Making a home isn’t supposed to be easy. You’ve got to want it. Work for it. Sacrifice. Overcome obstacles. Because making a home is proud work that builds families and communities.
When I think about the work involved in building a home, I take inspiration from one of BC’s iconic animals – the salmon. Few species match salmon for the effort they put in to making good childhood homes for their offspring.
Salmon don’t take the easy route. They don’t go with the flow. They swim up river for hundreds of kilometers traversing waterfalls and beating past bears. They suck it up, literally and figuratively, to reach spawning grounds.
So too, younger Canadians should suck it up. In response to changes in the real estate market, we all have personal responsibility to adapt our saving and spending practices, and to 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 too must policy makers, in recognition that the swim upstream is far more challenging now than when today’s aging population started out.
Our river is polluted by jobs that pay young adults thousands of dollars less for full-time work than in 1976 (once you adjust for inflation).
The waterfalls are two and three times taller, because the cost of housing has skyrocketed by hundreds of thousands of dollars across the country.
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.
In some regions like Metro Vancouver and Metro Toronto, the crisis has grown to #CodeRed proportions because the swim upstream has been almost entirely dammed off.
Whereas it used to take the typical young adult around five years of full-time work to save a 20 per cent down payment on an average home in Metro Vancouver, now it takes 23 years. Although half of British Columbians live in the Metro region, just 15 per cent of homes cost less than half a million dollars and provide access to more than two bedrooms. A generation ago, half a million dollars would have bought two entire homes (after inflation).
Happily, there is hope in our story of spawning salmon. When Canadians dam off a river for public good, we build a ladder for salmon to swim up, and over, and around the hydro dam.
That’s what younger generations now need as we try to make a go of it in this troublesome real estate market – our own version of a salmon ladder.
The first step would be a principled one: the principle of “Homes first. Investments second.” We need decision makers to recognize that the primary purpose of our housing market should be to deliver an efficient supply of suitable homes that are in reach for what typical people can earn in the region. Returns on real estate investments are good, but should be a secondary consideration to keeping homes in reach.
That’s why Vancouver Mayor Robertson deserves credit for proposing an Empty Homes Tax. Keeping homes in reach requires that we tax housing wealth more fairly, with the intention to slow down the escalation in prices and free up stock in which locals can live. This innovation is so important, we need Mayors throughout BC, and in many cities across the country, to implement similar measures.
Some will debate the rate at which the Empty Homes Tax should be set. Others will question how to measure when a home is empty, or what constitutes a principled residence exempt from the tax. It may even be useful for other municipalities to adopt variations on the Vancouver answers so that we learn from a diversity of approaches.
But let there be no mistake, when people speak out against an Empty Homes Tax, they speak against younger generations who face a daunting swim upstream. Whether they reside here or abroad, people who purchase homes for purposes other than living in them or renting them out contribute to market forces that are driving housing prices beyond reach for a large, and growing, proportion of younger Canadians and newcomers to the country.
So a tax designed to incentivize investors to rent out their homes to residents (not visitors via AirBnB) is timely. And it’s time for young and old alike to support such measures so that our city, province and country work for all generations.
Dr. Paul Kershaw is a policy professor at the University of BC School of Population Health, and Founder of Generation Squeeze, which launched the #CodeRed housing campaign.