CHERYL CHAN (VANCOUVER SUN) - Andrea Stucchi counts her blessings. She has a good job, a stellar education, a supportive family; she and her husband even have an enviable toehold in Vancouver’s red-hot real estate market — a 690-square-foot studio in Kitsilano they purchased four-and-a-half years ago.
The couple had put off kids for a few years to pursue their careers and in the hopes of getting a bigger place to raise a child, but with student loans, a hefty mortgage, and skyrocketing property prices that saw the benchmark price for a detached home in Greater Vancouver jump an astounding 30 per cent in the last year, that goal now seems impossible.
“We’ve resigned ourselves to the fact we’re likely going to be raising a child in a studio apartment with no walls and no bedrooms,” said Stucchi, who holds a full-time administrative job at the University of B.C. while pursuing a master’s degree. “It’s going to be quite cramped for a few years.”
With child care costs often adding the equivalent of a second monthly mortgage payment, children, said Stucchi, have become a luxury for her generation.
“It’s become such an out-of-reach aspiration,” said the 31-year-old. Many of her friends are in the same boat, unsure whether they can afford to have kids. “A lot of them are debating if it even makes sense,” she said. “If you have an entire generation of people doubting whether they can afford kids, something that is so natural and innate is becoming a luxury item.”
Stucchi’s concerns echo those of most Metro Vancouver residents who have seen already extraordinarily high property prices spiral further out of reach in recent years.
A new report released Wednesday by Generation Squeeze , called Code Red: Why We Need to Rethink Canadian Housing Policy for Generations, crystallizes in stark numbers the challenge facing young Canadians trying to make a go of it, particularly in Metro Vancouver where the situation is most dire.
“From a generational standpoint, B.C. is now the hardest place to be a young adult in our country, and probably the continent, because it’s where wages have fallen the most and where housing prices have gone up the most than anywhere else,” said Dr. Paul Kershaw, the report’s co-author and founder of Generation Squeeze, a national lobby group for Canadians in their 20s to 40s.
According to the study, released on the first anniversary of the #donthave1million housing affordability rally in downtown Vancouver, the average price of a Canadian home has nearly doubled from $199,182 in the 1976-to-1980 period to $408,068 in 2014. In Metro Vancouver, the price has more than quadrupled to a whopping $813,000.
At the same time, annual earnings for a 25- to 34-year-old are down more than $9,000 in B.C. compared to four decades ago, said the report, titled Code Red: Why We Need to Rethink Canadian Housing Policy for Generations.
The study found it now takes someone in B.C. 16 years of full-time work to save for a 20-per-cent down payment for a typical home, compared to five years in 1976.
In Metro Vancouver, it’ll take a homebuyer 23 years to scrape together a deposit.
Young Canadians also get dinged with monthly mortgage payments, now nine per cent higher with earnings nine per cent lower compared to the 1976-to-1980 period.
In Metro Vancouver, where the average monthly mortgage payment is pegged at $3,555, homeowners now are required to work an additional five months each year in order to make that payment, said the report.
The squeeze exists across Canada, said Kershaw, an associate professor at UBC, but “Vancouver is the warning sign, the canary in the coal mine.”
“You can leave Metro Vancouver and the squeeze wouldn’t be as tight a vise grip, but it’ll still be there.”
In order to examine the challenges facing young families in Metro Vancouver, the report looks into the availability of three-bedroom units that cost no more than $500,000, which is double the average house cost in the region in 1976.
It found that there are virtually no three-bedroom units in Vancouver that cost less than $500,000 (statistically, they make up one per cent out of 155,109 homes in the city for which bedroom data is available). Across Metro Vancouver, homes that fit both criteria amount to 15 per cent.
Even when people compromise and move to suburbs such as Coquitlam, Langley, Delta, Pitt Meadows, Surrey or Maple Ridge — where more than 25 per cent of their housing stock are three bedroom units for less than $500,000 — the move comes with significant costs, the report notes.
Taking transit adds an extra $120,000 to $180,000 over the 25 years of a typical mortgage, while the loss in time and productivity amounts to between $223,000 and $374,000 over the same time period, in essence adding the burden of a third or fourth mortgage for the privilege of living in a home that would have bought two detached houses in 1976.
“Let’s no longer talk about this as being a problem in Point Grey,” said Kershaw, referring to the wealthy west side enclave where the issues of housing costs, foreign investment, and hollowed-out neighbourhoods are most acute and where some politicians and industry insiders insist the problem is confined. “This has reached much more urgent proportions.”
At Creekside Community Centre one evening last week, surrounded by gleaming condo towers, about two dozen people in their 20s and 30s gathered for a Generation Squeeze meeting. The plan: a campaign to make housing affordability a major issue in next year’s provincial elections.
One man described himself as a third-generation Vancouverite who feared he couldn’t afford to live in the city any more. “When did having a baby become the equivalent of having a Lamborghini?” asked a woman.
It was, said Kershaw, equal parts depressing and empowering. But he also felt a powerful undercurrent he hopes could light a fire under a demographic known for lower voter turnout and political apathy: “Before it was frustration and embarrassment. Now there’s an anger that’s emerging.”
Tara Jean Stevens, 37, and husband Derek, 42, moved to Richmond from Vancouver five years ago because they wanted a home with a yard for their kids. But their neighbourhood in Steveston, where they rented, has changed. Renters were getting kicked out because homeowners wanted to cash out. Modest homes were being torn down and replaced by monster homes that remain vacant.
Tired of the uncertainty that comes with renting in a precarious market, they decided to buy a place. Vancouver, where Stevens works as the morning host for JACK FM, was out of the question. Squamish, an hour drive away on the scenic Sea to Sky Highway, will be their new home.
Stevens said she feels positive about the change, but frustrated at the circumstances.
“I’m not sure who to point the finger at … but along the way, we have completely done my generation a disservice. The fact we cannot buy a home in the vicinity of where we work in the city, it’s so sad to me.”
The report moves beyond the problems and offers 10 proposals authors hope will ignite conversation among the public and action from government.
Among the proposals are two recommendations from UBC and Simon Fraser University academics, including a new tax on vacant homes or homes owned by non-Canadian taxpayers, and a progressive property surtax for homes above $1 million.
The report goes further with some controversial proposals, such as a tax on all housing wealth, not just that of foreign investors or speculators, but also of locals, many of whom have benefited from the astronomical rise in property values.
It also suggests that urban hot spots such as Toronto and Vancouver revisit zoning for single-detached homes to allow for higher-density development.
Kershaw said most Canadians believe younger generations should have to prove themselves, that it should be hard work to own a home. But what the report shows is that the scenario is fundamentally different today from a generation ago.
He offered the metaphor of salmon swimming relentlessly upstream in order to spawn, negotiating rapids and waterfalls and dodging bears.
But today “the waterfalls are twice as high,” said Kershaw. “The number of bears … is in the dozens. Some places, we’ve completely blocked the route and there’s no salmon ladders to get around.”
Young people are willing to adapt, stressed Kershaw. Many do, working multiple jobs, pursuing higher post-secondary education, and living farther afield, in ever-smaller spaces. “But hard work doesn’t pay off like it used to. That’s what this data shows.”
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