The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Of all the lofty attributes Canada’s world-class cities have touted in recent years, making a home unaffordable for average folks is perhaps the least enviable. It was also avoidable. But self-proclaimed “smart growth” policies have proven the opposite of smart, contributing to an affordability crisis with little to show in the way of a cleaner environment.
The biggest losers are millennials now entering their 30s, a generation urban planners and creative-class types predicted would always prefer downtown living over the suburbs. For these echo boomers, moving up to a single- or semi-detached home to raise a family is no longer even an option. Bringing up junior in a 600-square-foot condo is not as cool as it might sound. Yet that’s the choice many face.
Vancouver is considered the world’s second-most unaffordable housing market, after Hong Kong. A median-priced Vancouver home costs 10.6 times the city’s median household income, according to the latest Demographia International Housing Affordability Survey. Vancouver’s price-to-income ratio has doubled in the past decade.
At 6.5 times income, Toronto’s house price-to-income ratio has risen 65 per cent over the same period. Demographia defines a multiple above 5.1 as “severely unaffordable.” Toronto is now even more unaffordable than New York.
Even those who think they can afford homes now may be fooling themselves. Record-low interest rates have slashed the carrying cost of a mortgage, but in doing so have masked what remains an unsustainably high price-to-income ratio.
Interest rates are virtually the same everywhere, but not every city has unaffordable housing. The economy is healthier in some cities than others. But Houston and Dallas are booming (or were, until oil prices collapsed) and they have among the most affordable houses in the world. They had no prerecession housing bubble, so no housing crash either.
What separates the most affordable cites, according to Demographia, is the absence of policies against urban sprawl, such as Ontario’s 10-year-old Greenbelt Plan and B.C.’s Agricultural Land Reserve. Other anti-sprawl laws, such as Ontario’s 2005 Place to Grow Act, have promoted densification and limited development to existing transportation corridors.
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