Housing through a generational lens

In the 2016 What We Heard report, seniors are mentioned 27 times, often as a “vulnerable” group experiencing housing challenges. Although, “young” Canadians was only referenced 4 times and “young adults” was never mentioned as being vulnerable. This distinction also appeared in the 2017 federal budget. Only in 2018, with the release of the National Housing Strategy was the term younger adults recognized as a vulnerable population in greatest need.

Generation Squeeze, led by Professor Paul Kershaw at the University of British Columbia, was central to this change. Working from years of data, it compared the housing challenges faced by current younger Canadians with those 4 decades ago. Its findings revealed the growing gap between young people’s earnings and home prices and the resulting challenges for those raising children. It also led to several policy changes in Vancouver and Ontario.

Project scope and expected outcomes

Turning a generational lens on housing

Starting with 1976, Generation Squeeze compiled data on housing sale and rentals, earnings, wealth and interest rates. It did this for every province and large city and for Canada as a whole. This provided a “generational lens,” a way of comparing outcomes between now and when today’s aging population were young adults.

That approach revealed interesting insights into young people and the housing market:

• The growing gap between home prices and young people’s earnings erodes the standard of living for many younger Canadians. It now takes years longer to save a 20% down payment for average-priced homes. It also takes longer to pay the remaining mortgage, even at historically low interest rates. Young people also face rising rents, and it can be challenging to afford homes with enough bedrooms to raise children.
• Rising home prices drive wealth accumulation for many older Canadians. In 2017, the typical senior household reported $277,903 more net housing wealth than the same group in 1977. Lower ownership rates for younger Canadians, however, means they rely on the rental supply and that extra demand increases rents. They also do not benefit from gains caused by rising house prices.
• Governments at all levels are slower to adapt policy for younger generations than for the aging population. Since 1976, social spending on Canadians aged 65 and older has increased 4.2 times faster than for Canadians under 45.

The result is increased pressure on younger Canadians who are looking to purchase a home or raise a family. It also contributes to generational inequality.

Evidence-based policy solutions

In addition to documenting the inequities facing younger generations, Generation Squeeze highlighted evidence-based policy solutions. These include:

• Increasing supply that is suitable for younger Canadians by changing restrictive zoning policy.
• Reducing harmful kinds of demand, such as by discouraging empty units or short-term rentals.
• Rebalancing the tax system to address inequalities.
• Scaling up the permanently affordable market through innovative use of public lands, trusts and co-ops.

Dr. Kershaw and Generation Squeeze have worked with several jurisdictions on policies that reflect these solutions. For instance, the City of Vancouver worked with Dr. Kershaw to shape its new housing strategy. Changes included revisions to zoning policy, and the introduction of the first empty homes tax in North America. The Government of Ontario’s Fair Housing Strategy also draws on the work of Generation Squeeze.

National research, education and advocacy

Moving forward, Generation Squeeze will continue to pursue national research, education and advocacy work. This includes building grass-roots support for purpose-built rental units and engaging young people to support new housing proposals at council meetings. Generation Squeeze also advocates for an emphasis on real estate as primarily about providing homes, with investment a secondary consideration.