Editor’s Note: April 2013
April 2, 2013
It was touch and go, getting this issue to press. Half the time I was meant to be working, I sat in front of my computer flummoxed by the Royal Bank's "Housing Trends and Affordability" report. In Calgary, says the bank, a 1,500-square-foot, two-storey house takes 39 percent of take-home pay. In Toronto, that so-called affordability measure climbs to 62 percent-nearly two-thirds of pre-tax household income going to property-and in Vancouver? Forget it. We spend 88 percent of our gross pay on housing.
Twenty-five years ago, that number was around 40: we've cut our earning power in half in only one generation, and when I look ahead to my kids' adult years it's hard to imagine them buying anything like their childhood home. I know I'm not the only one struggling with affordability. At every food truck lineup and daycare dropoff in town people circle around this one central question, Can we still afford to live here? Half of dinner party conversations are recurring fantasies about cashing out and taking off. We hoard details about those 75 cheap acres of Nova Scotia orchard. We wonder which is cheaper, Dunbar or Napa?
Here's a contrary thought: it's still cheap to live in Vancouver-if you're willing to recognize that the world's most livable cities reward residents in non-financial ways. (Sure, that Arbutus bungalow is $2.4 million, but Stanley Park!) That's only one insight into this sluggish, stubborn market provided by Jim Sutherland, a keen student of real estate and former editor of this magazine. His bigger aha moment, beyond some great tips on realtors and neighbourhoods, is this: we need to rethink our housing. Prices will rise and fall but barring a massive correction (a threat he addresses), little will fundamentally change. A single-family detached home on the West Side won't return to pre-Expo prices. Our salaries may well not balloon. So we need to rethink how we afford this paradise (those of us fortunate enough to be worrying about real estate value). Maybe we downsize. Maybe we share space with extended family or trade in the dream of a white picket fence for more modest acceptance of a condo. Certainly, we need to see the city in the context of the world beyond North America.