23 years to save for a down payment on a home in Vancouver?
Apparently so, according to a new report by Generation Squeeze, an awareness campaign founded by UBC policy professor Dr. Paul Kershaw.
Dr. Kershaw says he hopes the report, titled Code Red, will signal the urgency of the housing market situation, and how much it’s broken down for younger generations.
“The idea that in all of Metro Vancouver – this is where half the province resides – only 15 per cent of homes cost less than half a million dollars and make access to at least two bedrooms, that is shocking.”
He says their findings blow up the myth that housing unaffordability only affects certain neighbourhoods in Vancouver.
Not just Metro Vancouver
“Across the province it now takes 16 years to save a 20 per cent down payment, and in Metro Vancouver where half of people live, literally, half a million dollars is not going to buy enough rooms for two kids.”
LISTEN: Kershaw joined Simi Sara to talk about the report
The ‘burbs are expensive too
Even when younger people decide to move out of downtown Vancouver proper, says Kershaw, they find that very few areas in the suburbs have access to homes that are under half a million dollars.
“Take Burnaby and New Westminster, a few decades ago no one would have thought of those being the rich parts of the regions, and yet you have less than 10 per cent of homes in those municipalities under half a million dollars (with) access to more than two bedrooms.”
The cost of commuting
When people start looking further afield to regions that do offer family housing options under $500,000, many of them are still looking at commuting hours to get to work in the downtown core.
The cost is not only financial – which Kershaw says can be significant if you add it up over two decades – but the cost of time.
For example, the report estimates that it takes an average of 148 minutes per day to commute to and from Langley City to Vancouver.
That’s an hour and fifteen minutes each way.
Time that is taken away from family, friends community service, not to mention simply taking care of one’s own health and well being.
Not just Millennials, anyone under 45 getting squeezed
“The housing market is now broken for people in their 20s, 30s and 40s, and the kids that they’re raising.”
According to the report, home ownership is also down for 35-44 year olds, falling from 73% in 1976 to 65% in 2012.
In fact, while the younger generation’s situation worsens, the older generations are enjoying wealth gains.
“The typical British Columbian age 55+ enjoys between $246,000 to $305,000 more wealth than in 1977. In Metro Vancouver, accumulated wealth is approximately $320,000 to $370,000 higher than in 1977.” (pg 8)
Further studies suggest that the typical senior has nearly nine times more wealth than the typical 25-34 year old, as compared to the early ’80s when the wealth gap was only four times.
Of all the reports on housing that have been released lately, few have come up with any solutions.
Code Red bucks the trend by offering ten possible solutions to the housing crisis.
These including taxing housing wealth to slow down price increases, not only taxing foreign buyers, more tax breaks for younger adults rather than seniors, revisiting zoning in hotspots like Vancouver and providing more rental accommodation, to name a few.
While the report paints a very dire picture for anyone who has insecure housing in Metro Vancouver, perhaps what is most unsettling about this report is that the statistics are based on 2014 figures, and in that time the housing market has seen an unprecedented increase of 20-30% across Metro Vancouver.
Meaning that, as of today there could be even less than 15 per cent of houses under $500K with access to at least three bedrooms available in Metro Vancouver.