Housing affordability is the hot topic of the decade. Everyone has opinions as to how we got here. The dominant narratives involve access to cheap credit for wealthy people who do not need it, influx of wealthy foreign buyers and generation cycles seeing an imbalance of free capital in the hands of Boomers who are turning to real estate speculation and rentals as a sure form of retirement income.

Well the truth in economics is never linear. Most certainly all of the above are factors at play. But there is another narrative that is equally as valid yet receives absolutely zero press time or consideration from our media and bureaucratic leadership. The reason for this is entirely cultural. A generation will only fixate on things they desire or think they can demand. So let’s step back in time and ask the inverse question of what we are currently asking.

Why was real estate and building so historically cheap for our grandparents’ and parents’ generations? And why did it shoot up so quickly? It is time to take a serious look at supply. There are two sides to the supply equation in determining the price of real estate. Availability of land, and availability of materials and labour for construction of homes. First of all, it surprises no economist that the price of land is going up. Why? That is what happens when you declare a fixed supply. In Canada this is literally just a government policy. The provincial government was releasing public lands for development in North Vancouver as late as the 1980’s. Farmlands were still open for staking into the 1990’s through several programs but mainly agricultural leases that would convert to fee simple over time of proof. So who is shocked that the very first generation in Canadian history that does not have any access to public lands for development is also the first generation in history to pay high prices for land? Ninety-two percent of BC is public lands. Governments will enact whatever policies are demanded….the younger generation has been indoctrinated to not demand cheap land as every previous generation did.

Now there is the option of subdividing, but here too government policies will dictate the price (and the speed) by which existing private lands will be parcelled up. Tenth Avenue in Valemount was under construction when I was a kid. But the Village put a labyrinth of new regulations in the way, including things like underground power lines, street lights and pavement. Why was land so cheap for my parent’s? It was literally a dirt road and 4 pins in the ground. The pavement came after a decade or two of taxes. Again, these are nothing but government policies. We could reverse them and let people make a bed to lay in, and build up their property slowly as they earn money instead of upfront with interest. Then again, we could ask why it now costs $20,000 or more just to put a few property pins in the ground and register a new parcel with the province. But I have little faith in my own generation to demand these government policies be changed. This would be admitting self-responsibility for the situation we are in now and this old-fashioned kind of character is no longer in vogue and certainly not taught in our school systems.

Now let us go to the construction side. I was lucky. I snuck in my addition before the new laws forbade citizens from building their own houses. Ok to be fair, you can still ask permission to build a house after taking a mandatory training course at your own expense, but this is only valid for the one location you intend to build. When this new law came into effect, the local hardware store saw sales cool but up to fifty percent immediately. Veteran home builders who were too old to sit on five years of deposits adding up to $100,000 just to keep making a modest living said ‘screw it’ and turned to renovations and deck installations instead of major home-owner permitted projects. Overnight only one company in Valemount was legally allowed to build homes. Gee, I wonder why the price of housing has shot up so quickly?

I have bad news for my generation. It is not going to get better. But even worse, we can only blame ourselves. We are the generation that is refusing to buck the system and build our own houses. All of our parents’ generation moved and built their own lives if it was not affordable where they were. Every generation of Canadian before our own demanded not cheap rent, but cheap land and access to building supplies to build their own lives. Sometimes people would move into a basement with a make-shift roof then wait five years until they had enough money and time to add another storey. Oftentimes when the government tried to implement new regulations that were completely unreasonable they just said no and did what they did anyway. How hard can it be? Electricity, plumbing, set backs, inspections and square footage regulations. These are all reasonable. These are in the interest of public safety. After that can we please get the government out of the way? Four Million dollars for 13 subsidized luxury units, or four Million dollars to get 10th, 11th, 12th, and 13th avenue online with hundreds of new economy lots. And if that land owner will not play ball, we have urban reserves. Until my generation starts to demand more of these options on the table, no amount of over-priced and tax-subsidized rental units will prevent the inevitable that is setting up right now….the first generation of Canadians who never get a foot-hold into the economic growth of their age.

Joseph Nusse
Valemount, BC