Support strong Canadian climate journalism for 2025
When it comes to housing, young Canadians just can’t catch a break. After watching prices soar ever higher over the last decade, potential buyers are finally seeing them drop — just as rising interest rates push the cost of ownership as a percentage of household income to record highs. Waiting out the market isn’t exactly a winning strategy either, given that rents in most major cities are now skyrocketing.
In Toronto, rents have gone up as much as 20 per cent this year, with some aspiring tenants even facing the sort of ludicrous bidding wars that buyers were contending with before interest rates started to rise. In Vancouver, meanwhile, the average monthly rent for an unfurnished one bedroom has gone up $320 since March. The biggest winners in this latest act of Canada’s housing market drama are those who have already won big: existing homeowners without a mortgage and landlords who can pass along the cost of rising interest rates. The biggest losers, meanwhile, are those who bought a home recently or are in the process of saving up to do it.
There’s a certain irony in the fact that this long-awaited correction in Canada’s housing market — one that could be the deepest in 50 years, according to RBC — will actually end up punishing younger Canadians. After all, when it comes to housing, they’ve been getting the short end of the stick for as long as anyone can remember. It’s intergenerational warfare by proxy, one that’s been fought on the battlefields of municipal zoning bylaws and redevelopment applications, and the forces fighting for more density and affordability continue to suffer heavy casualties. It wouldn’t be surprising if many of those young aspiring homeowners wanted to surrender after this latest setback.
David Eby, the odds-on favourite to take over for John Horgan as both the leader of the BC NDP and the premier of the province, might finally give them a fighting chance. Unlike most of this country’s leading politicians, Eby and his family were renters until just recently. He’s also been on the front lines of the fight for greater affordability and efforts to draw attention to the impact of the housing market on younger people ever since he first stepped into elected office.
Most importantly, perhaps, he clearly doesn’t care if he ruffles a few feathers, given his willingness to go toe-to-toe with both the Trial Lawyers Association of B.C. over changes to the province’s auto insurance and homeowners in his own riding over his government’s speculation and vacancy tax. As Vancouver Sun columnist Ian Mulgrew wrote, “It’s hard to think of an example when, given the opportunity, Eby hasn’t played hardball politics.” He meant that as a criticism, but for younger British Columbians who have watched their elected officials capitulate to the entrenched interests of homeowners time and time again, that probably sounds like a refreshing change of pace.
So, too, do his ideas, which depart from the half-measures and hollow promises that most politicians in this country seem to prefer. Instead, as he told Postmedia last month, he wants to use the full weight of the provincial government’s financial resources to tilt the table in the direction of future buyers. “We can’t just leave it up to the private sector. We can work in partnership with them, we can work in partnership with First Nations. But building housing for the middle class on public land, using public resources … that is the opportunity that I see that we haven’t fully developed.”
That opportunity can’t come soon enough for the millions of young Canadians who see housing and homeownership in our biggest cities as impediments to their dreams rather than the fulfilment of them. And if Eby succeeds, other younger political leaders who also understand that — and who, unlike Doug Ford, don’t have multimillion-dollar houses to fall back on — may rise to the fore. “If he becomes premier,” the Globe and Mail’s editorial board wrote, “it may mark a generational shift in housing policy, a new vision that could spark real change. It is work that will take years, after decades of inaction.”
It’s work that can’t start soon enough. It shouldn’t be a secret at this point that Canada’s ever-increasing housing prices come at a high cost, one that’s measured in everything from vacations that aren’t taken, retirements that aren’t funded, and even families that are smaller than parents would like. These costs are carried disproportionately by younger people, who have had to make any number of compromises and sacrifices just to put a roof over their heads. It should come as no surprise that Pierre Poilievre’s anti-gatekeeper message has gotten traction in this segment of society.
