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Widening housing gap leaves homes out of reach for future generations

Last Updated Apr 11, 2021 at 4:56 pm EDT

CALGARY (CityNews) – Housing prices have continued to surge in Canada despite the pandemic, with the industry seeing a jump of 25 per cent growth from February 2020 to now.

But for many young and racialized Canadians who aren’t expecting to inherit wealth, home ownership is a difficult system to break in to.

“We know that the greatest transfer of wealth that many Canadians experience comes from the transfer of real estate,” says Dr. June Francis, co-director of the Co-Laboratorio Project at Simon Fraser University, and director of the Institute for Diaspora Research and Engagement.

A recent Angus Reid poll shows 70 per cent of those who want to buy a home say they are unable to afford one, with one quarter of respondents saying it was an inconceivable goal, even in the future.

Dr. Francis says that lacking access to multi-generational wealth can be a huge obstacle for those dreaming of their own white picket fences.

“For Canadians who have not gotten on the housing ladder, they have actually been excluded from the accumulation of this wealth, so that their children will not have the leg up to even start on that ladder of wealth accumulation,” said Francis.

It’s not all about housing prices either. Francis notes that even if costs do decrease, not everyone is positioned to take advantage of the market.

She adds that Canadians belonging to racialized groups face different challenges along the path to securing a home, pointing to systemic racism in the reliance on formal, taxable income to build credit.

“We know that having access to credit leverages your wealth,” she said. “Banks have historically relied on information from these credit bureaus and the information absolutely disadvantages racialized groups.”

The idea that systemic racism rooted in real estate is a solely American problem is an incorrect one, says Francis.

But the entire picture is impossible to see clearly in Canada, due to a lack of race-based data.

“Because banks are not demanded and required to report this information, we’re not seeing it. We’re not getting access to the actual information that would tell us everything. But if you look at the data that’s supplied, we have strong indications that racialized groups are getting more expensive mortgages and are being turned down to a greater extent.”

Dr. Francis adds that the problem also extends to housing assessments.

“We know that there’s bias in the actual encounters, so dark-skinned people, Black and brown people, get asked for much more information and are more likely to be denied,” she said. “In the United States, if you are Black and the assessment person comes to your house, they actually assess your house lower.

“What we’ve found recently is that some evidence is coming out in Canada showing exactly the same thing – and these gaps are huge.”

It’s a theory further solidified by the recent launch of GoodScore, an online tool that will assess the health of your neighbourhood based on factors including the local amenities, transit options, and air quality.

The tool shows a major difference between areas more affluent than not in Calgary.

A snapshot of GoodScore’s healthy neighbourhood assessment in Calgary, Alberta. (CREDIT: GoodScore)

Those gaps in housing assessments impact access to credit, which Francis points to as the main issue in a banking system that she says needs to be addressed.

“I think there is so much inequality in who gets access to credit and we know that having access to credit leverages your wealth and so becomes bigger for you. Because we also see in the housing market that as prices fall not everyone can get access to this at the same rate, so again there is a gap in who gets access to homes.”

Among respondents to the Angus Reid poll, 40 per cent hoped to see housing prices continue to rise.

“If you are already on this ladder, you are motivated to increase the gap because it means that your wealth will accumulate.”

It’s a problem, Francis says, that comes back to the lack of race-based data that would allow the country to address a system that pits Canadians against each other in the increasingly difficult journey to the security of homeownership.