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National

Liberals have options to help more millennials buy homes, experts say

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OTTAWA — The federal Liberals have several options as they look for ways to help more millennials buy homes in an era of pricey real estate and rising borrowing costs, housing experts say.

Finance Minister Bill Morneau said earlier this week Ottawa is exploring measures to make home ownership affordable for more millennials, a generation made up of people who are now in their mid-20s to late-30s.

Morneau didn’t elaborate on what options he’s considering, but Canadians could learn more in the coming weeks when he releases an election-year budget that will also lay out Liberal platform commitments.

Major political parties have already started positioning themselves on the complex area of housing affordability. It will likely emerge as an important campaign issue ahead of October’s federal election, and the challenges of millennials and first-time buyers could attract a lot of attention.

“There’s no silver bullet to making housing more affordable for younger generations,” Paul Kershaw, an associate professor in the University of British Columbia’s school of population and public health, wrote in an email Wednesday.

“What we need to do is modernize outdated policies that make the regular housing market inefficient.”

Kershaw, who is also the founder of the Generation Squeeze group dedicated to informing policy decisions about the socioeconomic challenges of younger Canadians, said boosting a permanently affordable housing supply is one way to help.

He also recommended putting limits on zoning rules that encourage lower-density neighbourhoods. Kershaw’s been calling on Ottawa to provide incentives for cities to add supply in lands that are currently zoned for low density.

In recent years, Ottawa has taken steps to cool the hottest markets — such as Toronto and Vancouver — with the cross-country application of stress tests that have limited some people’s ability to qualify for mortgages and have reduced the size of new loans.

The stricter rules have played an important role in preventing Canadians from piling on more mortgage debt, but experts say they’ve also put home ownership out of reach for many new buyers.

“There’s a lot of folks that just don’t qualify to purchase anymore at the bottom end of that ladder,” said Paul Taylor, president and CEO of Mortgage Professionals Canada.

Taylor said the stress tests have succeeded in taking some of the froth out of the market and he believes the time has come for Ottawa to loosen them. In recent meetings with federal officials, he said he has recommended the reintroduction of insurance on 30-year amortization mortgages as a targeted way to help people at the lower end.

The coming weeks would be a good time for some changes with the busy spring season is approaching, he said.

“If we have another cool spring market, that’s going to have serious knock-on effects to the economy,” said Taylor, who was encouraged by Morneau’s comments.

Tom Storey, an agent with Royal LePage Signature Realty in Toronto, said young buyers can usually afford to keep up with monthly mortgage payments, but the effects of the stress tests have made it much more difficult for them to enter the market.

Storey said changes designed for first-time buyers — such as more lenient stress tests for them and bigger rebates on land transfer taxes — could improve affordability.

“Millennials and the first-time buyers are eager to get into the market,” he said.

Pollster David Coletto said a housing policy aimed at millennials could be a vote winner among this increasingly critical demographic that he estimates will make up about a third of eligible voters in this year’s election. It’s now a bigger segment than the baby boomer generation, he said.

Coletto, CEO of Abacus Data, said for the last two or three years his surveys have suggested that, along with jobs, affordable home ownership has been among the top two issues for millennials.

“There’s a passion and an intensity about this issue with younger people,” he said.

He added there’s a perception among millennials that Ottawa has actually made it harder for them to buy a home, even if the direct decisions to hike interest rates were made by the Bank of Canada and not the government.

The Liberals, Coletto said, have to find a way to mobilize and engage young voters like the party did in 2015. He believes there’s a lack of enthusiasm among younger voters right now, which represents a real risk for the Liberals.

“I look at the data and I still see some vulnerabilities there,” he said.

Andy Blatchford, The Canadian Press

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Alberta

Hot rental market makes search ‘stressful’ for many — and it won’t get better soon

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Marissa Giesinger is pictured in Calgary, Thursday, Sept. 21, 2023. On the hunt for a rental home in Calgary over the last six weeks, Giesinger and her boyfriend trawled through listings morning, noon and night, only to find most come along with dozens of applications and a steep price tag. THE CANADIAN PRESS/Jeff McIntosh

By Tara Deschamps in Toronto

On the hunt for a rental home in Calgary over the last six weeks, Marissa Giesinger and her boyfriend trawled through listings morning, noon and night, only to find most come along with dozens of applications and a steep price tag. As an added difficulty, many landlords are unwelcoming to the couple’s brood — dogs Kado and Rosco and a cat named Jester.

