Millennials and Gen Z deserve compensation for protecting the housing wealth of homeowners who’ve come before them
Over the last half century, homeowners have gained $1.5 trillion in wealth. Rising prices have driven up their equity, building savings and retirement nest eggs on which many are now counting.
Our housing policies are designed to protect these homeowner equity gains. By choosing policy levers that sustain high prices, governments have insulated wealth windfalls for many existing homeowners.
The cost of this choice is punishingly high rents and home prices that harm the finances of Millennials and Gen Z. This limits their housing options, as well as their choices about work, education and starting families.
Compensation for this profound act of intergenerational solidarity is long overdue. Add your voice to our call to deliver it.
What is compensation?
Millennials and Gen Z deserve a larger share of the $1.5 trillion in housing wealth their economic pain has helped build. Our plan would deliver $14 billion without any new taxes, so it’s time for young people to think BIG about how they want their share paid out. So tell us your ideas!
Would you like…
- A Housing Wealth Dividend that pays every adult aged 18-39 $1,000 a year?
- Billions more invested in postsecondary education to bring down tuition and shore up student housing?
- To pay no income tax on the first $200,000 to $500,000 of lifetime earnings, as proposed by thought leaders like Sean Speer and Max Fawcett?
- Billions more invested in speeding up the roll out of $10 a day child care, so no family faces rent- or mortgage-sized child care payments?
- Every child born to receive a Head-Start Fund of $10,000, as proposed by Build Canada?
We compensate workers hurt on the job to minimize the social and economic costs of their injuries. Compensating young people for protecting homeowner wealth will similarly reduce the social and economic burdens our housing policy choices have imposed on them.
How do we pay for compensation?
By making responsible updates to retirement policies
At least $14 billion in compensation could be delivered by modernizing outdated retirement policies in ways that most Canadians support.
Old Age Security sends $18,000 a year in taxpayer funded cash subsidies to retired couples with $185,000 in household income. Trimming these subsidies only for those with six-figure incomes would save $7 billion/year right now - and $9 billion by 2030.
Canada spends $7 billion a year to fund two retiree tax shelters that fail to reach the poorest seniors. As our population ages and living costs rise, these funds could be used to make the biggest affordability gains in decades for young and old alike.
With the savings from these responsible reforms, Canada could:
- Eliminate poverty for 400,000 seniors
AND
- Help a million young people afford rent
- Fund 100,000 more $10-a-day child care spaces
- Prevent cuts to Canada Student Grants for one million students
- Create tens-of-thousands of jobs via an expanded Youth Climate Corps
By eliminating ageism in Canada’s housing policies
$5 billion in compensation could be delivered by asking those who’ve gained the most from rising home prices to show some reciprocity to the young people who’ve protected their wealth gains.
There is structural ageism in housing policies that protect wealth gains from (primarily older) homeowners at the cost of affordable homes for the generations who follow. A first step to eliminate it is making property taxes progressive – just like income taxes.
Our approach asks the 10% of owners with homes over $1 million to contribute slightly more (just 0.2% – 1%) to invest more in affordable homes. This design better captures wealth gained from decades of home value increases than changes to capital gains or the principal residence exemption.
Could compensation begin with a Housing Strategy for Young People?
MP Braedon Clark is calling on all parties to support a National Strategy on Housing for Young Canadians. Like the people who power Gen Squeeze, he recognizes that:
“Access to affordable housing is the foundation for opportunity, yet today, young Canadians are being priced out, locked out, and forced to compromise their futures… Young Canadians can’t build a life for themselves if they can’t afford a place to live, and the ripple effects will threaten the entire Canadian economy.”
– Braedon Clark, Member of Parliament for Sackville–Bedford–Preston
We welcome MP Clark's leadership, and applaud his efforts to draw attention to the challenges young people face in our housing system. A National Strategy could be an important first step in identifying and implementing the solutions we need - and delivering the compensation young people deserve.
That’s why we’re lending our voice and support. We hope you will too.
Send a letter to your MP urging them to vote in favour of Bill C-227: An Act to Establish a National Strategy on Housing for Young Canadians.
Each of Canada's major federal political parties has already acknowledged the harm young people face in our housing system. Now they have a chance to show that they’ll back up these words with actions.
