We all know housing prices have gone way up compared to a generation ago.
This is especially true in B.C.’s Lower Mainland – now the most expensive place to live on the continent. According to the Canada Real Estate Agency, the average cost of housing is $780,000 in Greater Vancouver, a region that includes Burnaby, Port Moody, Coquitlam, Pitt Meadows, and Maple Ridge.
By contrast, the average cost in 1976 was a paltry $62,000 – or $240,000 in today’s dollars, after adjusting for inflation.
Housing prices that are more than three times higher are great news for some. Since many bought homes decades ago, far higher housing values mean far more wealth for them.
But what’s been good for retiring parents is generally bad for their kids and grandchildren. High home prices squeeze generations under age 45 with crushing debt, which they must pay with wages that have fallen 13 per cent compared to a generation ago, and in jobs that rarely contribute pensions.
It would be one thing to accept that times are tougher for younger people, if we were working as a community, province, and country to try to mitigate the squeeze.
But we’re not. Governments spend just $12,000 on benefits and services per Canadian under 45, compared to nearly $45,000 for every retiree.
This is not a “good deal” if you are under 45.
Despite Canada’s economy producing more wealth than ever before, investments made in their generations look a little scant, or unbalanced. And that’s before talking about the larger government and environmental debts they inherit.
Still, younger generations are doing all they can to adapt.
To compete for better employment, they squeeze in years more of education and tuition. To buy a place, they accept jobs or contracts that require them to work years more to save a down payment.
Many wait years longer to move out of their parents’ homes, or to establish their financial independence. And when they do, they often commute long distances to work, especially when living in Pitt Meadows and Maple Ridge.
Or they give up the dream of home ownership to accept high rents, as is growing more common even in Burnaby, let alone in Vancouver. The latter has become the quintessential generational city, where people own homes primarily if they got into the housing market long ago, or are among the richest of the next generation.
The fact is, postponing more, working more, and scaling down expectations for the size and location of housing are key coping mechanisms for many younger people today.
Ironically, others routinely overlook these coping strategies when judging younger generations to be lazy, consumerist, even entitled – a charge that flies in the face of data showing governments annually spend nearly four times more on benefits and services for each Canadian retiree compared to each Canadian 45 years or younger.
Although they try to cope, most in the younger generations have a big problem because they can’t work their way out of the time and income squeeze unless they give up something fundamental – the opportunity to have the family they may want or the financial foundation they’ve patched together.
Since two earners barely bring home today what one breadwinner did in the 1970s, we’ve gone from 40-hour work weeks to closer to 80 hours.
The result? Generations raising young kids are squeezed for time at home. They are squeezed for income because housing prices are nearly double, even though young people often live in condos, or trade yards for time-consuming commutes.
And they are squeezed for services like childcare, which are essential for parents to deal with rising costs, but are in short supply, and cost more than university.
We can change this.
While the deck may be stacked against younger generations now, we can get A Better Generational Deal – one that gives all generations a chance. A deal that safeguards our medical care and retirement security without sacrificing our children’s present and our grandchildren’s future.
As it turns out, residents of Burnaby, Port Moody, Coquitlam, Pitt Meadows, and Maple Ridge have particular power to bring about this better generational deal.
Why? Because as I’ll show in my next column, these cities are home to provincial ridings where recent elections have been especially close.
So if even just a few hundred people add their vote to “Reduce the Squeeze,” it can make a big difference to the next election result.
That’s precisely when politicians are most likely to listen.
– Paul Kershaw is a policy professor at the University of BC, and hobby farmer in Pitt Meadows.