This presentation was the first in the club’s series on Peace & Conflict. Speaker Paul Kershaw of UBC spoke on how housing is a point of conflict between the generations - between those who have benefited from the relative increase in real estate values and those younger generations who are now trying to enter the housing market.
The Generational Divide Over Housing
This presentation was the first in the club’s series on Peace & Conflict which will occur through the course of this 2016-17 year.
Paul Kershaw was introduced by Nancy Singh. Paul is the Founder of the Generation Squeeze campaign. He is a farmer morning and night. By day, he is a University of BC professor, public speaker, volunteer, and regular media contributor. Kershaw is one of Canada’s top thinkers about generational equity with Canadian Family magazine describing him as “the ‘Generation Squeeze’ guru.” The Confederation of University Faculty Associations of BC awarded Kershaw its prize for Academic of the Year in 2016.  Twice the Canadian Political Science Association has also awarded Kershaw national prizes for his research. The Vancouver Province describes Kershaw as “a one-man road show trying to change BC one talk at a time.
Paul spoke on the conflict between the interests of the younger generation and those of the older “baby boom” generation. The 50+ generation has been organizing itself politically to protect its interests – in health care, pensions, etc. But no corresponding level of organization has grown up in the generations now in their 20’s and 30’s. From this, Paul’s focus was on housing.
Housing prices are good or bad depending on your position. The Canadian economy is double what is was in 1976, average prosperity has increased 30% and yet the average worker in their 20’s earns $9,000 less (inflation-adjusted dollars). And in spite of both higher education levels and higher expectations. Housing is not only more expensive in Vancouver and Toronto, it is more expensive everywhere.
Paul identified 10 policy propositions that deserve to be part of the public discussion:
  1. Houses are homes first (not investments)
  2. Tax housing more in order to slow increases in house prices
  3.  Don’t simply focus on taxing the housing wealth of investors and speculators
  4. Try to tax net wealth rather than gross wealth
  5. Low interest rates cut both ways
  6. Age matters but current treatment is outdated. (Note that property taxes for homeowners can be deferred at an interest rate of 0.8)
  7. Revisit zoning for single detached houses in hot spots like metro Vancouver and Toronto
  8. More rental accommodation (considering that some younger generations will always find the down-payment to be out of reach
  9. More below-market housing (remembering that the current commitment from federal/provincial governments is so low that current programs will not impact the housing market
  10. Don’t let child care, parental leave, transit, etc. become the 2nd, 3rd and 4th mortgage payments (so that they exacerbate financial inequity
  • Referenced the shortage of accommodation for students while there remain a good supply of vacation and short-term rentals.
  • Canada has a long societal preference for home-ownership, compared to European levels of renting (as a housing strategy) but also higher levels of inter-generational ownership? There doesn't seem to be any public-policy changes that would move away from the Canadian preference for home-ownership.
  • In making the comparison between health policy (and its public costs) beginning in the 1960’s with his ideas for housing policy, is the cost of these proposals sustainable? The costs are often not public (tax) costs but are changes in the environment (zoning, interest rates, etc.)
  • The situation in Montreal was compared, where both real estate and rents are lower. This could be associated with different policy environment (which are more oriented to the younger demographic in that province), but could also relate to the separation politics of the last two decades.
  • Reference the recent controversy about foreign buyers of real estate, does this not represent incoming direct investment (i.e. revenue/income for the local seller) making it available for other domestic use.