But the answer here isn’t less government, less regulation, or less intervention, as he always seems to suggest. It’s the opposite: the concerted application of government resources and pressure on behalf of those who keep bearing the brunt of the market’s forces. At long last, it seems like we finally have a politician in Eby who’s actually willing to do that.
Comments
I wish those who, like Mr. Fawcett, would stop taking the easy assumption for granted, and take a look at facts before maligning old people, indiscriminately, lest he be accused of making inflammatory remarks in which an entire generation is scapegoated, and nothing said at all about historical fact.
I wonder if he realizes that ageism is alive and well, and that in contributing to the effort to scapegoat an entire generation, forgets way too much of what he never knew. I blame, of course, the education system.
Had he been born a bit earlier, he'd perhaps have known a longer perspective, that included measure after measure after measure in favor of some mythical "middle class" (the definition of which has varied immensely over the many decades it's been in common parlance.
It bears mentioning that "greater density" isn't the answer to everything, and that parts of Toronto are already more dense than Beijing or Tokyo.
In Vancouver, mostly known for its forests of skinny towers and ocean views, the majority of the density is, in fact, low density sprawl. Nearly 80% of the residential land in the city is zoned for low density, large lots and detached houses and thus accommodates only 30% of all housing. That means the remaining 70% of housing must be crammed into the remaining 20%, mainly downtown and in commercial and industrial zones and at rapid transit hubs.
That is a horrible way to plan for a city that has run out of land. A chronic shortage of land supply blanketed by exclusionary zoning protecting inefficient sprawl over decades concurrent with strong demographic demand is one of the primary drivers of Vancouver's "world class" housing prices, which is now a full blown crisis. Those who lament eroding the dominance of detached houses on big lots should propose filling in English Bay and see how far that idea gets with the public. There is no option left but to infill or subdivide existing lots.
New density IS a valid answer, but not necessarily with towers. You can zone for half lots, du-tri-quad-plexes, rowhouses, townhouses, low rise walk-up apartments, mid rises and commercial high streets with continuous sidewalk retail while also maintaining neighbourhood character. The more transit backing up mid-level increases in density the better.
That's a hot topic for both NIMBYs and people seeking housing, but for opposing reasons. The freshly approved Vancouver Plan now sets the stage to finally make the excessively large detached home on a large lot obsolete. Low density neighbourhoods will soon be forced to accept their fair share of growth and responsible urbanism. The current council is the first one in decades to grow a spine and compose a viable plan for the future and have recently faced down mobs of loudmouth NIMBYists in predominantly wealthy West Side neighbourhoods opposing even reasonable and innocuous market rental projects, let alone subsidized supportive housing for the homeless. Of course, the critics were dead silent and supremely hypocritical when scores of similar projects were built in the lower income areas of East Vancouver for decades.
Vancouver mayor Kennedy Stewart and soon-to-be premier David Eby can go a long ways together on the housing file. I hope the current progressive majority on council is retained after the October municipal elections.
As Max Fawcett and the Globe and Mail look forward to "a generational shift in housing policy" if Eby becomes premier, they conveniently ignore the fact that Eby has been BC's housing minister since 2020. He could have acted to protect tenants against stratospheric rent increases, but he has chosen not to.
I had one conversation with Eby about vacancy control where we batted the ball back and forth eight times over six months. He ultimately refused to accept scholarly economic research produced after vacancy control had been in place in Manitoba for thirteen years. Hugh Grant's report showed that vacancy control had NOT led to the unintended consequence of reducing affordable rental stock or reducing investment in needed repairs. Grant reported that the policy had had no negative impact on the supply of rental accommodation, “either in the conversion of existing units to condominium ownership, or in slowing the rate of construction of new rental units” https://www.gov.mb.ca/cca/pubs/rental_report.pdf. Grant also found no evidence that rent regulations contributed to deterioration in the quality of rental housing stock. A pass-through system for capital expenditures ensures that rents can be increased to recover one-eighth to one-third of capital expenditures made by landlords, depending on the type of repair or improvement made. It turns out that the allowance for additional rent increases (and probably sensible protection of the investments landlords had already made in their assets) has been enough to inspire landlords to make repairs and improvements.
