out of reach & out of control
by Dr. Paul Kershaw and Anita Minh
• Generation Squeeze is a project co-hosted by the University of British Columbia and the Association for Generational Equity (AGE), a national non-profit. Generation Squeeze began as a University of British Columbia project researching generational inequality in Canada. On Wednesday May 25th, Generation Squeeze launched the Code Red Campaign to address the housing affordability crisis, with a particular (but not exclusive) emphasis on BC. www.gensqueeze.ca
Coming out of the Great Depression and World War II, many Canadians could not afford a doctor – especially in Saskatchewan. It’s no coincidence that the father of Canadian Medical Care, the great Tommy Douglas, had his roots in that prairie province. The gravity of circumstances in Saskatchewan motivated Mr. Douglas to dream differently for our country about how we might pay for and provide access to medical care. Eventually, his dream awoke a nation to the broader pan-Canadian problem of unaffordable health care. And over time, his dream became our identity. [We] Canadians now define ourselves in large part by our commitments to publicly provided medical care. We define ourselves by a noble policy adaptation to a problem that first reached intolerable limits in a particular region.
We face a similar scenario today with respect to housing. Between 1976 and 1980, the average cost of a Canadian home was $199,182, after adjusting for inflation and reporting the historical prices in 2014 dollars. The average price in 2014 was $408,068. This means the average home doubled in price across the country. In British Columbia, the average cost more than doubled, surpassing $568,000. In Metro Vancouver, the average price more than tripled, reaching $813,000.
BC Assessment (2015) has since reported that the province witnessed strong growth in housing prices again in 2015. The Economist (2015) magazine routinely ranks Vancouver among the most livable cities on the planet. In this study, we challenge the Economist and other commentators to reassess this ranking from the standpoint of young adults who grew up or trained in the region. This study will show that Vancouver is now the most difficult city in the country in which to make a home as a young adult. Markus Moos previously described “generationed spaces” emerging in the Vancouver housing market. We think the data show that these patterns risk turning the city into a generational ghost town – one in which the vast majority of young people cannot house a family in anything resembling the norms that were taken for granted a generation ago. The situation is not much better throughout the Metro region. And while the outskirts of the region become bedroom communities for more central parts of the metropolis, this adaptation comes at the cost of long commutes, tightening the vice grip squeezing many young residents for time and money.
Vancouver is a canary in the national coal mine. While our study will show the housing problem is particularly grave in Metro Vancouver, the resulting lessons are national in scope. Among the factors driving housing prices to double across the country are straightforward supply and demand issues. In 1976, Canada’s population was 22 million and less urban. Today, our population is over 35 million (Statistics Canada 2014) and we converge more in urban settings in search of employment. With horizontal space in our urban cities a limited commodity, growing demand for a constrained supply has increased prices, while driving developers and buyers to look upward in search of space, often in skyscrapers.
This trend is not likely to change in any dramatic way. Even as birth rates remain below replacement rates, our population will not be shrinking. Even as Boomers age and eventually sell their homes, it is unlikely there will be a sudden price “correction” on a scale that reverses the doubling of housing prices since 1976 – when the majority of Boomers came of age as young adults. Why? Because Canada is part of a global population that is now over seven billion; and this global population faces increasing threats from climate change, let alone war and economic hardship in particular regions. We can therefore anticipate that people from across the globe will turn their attention to the second largest geographic country on the planet, with a strong, peaceful, democratic tradition and a reasonably solid economy. This will sustain, if not increase, demand for housing in the years ahead, most likely in our urban centres where employment is concentrated.
Fortunately, our national history shows there is reason for Canadians to feel confident that we can and will adapt. Vancouver is to housing today what Saskatchewan was to medical care in the 1940s and 50s. From within the insupportable housing situation facing generations of young people in Vancouver, we must search for the vision that motivated the likes of Tommy Douglas to dream differently for our country. We must awaken the nation to the pan-Canadian problem of housing prices that stymy entire generations. Over time, this dream may also become part of our identity – the kind of national commitment to policy adaptation that makes us proud to be Canadian.
To foreshadow the looming risks for the country, we organize the study into three parts. The first documents how housing prices have changed across Canada, British Columbia, Metro Toronto and Metro Vancouver relative to earnings for young adults. We examine how these changes have increased the number of years that people must work to save a down payment today compared to 1976; and have increased the number of months of work required each year to pay the annual average mortgage. We compare what these changes mean for wealth accumulation and debt for Canadians of different ages.
In part two, we shine a light on the reality of living today in Metro Vancouver specifically. Following the BC Real Estate Association (2015), we agree the dialogue should not be overly distracted by the influence that multi-million dollar home purchases have on the “average” price. Accordingly, we examine the stock of housing available below the average price of $813,000, paying particular attention to housing up to $500,000 across the region, and by city within Metro Vancouver.
