Housing affordability has become a pressing concern in Canada, particularly as the dream of homeownership continues to elude the working class. While the Canadian elite benefits from real estate investments, many are left disenfranchised by soaring housing prices. This article delves into the intricacies of the housing market, shedding light on how it adversely affects the working class and, more specifically, Black Canadians.
Before dissecting the housing crisis, it’s crucial to understand the significance of homeownership in facilitating generational wealth and success. Data from the Canadian Real Estate Association (CREA) reveals a direct correlation between the increasing value of principal residences and the rise in median family net worth. Homes, considered stable assets, appreciate over time, contributing significantly to homeowners’ overall wealth.
Projects like those undertaken by Habitat for Humanity emphasize not only the financial benefits but also the positive impact on mental well-being and educational outcomes for families. Homeownership provides a conducive environment for children to succeed in school, adopt healthy learning habits, and secure a stable future.
In Canada, homeownership has long been considered a pillar of generational success. However, this pillar is rapidly moving out of reach for many Canadians. Ontario, a province at the forefront of the housing crisis, established the Housing Affordability Task Force in response to escalating concerns.
The task force’s 2022 report paints a grim picture, revealing a “housing crisis” in Ontario. The average home price surged to an alarming $923,000 by the end of 2021, marking a staggering 180 per cent increase from a decade ago when homes cost $329,000. This surge makes it challenging for first-time homebuyers to afford a down payment.
Even with a median after-tax income of $105,500 for families with children in 2019, this amount proves insufficient in major cities like Toronto. The approximate cost of living for a family of four, excluding rent or a mortgage, is $4,710. With a $900,000 home and a 3.5 per cent interest rate paid off over 25 years, the monthly mortgage payment for a four-person family would be $4,169. This leaves families effectively living paycheck to paycheck.
The high cost of living compounds the challenges for young couples making $100,000 annually. Despite having the means to afford property, many are priced out by unaffordable housing combined with soaring living costs.
Black Canadians face unique and formidable barriers to homeownership, with one significant obstacle being the down payment. In Ontario, where the average home is around $900,000, a 10 per cent down payment amounts to $90,000. This poses a significant challenge for Black Ontarians, a majority of whom are first or second-generation immigrants.
Census data from 2016 reveals that 53.4 per cent of Ontario’s Black residents were first-generation immigrants, and 38.4 per cent were second-generation. New immigrants, seeking opportunities in Canada, often start with minimal resources, making it difficult to accumulate the necessary wealth for a down payment.
The median income for newly admitted immigrants in 2018 was $31,900, an unsustainable wage in cities like Toronto, where one needs to make $22.08 per hour to afford basic necessities. This economic disparity forces Black Canadians, including immigrants and their descendants, to live paycheck to paycheck and struggle to save for a $90,000 down payment.
Despite high educational attainment among Black youth, with many holding university degrees, there is still a disproportionately high unemployment rate. Black Canadians aged 15 to 24 experience a 30 per cent unemployment rate, compared to 15.6 per cent for non-Black peers as of 2021. This, coupled with the lack of funds due to inflation, impedes the ability to pass on generational wealth, affecting homeownership and financial stability.
The unaffordability of housing in Canada is not just an economic issue but a social one, disproportionately affecting Black Canadians, immigrants, and the working class. Urgent measures are required to address the housing affordability crisis, ensuring that homeownership remains an attainable dream for all Canadians. If left unaddressed, this crisis risks turning many Canadian cities into elitist hubs where only the ultra-rich can afford to live, marginalizing the very people who have contributed to the development of these cities.
