Buying An (Affordable) House and How To Feel (Again)


I duNNO I. I don't know if it's it's super productive. I saw someone joke on twitter today. I actually think it was a vice thing that I saw and they asked Jagmeet Singh weather weather he could beat Trudeau in a fight. Apparently he's good at mixed martial arts yeah that was like at what point do we just put them all in a boxing ring and that's how we decide site this election. I have always maintained that we should have one debate and they can answering any frigging language they want to but then we have another debate. That's just all of them. In some sort of like escape deep room or some sort of battle bought situation American Ninja Warrior like there's other ways to game affi- this thing rather than you know various pundits saying Oh this person clearly one now let the rest of US actually judge based on actual scorekeeping it always brewed balancing the Mercedes service welcome to say space a podcast about the news politics pop culture and anything else that catches our attention I am. I'm your host Mickey. Mouse here say space. We are creating a safe space every single week for bad takes and to do that. We are joined by a couple of friends. Help us make sense of world. I'm so excited to have in studio with us. Emily Jackson she is the host of the downtown business podcast and she is a reporter for the financial post handling hi. Thanks for having me very welcome. We also have with us in Studio Stephen Joe. He is a reporter for vice news here in Toronto asking check in. How's the election election holding out for everybody I would just I think it's a bit demoralizing at this point. You know we just got the news that Andrew Scheer is also an American which I can't bring myself to care about on top of everything else in this election so it's just been one full of complete Duthie. Yeah I think between the two planes thing and Andrew Shears passports thing. It's like it's kind of like points of information than if you ask me them in two weeks I will not be able to recall when I discovered that or why all right well then let's get down to some topics do matter because aside aside from the kind of side show of politics they are still campaigning and for almost every single party a major issue on which they've been campaigning around is the idea of housing and housing affordability. There's people that need housing right now. There's people that need help right now so to help those families out right now now. We're going to put in place a rental subsidy. This is going to help families that are struggling with housing today. We can change the tax code to encourage the building of purpose built rental housing we can increase access to more affordable housing by dealing with some of the perverse pressures on our supplied housing airbnb have taken a lot of actual housing housing out of the marketplace point you specifically to our housing strategy which consists of reworking the stress and make it easier for young couples else to purchase their new home with a longer amortization period. We're announcing that a new liberal government will expand the incentive to give even more help to people living in Victoria the Greater Vancouver area and the Greater Toronto area in those markets. We will increase the value of a qualifying home from approximately really five hundred thousand dollars to nearly eight hundred thousand dollars. Everyone's kind of made their pitch about it how they want to offer the incentives for first time home owners or what they wanna do to the mortgage dressed has to you know how much more housing they want to build and it's kind of a lot to factor in soon as a renter. I'm endlessly kind of confused. Emily your financial report or maybe you can give us the landscape what is housing affordability mean when these parties are talking about so so the challenge with the term affordability is that when they talk about it on a grand scale. It doesn't really mean anything because affordable to who is the question what's affordable to someone who makes one hundred thousand dollars. A year is very different to a F- then what's affordable to a family of four that makes about seventy thousand dollars a year which is about the average household income in Toronto so when you're talking about affordability in a blanket sense it really it stops meaning anything and it it just is kind of the same sort of pitch that we hear about you know wanting to appeal to the middle class so both of those words to me have lost lost a lot of meaning which gets kind of frustrating when we talk about housing affordability but ultimately the definition is supposed to be if you're spending about thirty percent of your income on housing that is supposed to be affordable so whether that's on your mortgage payments your your rental payments that supposed to be affordable that is definitely out of reach for a lot of people living in Canada's biggest cities where housing prices have skyrocketed. I mean in part of the responses from the parties are coming. Are you know kind of tactically shrewd having to do with hot housing markets in Toronto and we cover in aiming for those voters but when we're looking at housing affordability affordability who isn't able to afford their housing it. It's interesting so depending on the policy a lot of people are targeting