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Canadians see a home ownership crisis that governments aren’t addressing

By Kevin Lee      

People across all age groups and political stripes think home ownership is a mark of the ‘middle class,’ yet younger Canadians are anxious about whether they’ll get there.

In Toronto and Vancouver, more than half of respondents to a recent survey done for the Canadian Home Builders’ Association cite declining home affordability and ownership as top concerns. Adrian Farcas photograph courtesy of Flickr
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Home prices have been rising for nearly two decades, far outpacing average income growth. The result is a growing anxiety among younger Canadians about their prospects for home ownership and a middle-class lifestyle. Most feel their political leaders are failing to address this situation—or even making it worse.

New public opinion research, commissioned by the Canadian Home Builders’ Association and led by Allan Gregg of the Earnscliffe Strategy Group, confirms what most Canadians know intuitively: it’s getting harder for young people and families in this country to achieve home ownership. What’s more, there is a very strong sentiment that this is an important principle to protect, and that governments are failing to do so.

More than two in three Canadians polled said that rising home prices and declining ownership ranks as a “very important” issue. And 40 per cent said it is or is tied with their top concern. That level of concern is even higher if they live in the Toronto or Vancouver areas.

In these two census metropolitan areas, more than half of respondents cite declining home affordability and ownership as top concerns. Canadians under the age of 35 express even greater anxiety about home ownership.

The survey also shows a broad consensus, across all age groups and political affiliations, that home ownership is a fundamental marker of “middle class” status in Canada.

Nationally, 74 per cent of Canadians feel that being “middle class” means having access to home ownership. Additionally, 78 per cent of Canadians who consider themselves middle class—and a vast majority of Liberal voters (81 per cent)—link being “middle class” with home ownership.

Three-quarters of Canadians also connect home ownership with greater financial security, and two-thirds agree Canadians who do not own a home will face financial challenges in retirement.

Alarmingly, more than seven in 10 Canadians also feel that falling home ownership rates indicate that Canada’s economic and social system is not performing as it should.

Eighty-one per cent agree it is becoming more difficult for young people to own their own home, and a similar 76 per cent agree that “in the future, only the rich will be able to buy a home in the area they want to live in.”

In short, the current housing situation is perceived as leading a two-class society: those who own, and those who don’t.

An overwhelming majority of those surveyed also believe that governments are failing to address their home ownership concerns.

Only one in 10 Canadians thinks the federal government is doing a good job making sure homes are affordable to the middle class. Almost half say the federal government is doing a poor job in this area. A similar dismal 11 and 10 per cent say provinces and municipalities are doing a good job.

In short, no level of government is seen as being on the right course in supporting home ownership for the middle class and those aspiring to join it.

What conclusions can we draw from this data?

Clearly it’s time governments start working together to restore home ownership to its rightful place, socially and economically—the place Canadians expect governments and home ownership to be.

Politicians seeking to convince Canadians they support the middle class need to ensure they also support home ownership, not hinder it. This is particularly important in relation to younger and new Canadians working hard to join the middle class and become home owners.

It is also clear that while increased government investment in social housing is necessary for its own reasons, members of the public recognize that this is not addressing their issues and concerns over declining market affordability and falling home ownership rates, particularly among middle class Canadians. A limited view of affordable housing does not address middle-class anxiety about housing affordability.

Smart policy choices that can effectively address the underlying issues eroding the middle-class dream of home ownership will require collaboration and coordination across all three levels of government. It will require a focus on affordability, particularly for first-time home buyers.

The federal government has an important role. Directly and indirectly, the government can positively affect the three key areas in need of action: increased supply, in the right places, of the types of housing Canadians seek; avoiding continually increasing the costs of construction through ill-advised taxes, codes, and regulations (it is time research focused on building better houses not for more cost, but for the same price or less); and creating a mortgage and financing environment that is supportive of home ownership for more first-time home buyers. This can be done without undue pressure and risk on the financial system.

Canada’s enviable quality-of-life depends, in large part, on middle-class Canadians being able to achieve their home ownership aspirations. If we want communities that are economically vital, diverse, and strong, action is needed now to have home ownership needs to remain within reach.

Kevin Lee is president and CEO of the Canadian Home Builders’ Association.

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