“We made the tough decision recently to house our dogs with someone else until we can find a place that’s affordable and we can take both of them,” said Giesinger, a 23-year-old Mount Royal University student.

“It’s definitely been stressful.”

The competitive rental market Giesinger has encountered in Calgary is being seen across the country as multiple factors combine: high interest rates deter buyers and add to rental demand, still-high inflation is squeezing renter budgets, there’s an undersupply of purpose-built rental units and population growth is fuelling demand.

These conditions have left prospective renters feeling even more frustrated than usual by sky-high rents, the frenzy of interest that surrounds any affordable listing and the litany of demands landlords can make when so many people are interested in their home.

Giacomo Ladas, communications director for Rentals.ca, calls it “almost a perfect storm” — and it isn’t likely to ease up any time soon.

“What this does is create such a burden on this rental housing market that even though we’re out of the (busy) summer rental season, there’s so much demand that (these conditions are) going to continue like this until the fall and into the winter,” he said.

Data crunched by his organization and research firm Urbanation.ca shows average asking rents for newly-listed units in Canada increased 1.8 per cent between July and August and 9.6 per cent from a year earlier to reach a record high of $2,117 last month.

Between May and August, asking rents in Canada increased by 5.1 per cent or an average of $103 per month.

When Giesinger rented a two-bedroom basement unit with a roommate a few years ago, the duo paid $1,000 per month, but now she routinely spots “super tiny,” one-bedroom places for $1,350 a month.

“If you want a basement suite or an apartment, you’re looking at minimum $1,200 and that doesn’t include any utilities or anything like that unless it’s a super rare listing,” Giesinger said.

Rentals.ca data show newly listed one-bedroom properties in Calgary priced at an average $1,728 per month in August, up 21.6 per cent from a year earlier. Two-bedroom homes have climbed 17.4 per cent to $2,150 over the same period.

The picture in Vancouver and Toronto is far bleaker. Rentals.ca found the cities had the highest rents in the country.

Newly-listed one-bedroom properties in Vancouver averaged $2,988 in August, up 13.1 per cent from a year earlier, while two-bedroom units hit $3,879, an almost 10 per cent increase year-over-year.

Newly-listed Toronto one-bedroom homes averaged $2,620 in August, up almost 11 per cent from the year before, while two-bedroom properties had a 7.1 per cent rise over the same time frame to $3,413.

It’s numbers like these that have convinced Kanishka Punjabi to abandon her hopes of moving in the near term.

“Two days ago, I gave up on my search because the rental market is that bad,” she said.

The public relations worker has been living in Mississauga, Ont., but felt it was time to find a home in downtown or midtown Toronto, closer to where she works.

However, few of the two-bedroom homes she spotted in her two-month search were within her $2,800 budget.

For example, one apartment she liked at the intersection of Yonge and Eglinton streets had 25 offers in just over a week.

“Some people actually just sent in their offer without looking at the apartment too because there are so many people who are in desperate need of rental units,” said Punjabi. “There’s just not enough.”

The Canada Mortgage and Housing Corp. has projected that the country needs to build 3.5 million additional homes beyond what’s planned before the market reaches some semblance of affordability.

It also calculated that the annual pace of housing starts — when construction begins on a home — edged down one per cent in August to 252,787 units compared with 255,232 in July.

Despite the nudge down, Rishi Sondhi, an economist with TD Bank Group, said it has been a strong year for starts because the industry is responding to elevated prices by building at a robust pace.

But between population growth and rising interest rates, he said, “supply is struggling to keep up with demand” and that’s bound to weigh on renters for quite some time.

“In the short term, it would be unrealistic to expect too much of a reprieve simply because population growth is likely to remain strong through the duration of this year — and that’s really one of the big fundamental drivers,” he said.

“In addition, it’s unlikely to expect affordability in the ownership market to improve too much either because we think the Bank of Canada (key rate) is going to be on hold for the remainder of the year, but there is some risk that they take rates even higher, especially if inflation doesn’t co-operate.”

For renters like Giesinger that message puts even more pressure on her to settle on a place soon.

“Now I’m scrambling to find the money for a deposit and we’re still never really sure like what kind of place we’re going to get,” she said.

“And when you’re battling dozens of other people for a rental it can be super stressful.”

This report by The Canadian Press was first published Sept. 24, 2023.

