Our Goal: Restore Affordability, Forever
Establishing a home will always take hard work and sacrifice. But for too many young Canadians it’s starting to feel impossible. In many places, housing costs have grown out of reach and out of control.
We’re working to make it so that Canadians — young and old alike — can afford a suitable home as renters or owners, by ourselves or with others, restoring affordability forever (read this for definitions).
This will be very difficult. But, it’s doable.
Guiding principle: Homes First (investments second)
To succeed, the primary purpose of our housing market must be to provide homes for people to live in, and only secondarily as a means to earn an investment return.
If we allow housing to be treated primarily as a commodity or investment vehicle, then we risk speculative bubbles and runaway costs like we’ve experienced in Metro Vancouver, Greater Toronto and other areas.
Our basic plan
Affordability can be restored through some combination of higher incomes and lower costs. In many Canadian communities, housing costs have risen so sharply that it’s unrealistic to expect young peoples’ incomes to catch up.
So, while we also need to wrestle with the future of work and incomes, this basic plan focuses on reining in costs.*
In the regular market, we need to dial down harmful demand, dial up the right kind of supply and rebalance the way we tax housing wealth (dial-up) vs. income (dial-down). Adjusting these dials won’t guarantee affordability, but we can use them to push the market’s creative energies in the right direction.
At the same time, we need to scale up what we’re calling the “permanently affordable” market, where land trusts, covenants, and other mechanisms are being used to shelter homes from the volatility of the regular market in order to guarantee affordability on a permanent basis.
* We also need to ensure major costs like child care and transit no longer add up to extra mortgage or rent-sized payments.
Sketching some details
Building on that basic two-path plan, we can start sketching out some details.
Path one - adjusting the dials of the regular housing market
We’re currently encouraging governments to:
Restrict harmful demand — by tracking and restricting global and domestic speculation, cracking down on fraud, taxing empty homes, restricting and regulating short-term rentals, and channeling private investment (foreign and domestic) into building more suitable supply.
Increase suitable supply — by protecting/stabilizing existing affordable supply, supporting YIMBY-ism (yes in my back yard!), opening up low-density zoning to enable more family-sized units, emphasizing purpose-built rental, and prioritizing substantial density near transit corridors.
Rebalance housing and income taxes — dialing up taxes on housing wealth windfalls and dialing down taxes on local income — to help restrict harmful demand and encourage suitable supply, and to address inequalities created by the out of control housing market.
Path two - scaling up the permanently affordable market
We’re currently encouraging governments to:
Leverage publicly owned land - to build permanently affordable supply (e.g. instead of selling it off to reduce deficits in the short-term).
Make it easier for large private landowners - to build and operate permanently affordable supply.
Explore incentives for individual homeowners - if we could find a way to incentivize individuals to voluntarily add their properties to a permanently affordable stock, that could be transformative.
Within that basic plan, our current priorities are:
Mobilize younger residents to support the building of new homes
With a focus on Metro Vancouver — to start — we're working to change the culture around new supply by getting more people involved, and by showing what we can accomplish when we focus on opportunity instead of fear.
Restrict harmful demand from global capital and short-term rental operators
It's harder to get excited about building lots of new homes if too many of them end up getting snapped up by non-resident buyers, domestic speculators, those seeking to run commercial STR operations and others looking to use these homes primarily as investments — which altogether inflate costs for everyone else.
We're currently prioritizing the issues of global capital (from a provincial and federal perspective) and STRs (from a municipal perspective). You can read about our approach to global capital here. On STRs, we're encouraging municipalities to follow the lead of places like Vancouver, Victoria and Toronto.
Rebalance our tax system to address growing inequalities
As housing values have spiralled out of control, huge new inequalities have been created between renters and owners, and young and old. Our tax system has yet to catch up, burdening many of us more than is fair. That's why we're proposing a #TaxShift: less tax on local income, more tax on crazy housing values, enabling better investments in young and old alike.
"Explanations exist; they have existed for all time; there is always a well-known solution to every human problem — neat, plausible, and wrong." — H. L. Mencken
The housing system is dynamic and complex. That shouldn't stop us from acting boldly, but it should keep us wary of potential oversimplifications and unintended consequences.
At the end of the day, we're all in this together and we need to work together. That doesn't mean agreeing on everything, or presuming we'll ever get it perfectly right...
... it means treating each other with respect and building common ground.
A note about definitions
Let's start with the traditional Canadian definition of “affordability” — where housing eats up no more than 30% of everyone’s pre-tax income, and then modernize it by:
- Adding transportation costs to the mix when appropriate — because the two go hand-in-hand — e.g. utilizing a combined threshold of ~45%, a method increasingly being used in the US; or
- We could decide on some targets using the Canadian "Shelter Consumption Affordability Ratio"
Both of these approaches help push us in the right direction.
But at the end of the day, any definition of affordability is going to be subjective, and that's OK. You tend to know it when you have it, and you feel the pressure when you don't.
The same goes for “suitable”, which we take to mean secure, quality housing that comfortably meets our basic needs as we grow and age. And let’s say we really mean it when we say “forever.” Sure, nothing actually lasts forever, but if we’re going to solve it, let’s try to really solve it.