Profitability and climate change are the cause of why many young North Americans won't be able to own a house like their parents did.
One of the most repeated phrases in Canadian politics and economics today is "housing crisis." It may be a simple phrase, but you might receive a variance of answers if you ask Canadians what it means.
One contingent might describe a situation in which many Canadians are working but are not making enough money to shelter themselves. Such a situation seems like an inevitability of urbanization without public housing. Affordable apartment buildings simply aren't as profitable as luxury apartment buildings.
However, it appears as though a significant contingent of Canadians would not leave the housing crisis at that dynamic. In the first section of the recent Ontario debate, almost every leader mentioned the apparent huge issue of young Ontario residents being unable to purchase a home.
Such answers made it clear that it is not just Canada's poorest who feel as though the housing crisis is their issue. Instead, it appears as though people who are having trouble purchasing a house also feel as though the housing crisis is about them as well.
One could argue the word "crisis" may be a better descriptor for someone who can't afford to shelter themselves rather than someone who wants to buy a house. However, the mismatch in supply and demand for single-unit houses is separate from the mismatch in supply and demand for affordable apartments. Here's why:
The chart above shows clear evidence that Canadian developers are opting to build apartment buildings over single-unit housing as time goes on. Why? Money and climate change.
"The footprint of one 200-unit apartment building, as opposed to 200 single-family homes - the approval process would probably just be that much easier..." said Nick Ogden, a realtor for Press Realty.
One doesn't need to be a developer to see how developing new land in Canada's cities today would be more profitable for apartment and condo buildings than single-unit houses. One of the reasons is because of rising material costs.
"You look at a house starting construction 18 months ago, I guarantee you they've had like a 40% increase in price," Ogden said.
But the more relevant example regarding the future might be climate change. Single-unit houses have much higher carbon footprints than apartment buildings by their design alone. Meaning that as the Canadian governments continue to hike taxes on sources of greenhouse gas emissions, single-unit dwellings will become more and more of a luxury.
"We need to have alternative ideas of what homeownership looks like. Unfortunately, there are going to have be some sacrifices made. Some of my client's expectations for first-time homes are not what our parents bought for their first time home," Ogden said.
For young Canadians who spent their entire childhoods in a single-unit house that their parents and grandparents bought decades ago, the realization that they won't be able to follow in their parents' footsteps may cause anger.
"The 50s, with the nuclear family concept, where everyone kept up with the Joneses and the white picket fences. The expectation of homeownership after the Second World War was there," Ogden said.
The post-WW2 suburban explosion of North America may be coming to an end. But perhaps there are much more important issues on the planet to be solved than the inability of Canadians to own a house.
"We have a bit more of a gluttonous appetite for larger homes. People really need to hone in on their needs versus their wants," Ogden said.