to accommodate population growth. Preserving existing single-family homes for families would help, but only so much if policy for new construction seems determined to make houses (and even townhouses) a luxury good in favour of building apartments.

19th March 2024 at 10:06 am

The first obstacle that must be overcome is the belief that there is some entitlement to own a single detached home built into the soil of the country….. There is none… we must look at the intergenerational examples as a way of not only dealing with a roof, but many of the countrys other issues. of course this would take maturity.

19th March 2024 at 2:59 pm

I’d question the entitlement to use land-use policy to pull up the ladder on housing choices previous generations allowed themselves, though. Environmental policy where a large group of people are effectively grandfathered out (by having bought when urban expansion was less restricted) is not a good way to get either support for climate policy or social stability.

19th March 2024 at 4:11 pm
Murray D Skelton

Living as a ‘single’ and in Toronto for over 30 years, the “Dream of a decent home in a desirable neighborhood” was dead-on-arrival when I moved to Toronto in the late 80’s…so what are you saying exactly?
…now couples are permanent renters too?

19th March 2024 at 1:23 pm