first time homebuyers that would be the conservatives conservatives the liberals in even the MVP a little bit so with the Conservatives they want to essentially reduce the mortgage stress tests and allow how people to increase the amount of time it takes to pay off their mortgage so their monthly mortgage payments are smaller so instead of like a standard twenty five year mortgage. Maybe they can add a decade or so so onto that added at five years thirty years so this is what the Conservatives are promising to end. EP wants to do thirty or as well that could make your monthly payments smaller again. It's riskier right because then if interest rates go up you've got a mortgage for a longer amount of time or a bigger mortgage essentially to pay off the liberals also targeting first-time time homebuyers with this incentive where essentially the government will help you out with your downpayment and you have to pay them back when you either sell your your house or within twenty five years so if you have five percent of a of the total cost of the house you can. That's your down payment. That's fine but they would louis new and up to an additional ten percent so your mortgage payments again would be smaller but ultimately you do have to pay the government back. This is a bit of an interesting strategy eighty but I'd save first-time homebuyers kind of the the hot demographic that people are targeting that does tend to make sense because once the people are in the property market they can kind of stay in there so it's about enticing people who are sick of paying all their money to rent which it can feel like when you're living in and Toronto or Vancouver or Montreal or less Montreal everyone in Montreal Komo brags about how good their rent situation is. I'm sick of them. It's so oh good. I mean Stephen. Let's bring you in on this. You know Toronto's kind of the hot housing market. Is there an idea that's resonating with you. Read read these promises. I you know I'm I'm always super impressed. When I hear people kind of like commentators were able to to remember what these people say with the numbers and stuff because you know if it resonated with me I would remember and and you know I've been writing party profiles for for Vice Dot Com and the Green Party has gigan- like must be a couple of hundred pages of worth of platform points the MVP have a summer thing. I don't remember reading any of it and thinking okay. Some of the stuff is actually you you can get to the structural problem of the fact that what is it like one in four one in three households and can. I think pay more than half half of their pre taxed income on rent or on their mortgage. That's that's housing. Affordability as a sign of affordability in general people's wages are not going up fast enough so they can ask comfortably afford food shelter obviously and then and clothing you know. I I I agree. Elections are very important. You should probably familiarize yourself basically with you know if you're a if you care about being a citizen about out you know of what these people are saying all that being said these aren't problems that can be solved by just by ratifying thing every every few years going to the polls to ratify policies that have already been shaped. I think that's a really good point your point about though you you know people are only making a certain amount of money in the seventies is if a house price was say one hundred thousand bucks your income would probably be twenty five thousand bucks a year now. The ratio is ten to one so it takes so much longer for people to actually afford to be able to buy a home and and wages haven't been rising as quickly as housing prices in in the last ten years in Toronto alone. The average housing price has doubled so I mean we we all know haven't doubled they definitely haven't I certainly am not making twice. As much as I wish I wish yeah. I'm just GONNA cut this part out email email to all all our bosses. I mean part of that is in then in an election and you have the parties making these promises or having done made some action in the past couple of years here's to do something around relieving housing. Is there still too much of a push on the idea of like you have to buy a house in order for this economy to sustain itself. I think that's a really good question and I think that's something like our generation. The millennials and the younger generation are going to be grappling with because that idea the of homeownership was always kinda dream but is that really realistic anymore in at least in Canada's big cities we have these cities are expected to grow by hundreds of thousands of people in the next ten years and if we're not building supply to keep up with that demand we're all going to be crammed crammed into the same amount of space right so does it really make sense to think of a detached home. I mean sure if you want to commute for three hours a day. Maybe you could afford one but you have to weigh those pros and cons so I think this dream of home. Ownership is not as I think it's still something we is kind of left over from a previous generation. I'm not sure it resonates strongly with millennials and maybe Stephen. That's why you feel like these parties aren't really speaking into you when they're talking about get into a home. You'll be the first time homebuyer yeah I