The Housing Crisis and its Impact on Young Adults

real estate agent with couple in new home

Written by: Where Parents Talk Staff

Published: May 25, 2024

by Katherine Martinko

“We are in a crisis. There has been a market failure. For a long time, housing was seen as a ‘them’ issue—an issue for poor people [and] for students who then would move up the housing ladder. I think we’re now moving to a consciousness that housing is an ‘us’ issue, even for those of us [who are] comfortably housed.”

Carolyn Whitzman, a housing researcher and adjunct professor at the University of Ottawa, does not have a rosy view of Canada’s current housing situation. She spoke with Lianne Castelino, host of Where Parents Talk, about how dire things are and why many young people today may need to recalibrate their expectations for home ownership.

Click for video transcription

Welcome to where parents talk. My name is Lianne Castelino. Our guest today is a housing policy researcher, and adjunct professor at the University of Ottawa. Carolyn Whitzman is also an expert advisor to the housing assessment resources tools project at UBC. She’s an author and a mother of two. And she joins us today from Ottawa. Thank you so much for making the time.

Thank you, Lianne.

We are talking about a topic that is affecting families right across the country. Certainly not just today. But for the foreseeable future. In many cases, you have worked in research and how and researched housing supply, demand and policy for decades. How would you characterize the current housing situation in Canada?

Well, certainly, it’s, we are in a crisis, there has been a market failure. One of the challenges, but also an opportunity is that for a long time, housing was seen as a them issue, it was seen as an issue for poor people, it was seen as a temporary issue for students who then would move up the housing ladder, I think we’re now moving to a consciousness that housing is an us issue, even for those of us and I’m comfortably housed, I own a home, I have been through the experience of dealing with an elderly parent and trying to find a good place for her to receive long term care. I have through my children who are now adult, watch them go through much more stress and much more difficulty than I did when they were eight, their age finding suitable accommodation. So even from the perspective of my particular Boomer household comfortably has, I’ve seen how the housing crisis is affecting young people, how it’s affecting older people, and how it’s affecting all of us.

It’s such a multi layered lens that you bring as you describe it there. I wonder when you talk about your your children, what frustrates you most or concerns you most given all of the expertise that you have? And the subject matter?

Well, I guess I’m most concerned about the notion of inherited wealth, rather than meritocracy. So we’re comfortably housed, we don’t have the capacity to buy a house or paper or part of a mortgage for our adult children. And I see my son considering leaving Ottawa where I live, because he can’t afford to get secure accommodation here. It’s a slightly different situation with my daughter, because she lives overseas, but certainly, in her visits to Canada, she’s been appalled at the housing situation here. So you know, as you get older, you start thinking, I would like to have grandchildren at some point, you know, if the kids are up for it, which both of them are, and I would like to be close to those grandchildren. And it’s seeming you know, from a selfish perspective, it’s getting harder and harder for that to, for me to imagine that happening. And so I really think that we need to start thinking about how we can be better parents and grandparents, how we can be better ancestors and ensuring that housing outcomes work out for the next generation as well as they did for the generation that I was part of.

You brought up so many important points and what you just said there. And I think what a lot of people might not think about often is the importance of housing, a lot of us just take it for granted. But if you were going to explain well, how and why housing is important. How would you go about doing that?

Well, I mean, housing is the basis for if you look at Maslow’s hierarchy, housing is a real basis of of having secure the rest of the rest of your health the rest of your life. So a lot of people become homeless and have housing issues because of physical and or mental health issues. But if you have insecure housing, it’s so difficult have for you to be able to take medications at a regular time for you to feel good about yourself for you to have a meaningful life. So it’s the basis for the rest of our life. And it’s also the basis for caring, you know, at the extreme end, I’ve done work on violence against women, and a lot of women are reluctant to leave violent relationships because they’re worried about not finding housing and potentially losing custody of their children. But even at a less extreme scenario, if you have to drive until you qualify for an affordable place, that’s taking away on a daily basis, life that you can spend with your growing family. And if you’re reliant on a car to ferry, you’re growing children everywhere. And they don’t have an opportunity to explore the city for themselves or the countryside for themselves, then that is also depriving them of the very important part of their growing up and getting independence.

There are many reasons how we got here. If you were to point to one or two, as the main catalysts for how we have arrived at this housing crunch, what would they be in your estimation?

