Everyone these days talks about “affordable housing” as though it’s self-evident that we all want it. The problem is, we don’t, this letter writer states.
The Editor:
Everyone these days talks about “affordable housing” as though it’s self-evident that we all want it.
The problem is, we don’t.
Not really. In theory maybe, but not in practice.
How often do we hear the clarion call, “We need to crack down on speculators?”
The nature of home ownership effectively turns us all into speculators.
We all know how the game works: If you put 20 per cent down and the price goes up 20 per cent, your equity has doubled.
So you sell, upgrade to take on a higher mortgage or a second property, keep some of the cash and keep going all the way to retirement. You naturally want prices to keep going up. Why wouldn’t you?
“Ponzi scheme” has been used to describe this and it’s not far off the mark. We’re all complicit to some degree.
Non-homeowners, meanwhile, are left out, as home prices are increasingly out of reach.
Using some standard definitions of affordability and some back-of-napkin numbers, a family with a median household annual income of $84,000 and a $100,000 down payment would be able to just barely “afford” a one-bedroom condo.
That’s if interest rates don’t go up, which it looks like they will.
Keep in mind, too, that’s median household income — meaning half of households wouldn’t be able to afford even that…
