When my partner and I first walked through the door of our prospective home, last October, the air was thick with a musty scent that I preferred not to place. It was clear that the carpet upstairs, which appeared to be the culprit, would have to go. Our feet creaked on the laminate as we descended into the unfinished basement. Previous residents had graffitied the exposed drywall with markers, pen, and chalk: “YOU MAKE A MESS, YOU CLEAN IT.” The faded letters looked like someone had once tried, hopelessly, to erase them.
But, still, there was something charming about the place. It was the type of house I always imagined would be my first: a small semi on a crescent of modest homes, tucked beneath old trees. It was a small-town Ontario home where a young couple could build the kind of life that, for my generation, always seemed tantalizingly out of reach—one with a house, a back yard, space for kids if we someday decide to have them.
We bought it a few weeks later, for $36,000 over the asking price. And we got very, very lucky. Despite paying more than double what it had sold for in 2015, we managed to avoid a lengthy bidding war—a trend that has recently moved from big-city markets to small-town properties—by putting in an offer before it was listed.
For years, housing costs have plagued millennials. Some of us graduated into a recession; others have seen stagnant salaries and limits for growth. The harsh reality became clear: we would have fewer economic opportunities than our parents’ generation. The pandemic has been a nightmare, but—for some, anyway—it seemed at first to be a once-in-a-lifetime opportunity to reverse those dire prospects. Like so many other twentysomethings, I have been limited in where I can live by my daily commute to the office. I spent most of my working life tethered to the city: first Toronto, then, as prices became increasingly unreasonable, the nearby city of Burlington. I’d accepted that I would likely be confined to an overpriced rental for years to come. But COVID-19 has changed that. My job, like many other office positions, will stay remote after the pandemic ends—a shift that has made countless other young middle-class workers reevaluate not only how they work but where. Now, young people are fleeing to parts of the country where what money they’ve managed to accrue will still buy them their very own small, messy houses. The trouble is, everyone has been heading for the exit at once.
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Over the past year, Canada’s suburbs and small towns have experienced an unprecedented spike in real estate demand. According to the Canadian Real Estate Association, national home sales hit a record high between February and March of this year, rising by 5.2 percent. In Ontario, places like Barrie and the Durham region saw even greater increases, doubling their sales between January and February. On the east coast, the Nova Scotia Association of Realtors noted a 39.5 percent price jump year-over-year in April. Re/Max Canada’s 2021 market outlook predicts that Canadians—keen to capitalize on the housing boom—will continue to relocate throughout the year. It’s a trend that is not only elevating prices but positioning many of the country’s smaller towns and cities to grow significantly.
Paris, Ontario, where I live, has a population of just over 12,000. The area already has 5,400 new dwellings, in various states of approval, that predate the pandemic. Many of these are large modern houses geared to relatively well-off buyers. After all, the exodus from Canada’s cities has benefited not only young people. Scores of middle-aged upper-middle-class folks have been happy to pay well over asking price for properties that far exceed what they’d get with that money in the country’s urban centres.
Steve Howes, the County of Brant councillor for Ward 2 of Paris, told me he worries about gentrification. He lives in a yellow-panelled older house he described as “modest.” “Nobody in this neighbourhood has a marble backsplash or gold fittings on their bathtub,” he said. “And nobody’s building a house like the one I live in.”
And why would they? Howes noted that a lot his size could have a bigger house, one worth perhaps twice as much. The math isn’t hard: increased demand, coupled with the changing DNA of these small centres, is driving prices to record highs, leaving some locals struggling to afford the towns where they grew up.
Two of my closest friends from university have kept an eye on a place in Lake Echo, a small unincorporated neighbourhood in the Halifax region, since it first appeared on their radar, in 2017. It’s an ordinary two-storey house with beige panelling and a modest backyard. The owner had been trying (and failing) to sell it for more than a year, gradually reducing the asking price from $337,500 to $299,000 before finally giving up, in October 2018.
That’s not uncommon in Nova Scotia. The populations of some of the suburban communities outside Halifax were stagnant, or even declining, in the years prior to the pandemic. Houses often sold for slightly below asking. Sometimes, they didn’t sell at all.
But, early this year, the little house in Lake Echo went back on the market and sold, well over asking, for $402,000.
Sara Keyes, a Royal LePage real estate agent based in Enfield and the municipality of East Hants, about a fifty-minute drive north of Halifax, told me that she saw a home in the city go for $275,000 over asking. In stark contrast to the quiet prepandemic buyers’ market, homes in Keyes’s area are inciting bidding wars, with as many as twenty eager house hunters making offers on a single property. Many of those buyers come from out of province. Some, unable to quarantine in time to view their prospective homes, have bought houses sight unseen.
Keyes doubts that housing prices could continue to grow at current rates past the pandemic, and the national market does seem to be slowing down. But year-over-year sales remain startlingly high. Her son is twenty-one and plans to own a house someday. She isn’t sure he understands just how much harder that has gotten. “East Hants, especially, is a small community,” she said. “People who live here want to stay here. And they’re being priced out of their communities. So a lot of these first-time home buyers have to go thirty minutes or an hour away.”
