We’ve Let Our Housing Crisis Get So Bad, a Crash Is Now Our Least Bad Option

A younger version of me now wouldn't be able to afford the life I led in my 20s - and I didn't even live that well

My aunt, a tail-end boomer with an exceptional level of self-awareness compared to the average elder in her demographic cohort, recently noted to me that if she and my uncle had been born millennials - even with identical jobs and career paths - it's highly unlikely they would have been able to afford their house.

What's even more disheartening, as I pointed out to her, is that younger versions of my partner and I (elder millennials, ourselves) can likely barely imagine the kind of life we lived in our 20s, either - despite it not being too long ago, and our own lack of chance to achieve the typical boomer lifestyle.

In the eyes of many the age of my cousins (via said aunt), on the younger end of millennial - even my meagre advantages seem idyllic and nearly unattainable.

Immediately after getting our degrees and landing our first (low-paying) jobs, my partner and I moved out of our parents' homes and in together. It was never a problem for us to pay our rent without help from our parents. We were also able to explore local, independent restaurants, events, and shops in our vibrant downtown neighbourhood fairly regularly, without breaking the bank. It is even possible that I may have enjoyed the occasional overpriced avocado toast from some of these establishments. We were also able to slowly save up a little, and stay out of debt.

It was at least possible for me to enjoy being just a touch young and careless. Over the course of my (relatively) young(ish) adult life, we seem to have slowly devolved into a society where there is little opportunity to just take a chance - certainly no room to make a mistake.

One could say I made a mistake by not buying property in my early 20s. I suppose, in retrospect, I could have lived at home a few years longer and that may have been feasible. But (as was our humble privilege) few thought that way, back then. Having the luxury to feel as if there was no rush, we had no idea that this was the only opportunity we would have to do so affordably.

My experience differs significantly from that of people 5 years older than me, in that they really did have that luxury - while as it turned out, I did not. The difference between me and everyone following me is even greater. At least I had hope. It's easy for me to see why younger people don't.

Considered in a global context, both me and my younger cousins are still pretty fortunate - but I think it's similar to the notion (however unfair) that crime becomes a more urgent concern when it starts encroaching upon those who are typically part of the secure middle class. If even they can't experience comfort - then who can?

More to the point, when a sense of security and carefree spirit eludes everyone, who will be left with the resilience and creativity to bring forth positive transformations that benefit everyone in society?

When I first moved downtown and started renting in Toronto, the city - and Canada in general - felt ascendant. Famed urbanist Richard Florida even moved here, around the same time. It did seem that we were particularly well positioned to nurture the creative class, back then.

Looking back, however, it appears that we were under the impression that we could become "world class"  without understanding that this would require constant maintenance. Consequently, we stopped caring about the appeal of our city and immediately started selling off its potential. Florida seems to have noticed the shift around the same time I did, in the early 2010s.

This is a problem that will feel familiar to many in the Western world - a lot of the stories coming out of the US and UK could easily come from Canada - however, we have allowed our particular version to reach macabre proportions.

The typical price of a home in Canada exceeds $760,000, reaching well above $1 million in cities like Vancouver and Toronto. These prices are so exorbitant that the average household income required to qualify for Habitat for Humanity aid in the Toronto region last year was $85,352.

New and increasingly outrageous statistics like these continue to emerge, particularly in Toronto. According to a recent report, the minimum wage would need to reach $40 an hour for workers to afford living here. Even better-off Torontonians must earn an annual income of $229,800 to afford the average-priced home in the city.

What's most worrying about this scale of housing price inflation is that it not only prices out creatives, but anyone who does anything at all. It's hugely beneficial to people with existing assets to make passive income, over those doing productive work, leaving the market open only to those who got in years ago.

Not only do investors make up more than one in five property owners, with the majority being 55 and older - a lot of them have three or more properties under their ownership.

What’s also striking is that most of them don't have incomes that would normally qualify them for so many properties - they typically leverage equity from one to buy another. This has created a daisy chain of doom for affordability, presenting a cumulative advantage to those with assets, amid a lack of proper regulation.