Well, there were two distinct points where we kind of went wrong. One of them was that immediately after World War Two, the Canadian government acquired land supported municipal governments to build adequate housing, and had a very clear sense of the populations that they were serving and how they could best be served. Now we can look back and go, yeah, they supported a certain amount of suburban sprawl, or yes, they probably over emphasized homeownership. And so they put a lot of resources into something that would lose affordability the first time but the bottom line is, we had 2030 years where housing was affordable to moderate income households, homeownership was affordable to moderate income households. And it was possible for young people to find affordable rent as they went to university, for instance, we started going wrong in the 70s when the capital gains tax was introduced. And there was a principal residence exemption for your home. And although you know in the abstract that was intended to help people save towards their retirement, the emphasis on housing as an investment vehicle to help support your retirement, as opposed to a place to live started fueling housing speculation, particularly when it was combined with less investment, through tax. Tax rebates for purpose built rental. The second point where the we really went wrong as a country is in the late 1980s and early 1990s, as the federal government decided that housing policy was not their responsibility, and they downloaded it to municipalities. And certainly in the case of Ontario, the largest province, provinces downloaded to municipalities. So virtually no non market housing was built. And since the beginning of housing policy in Canada, at least 100 years, there’s been a recognition that low income people, their needs are going to be met by the market, there does need to be community housing, Co Op housing, public housing that can meet the needs of low income people. So now what you have is housing that’s about three or four times as expensive as it needs to be for moderate income people. So they’re stuck in the rental market, you have low income people who are crowding for the same units in the rental market. And you have not enough purpose built rental being built and not enough in the way of rental rights to make that stable housing, stable long term house and doesn’t need to be homeownership in order to be stable and secure housing. But unfortunately, with our rental laws, it is and you have just honestly, every time I speak to somebody, they have a horrible story. I was hearing a horrible story this morning about a middle income person who’s really worried about what her old age is going to be frankly. And you know, I hear stories of people not having children because of lack of adequate housing, people getting divorced because of lack of adequate housing. The human cost of the housing crisis is just enormous.

When you look at some of the more telling statistics that you have come across that give you pause, any rise to the top there where you say to yourself, like you just described this as a 40 to 50 year old issue that’s been developing. But here we are now, post COVID. And we’ve got this catastrophe on our hands, which has no easy, immediate fix. Is there a statistic in particular that you that you really find striking?

Well, there’s a few statistics, there’s one have generated myself, which is 3 million households who are in need of homes that are $1,000 or less per month in housing costs. And that’s virtually impossible to find right now. So 3 million households, that’s about a fifth of households. And we count in certain ways, we don’t count students, we don’t count homeless people, we don’t count people who need who are in group homes or in long term care, et cetera. But when you start counting all those people, people are commuting more than an hour, for instance, you end up with a very disturbing number, which is 3 million households who need that kind of housing in order to have these insecure lives. I guess another statistic that sticks with me, is that into the early 80s, the average home costs 2.5, maybe three times the average household income. Now across Canada, it’s about nine times in Toronto, it’s about 412 times in Vancouver, it’s about 14 times. So this is this, the homes have become so unaffordable, that really it’s only the top 10% who can afford to buy a home. And that’s that’s crazy.

So then what is it going to take to attempt to stem the current housing supply shortage in your view?

Well, there have been times in the past when there has been a shortage of affordable housing. And the Canadian government’s been able to do something I mentioned World War Two, when there was a huge housing shortage and of course, a bunch of returning servicemen who would presume and women who would be presumably forming families. So between about 1943 and 1960, the Government of Canada enabled 1.5 million affordable homes being built through a number of mechanisms, they say, buying up big chunks of land, having a fee approved designs, supporting the building of very affordable small home subdivisions cetera. So Canada has done it in the past, Sweden built a million homes in a country that was a little bit less than 8 million people from 65 to 74. So there have been Finland has virtually eradicated homelessness, there are contemporary examples of countries that are doing very well. There are historic examples of Canada, having done a lot more during the mid 60s to the mid 80s. Between 10 and 25% of annual home completions were non-market homes that were aimed at low and moderate income households, which is sort of a baseline of where you’d want to be. So we’ve done we’ve done it in the past, I believe we can do it in the future. We’re richer than we used to be. We’re at least as smart as we used to be. It’s really a matter of political will.

