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Canada Grapples with Housing Affordability Crisis as Election Looms
Housing affordability has emerged as a paramount concern in Canada, overshadowing even international trade disputes. As an election approaches, Canadian voters are increasingly anxious about whether any political party can effectively address this escalating, generational challenge, particularly in cities like Vancouver, consistently ranked among the world’s least affordable housing markets.
Generational Divide in Home Ownership
Willow Yamauchi, a Vancouver resident, recalls purchasing her family home 25 years ago for a relatively modest C$275,000, equivalent to approximately C$435,000 ($312,000; £236,400) today. That same property now commands a price in the millions.
In Vancouver, stories like Ms. Yamauchi’s are commonplace, mirroring the city’s persistent rain. In 2000, the average price for a detached house in Vancouver hovered around C$350,000. Currently, it exceeds C$2 million.
“My husband and I were fortunate to buy when we did,” reflects the 52-year-old writer. As a member of Generation X, timing proved advantageous.
However, she notes, the same cannot be said for younger generations who, lacking substantial family financial assistance, are effectively excluded from the Vancouver housing market where they grew up.
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Vancouver: Epicenter of Unaffordable Housing
Vancouver, a vibrant cultural and economic center with a population under one million, is frequently cited as the epicenter of Canada’s housing crisis. A study by Chapman University in California designated Vancouver as one of the most “impossibly unaffordable” cities globally.
This issue extends beyond Vancouver. Canada as a nation exhibits one of the highest ratios of house prices to income among developed countries.
National data from 2021 indicates an average after-tax household income of roughly C$88,000, while the average home price reached C$713,500 – over eight times greater. This disparity is even more pronounced in major urban centers like Toronto and Vancouver.
Election Focus: Housing Crisis
For numerous Canadians, housing affordability is a top election priority, recently rivaled by concerns over international trade relations. Prior to these external factors, anxieties about housing affordability had been a boon for the Conservative Party, often perceived as best equipped to resolve the crisis. Their focus on economic issues had posed a threat to the then-governing Liberal party, which recently regained poll leadership amidst trade tensions.
Despite these shifting political landscapes, housing remained a key topic in federal leaders’ debates. During a French-language debate, a moderator presented data showcasing significant home price increases in Montreal, Toronto, and Vancouver over the past decade.
“I am certain this comes as no surprise,” the moderator remarked to the leaders, before inquiring about their strategies to address the housing crisis.
Youth Concerns and Postponed Dreams
Surveys reveal heightened anxiety among young people regarding the housing crisis and its implications for their future.
Discussions with students at the University of British Columbia (UBC) in Vancouver underscored the issue’s prominence. Many students reported residing at home to minimize expenses or paying between C$1,100 and C$1,500 for single-room accommodation near campus, frequently sharing residences with multiple occupants.
Emily Chu, a 24-year-old UBC student in her final semester, recounted having to defer her studies for two years to work, as she struggled to manage both tuition and rent.
Currently, she shares an apartment with her brother, who provides primary rent support. Ms. Chu considers herself fortunate.
Regarding future homeownership, she states it is “not even possible” for most of her peers. “Everyone just assumes that we can’t ever own housing.”
Young professionals with stable employment, such as Margareta Dovgal, also face housing inaccessibility. The 28-year-old director at a Vancouver-based non-profit has contemplated relocating to Alberta due to its lower living costs, despite her deep roots in Vancouver.
However, even Calgary, Alberta’s largest city, has witnessed a 15% surge in house prices in 2024 compared to the prior year, coinciding with its highest population growth rate since 2001.
Roots of the Housing Affordability Crisis
The origins of Canada’s housing affordability crisis are multifaceted. A central factor is insufficient housing supply failing to meet population growth, thereby inflating costs for both buyers and renters.
The Canada Mortgage and Housing Corporation (CMHC) estimates a need for over 3.8 million new homes within the next six years to rectify the housing shortage.
However, current construction rates fall short of this target, raising doubts about Canada’s ability to meet this demand. Experts point to obstacles like the high cost and limited availability of land in urban areas, where a majority of Canadians prefer to reside and work, hindering rapid construction.
Regional challenges also exist, including municipal zoning regulations that restrict the development of more affordable, higher-density housing options – such as apartments or multiplexes – in certain neighbourhoods.
Daniel Oleksiuk, co-founder of Abundant Housing Vancouver, highlights Vancouver as an example, where historically, over half the land has been zoned exclusively for single-family homes.
“We have essentially reserved most of the land,” Mr. Oleksiuk explained. “Entire neighborhoods are dominated by homes valued at three to five million dollars.”
Political Platforms and Proposed Solutions
Major federal parties have presented campaign platforms aimed at resolving the housing crisis, all prioritizing accelerated home construction.
The Liberals propose constructing 500,000 new homes annually through a new government agency, Build Canada Homes, tasked with overseeing and funding affordable housing development – a strategy reminiscent of post-World War II initiatives to house veterans.
Critics question the feasibility of this target, as it would necessitate more than doubling Canada’s current construction pace.
The Conservatives advocate linking federal funding to housing starts, rewarding cities that increase construction and penalizing those impeding development – a policy employing both incentives and disincentives.
Furthermore, the Conservatives pledged to eliminate federal taxes on newly built homes to reduce costs for prospective homebuyers. Critics argue this measure might have limited impact, given that most home purchases in Canada involve resale properties rather than new constructions.
Voters consulted by the BBC expressed support for any initiatives to boost housing construction across Canada.
While provincial and municipal governments largely govern housing, Ms. Dovgal emphasizes the federal government’s capacity “to lead persuasively” and implement measures facilitating more cost-effective and streamlined construction nationwide.
However, observers closely monitoring the issue caution that proposed measures might be insufficient.
Generational Tension and Wealth Disparity
Paul Kershaw, a public policy professor at UBC and founder of Generation Squeeze, contends that politicians have evaded addressing the significant wealth gains older homeowners have accrued from the housing crisis.
“The implicit political agreement has asked younger Canadians to endure higher rents and mortgages to safeguard elevated home values for older homeowners,” Kershaw argues.
“None of the parties are truly acknowledging this generational friction,” he adds, suggesting politicians may perceive political risks in attempting to moderate housing costs and, consequently, older Canadians’ assets.
Professor Kershaw terms this a “cultural issue” and suggests parties should also prioritize reducing costs for younger demographics to alleviate this generational burden.
Resolving the housing crisis, he maintains, is as crucial as defending national sovereignty and prosperity against international trade pressures.
The “dysfunction pervading our housing market undermines national well-being,” he asserts.
Until effective solutions are implemented, the prospect of homeownership remains distant for many.
Ms. Dovgal remarks, with a hint of resignation, that aside from relocation, “you have to win the lottery, or marry a multi-millionaire. These are essentially the available options.”