I rent I have. I live in a house with a a bunch of other people having rented for so long and having had so many dozens and dozens of roommates looking back I still feel like you you know having your own place is important a your own privacy or whatever I think it's not resonating the idea of home ownership primarily partly of not primarily because of affordability thing like you can't it's fifty years it takes now forty fifty years re to save up to buy something and Mangku Hoover Okay and dozens of years to buy something in a suburban neighborhood here in the Ta for example I. I don't think that's sustainable because there's a lot of debt and I was having a conversation with a friend of mine who works in the financial industry and you know he said something that so obvious but never really thought of thought of it that way but you know for a lot of the for you know credit card banks credit card companies. You know an increase in personal debt is is a positive thing for them. It's considered growth and I think recently the annual increase for the average Canadian person's debt is like thirty percent like growing cumulatively every year so at some point like you know you have a huge. You have obviously of people been talking about. Oh when's the housing market. Come crashing down or whatever and it hasn't happened yet but in my mind you know. I'm not an economist but I'm just thinking like one of these days. Something's nothing's GonNa Happen and and you know was the politician knowing that you know things like student. Loans or student debt is such a factor for a younger set of people than than it was prior. Generation is something like the offers by each party around housing really going to resonate because almost all still still rested the idea like you have to take out a mortgage. You have to take out a big debt in order to join this part of the economy that we're going to support and sustain and for a lot of people that are like that's not necessarily recycle. I want to get back into so it's always kind of you. Know never really resonated for me when parties are offering more in housing and I'm just like everyone I know is so terrified of their debt already is it. Is it really something that's going to work for them. Debt is such a huge part of the equation and I think that you you touched on it. Canadians have one of the highest debt levels of any country in the world and money is so cheap right now by the interest rates rates are so low so interest rates right now. Are I mean the benchmark. Rate is one point seven five percent. I believe we need to fact check me on that too but essentially what it means is that it's fairly cheap to borrow money. You're only you only have to pay back the principal plus one one point whatever ever percent on a mortgage rate right now you can get a mortgage for like two point eight percents in the eighties when the boomers were having kids leads buying houses the interest rates were up like above ten percent up to almost twenty percent at some points so then you're paying back twenty percent on top of what you paid so that that would be insane if the interest rates went up that high right now people would have to walk away from their houses. There's no way they could have afforded they could afford their payments still in Alberta Berta. When that happened in the eighties they called it Jingle Mail because people would just send their keys back to the bank and just walk away from their houses and just leave them so this I I feel like our generation? We've kind of been raised on cheap debt so some people aren't as afraid to get into it because you're like oh well. I only have to pay back a little a bit more than what I borrowed but it all stacks up and the point about student debt is so good because not only and I do think that's what's keeping a lot of people people kind of disenchanted by this dream of home ownership because they already have these debt payments to service they see that it is taking years and years and years to pay them off and also because you're so busy paying off your other debts you don't have enough cash to save up her for a mortgage down payment and you don't don't have enough cash to it's difficult especially in the major cities to do anything more than just pay for your cost of life talk about like millennials who are not in these major markets goodness knows sort of like montrealers but other friends who live outside of major cities will say just move it. Is that like would it be much more a sustainable for a party to say instead of helping out with your mortgage. We'll just help you move. You know what I think would be helpful. If there were jobs in the smaller centres so like the thing is there's more jobs in Toronto rates so you need to go where the jobs are but say if they were like we're going to build awesome. Internet connections out in the boonies and you can go get a house there for a hundred thousand dollars and start up a company there at that will be that would be an an interesting policy. I think I think the the job thing is is obviously really really important being connected in that kind of thing there is you know the maritimes obviously is is facing this this problem to young people don't want to stay there and there's massive incentives being handed out when I was in Halifax. Someone told me like the provincial