Gen Squeeze’s latest housing affordability analysis of the gap between home prices and earnings confirms that our primary goal should be that home prices stall for many years ahead – or even continue to fall moderately.
Our poll suggests many Canadians are open to changing a dysfunctional housing system that pits younger aspiring home owners working to overcome the chasm between home prices and earnings, against older established home owners who bought into the market decades ago and have watched as rising prices created wealth windfalls.
Generation Squeeze has been busy crunching the latest data on housing prices in Canada, building on past work to expose the disconnect between home values and earnings from paid work. We started with Ontario, to give voters in that province the most up-to-date information on housing ahead of their June provincial election. Spoiler alert – what we’ve found isn’t pretty.
You might have heard us say that there’s no silver bullet to fix housing affordability - only silver buckshot. Housing supply is one piece of the puzzle, protections for renters is another, and so is tax policy. One-piece we haven’t talked about much yet is monetary policy. Yes, we know it’s not exactly sexy. But for anyone struggling to afford a home, or anyone concerned about whether their kids can afford a home, things like interest rates and inflation are important. We explain how our cheap credit system is contributing to Canada’s housing crisis.
Just like governments have introduced a price on pollution to lower our emissions and tackle climate change, this report recommends putting a modest price on housing inequity to apply downward pressure on the skyrocketing housing prices that have landed Canada in an affordability crisis. We can start down this path by adding a small surtax (starting at 0.2% and peaking at 1%) on homes valued over $1 million. The surtax would help to disrupt Canada’s addiction to high and rising home values by signalling that earnings from hard work shouldn’t be taxed more than wealth home owners gain from rising home prices while they sleep and watch TV.
solutions lab report
Wealth and the Problem of Housing Inequity across Generations: A Solutions Lab examines how everyday Canadians are entangled in a web of public policies that motivate them to count on rising home prices to gain wealth – even though these same high prices make it harder and harder for those who follow to afford a home at all. When home prices rise faster than the incomes of Canadians, we erode affordability. A good home should be in reach for what hard work can earn.
In October 2020, Gen Squeeze released new data showing that British Columbia remains the worst economy in Canada when it comes to earning enough to cover one of the biggest costs of living – housing. This means BC’s economy is especially problematic for young people, newcomers and others who struggle to afford housing here.
It's not news that the cost of buying a home in many parts of Canada is a struggle for younger people. Average home prices in Canada are more than double what is affordable for younger Canadians, according to research we released that illustrates the state of housing affordability in every province and major cities within them.
If you get a bunch of housing sector leaders in a room for a day, what can they all agree on? To find out, we convened a diverse mix of 48 housing experts from Metro Vancouver, Victoria and Toronto. We wanted to find the common ground principles that tie diverse interests together and find a way to reform our housing system from there.
With the release of this report, Gen Squeeze launched its CODE RED Campaign, which seeks to rein in housing costs for both renters and prospective owners. The report is a wake-up call, shining a spotlight on the epic struggle facing many younger residents in Metro Vancouver. We hope other jurisdictions can learn from, and avoid the crisis affecting this part of the country.