This isn't just about those shut out of buying; borrowers who put in the effort to secure a mortgage they can't really afford are also struggling. I don't envy them. At times, I wonder if an earlier crash, though potentially financially ruinous in the short term, might actually be a better option for them too. It could be akin to ripping the bandaid off quickly, rather than letting them endure a slow and agonizing bleed-out.

I feel this more acutely even as I am in a position to possibly buy a place (mainly because freehold prices outside of the GTA and condo prices inside Toronto are down; although I prefer renting, the math starts to work towards buying when rents are exorbitantly high) and I may end up among those with a property worth much less than I paid for it (though I would still likely be able to make payments in this scenario). As I consider my options, I am struck that I can't see a bright future anywhere in Canada unless we stop pushing people to accept less.

In the past, we were a land of opportunity, a place where people went to pursue their dreams and achieve greater heights. Presently, however, we seem to be pressuring people to lower their sights, mirroring the very environments they once sought to leave behind.

During a recent Toronto mayoral debate, Olivia Chow and Ana Bailao both shared how their own family stories wouldn’t be possible today, given our housing crisis. Ana's later remark, however, stuck with me the most: that perhaps young people can't afford that $1.5 million house, but maybe they can stretch their means and buy a smaller $750,000 house to cram into with their siblings - demonstrating the status quo bias that I like to think cost her the election.

There have been a lot of such ideas floating around recently - that maybe "young" people (under 50) simply need to expect less. Why not put their life savings into unlocking their parents' unrealized equity by buying half their house for the privilege of living there - thus securing their parents' retirement funds, as well as making themselves more readily available as caregivers to their parents in their twilight years? This was the premise of an actual article.

Such schemes, along with so-called mom and pop investors, mean that our elderly are not only spending their children's (and grandchildren’s) inheritance - they are essentially garnishing their wages as well, making it near impossible for them to ever have a chance of building a similar quality of life or retirement for themselves.

It's not that I want to see older generations decimated in a crash (I love my aunt, my parents, and many other older people) - rather, I view such an event as a potential means to level the playing field in terms of wealth distribution. Currently, the gerontocracy is not treating other generations fairly.

It’s obvious that no one is going to fix housing, because our governments at all levels seem to have decided it is much more important to preserve assets for our elders at the expense of quality of life for the young. There seems to be an idea that we can wait, indefinitely. But as the young become not so young anymore - many millennials are over or pushing 40 - how long do they expect them to wait to build a good life?

It's essential to recognize the implications beyond the present. The next generation faces a future without a fair shot at success, where hard work and responsibility may not yield the rewards they once did. The consequences extend far beyond economic concerns; it shapes the very fabric of our society, eroding the belief in a future worth striving for.

If we continue down this path, the societal implications could be severe. It will sow the seeds of bitterness, resentment, and a lack of societal cohesion. Our elders, who benefited from the housing boom, may find themselves abandoned by a generation that feels it's past time for their concerns to take priority.

A crash does not guarantee a fix - mishandling it could lead to an even worse situation. However, given our increasingly unfair society, where inherited advantages trump hard work amid a lack of corrective action - a crash emerges as the least bad option.

This disruption would only be our shot, not the ultimate goal.

I just can't help but think that if everything were to break more quickly, we might have a chance to put it back together better sooner, as well.

This would open the door for more homes to be built for people, instead of becoming units for investors. Implementing robust regulations could also discourage such speculative practices from occurring again.

The housing crisis is not just about numbers, economics, or politics - it's about people. It's about the dreams that we hold dear and the future we envision for ourselves and the generations to come. Without a reset, we risk leaving a legacy of broken dreams, unfulfilled aspirations, and a divided society.

I don’t have faith that enough of us have the foresight to realize it, but I still hold out hope that a severe consequence of our complacency could ignite a much-needed proactive societal transformation.

The very least we should all hope for is that every Canadian has a reasonable chance of attaining my level of mediocrity.