The study, entitled Code Red: Rethinking Canadian Housing Policy
, published by advocacy group Generation Squeeze, looked at how long it typically takes Canadians to save up for homes.
“It used to take 5 years for a typical young Canadian to save a 20 per cent down payment on an average home. Now it takes 12 years across the country. 15 years in Metro Toronto. 16 years in all of BC. And 23 years in Metro Vancouver,” Dr. Paul Kershaw, an author of the study, and a professor at UBC, said. “Even at historically low interest rates,” he adds, “it then takes the typical young Canadian an extra month of work per year to pay the mortgage. In Metro Toronto and all of BC it takes an extra 2.5 months.”
The study also put forth a number of proposals for addressing affordability, which includes levying property investors – both domestic and foreign – with heftier taxes.
“We face a similar scenario today with respect to housing, and the need to adapt policy across the country. That’s why the latest study published by Generation Squeeze is a solution-oriented document,” Executive Director Eric Swanson said. “It offers 10 propositions for rethinking Canadian housing policy. We offer them as conversation starters.” The propositions are:
- Homes first. Investments second.
- Tax housing wealth to slow down housing price increases
- Don’t just focus on taxing the housing wealth of foreign investors or speculators
- Try to tax net housing wealth, not just gross wealth
- Recognize low interest rates cut both ways for younger generations
- Age matters. But the current treatment of age in housing policy is outdated
- Revisit zoning for single detached homes in housing hot spots like Vancouver and Toronto
- More rental accommodation
- More below-market housing, but
- Don’t let child care, parental leave, transit, etc. add second, third & fourth mortgage payments
The group realizes making housing more affordable while protecting existing home values is difficult.
“That is why it is imperative for political parties to turn their attention in advance of the 2017 election to the broad range of costs squeezing young adults,” Kershaw said. “We can help ease the housing squeeze by no longer tolerating child care, parental leave, transportation, etc. adding up to second, third and fourth mortgage payments.”
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New study spurs housing suggestions to address affordability that could mean lower profits for investors.