I know two young couples who have come up with a novel way to deal with the housing crisis.
Their story illustrates a big disconnect between the kind of houses being built, and the kind of houses that are wanted.
These four young people all have good jobs and good work-ethics. Two of them spent several years living in a basement apartment where the largest window was roughly two feet by three feet and looked out onto a brick wall. They made the best of it, and saved money to buy a house. Every year, instead of getting closer, that goal moved further from their reach. The other couple was in a similar situation.
Scanning for housing across social media was a prime obsession for them all.
Last spring, the four of them moved into a brand new four-bedroom house which had a market value of around $1.2 million. It was in a new subdivision outside of Orillia, surrounded by roughly two dozen other mansions, many of which are unsold.
The developer had no intention of becoming a landlord, but he couldn’t sell the house. So he rented it to the two couples. They split the rent, divided the house space in half and landed a beautiful place with lots of windows and granite countertops for the same monthly price as their basement apartments.
A clever adaptation, though all four of them gave up some of the privacy and autonomy that adults generally crave. It is working for them. But they all know it’s a short-term fix. Each couple is still saving for the most modest of houses.
So here are four twenty-somethings looking for housing that isn’t being built, and a developer looking for customers that don’t seem to exist.
Meanwhile, at the other end of the life cycle and amidst the biggest single cohort in demographic history, my wife and I are thinking about downsizing. That is a misnomer, since we never really upsized by today’s standards.
Our house is a modest split-level on a large lot in Orillia, and we love it dearly. It’s the Canadian dream, really, with lots of space to garden and lots of privacy. But we can see the day coming when it will be too much. We’re interested in living closer to the downtown and its amenities, which we really enjoy. We want to be able to walk and cycle everywhere, and we toy with the idea of getting rid of our car altogether.
So we have watched with interest as new builds go up downtown. We are theoretically open to everything from a small house to a condo, to perhaps even an apartment.
At this point, nothing has come close to meeting our short list of needs.
My wife and I consider ourselves very fortunate compared with many Orillians. Yet among the new builds at least, even we can’t find a place that we could afford without taking a mortgage again.
So here we are, looking for housing that isn’t being built.
We’ve struggled to find anything suitable in the existing housing stock, too.
According to Realtor.ca, there are 178 properties for sale in Orillia this week, at the slowest time of the real estate season. According to houseful.ca, the median house price in Orillia is $699,000. The Canadian Housing and Mortgage Corporation pegs the median income in Orillia at $70,000. A Realtor.ca mortgage calculator shows that after saving up a $50,000 down-payment and amortizing their mortgage over 30 years, a median Orillia household could afford a $349,000 house.
It’s no surprise then that many over-priced properties sit on the market for months while so many Orillians are under-housed. A significant majority of Orillians have been priced right out of their own community.
Yes, yes, interest rates.
Yes, undue complications and restrictions as to what and where you can build.
Yes, wage and price inflation (driven to no small extent by the housing shortage).
An aside: Please don’t mention a shortage of land. There is plenty of that already in the pipe, despite what the real estate lobby says. That argument is bumph.
But despite these factors and complexities, it seems to me one of the things we need to fix is the disconnect between local buyers and builders focused on people cashing out from Toronto.
In the end, with the exception of the new builds in Orillia which have been directly subsidized or negotiated by various levels of government, virtually nothing new is being built by private developers for average folks in Orillia.
The market is not providing.
