Thank you very much.
I have been requested today to speak about a solutions lab I lead in partnership with the Canada Mortgage and Housing Corporation called Wealth and the Problem of Housing Inequity across Generations in Canada. I do so as a UBC professor and founder of Generation Squeeze, a university community collaboration.
Our lab is an exciting one because it's searching for solutions to Canada's housing affordability challenges caused by the fact that we have a growing, even skyrocketing, gap between local earnings and average home prices. That wider gap between home prices and earnings creates wealth inequalities, especially between owners and renters, and also between generations that bought homes decades ago and those who are starting out in the housing market today. In addition, the gap imposes dramatic unaffordability barriers, especially for younger generations of renters and aspiring owners, newcomers of any age and seniors who are renters. Within those groups the barriers can be particularly great for indigenous residents and Canadians of colour.
Given all of that, the growing gap between home prices and earnings turns out to be a major impediment to the CMHC's ambitious goal that all Canadians can afford a home that meets their needs by 2030. At Generation Squeeze, we think that goal is so important that we've embraced it as our own, and we encourage all in Canada to do the same. In pursuit of the goal, we aim to disrupt a root cause of the growing gap between home prices and earnings.
Our lab starts with the recognition that if a pandemic-induced recession does not deflate home prices, then we can no longer ignore the probability that our housing system is actually structured, even if unintentionally, to grow housing values out of reach for local earnings. Indeed, our lab is hypothesizing that many everyday Canadians, myself included, are entangled or incentivized by public policies to bank on profits from home ownership to secure our financial future and gain wealth. By being thus entangled and responding to such policy incentives, we reinforce feedback loops in the housing system that further fuel home prices and wealth inequalities.
My personal story is emblematic of this hypothesis. BC Assessment reported that my home increased by $300,000 in the year before the lab started, and that single-year increase is way more than I earn as a hard-working professor. It gave me a lot of opportunity to leverage the additional housing equity for home improvements and even other investments in the stock market, which I have taken advantage of with the support of the remarkably low interest rates available amid the pandemic. I clearly benefit from rising home prices, but that rising home price is a double-edged sword.
What's been great for my personal finances is hurting some of my other family members who, as renters, struggle to afford an apartment with enough bedrooms for their kids. It's hurting my younger colleagues, who are just as smart as me and just as hard-working as me but who now cannot afford to live where I do. It's hurting my community and country because evidence shows that wealth inequalities and pervasive unaffordability barriers make our economy less efficient while compromising our population's health.
By putting everyday Canadians at the centre of our lab, we know our lab's focus is provocative and potentially uncomfortable. Too often I have participated in housing dialogues where we hear Canadians say that unaffordability is simply the result of others, people over there, like a foreign investor, a money launderer, a speculator, a NIMBY, a developer, a landlord or a realtor. Yes, all of those actors do play a part in Canada's housing unaffordability saga, but our policy-makers have increasingly focused on those other actors as low-hanging fruit. There exist now foreign buyers taxes, speculation taxes, empty homes taxes, new measures to address money laundering, new efforts to address NIMBYism, new rent control policies, new expectations for developers, new regulations for realtors and a lot of efforts aimed at building more housing. Unfortunately—