Why You’re (Probably) Still Living at Home
Run-Down / June 14, 2016
Young adults are being pressured to stay with their parents as housing prices continues to grow
The average young adult looking to live well in Vancouver is stuck with a daunting ultimatum—room with their parents or leave the city.
Statistics Canada’s 2011 census has revealed that 42.3 per cent of people in their twenties lived at home that year, as compared to 32.1 per cent in 1991 and 26.9 per cent in 1981. The Vancity Credit Union Report, published during May of last year, has shed further light on the subject, stating that although owning a home is a goal for 93 per cent of millennials, a great deal of them will leave Metro Vancouver and relocate to an area with a lower cost of living to achieve it.
The report also states that the average income for a family household “to maintain the average Metro Vancouver mortgage,” must reach a minimum of $123,000, which is an unattainable standard for many who live here. At the same time, housing prices are expected to raise by 4.87 per cent “year-on-year”, while the average salary inches up at between 0.6 per cent and 3.2 per cent growth annually. As a result, it is predicted that 85 out of 88 “in-demand jobs”—such as health workers, educators, and lawyers—will fall short of the income needed to live in the city, and exclusively senior and managing positions will end up being profitable enough to get by.
The causes behind this phenomenon are various and complex. First, Vancouver is a culturally diverse area, and some of the cultures that exist here commonly accept living with family not only throughout childhood and adolescence, but also into adulthood.
A more general reason is the money and time invested in going to post-secondary school. Higher numbers of young adults are spending several years in school, in response to an increasingly specialized, fast-paced, and competitive job market. Not only will students stay at home in order to afford their tuition and books, but they will move back home after graduating to pay off student debt. And since the economy and job market is so tough, they are forced to diligently tend to their careers, both academic and professional, in order to save money to do so.
That puts young people in a situation where paying hundreds, if not thousands, of dollars a month in rent is simply unsustainable. Add that onto the fact that less people are getting married—and if they do, they’re doing it later in life, according to census data—and it becomes even less likely that they will be able to afford survival in Vancouver alone.
As with any societal issue, those struggling are not the only ones who will be affected by this. Youth living at home means that they aren’t spending their money on housewarming items or other luxuries, which results in less gross domestic product for Canada. That harms the entire economy from the bottom-up, as will the flood of millennials who will leave the city. Mass relocation of young, educated citizens could cause a brain drain, irreparable cultural loss, and further cutbacks into the country’s GDP. That’s bad news for the whole nation.
Fortunately, there are people out there who are trying to stop the downward spiral in its tracks. Real estate magnate Bob Rennie’s opinion is that young people in Vancouver only have one option for survival: give up on the idea of owning a single family home in the city and prepare to live in eternal density; that means inhabiting apartments, condos, shared homes, and townhouses. He believes that, since single family homes are no longer being made rapidly, they are a thing of the past, even more so for broke youth and students.
Choosing to use a more conceptual approach, Eveline Xia, constituency assistant at the Legislative Assembly of British Columbia, has started a Twitter campaign with the hashtag, #donthave1million. The hashtag, which targets the unreasonable price of Vancouver real estate, has received responses from thousands of social media accounts. By extension, it even inspired a group of nearly 100 protesters to rally against the high cost of housing at the Vancouver Art Gallery this May.
“I felt I could no longer stand idly by, as the city we love sees an exodus of our youngest and brightest,” says Xia, to the Huffington Post.
A larger-scale campaign, Code Red, launched by Generation Squeeze, calls for a “rethinking of Canadian household policy.” It reminds the public that it will take the average young Canadian aged 25 to 34 an astounding 23 years to save for a 20 per cent down payment. Their data was gathered from a B.C. assessment and written into a report by UBC staff, which further confirms the notion that Vancouver’s housing market has become increasingly difficult to navigate.
It notes that the average price of a Canadian home has doubled between 1976 and 2014, and in Vancouver, that price tripled, reaching $813,000. The population has grown from 22-million in 1976 to 35-million in 2014, which has encouraged urban density and hiked the price of detached homes.
In the rest of the country, it doesn’t take anywhere near as long for youth to save up for a down payment. In all of Canada, it takes 11.7 years. In B.C., it takes 16.1 years, and in Metro Toronto, it takes 15.2 years.
Meanwhile, 55 per cent of Metro Vancouverites that claim to be satisfied with the state of the local housing market are older than 55 years of age. That can be explained by wealth gains from the rising price of their owned housing, which amounts to an average price double what they originally paid for their property. Whereas past generations’ debt was a fraction of their wealth, wealth and debt is now levelling out for Canadians under the age of 35, once again pushing many of them to live at home.
Generation Squeeze has proposed a list of propositions for policy reform in their report, which includes “taxing the capital gains that result from the sale of homes purchased within 24 months,” and taxing net housing wealth and the properties of both foreign and local investors, raising interest rates to avoid mounting debt, giving tax breaks to the young and not only the old, “Revisit[ing] zoning for single detached homes in housing market hot spots like Vancouver and Toronto,” accommodating for more rental space, creating more below-market housing, and putting forward motions to avoid letting “child care, parental leave, transit, etc. add up to second, third and fourth mortgage payments.”
An official government response to Code Red and #donthave1million has not been released, but Vancouver Mayor Gregor Robertson continues to restate his efforts to make the housing market more reasonable in Vancouver.