‘If I lived in Toronto I’d be broke’: How owning a home is becoming increasingly unaffordable for many

With interest rates rising, the Canadian housing market is showing signs of cooling. But the idea of ​​owning — and even renting — a house still leaves some people feeling stretched.

Despite making what he describes as a “fairly good” single income and having a down payment, government official Craig Dykeman, 54, says he’s struggled to find a home he can afford near his home. community of Jemseg, NB

Dykeman currently lives with his mother in a house she owns an hour west of Moncton, but he hopes to buy a home with his young daughter soon.

Aside from the mortgage costs, he is concerned about covering related costs such as insurance and property taxes inflation pushes up the cost of living

“It doesn’t have to be a fancy house, but a house that I can live in… that I have enough to spare not to worry about groceries or heating,” he said. Cross country check up.

Politicians, economists and advocates alike write off the hot market as a lack of supply. Many say there is a need for more affordable housing.

But as more people are being pushed out of the market, the definition of what is affordable can feel murky, says Julieta Perucca, deputy director of The Shift, a nonprofit that advocates for housing to be seen as a human right rather than a human right. commodity.

“I feel like we’re currently using our imaginations to define affordable housing, unfortunately,” she said.

“Affordability, right now, and the price of our housing, is largely determined by the market itself. And this is why we see housing costs much higher than household income.”

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Affordable defined as 30% of pre-tax income

The Canada Mortgage and Housing Corporation (CMHC) defines housing as affordable when it is less than 30 percent of a person’s pre-tax income and can include council housing, market rent, and home ownership.

Assuming a pre-tax income of $55,700 — the median household income before taxes in 2020 according to Statistics Canada – the average household could spend just under $1,400 per month on housing.

For Eric Burnet, a social worker, buying a house in Hamilton where he previously lived with his partner was a daunting prospect. At the time, the couple paid “a fair amount” of rent for a “good place” as they watched home prices skyrocket, he said. Check.

“We’ve just started our career. We’ll be in our 40s by the time we can afford something like that,” he recalls.

So Burnet and his partner decided it was time to take the plunge and look elsewhere. They moved to Sydney, NS, first subletting an apartment and finally buying a house in October.

The move worked well for them, he says, but he still worries about affordability elsewhere.

“I feel like I make a good income, but if I lived in Toronto I’d be broke,” he said. “I don’t know how people do it.”

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Perucca believes the 30 percent figure needs an update and that calculating housing costs should take a more sophisticated approach that considers affordability in relation to income.

For example, the affordability for a two-income household with support from an extended family must be calculated differently than for a household with a single parent who has two jobs and has to pay for a full day of care.

“I think many of us are left out of this definition of affordability,” she said. “So many of us are dealing with a housing market that is not meeting our needs.

“But I don’t think people feel it as acutely as those low-income groups, who in Canada also happen to be disproportionately colored people, indigenous peoples [and] marginalized communities.”

Burnet says the challenges with housing affordability are systemic and need to be addressed through increased investment in social housing, more housing and better public transport in cities. Real estate speculation and prices should also be limited, he added.

“Housing is essential,” Burnet said.

Access to safe, secure housing crucial: economist

Addressing housing affordability requires different responses for different scenarios, said Tsur Somerville, an economist at the UBC Sauder School of Business.

“A lot of the focus on housing affordability has been focused on people’s ability to access home ownership,” Somerville said.

“I think the fundamental question should be whether people have access to safe, secure housing that is the right size and of decent quality.”

Condo towers under construction are rising a few blocks away from homes, in Burnaby, BC. Increasing density in urban areas may hold the key to making housing affordable, experts say. (Daryl Dyck/The Canadian Press)

This means ensuring that low-income households have access to subsidized options and that the total housing supply is adequate.

“What that means is it’s money and supply — and money is taxes, and supply is a change in the built environment,” Somerville said, referring to the need for more density. “People are very resistant to that.”

Dykeman recently looked into buying a used caravan that he could move into on a plot of land he owns.

It was 11 o’clock in the market, he said.

By the time he heard from the seller, it was sold – asking too much.

Written by Jason Vermes with files from Steve Howard and Abby Plener.

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