provincial government in the city government are really coming together to say to people we're going to give you all these benefits up to and including housing just to get fifty thousand more people into the greater or Halifax area and still the young people are Kinda like yeah. I'm still going to just leave Nova Scotia. Thank you so much. Obviously you know people have aspirations right like they. There's something about big incredibly diverse places that draw people in and there's a certain lifestyle people feel like they can. Maybe you know they can be more themselves or something but we don't have an economic. We were losing. I think an economic comic sort of I dunno model or you know the status quo right now is is changing in a way that doesn't allow people to sort of not just sort of aspire things but often to fulfill their most basic needs and I think you know just speaking big picture wise. I feel like that. D- legitimizes misers not just industry or or business or whatever but de legitimizing are like democratic principles and I think that's why we we're seeing so much sort of a you know the the right wing populism today for example and you know the Reisen in a lot of hate. I think that's a huge part of it. Yeah I mean I think in general we're seeing I actually think there's a bit of populism on both ends of the political spectrum like I think you know real marker. Populism is the idea of like railing l. e. against the elites and we've seen both the MVP and the Conservative Party kind of say like elites are doing the S. and the liberals were doing it when they were trying to achieve their tax code changes so so I mean we're looking at housing. Maybe this is cynical of me. I tend to think like well. That's not really form. People are describing like first time home. Buyer is an all of these incentives entity as being for me but what I know to be true is that a set of people who have a lot of money are handing out money down to a generation that does not include me and so I think the kind of wealth transfer were seeing in. This country is part of this question. I think that's part of where these parties are. Targeting is this this set of giant pool of money that is being moved down across generation but excluding a set of people like myself and Stephen who are not going to be able to receive that giant pile of money and say okay okay well. Let's by the House off mom and dad or let's invest in these condos based off this wealth transfer that we've gotten. Is that something you're seeing coming up emily absolutely and I I think I think you've touched on a huge thing so of millennials who are buying homes. I think fifty percent is the statistic have help from their mom and dad and baby. boomer have a ton of wealth even think about it in the housing market alone. Some people say they bought their house in Toronto in the seventies probably bought it hundred grand and now it could be worth three million dollars so they're sitting on a ton of wealth even if even for people who didn't grow up as wealthy or didn't. I didn't grow up in that elite class but now there's all that money that they can transfer to their kids to help them out and say well better. Give it to them now than what I'm Gon helped them. Get a foot ahead right and I think that is a huge huge huge factor more than fifty percent so I do think that's something that really needs to be considered and and is having a huge impact on the housing market and finally it's time for take. Lee's this is the part of the show. where we share our boldest bad opinions rant endorsements or whatever else we need to get off our chest emily. You're the first time I wanted to get started with your takeaway this week. I I have have to say that. This is what I was most nervous about the podcast because all of your guests have the coolest takeaways and I'm not as funny but as we're talking about what we were watching on TV last day with the debate debate what I wasn't watching which I'm very sad about is that the bachelor in paradise is over so I had to turn to net flix and binge. Watch something else I I started watching. This is us and guys my take on. This is us which is just essentially emotional porn is that it's actually a very good show is. It just seems like your show where they're like at some one point. They like Flash a card on the screen. They're like this is always when you cry. It's essentially just crying and this is my argument for it is that I just WanNa feel feelings you. We're on twitter all day. We're following this election and it just can feel so you feel kinda stuck in this void anyways. It makes you feel feelings. It is objectively objectively very terrible bad teeth but it makes you anything happens to all these people and it's how much more can they take and you're like. I can't take it at at all. anyways that is my that is my take on what everyone should be watching as a guilty pleasure during this election that's fair. I recently caught an episode of parenthood which used to be my go-to. I'm going to cry kind of thing like it's just it's just very for for those of us. Who WanNa feel feelings yeah. I understand that I can rock without one. I feel feelings but they're like bad feelings like anger frustration. They have a guilty pleasure then pleasure I'm not I I'm bad I get nervous when I start new show so I don't do