On the morning of August 7, our realtor emailed to let me know that our offer of $462,500 had been accepted by the sellers of the big yellow house on Devonshire Avenue. As long as the financing and inspection work out, we’ll be popping champagne on September 5 and moving from our corner lot on Richmond St. and Devonshire in Halifax’s North End.
My wife Rachel and I bought our first house twelve years ago for $182,500—and we have no intention of selling it any time soon. Instead, we’ll rent it out and enjoy the view of the gardens I’ve grown, from our new sun porch across the road. The income, combined with rent from the basement suite at the Richmond house and the one-bedroom flat above the Devonshire garage, will cover the mortgage payments at both houses, and a good chunk of the taxes to boot. Not only that, but in 2013, we bought a large, renovated duplex in Moncton, a property that has been completely self-financing over the three years we’ve owned it.
A month shy of forty, I find myself poised to be the co-owner of a million dollars worth of property. Mortgaged property, sure, but it’s not our money paying the (tax-deductible) interest—the tenants cover our costs. Nor was it our money that got us rolling. How we got into this position is a complex mix of good luck and good decisions, but the fundamental fact is that we wouldn’t be here without the privilege into which we were both born.
When, in early 2009, my grandmother died, she left to my mother and her two sisters significant inheritances, legacies of my late grandfather’s medical career and investments. After Grammy’s estate was settled, my mother placed a $75,000 lump sum payment on our mortgage as an interest-free loan, to be repaid when we were finished paying the bank. In 2013, we killed almost one third of that debt with one cheque when we co-purchased the Moncton duplex (another house we couldn’t have bought on our own), and Rachel and I fronted the entire downpayment and closing costs. That money came out of a secured line of credit tied to our mortgage on the Richmond Street house—credit we could not have received without my mother’s generous principal payment.
Our friends and co-workers hail us as successes, but the less fortunate shouldn’t think they’ve failed. They are being failed. Worse, they’re being parasitized. Between their debts, their exploitative wages in insecure semi-skilled jobs, and their ever-escalating cost of living—especially in cities bigger than Halifax—young, educated people are barely able to afford a decent restaurant meal once a month, never mind investing for the future. Paltry measures like the Federal Liberals’ expanded grants and loan repayment exemptions for those earning under $25,000 won’t help much without major social restructuring to redress inequality.
There’s a lot of talk about class and privilege these days and much of that talk obscures the dynamics of these concepts in real-life scenarios. My wife and I can take credit for a few things. We’ve worked hard. We’ve ventured. We live modestly, but by no means monastically. We don’t have a car and never have. We don’t carry credit card balances. We’ve made smart calls on the properties we’ve bought (including dropping offers on two houses that failed inspection). But we should never have qualified for our first mortgage. Having quit one job and not yet started my new entry-level, seasonal service gig with Via Rail, I was unemployed and Rachel was working twelve hours a week on a program coordinator contract at the Halifax Public Library. But my parents, well-off owners of unmortgaged property on PEI, were game to co-sign, so we qualified for just enough of a mortgage to buy a solid one-and-a-half storey house on a sub-optimal street across from public housing, with 5 percent down.
In other words, we are where we are because of where our parents were: comfortably middle-class professionals who were able to pass on inherited wealth because they didn’t need it! It’s so much harder to get there these days. It’s almost impossible to imagine inheriting money and not having an immediate use for it. Millenials have even more debt and even poorer prospects than we did at their age.
Rachel and I—both of us from families of four kids, each of whom has derived much benefit from their parents’ social standing, income and wealth—decided to stop at one child, a decision sealed when I had a vasectomy a couple of years ago. We might put an only son in a position as good as ours. Maybe better because, unlike our parents, we’re neurotically obsessed with not being poor and debt-hobbled. The properties we own should be unmortgaged, profitable and more valuable by the time he’s an adult. There may even be more of them.
The good decisions we have made are a luxury we have been afforded; just having the confidence to attempt what we’ve done and the wherewithal to prosecute our efforts are intangible benefits of the class we come from. We can take credit for nothing so much as not squandering our privilege.
We decided not to live in Vancouver, the city of Kaleb’s birth. Rachel’s sister, partner and two kids, despite having better income than we do, are renters. They just got turfed from the house they’d lived in for eight years because it’s being sold. Happily, they found a new place—for $1,000 more a month. Meanwhile, the Globe and Mail reports that Simon Fraser University students are sleeping rough on campus and couch-surfing because they can’t afford rent.
Rachel and I know how lucky we are, and it makes us uneasy. The wealthy should feel ill-at-ease when the poor have nothing to lose and even the middle class can’t get ahead. Just ask Marie Antoinette.