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Crime

RCMP ‘gutted’ by death of Const. Rick O’Brien, 51, shot in B.C.: deputy commissioner

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RCMP Const. Rick O’Brien poses in this undated RCMP handout photo. The 51-year-old officer was shot and killed and two other officers were injured while executing a search warrant in Coquitlam, B.C., on Friday, Sept. 22, 2023, while a suspect was shot and is in hospital with non-life-threatening injuries. THE CANADIAN PRESS/HO, RCMP

By Nono Shen in Coquitlam

The death of another Mountie in British Columbia less than a year after the last killing “enrages” the lead officer in the province.

RCMP Deputy Commissioner Dwayne McDonald said Const. Rick O’Brien, 51, was shot dead and two other officers were injured on Friday as they tried to execute a search warrant in Coquitlam, B.C.

A suspect in his 20s was also shot and is in hospital with non-life-threatening injuries.

O’Brien, who had a wife and children, was decorated for bravery in the rescue of victims during a home invasion within months of joining the RCMP in 2016.

“This is an extremely difficult and tragic day for our members,” McDonald said Friday. “Const. O’Brien led by example. He had a great sense of humour. He was well respected by his peers and he was loved in his community.”

He said O’Brien was part of a team from Ridge Meadows RCMP that had been serving a search warrant at a home in the neighbouring community of Coquitlam.

McDonald said O’Brien died at the scene. One injured officer is in hospital with non-life-threatening injuries, he said, while the other suffered minor injuries and was discharged.

While McDonald didn’t reveal details about the investigation, he said it was a long-term probe.

A procession of RCMP vehicles led an ambulance carrying O’Brien’s body from Coquitlam to Abbotsford later Friday.

O’Brien’s death comes just 11 months after the death of RCMP Const. Shaelyn Yang, who was stabbed to death while accompanying a Burnaby, B.C., city worker to a homeless campsite.

McDonald said the past year had been a tragic one for police departments across Canada.

“It hurts. It really hurts. I’m outraged,” he said. “To see police officers across this country killed trying to protect their communities enrages me.”

Policing was a second career for O’Brien, who worked with at-risk youth before joining the RCMP. His entire career was spent at the Ridge Meadows detachment.

Supt. Wendy Mehat, the officer in charge of Ridge Meadows, said speaking about the impact of O’Brien’s death was the most difficult moment of her career.

“Rick’s contribution to his work, and his fellow team members at this detachment was immeasurable. Rick loved visiting schools and helping students, doing presentations, supporting our detachment (with) food drives and sport events,” she said.

“He was truly exceptional, a hard worker and a good human being. His death is senseless and heartbreaking.” Mehat said.

McDonald said O’Brien’s death seemed to speak to an issue he and his colleagues across the country have been talking about.

“Perhaps painting police in a certain light … sometimes seems to encourage people to resist authority and disrespect the profession of policing and, quite honestly, fight the police,” he said.

“I’m not commenting on this particular instance. But I will say that this is a stark reminder that the police are here to help you.”

The Independent Investigations Office said in a statement that the officers went to a home in the Metro Vancouver city on Friday.

“While there, the attending officers became engaged in an altercation with a man which resulted in multiple officers being injured and the man being shot,” the statement said.

“Emergency Health Services transported all injured to hospital, but one of the officers who was shot succumbed to their injuries.”

Carley Hodges, a witness in the busy area of city, described a chaotic scene, with an officer receiving CPR as he was put in an ambulance, another officer with a wound on his leg and a tourniquet above it, and a man in handcuffs.

Hodges said there were “tons of police cars, ambulances and fire trucks coming in.”

Mehat said O’Brien’s death was “senseless and heartbreaking.”

“He simply went to work today, and he was killed, doing his duty and keeping his community safe. The hours, weeks and months ahead will be difficult to our communities and Maple Ridge, Pitt Meadows, Coquitlam and across the country.”

B.C. Solicitor General Mike Farnworth said he was shocked and saddened to learn of O’Brien’s death.

“All three officers are shining examples of the extraordinary individuals who chose to take on the challenging mantle of protecting the public.

“I have spoken to the local mayors, and we all agree that the death of an officer is a stark reminder of the dangers police face to keep us safe. They put their lives on the line every day to fulfil their oath to protect our communities.”

Prime Minister Justin Trudeau sent his condolences to O’Brien’s family, friends and colleagues on social media.

“And to the officers who were injured: I’m wishing you a fast and full recovery.”

This report by The Canadian Press was first published Sept. 22, 2023.

This is a corrected story. A previous version said police were trying to serve an arrest warrant.

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