Can’t afford a house in the city? Don’t ask the government for help

Ted Rechtshaffen: The ‘I deserve a city house’ argument is a losing fight for all

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In some cases releasing the past can be extremely hard.

I miss out on having open fields all over northeast and northwest Toronto. I miss out on going to a Blue Jays video game for $2 (obviously, now I simply miss out on addressing any cost). I miss out on the Leafs winning the Stanley Cup (by miss out on, I imply a before-I-was-born sort of miss out on).

Times modification, and individuals require to adjust.

There is no concern that real estate costs have actually altered more than many things over the previous 50 years, and lots of, consisting of possible young house purchasers and federal governments, are having problem recognizing that.

The City of Toronto core’s land mass hasn’t altered in 50 years, however the Greater Toronto Location population grew both around it. The location’s population development over the previous 50 years is 138 percent, or an additional 3.6 million individuals.

According to the United Nations’ World Population Potential customer report, the 4 biggest Canadian cities have actually been growing much quicker over the previous 50 years than bigger cities such as New york city, Paris, London and even Hong Kong for the most part.

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In Canada, an urban house with a yard 50 years ago was within reach in all cities. Today, it simply is not

If think of owning real estate in the heart of New York, Paris, London or Hong Kong, you think of owning an apartment or condo. The idea of buying a house with land in the core of any of those cities is pretty far-fetched. If that is what you are looking for, you need to move further afield, often a good 25 kilometres or more out of the city core at least — usually, it’s more like 40 kilometres away for something at all affordable.

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In Toronto, 10 kilometres north of Yonge and Bloor takes you to Yonge and York Mills. This is still considered “in the city” by most, but it’s definitely quieter and more suburban. About 25 kilometres north takes you to Yonge and Major Mackenzie, which is in Richmond Hill, a good 40-minute drive away at a low traffic time of day.

In a city such as Vancouver, the core city is really quite small geographically (like Hong Kong), with mountains and oceans containing urban sprawl to some extent. Clearly, urban growth still happens, and Burnaby and Richmond are good examples, but it is tough to find places to expand in North Vancouver.

If you are at Denman and Robson, not far from Stanley Park, 10 kilometres might take you to Cambie and SW Marine. Away from the action, but still part of the city. Go 25 kilometres and you’re all the way to Surrey, which takes 45 minutes or more to drive.

The point is that in much older international cities with significant or meaningful size, and with major geographical restrictions to expansion, a house with a yard is something that takes place far from the city. In Canada, an urban house with a yard 50 years ago was within reach for many people in all cities across the country. Today, it simply is not. It isn’t the government’s fault; it’s due to a generally strong government, a good and varied economy, and sizable growth.

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Unless someone has a time machine to turn back the clock, this is simply the reality today in Vancouver and Toronto, and it could become true in some other cities as well over the next 50 years.

But renting is not a crime. Depending on where you want to live, renting can be a very viable short- and long-term solution. In London, England, 60 per cent of residents will likely be renters by 2025, according to PricewaterhouseCoopers.

Having to go 25 or even 50 kilometres away from a city’s core to own a home with land is not a disaster that the government must fix. It is a result of the success and growth of a country and its biggest cities. In addition, many people prefer to live with more space, less “action” and more community.

It may not seem fair when younger people see what their parents or grandparents were able to buy at a similar age, but keep in mind that they were buying in both a country and a city that were much younger and smaller. The problem, to the extent that it is a problem, is not fixable if only the government would step in, spend more money or change certain policies.

Don’t get me wrong. Overall housing affordability, especially for renters, is a real issue and an understandable problem. People need to live somewhere, and in reasonable accommodations. That is different from homebuyer frustration and the government’s response to it.

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Government has an important role to play in transportation and infrastructure in order to properly support much bigger metropolitan areas and those who may have to travel further for their daily commute (yes, this will once again be a real thing in the very near future). However, governments should have no obligation to keep the old Canadian dream alive of a young family buying a home in the middle of a large city.

We all require to accept this reality and focus government attention and funding elsewhere. The ‘I deserve a city house’ argument is a losing battle for all.

Ted Rechtshaffen, MBA, CFP, CIM, is president and wealth adviser at TriDelta Financial, a boutique wealth management firm focusing on investment counselling and estate planning. You can contact Ted directly at tedr@tridelta.ca.

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Jobber Wiki author Frank Long contributed to this report.