Reddit group’s billboard says you need rich parents to afford real estate
A Reddit group is calling out skyrocketing home prices in a city where tiny bungalows are listed for $1.5 million
By Radheyan Simonpillai
May 22, 2021
A two-bedroom bungalow is listed on the Toronto real estate market for $1,499,000. According to a billboard purchased by Reddit group CanadaHousing, only people with a cushy inheritance could afford it.
“Can’t afford a home?” asks the billboard located at the corner of Queen and Spadina. “Have you tried finding richer parents?”
The Redditors are not off.
According to a recent National Bank Housing Affordability monitor report, it would take an average household earning $183,594 annually 25 years to save up the down payment for a million-dollar home. The average price for a detached home in April was $1.7 million, which means the listing price for that Little Italy two-bedroom bungalow is quite a steal. And the house is only a few blocks away from the billboard, which is the Reddit group’s way of drawing attention to an affordability crisis that they say is being left unchecked by the government.
“Politicians could take decisive action to fix housing in this country,” says the group’s website. “But they won’t act unless we push them.”
The billboard’s sentiment about rich parents is rooted in an underlying despair that the only people who can afford Toronto real estate are previous property owners who gained a substantial amount of equity in the price boom of the last decade. Parents leveraging home equity to pump up their kids’ down payments and purchasing power is one demographic driving up prices. But so are investment property owners and foreign investors.
The CanadaHousing group’s website lists proposals that have also been pitched by economists at RBC and BMO who warn of the negative impact of the housing bubble. The proposals include doubling the minimum down payment for investment properties, ending the blind-bidding process, making all sales and listings data available to the public, increasing capital gains taxes for investors and speculators, and introducing new vacancy and short-term rental taxes.
But real estate industry groups have consistently and predictably pushed back against proposals that could stifle demand. Instead, they push for more construction to boost supply. The danger of this narrow approach is that they inevitable encourage politicians like Premier Doug Ford to roll back greenbelt protections and sell off the environment to benefit real estate developers.
On May 12, Ontario Real Estate Association CEO Tim Hudak issued a statement suggesting the provincial government is working to allow the option of open auction processes rather than blind-bidding. But he stood firmly against forcing sellers, who generally favour the blind-bidding process, to do so.
“Potential buyers may not want to share some of their most personal, private information,” said Hudak. “We believe that buyers and sellers should be able to choose if they want to use the traditional offer process or an auction.”
Hudak then goes into the familiar refrain: “All levels of government need to work together and make it easier for first-time buyers to own a home, through increasing housing supply, eliminating unnecessary government red tape, addressing affordability and giving both buyers and sellers a choice in how they engage in the offer process.”
Councillor Gord Perks rightly raised caution about some of the discussions being had in the CanadaHousing Reddit. Several comments expressed anti-immigrant sentiment, blaming affordability on the booming population and suggesting a closed border approach.
“We are a pro-immigration group,” the CanadaHousing moderator posted in response, restating rules against xenophobia and recognizing that some users might latch onto the population growth to dog-whistle. “Good housing policy is pro-immigration policy.”
Perks’ concerns reflect a growing wariness of the different bad faith players latching onto Canada’s affordable housing crisis for their own gains. Earlier this week a report from Oxford Economics listed real estate in Toronto, Vancouver and Hamilton as less affordable than New York or Los Angeles. The report weighs average income against home prices, but ignores Los Angeles’s property tax rate, which is double Toronto’s.
In February, Canadian media pounced on a Demographia International Housing Affordability report put Toronto and Vancouver among the top five most unaffordable cities in the world, though it got to that conclusion with some very questionable data that excluded other expensive cities like Paris, Geneva, Zurich, Amsterdam and Munich. The report was produced by a real estate lobby group and a think tank that has questioned climate change. Both are organizations with arguments and aims that align with the Ford government’s push to allow developers to build on the greenbelt.
The CanadaHousing website’s push to attack the demand side of the real estate market suggests a more environmentally favourable approach.
Radheyan's first assignment for NOW was reviewing the Ice Cube heist comedy First Sunday. That was back in January 2008. Born in Sri Lanka and raised in Scarborough, Rad currently lives in Leslieville with his wife and two adorable kids.