Do you think that the scope, the breadth and the depth of the housing crisis was which is not just not having enough supply? you’ve outlined all of the potential impacts across the lifespan that someone could experience? Do you think the impacts are fully well understood by everybody who needs to understand them?

Oh, absolutely not. So there’s been a failure by all three levels of government, as I say, really, it’s only the federal government that can lead a national response to what is essentially a national crisis. So the federal government has been very slowly wrapping its head around the notion of what needs to be done. And even in the last few years under the Liberal government, as it created a national housing strategy and the first national housing strategy really in decades. A lot of the homes that it was supporting were simply not affordable. And it wasn’t taking advantage of some of the levers in terms of taxation in terms of infrastructure investment that it could do. The provincial governments have been horrible in general, with Paul sqlexception BC and historically Quebec, so they have not had social assistance or minimum wage rising like, literally, if you’re on minimum wage, you can’t afford a place to live, if you’re on social assistance, you really can’t afford a place to live. And they also dropped the ball when the federal government handed it to them in terms of non market housing. municipalities have generally been more concerned with making wealthy homeowners allaying their fears about development rather than building the kind of well located housing that’s necessary. So there’s been failure at all three levels of government, and that’s helped create this crisis that we’re in. I think things are changing very quickly. I think that discussions, for instance, about zoning, which is a very prosaic issue, but you know, who can afford to live in well located areas and how we can start building more carbon neutral and more accessible housing, as well as more affordable housing through changing zoning and building codes. That’s just exploded in the last couple of years. And to give the federal government credit, just in the last year, there’s been a lot of leadership by the federal government in that area. But I think that we’re still really wrapping our heads about what needs to be done.

You know, listening to yourself, in terms of all the expertise you bring to this topic, it seems on some level that we’re at this almost at the point of no return. So let me ask you, what kind of gives you hope, in the short medium term that this can be addressed with the speed and the thoughtfulness that it requires?

Well, I see people getting more and more involved in housing organizations, whether they’re Yes, in my backyard organizations, or they are organizations to help people who are homeless. And I think that that sort of activism is very exciting to me. Definitely, there have been examples. And one example is a federal initiative called the rapid housing initiative that built a lot of housing quickly, but more importantly, I think, showed some of the ways forward. A lot of reliance on factory built housing. So we talk a lot about how there aren’t enough people, like a rapidly aging construction sector, but factory built housing has worked before for Canada has worked before in other places like Sweden, I gave that example, and can work again. So we’re, we’re we’re starting to think outside the box again, which I find very heartening.

So what does that translate into? If you’re talking to young adults today, you talked about, you know, having kids and you’re in their 20s and early 30s. In your case, I’ve got kids in my 20s. What would you say to them about what they can look forward to in the short term in the medium term, based on what the current situation is?

Well, I there is going to be a federal election in the next, let’s say, two years, there’s going to be a both provincial and municipal elections in Ontario, in 26, which is coming up fairly soon. And I think it’s really important that people get politically engaged. And, you know, to really ask, the tendency is always for politicians to look for Magic Bullet solutions, less regulation. I don’t know first time homebuyers grants or something like that. I would say it’s really important for everyone, but particularly young people, to inform themselves about some of the solutions to advocate collectively for those kinds of solutions, to ask politicians hard questions about what they’re going to do, to make sure that there’s a adequate home for every one so that everyone can have good lives and feel comfortable and supported in their decision to have children if that’s their decision.

And on that note, when we’re talking about young families, presumably young home owners or wanting to be homeowners, what do you see as some of the impacts on that demographic with respect that this current current housing crisis?

