Globe & Mail: The one question that all politicians dodge: Do housing prices need to fall?

Originally published in The Globe & Mail on May 24, 2025

The politics of housing in Canada hinge on a quiet bargain that’s only now being exposed. It was put on awkward display recently by Gregor Robertson, Canada’s new federal Minister of Housing. In his first scrum after being sworn in, he twisted himself in knots trying to avoid saying whether home prices should fall – even slightly. His discomfort said more than any words could.

Like many politicians before him, Minister Robertson was trying to sidestep the most important – and politically dangerous – question in our housing debate: Should home prices rise, stall or fall? Until we answer it, we can’t fix what’s broken in Canada’s housing system. But politicians will dodge it so long as they fear backlash from older homeowners whose wealth is tied to high prices, or younger owners who risk going under water if prices fall.

That’s why Canada urgently needs a national task force to make this question safe to ask and necessary to answer.

As I often note in this column, the intergenerational tension revealed by Canada’s housing wealth inequality fuels the most damaging features of our system. Without political willingness to say home values should stall – let alone fall – the default is that Millennials and Gen Z must pay higher rents or larger mortgages to preserve the wealth that older Canadians, like me, have gained from decades of rising home values.

Amid speculation that younger voters lean Conservative and older voters Liberal, a national task force is essential to prevent partisan politics from deepening generational divides. Both parties stand to benefit. My analysis of their 2025 election platforms reveals a shared weakness: Neither confronts the core question of what should happen to home prices. Instead, both promise that boosting supply will restore affordability based on ambitious (some might say unrealistic) assumptions about how many more units can be built in the near term.

So, in a strange way, Mr. Robertson’s early missteps may have been a gift. They provoked rare, welcome critique – including from The Globe and Mail’s Editorial Board – of the persistent political fiction that we can achieve greater housing affordability without home values dropping. Public pushback is a sign Canadians may be ready to open the doors on a conversation our leaders have long avoided.

That wasn’t the case five years ago, when I co-led a “Solutions Lab” with the Canada Mortgage and Housing Corporation focused on intergenerational inequities. We put the question of home prices at the centre of our work. I expected it would be easy to build consensus that prices should minimally stall so incomes could catch up eventually. But many still clung to the comforting illusion that home values could keep climbing while affordability improved.

That’s a mathematical impossibility. When prices outpace earnings to generate wealth, they inevitably drive up rents and mortgages for those entering the system.

We must confront this trade-off. Reasonable people can disagree on how much home prices should fall, or whether long-term stalling is good enough, because it protects wealth gained by older owners while avoiding the risk that younger buyers end up owing more than their homes are worth. But this disagreement belongs in public view – so Canadians can weigh the options, and politicians can find a path forward that balances generational fairness with financial stability.

That’s why a task force would be helpful. It should bring together homeowners and renters, older and younger Canadians, policy experts and community leaders, to negotiate a new intergenerational bargain.

I suspect the process would build support for home prices to stall or fall moderately, as they have over the past two years. This consensus would require compensation for Millennials and Gen Z, because they would still pay higher rents and larger mortgages to protect the wealth gained by older people like me. In a recent column, I proposed one example: a $1,000 annual dividend for every Canadian aged 18 to 39, funded by financially secure older homeowners.

Canada’s housing system is at a crossroads. A national task force on home prices would signal that we’re ready to confront hard truths, and search for common ground across generations. Minister Robertson’s early misstep has opened the door for our country to finally answer the right question.

Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze, Canada’s leading voice for generational fairness. You can follow Gen Squeeze on Bluesky, Facebook, Instagram, and LinkedIn, and subscribe to Paul’s Hard Truths podcast.