it that smart and I usually just watch really bad action movies on Netflix or Amazon Prime. I have both so those are your go to. I'm going to feel something but it's action based aced yeah. I've watched some Arnold Schwarzenegger movie for the Fortieth Time Kindergarten Predator Predator. I can't believe I'm I blinked on that but I just feel like if you as a quote unquote take it's an obvious one but if you're going to be erases towards a famous person you should make sure he's not hot miked so this is a in a market in Montreal prior to the debates. Jagmeet Singh was yeah some wait racist guy kind of run up on him towards him and then you should cut geared turbine off and you're Lulu eighties look like all sorts of people. That's the beauty of Caddo. I don't agree in you know creepy slash friendly way it tells them to cut the thing he's wearing on his head look more Canadian and we can hear everything and it's almost like when he did the Leinen he was like I'm. I'm doing you a favor telling you this. Maybe no one's told him it was like Jesus. Christ is this I mean. I think every person was watching that like Oh. Uh I know that lean like I know they're about to say so. Let's look the racist lean. It's like an eighty degree angle or someone's just like I can tell you something terrible. You're like no please. Lisa lean into me that way but oh my God I now. I want to carry a hot. Mike all the time. I think that's a good idea because I think I mean it's just even watching the reactions actions on twitter and the fact that Jagmeet Singh is being celebrated because Oh he dealt with it so well. It's like well. He has to deal with this crap crap day in and day out and this video is perhaps proof to some people who say that racism. It's it's not a thing. It's not what people are worried about. I mean feel like the guy was genuinely trying to give him good advice. I think he is. I think he was just like I. I'd love to share with him. My opinion hope you win in hope you would yeah is is. I feel like it's I mean I've said this many times about none of these men being particularly inspiring or feeling like the second coming of Barack Obama but at at the same time I'm like I Barack Obama wash that was like I know that lean people are about to say they support you but there are all sorts of say something racist and wild man. Yeah I watch that and I just like I genuinely think the amount of restraint Jagmeet Singh shows knowing that this man can do mixed martial arts and opts not to hit everyone in the face says wild things to him that is that's almost as Maneka it is it is I think I think it is not a on that one. What's what's your take. I'M GONNA probably wrong about this. Regretted almost instantly which is I do not think in any way we need five moderators for the official kingland debate. There's five of their five of them that I saw I saw the ad come up on last night and it was like they did all the party. Leaders like little flash flash cards are like maxine Bernie Justin Trudeau Andrew Scheer Missouri's May Francois Blanchette and I was like cool like that's expected either and then they also did the title cards for all the moderators. I was like man. This is like when. WWe would announce everyone on the card because it was then it was all of them and they did it by last name to their delacour Raj Nick. We'd we need. Just maybe two of these people and it's not because I don't think any of them are titans of the industry or I don't think any of them are really good at the job. It's it's just one of those things and I'm like the compromise is as condescending as it feels which is like just pick one of them. I think they all like each other enough. Just pick one and let one do the job and let us be mad about that if she if they do a bad job but like saying like we've got five women as like. I feel I feel condescended to. I'll watch it one five. I'll watching I'm probably going to regret it instantly and they're going to be like the frigging vendors of moderating a political debate like well. I'm a dummy I mean I would love that and adventurous style political debate yeah I guess. CBC Did kind of the same thing with the national right instead of choosing one host they went with four. It's it's a lot it's a lot it's a lot of people out there on the stage. Hey I'm It'll be interesting to see how that plays out. It's I'm sure that it's GonNa be pretty talked about okay well. That's it for the show this week. Thank you so much to emily and Stephen Emily. Where can people keep up with you. In your work. You can follow me on twitter at the Emily Jackson and you can subscribe to her fantastic podcast down to business. It's where I learned anything informative about the world of business at all. I can barely read so super useful Stephen. Have you I'm at Stephen said that each of you and you can find us on Itunes by going to you. It's it's a safe space dot com where you can leave a rating or a review and let us know if you like the show because we love hearing from you especially this election. We want to know what you think and what you're thinking about. Some feel free to to reach out you can get in touch with the show on twitter at it's a safe space and you can keep up with me on twitter at the space comes out every Friday and until next week they say.

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