Well, I’ll be honest, Lianne, I would say that homeownership is not necessarily the best bet for a lot of people at this point. I think it’s really important that we support the rights of renters for long leases. If you look at countries like Germany or Denmark or Austria or Switzerland. You have richer countries per capita In Canada, that are also majority renter countries. And one of the differences between those countries in Canada is that renters aren’t treated like second class citizens. So I would say that I worry about some people who are getting very indebted, and very over their head in terms of debt, in order to own a home. And I understand completely why. Because it is, you know, you’re looking for a place you’re feeling, I’m paying so much rent anyhow. But you don’t want to be in a situation where you weren’t. You weren’t on the situation, you weren’t able to do anything else other than pay your mortgage, or that you’re so far away, where you’re living, that you aren’t able to enjoy your life with your family if you have young children. So I’d say to young people, look at your options and advocate for the right options to to support you into the future. And it might not be homeownership at this point.
So the lure that many of us of a certain generation have been sort of taught to appreciate which is homeownership, as the only goal. Are you saying that that really, you know, this housing crisis has maybe kind of put a nail in the coffin of that kind of approach and thinking
the nail in the coffin and has also opened up other opportunities. I mean, there are other opportunities out there. In Germany, a lot of housing that’s built is cohousing, where a number of households get together and build a set of shared apartments, let’s say, you know, Co Op housing was very strong for many decades. And hopefully, it’s coming back where you don’t have to buy a share like a condominium. But you also don’t get a share when you leave. But having said that, you get secure accommodation, you get resident run accommodation, which is really important. I know it’s somewhat presumptuous of me as a homeowner to say to other people, that homeownership isn’t the ideal, but I’d ask people to really think about what they’re trying to achieve. And if they’re trying to achieve a secure home, where they’re not worried about being evicted, then that’s one thing. If they believe the thing that we were sold for a number of decades, which is that you’ll own a house, and then at some point, you’ll cash out and that will pay for your retirement, I’d remind people of that. People are living a lot longer. And certainly anecdotally, but also statistically, as people get older, they need more care. And a lot of people aren’t able to fund their retirement through homeownership. So that might not be the best way to save towards your retirement. I know a lot of young people aren’t necessarily thinking about their retirement. But you know, homeownership is not a panacea. Um, you don’t want to be in a situation where you’re beating yourself up all the time, about not being able to afford homeownership. I want to say it’s not just you, it’s it’s the crisis that we’re in. And I’m not saying that there is a switch. I mean, what would it take to make homeownership affordable, again, is a really important question. And prices would have to be at least half of what they are now, or people’s, they’d need to stay stable for a number of decades until household incomes doubled. And you know, those are those are choices. And those choices would have problems attached with them. And and there isn’t a there is no magic bullet. Let’s put it that way.

What would you say to parents who perhaps are in the category of you know, owning their homes, they were raised a certain way they work they pay their mortgage, and now they have young adults in the House who are faced with the current situation? What would you suggest to them about how they can support that young person to navigate this current housing crisis?

Again, it’s really important to not make it about the individual. I think that there’s parents who just don’t really understand how difficult it how much more difficult it is for this generation to own a home than it was for me. We bought our first home when our first child was two, and we weren’t paying more in mortgage than we were in rent and the downpayment. was relatively low, the interest rates were relatively low at that particular time when we bought a home, I don’t, those current conditions are not in place now. So, you know, on an individual basis, you might want to put some money forward towards the down payment or something like that. But collectively, I think we as a society, need to reckon with the fact that we need to change our attitude towards home, you know, we need to stop, we need to seriously consider whether home is an investment, in which case I win, and my children lose, or is home a place to live, in which case, let’s try to create the kind of society where everyone can win.

It’s important food for thought, certainly, and maybe, depending on the family or the background, might be a hard sell, because you’ve been conditioned to think a certain way. And for many people, this has only been on their radar as a crisis. In the last little bit, it seems to be, you know, the only thing we’re talking about, has the pandemic had any impact on it at all?

Oh, I think so. So a whole bunch of things happened during the pandemic, a lot more people started working from home. And that created, again, a need for larger units, because you’re using a broom as I am right now as an office. Another thing that changed during the pandemic was that there was a lot more readiness for people to move to Montreal or to Nova Scotia, or to somewhere far away. And that’s created a certain amount of tension, I think, since the immediate threat of COVID has abated, because some people have been asked to come back to work. And that makes it difficult. So what we saw was, at least in the short term, rents became cheaper as people either fled cities and an old fashioned play the kind of way students were not renting, etc. And then home prices went way up as the importance of home became even more clear. So yeah, it’s it’s certainly in the last little while, since COVID, that the importance of home has really been reinforced.

How does one know if their house poor?

Who if you so Canada has the highest level of household debt in the world? If you are worried about not making mortgage payments, if you are finding difficulty in furnishing your house, if you feel that every single expenditure that you’re making is towards the maintenance of your homes such that you cannot have holidays, and you can’t have vacations and you’re stressed all the time, then your house poor?

