The following is part two of a two part feature on the Canadian housing crisis. Part one, on the role Covid-19 policies played in worsening renters plight, can be found by clicking here.
Vectored through the housing market, a cost of living crisis has gradually imposed upon Canadians a neo-feudal system that will invariably leave them poorer than their antecedents.
The Covid-19 crisis exacerbated years of mounting housing affordability woes in Canada’s major markets, namely Toronto and Vancouver, but it’s since spread through the nation like wildfire.
Now, despite a dearth of sufficient purpose-built rental stock to house them, a growing number of young adults are either living with their parents or slated to become part of the country’s permanent renter class.
“Absolutely, there’s a permanent class of new renters. People are earning terrible wages and living with their parents,” New York-based Gerald Celente, a forecaster and publisher of Trends Journal, told True North.
Celente, a heterodox thinker whose vast body of work includes predicting, among other things, the Great Recession, likens the contemporary financial system to the plantation economy, only circumstances are far more propitious for today’s plantation owners because they don’t lodge and feed their serfs.
“You get a job at Walmart or Amazon or Home Depot or Lowe’s—any of the big chains—and you make nothing, go home, live paycheque to paycheque and can’t afford to buy food, so you eat crap, and then go back to work,” Celente said.
“Look at the data that came from Oxfam at the beginning of the Davos meeting about the one per cent becoming, what, $27 trillion richer since 2020. Everybody is going down. The money is all being gobbled up to the top.”
The panacea to housing unaffordability today is preponderantly parents gifting children down payments for, or even outright purchasing them, starter homes so they can build equity. However, for the rest, affording a Toronto-area home that averaged $1,189,850 at the end of 2022 is insuperable—especially when factoring inflation, which shows nary a sign of dissipation.
“If you’re a person starting from nothing whose parents were renters, barring winning the lottery, your ability to put a down payment on a house in excess of a million dollars, or a small condo that’s $750,000, is increasingly difficult. Where will you find money to start the process?” said Ron Butler, owner of Butler Mortgage in Toronto.
“It’s a neo-feudal society. We’re observing it: when the price of an average home is nine to 12 times average earnings, it’s not achievable. We’re sentencing people to never own a home. You could describe it as the new feudalism, that we’re going back to the middle ages when people’s parents had to own property for them to own property.”
Homeownership rates in many European capitals like Paris hover around 50% while Toronto’s is roughly 70%, but Canada’s largest city has paltry rental housing, driving up prices and creating overreliance on the secondary (condominium) rental market, where the vagaries of inadequate security of tenure loom large.
Moreover, because rental supply is vastly outstripped by demand, renters, who must have impeccable credit ratings, engage in bidding wars for units that ultimately rent for hundreds over asking, and they frequently pay months of rent up front.
Speaking to the ramifications of never owning homes, which proffer wealth and familial stability, Butler said, “The incidence of people being childless is the highest it’s ever been in Canada,” adding that Canadians aren’t replacing themselves.
“It’s statistically abnormal that a couple has two children, and we’re seeing the outcomes of economic pressure on people, where they won’t reproduce. We’ve heard people talking about affordability, but nobody municipal, provincial or federal say the solution to helping society is getting house prices down.”
Canada’s unemployment rate was five per cent in December, however, many of the jobs created nowadays are part-time, bereft of benefits, and mean a growing number of Canadians work at least two of them.
Canada isn’t suffering alone. Celente noted that 41% of American children are born into single-parent households, and that 63% of the country’s workforce survive paycheque to paycheque.
“When you look at the details, we don’t have the nuclear family anymore.”