For years, gradually increasing housing prices in Halifax have trickled into communities outside the city. But, now, those costs are also affecting homes that, until this year, were not on the map for most of the country. And most housing experts can agree that buying a first home just about anywhere is only going to get harder.
It’s important to understand that these problems are not entirely new. Yes, the pandemic has been a catalyst for a departure from the country’s urban centres, but experts have been concerned by trends in the housing market for decades. The federal and provincial social systems that helped make housing more affordable, such as co-op housing, were gradually dismantled throughout the 1990s as part of the cutbacks and austerity measures that were politically in vogue. Rent and housing costs have been steadily rising ever since.
David Amborski, director of the Centre for Urban Research and Land Development at Ryerson University, said it’s a simple matter of supply and demand. “The housing market can’t adjust instantaneously. If there’s a huge increase in demand, you can’t say that, tomorrow, you’re going to double the number of housing units.” In other words, city planners need to anticipate housing trends in order to keep pace with the market. The price surge happening now is partly because no developer could have anticipated the increase in demand for houses outside of city centres.
Policy makers in Canada are aware of the current situation. Historically low mortgage rates have almost certainly played a factor in the explosion of home sales. (Last December, for example, HSBC Canada offered a variable rate as low as 0.99 percent.) But, in an effort to manage some of the demand, the Office of the Superintendent of Financial Institutions proposed changes, in early April, that would make it harder for Canadians to qualify for mortgages.
These changes offer a quick fix to the current pricing problems but no long-term solution for those who now cannot afford to buy in to the market, leaving many young people—especially those from BIPOC and otherwise marginalized communities—struggling to afford property in parts of the country that have always been relatively inexpensive. While some have suggested that the current market could reflect a bubble, others disagree. Bubbles are often based on speculation, said Amborski, and in April, 96 percent of Re/Max brokers and agents reported that the majority of those buying homes are those who will actually be living in them.
Now, any hope of home ownership being obtainable for future generations likely lies in government programs and nonprofits. Rent-to-own programs, such as Rent to Own Canada, have been hailed as a possible solution for years. In these programs, a portion of tenants’ monthly rent goes toward the down payment on the property—which, Amborski noted, is often the greatest hurdle to home ownership. This allows a buyer to lock in the price of their home regardless of what turns the market may take, and it can be especially useful for those who have low credit. By the time they’ve saved enough for a down payment, their credit will likely have improved enough to qualify for a mortgage.
Another solution is shared-equity mortgages. Nonprofits like Options for Homes help first-time home buyers with moderate incomes manage their down payments. They act as a developer by purchasing land and zoning and building condo towers. Then they sell the units, take the money they would have earned as profit, and use it to share the cost of down payments with their buyers. When those buyers eventually sell, they pay that money back, and Options invests it in the next project.
To date, Options has helped over 6,000 people purchase their first home, with projects valued at over $1 billion across the GTA. And, though the organization’s focus has been on Toronto and smaller cities in Ontario—it recently completed a condo tower near the GO station in Milton—CEO Heather Tremain told me that a similar model could be applied to small towns as well.
“Options, when it started, did townhouses,” she said, explaining that their first project was a townhouse development in Weston. “So it can work in other forms, and I think it could absolutely work in lower-density communities.”
There used to be more programs like Options, Tremain said. And there are a few examples of others following in their lead. The federal government’s Canada Mortgage and Housing Corporation (CMHC) offers a program called the First-Time Home Buyer Incentive, which is based on Options’ model. That program allows for a first-time buyer to enter a shared-equity mortgage with the government, which covers 5 or 10 percent of the cost.
Without such programs, Tremain predicts that an entire generation will struggle when they’re older. “What happens to us, as a society, if we live in a world that assumes people will own their own homes?” she said. “[People], to some extent, finance their older years by selling, downsizing, and monetizing that asset…. We can’t solve that problem right now, but at least we can continue to help to get people into housing.”
Shortly after we arrived in Paris, at the end of December, the province entered its second widespread shutdown. My partner and I spent January fielding questions about a new place that we couldn’t really explore. So we went for long walks along Barker’s Bush trail, which loops through the forests on the edge of town.
On our first visit, the trail was pure ice, and the woods were frozen in a reverent stillness. For one long stretch, the only sounds were our hushed voices and a wide bubbling river that moved too fast to freeze. For the first time since a chaotic move at the height of the pandemic’s second wave, I felt like this place could be home.
Along the back half of the trail, the path reaches the edge of the woods. Beyond them is a sea of cornfields.
Councillor Howes was quick to extol the virtues of this place to me, but there’s a catch. The county acquired the land for the trail, but along its borders, there’s no stopping the steady march of development. Someday soon, all those cornfields will be houses. The question now seems to be: Who will be able to afford them?