The third part moves from describing the problem to search for solutions. In anticipation of the national housing strategy proposed on the campaign trail by the new federal Liberal government, we offer 10 propositions to stimulate dialogue in Canada about what it will take to rethink housing policy for generations.
Excerpted from the study Code Red: Rethinking Canadian Housing Policy (2016) by Paul Kershaw and Anita Minh. See the full study at Generation Squeeze, www.gensqueeze.ca/resources
The Code Red Campaign
summary by Eric Swanson
Generation Squeeze, an umbrella effort to increase the political clout of Canadians in their 20s to 40s, has launched what they’re calling the Code Red Campaign.
Though all levels of government have an important role to play in ensuring people have a decent shot at affording a suitable home, the campaign is timed to coincide with the lead-up to the next BC provincial election and provincial policy will temporarily take centre-stage.
The good news is there is no shortage of specific policy options to meaningfully address the crisis. On this front, Generation Squeeze has contributed to the public dialogue by releasing a detailed report that includes 10 policy propositions, ranging from those already on table – like additional taxes on foreign investors and speculators – to more provocative alterations to our property tax system.
The report also recognizes the tight ties between housing and transportation and reiterates the call for additional investments in families with young children to ensure that child care no longer risks costing as much as a second mortgage.
As the next BC election draws closer, the Code Red campaign will contribute to a public debate over the best specific policy options. However, to start, the campaign is organizing around what they hope is a bedrock, common-ground policy principle of Homes First.
Code Red organizers describe the Homes First principle this way: Canada’s housing market should be regulated primarily to provide an efficient supply of affordable, suitable homes for community members and families to live in. The current excesses in the use of local housing as windfall investment vehicles and places to park [often international] capital need to be immediately curbed.
Petition, pledges, window signs & lights
A Homes First petition has just begun to circulate, which you can sign at www.gensqueeze.ca/homes_first
As the campaign progresses, BC election candidates will be called upon to support the principle of Homes First by signing an online political pledge and organizers will be counting on members of the public to ask their local candidates to participate.
The name Code Red communicates a state of emergency/crisis and is being paired with a siren symbol in campaign window signs and other materials. Inspired by the False Creek Residents urban parkland campaign, Code Red lights are also being distributed for people to place in their porches/balconies/windows/etc. as an additional way to show support.
Resources and time
The reality of the affordability crisis is that many British Columbians are squeezed for time and money. Occupied with the responsibilities of work, school, family and life, it can be difficult to find the time and energy to get involved.
At the same time, securing meaningful change takes resources. Lots of resources. Both money and time. In recognition of those simultaneous realities, Generation Squeeze is raising monthly contributions to keep the Code Red network coordinated and effective. When you don’t have time, the network will work for you and when you do, they’ll work with you.
In either case, funds are required. Members of the public are invited to contribute as little as $1.87 per month to help pay for organizers and materials. See www.gensqueeze.ca/donate
Code Red activities will expand through the summer and fall, with more and more opportunities to get involved. However, Generation Squeeze is stressing that the first step is raising sufficient funding to pay for organizers to make those additional activities possible.
Read the full Code Red report and learn more about this new entry into the housing debate at www.gensqueeze.ca
Housing crisis newsbites
by Bruce Mason
“Affordability” is a Lower Mainland and Victoria buzzword. But growing cries for BC’s government to do something about foreign real estate investment are falling on deaf ears. When asked why the BC Liberals aren’t doing more, Housing Minister Rich Coleman said, “I don’t worry about that noise that comes with it because that’s just noise. I guess some people just have to get up and whine every day.”
Vancouver Mayor Gregor Robertson’s call for extraordinary taxes on housing speculation was rejected outright by Christy Clark, who argued it could wipe out billions in home equity.
At press time, she announced Nu Stream Realty and Sutton West Coast Realty would be part of her current trade mission.
“Bad optics… to take brokerage firms along on a trip to Asia when people are very concerned about the extent to which foreign capital is driving up prices here,” says UBC Business Prof. Tsur Somerville.
But ‘Clark and Co.’ has dug in its heels, unlike government response in every other hot, global housing market. A year ago, LIU Fei, Consul General of the People’s Republic of China in Vancouver, reported, “In this situation, the Chinese government would come out and say, ‘Now, we should put some quota on the houses for those with low-incomes.’ This is the regulation in China.”
Andrew MacLeod, who chronicles BC’s stark and growing inequity, says, “BC’s economic growth may be leading Canada as the provincial government frequently reminds us, but it’s little comfort to the many people who are struggling to afford a place to live, coping with high debt payments and receiving stagnating wages.” His book, A Better Place on Earth, has just earned the George Ryga Award for Social Awareness (see Common Ground review, July, 2015).