It has to be said, too, that it's been on David Eby's shift that additional rent increase legislation has been approved in BC, allowing these rent increases on top of an unregulated housing market when rental units become vacant. Tenants are now expected to cover 100% of landlords' capital expenditures for repairs and updates to major systems and major components that include, but are not limited to, the foundation; load bearing elements such as walls, beams and columns; the roof; siding; entry doors; windows; primary flooring in common areas; pavement in parking facilities; electrical wiring; heating systems; plumbing and sanitary systems; security systems, including things like cameras or gates to prevent unauthorized entry; and elevators.
With a lack of vacancy control, landlords get to hammer those tenants who move into or around BC. With additional rent increases, they get to hammer those tenants who are not moving around. Nice work! Every tenant in this province is hammered!
Vancouver has had a Vacant Homes Tax for years, enacted roughly the same time as Eby's Speculation Tax. Whether the dial on suite availability has moved enough is still a matter of debate. But affordability hasn't budged; regulation of private landlords and developers won't be effective at all to fix the lack of supply.
Burnaby has had a tough rule in place where tenants evicted from cheap, low density rental housing in dense town centres and transit hub areas are now offered new units at the same price in the new developments that take their place. This requires the full co-operation of developers, and they haven't exactly signed up in droves, though some have done the math and still find they're coming out ahead. Vancouver has recently proposed a similar policy during the discussions around the now approved Broadway Plan (which covers 485 blocks of the city). It will be accompanied by measures that protect existing affordable rentals with heritage classification. And new rentals are on the boards on Broadway, some subsidized by the public sector near the new subway stations currently under construction.
It is impossible to manage private strata towers where a majority on the board purposely protect large numbers of absent private owners who run short-term Air BnB rentals over standard long term rentals of their units. This results is a shortage of affordable rental units, not to mention wear, noise and a constant flow of strangers who don't care about the neighbours down the hall. This is just one of the many issues many people have trouble with concerning the Strata Act.
It's painfully clear that affordable rentals are in chronically short supply. In my view, all levels of government must now build a good portion of that supply, and these have to eventually comprise a critical mass that are a significant counterweight to the problematic private market currently heavy on condos and light on rentals.
Non market, non profit rentals would answer much of the demand. A city can donate the land, and the provinces and feds could share the costs of construction. Low and mid rise structures built close to decent transit services will probably work best to fit in with existing neighbourhoods. The construction could be durable mass timber with a reduced-emission concrete foundation and underground parking only for a small fleet of car share vehicles for the exclusive use of tenants with memberships. Some buildings would be oriented to seniors and the disabled and designed for universal accessibility. Other buildings would feature ground-level three-bedroom units for families with two and one bedroom units on the floors above, and some units could be reserved for nurses and other workers at medical institutions and offices within walking distance. Some buildings could generate rent-offsetting revenue from commercial / retail at the ground level.
Rules of one bedroom per person would be applied within limits, which will generate some moving of long-term tenants within a building as family circumstances change. On-site managers should be accommodated. Rents would be set to inflation with a ceiling and a floor, and would cover the construction cost, then maintenance, replacement and depreciation amortized over 30 years or so to keep monthy charges affordable. Non profit, break even costs applied to hundreds of buildings and tens of thousands of units built nation-wide over a decade or more will no doubt make a difference.
The Centre for Policy Alternatives has proposed a similar break-even rental housing model.
It's also reasonable to expect that 20%-30% of all the units in the above model would be subsidized, though self-managed co-ops would probably be a better option, within certain rules on housing under / over supply and income subsidies. We really don't need singles living in subsidized two bedroom units in public projects and spending three months a year at the Gulf Islands cottage while subleasing the unit for personal profit.
Yep, stuff like that actually happens even during our affordability and homelessness crisis.