What does the conversation look like with your kids? If you ever have it? Or have had it I’m sure in the past, when it concerns housing, what does that sound like?

We have it a lot. I should mention at this point Lianne that my last name is pronounced Whitzman, sorry, but hard i. So one of the way it’s been talked about, we just went on a little family road trip, which was fun. We talked about housing, as we often do. And in a way, I’m not sure I want to say because some of it’s a bit brutal, like for instance, with our son, who is now living very far away from his work, we were suggesting, rather than him put all of his savings into a condominium, which he was considering. We said, get a car instead. And in a very good way. I said, Well, you can live in your car, but you can’t drive your condo. So that was a bit of a brutal conversation that we had. I’d say in general, we’re saying to our kids, you need to be able to feel comfortable with the choices that you’re making. I have seen situations not necessarily with my own children, but with other people’s children, where they just are so overwhelmed and debt, that it creates a lot of stress in their lives and mental health stress. Because another thing that happened of course during COVID Is that it didn’t no favors for anyone’s mental health. So you know, don’t beat yourself up is another thing that I say with them. If you’re not able to achieve entirely arbitrary life goals by a certain point in your life you take as long as you need to study you take as long as you need to find the right job, etc. So I just When I’m talking with my children who are both wonderful people, I try to emphasize that they’re there, frankly, facing a very different world in a lot of ways from the world that we faced when we were their age. And I mean that about climate change. I mean that about a whole bunch of issues that concern me.

Dr. Carolyn Whitzman, lots of food for thought housing policy researcher, adjunct professor at the University of Ottawa. We really appreciate your time and your insight today. Thank you so much.

Thank you, Lianne.

“In the early ‘80s, the average home cost 2.5, maybe three times the average household income. Now, across Canada, it’s about nine times in Toronto and 12 or 14 times in Vancouver. Homes have become so unaffordable, it’s really only the top 10% who can afford to buy a home. And that’s crazy.”

Whitzman explains why secure housing matters. “It’s the basis for the rest of our life.” Without it, it’s harder for a person to feel good about themselves, to have a meaningful life, to do basic tasks like take medication regularly. Lack of housing can complicate relationships where domestic abuse is present; it can force people to commute long distances, which reduces time spent with family; and location can make it hard for children to explore independently, affecting their development.”

In considering what needs to happen, Whitzman cites historic examples of governments taking effective action. There was a federal government push in Canada to build 1.5 million affordable homes after World War II. Sweden built a million homes between 1965 and 1974. Finland has virtually eradicated homelessness.

Whitzman says, “We’ve done it in the past. I believe we can do it in the future. We’re richer than we used to be. We’re at least as smart as we used to be. It’s really a matter of political will.”

Couple with advisor calculating costs pexels-rdne-8293651A mother of two adult children, Whitzman is hopeful more people will get involved in housing-related activism.

She thinks we need to embrace factory-built housing as an alternate to the aging construction industry in order to ensure that enough houses get built.

“Factory-built housing has worked before for Canada; it has worked before in other places like Sweden, and it can work again. So, we’re starting to think outside the box again, which I find very heartening.”


Whitzman says she would like to see long-term renters treated better (which Germany does well) and more development of co-housing alternatives. She warns against the profound stress induced by being “house-poor” and stretching oneself to meet mortgage payments, furnish a home, and have nothing left over: “I have seen situations… with other people’s children, where they just are so overwhelmed with debt that it creates a lot of stress in their lives and mental health [issues].”

When asked if she has any advice for parents trying to support their young adult children, Whitzman believes a collective reckoning is needed.

“We need to change our attitude toward home. We need to stop [and] seriously consider whether home is an investment (in which case I win, and my children lose), or is home a place to live? In that case, let’s try to create the kind of society where everyone can win.”

Parents, children and housing advisor

Her own lived experience as a mother serves as a further reminder about some of the stark choices young people today may have to make when it comes to housing.  She shares the example of her adult son, who she says, “is now living very far away from his work.”

She and her husband suggested to their son that, “rather than him put all of his savings into a condominium, which he was considering, we said, get a car instead. And in a very good way I said — well, you can live in your car, but you can’t drive your condo. That was a bit of a brutal conversation. I’d say in general, we’re saying to our kids, you need to be able to feel comfortable with the choices that you’re making.”

Related links:

University of Ottawa

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