Brandon Williams is doing just as Vancouver real-estate industry insiders suggest. He lives and works in Vancouver, but soon he, his wife and his baby will move to Maple Ridge to pursue the dream of owning a house with a yard.
Only in his family’s case it will be half a yard, because the Williamses are planning on teaming up with another couple to buy a house with two suites. It’s the only way they’ll be able to afford a house, even in the lower-priced suburbs.
He admits he’s not thrilled about the move. When his wife returns to work from parental leave, they’ll make what he thinks should be “more than enough money to afford a place.”
“I’m pretty excited about our future,” Williams said, “but I wish our future could be in Vancouver.”
Housing in Vancouver has become a symbol of a growing divide among the generations and among the rich, poor and middle class. But beyond the hot-button issue, measures of income disparity show that British Columbia also has the highest level of income inequality in Canada — and that could put future economic growth at risk.
Over the past 30 years, inequality has grown throughout the developed world, including in Canada. By measures of both income inequality and wealth inequality, B.C. is the most unequal province in Canada, according to analyses of Statistics Canada data by the Canadian Centre for Policy Alternatives and the Broadbent Institute.
Real estate is a big part of the reason wealth is more concentrated in B.C., according to the Broadbent Institute. A recent BMO study found affluent people in this province owned a house worth on average $3.9 million, whereas wealthy people in Ontario owned homes worth an average of $1.7 million.
The Business Council of B.C. and B.C. Chamber of Commerce tackled the issue in a series of panel discussions and a 2013 report, which suggested modest investments in early childhood education, improving access to post-secondary education, introducing a tax credit for low-income working families and steady, predictable increases to the minimum wage.
In a new book, A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia, The Tyee reporter Andrew MacLeod places much of the blame for B.C.’s spiking inequality on the B.C. Liberals.
“They’ve had lots of policies that have exacerbated the gap,” MacLeod said.
For instance, MacLeod writes that after the Liberals came into power in 2001 they implemented a 25 per cent income tax cut, while at the same time cutting welfare rates and reforming the welfare system. The income tax cut disproportionately benefited high-income earners; meanwhile, low-income earners in B.C. currently pay “significantly more” taxes than their counterparts do in Ontario, Alberta or Quebec.
From 1976 to 2001, B.C. was usually below the Canadian average in terms of inequality levels, including the period when the right-leaning Social Credit Party was in power, MacLeod noted.
“Then in 2001 we sort of spike above it,” he said.
Paul Kershaw would like the conversation around fairness to centre less on class and more on generational differences.
The University of British Columbia professor has created a lobby group for Canadians under 49 called Generation Squeeze. Kershaw hopes to push policymakers to consider the needs of millennials and generations X and Y, who he calculates receive around a third fewer government services and benefits than retirees.
Despite the protests of boomers who say they too had to eat toast for supper at a second-hand table when they were young, Kershaw said young people today are operating under a completely different financial reality.
“A typical 25- to 44-year-old earns $9,000 less for full-time work today compared with 1976,” he said.
“They pay more than double in tuition, and after going to school longer to get a job that pays thousands less, they have to pay hundreds of thousands more for the privilege of living in an average home.”
Housing is an important piece of this generational angst, and Kershaw believes we should be looking at a wide range of policies to make housing more affordable — from rental assistance for the working poor to a speculation tax or a tax on houses worth more than $1 million.
But Kershaw said there’s a limit to how much government policy can limit home price increases. Helping families with the enormous cost of child-care and making parental leave more generous would also help young people handle non-housing costs.
“It’s probably no coincidence that Generation Squeeze has evolved out of work in Vancouver,” Kershaw said.
“The epicentre of where it is most challenging to be a young adult today — on the continent — is in Vancouver.”
While boomers who have amassed wealth in their homes will understandably want to pass on that wealth to their children, “we probably need to think about distributing that” more widely, Kershaw said.
“Young people are going into debt trying to live in the region, and all the data shows [people] 55 and over have reaped that reward in this country.”
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