The U.S. and Canada, as I've learned, are distinct places with distinct ways of doing things. But at the core, I think we are quite similar--even cut from the same cloth, so to speak. One of the deep-seated similarities between the two is a culture of fervent patriotism, fed by a history of relative prosperity. While the average American is quite convinced the Stars and Stripes are emblematic of the "greatest country in the world," Canadians tend to look snobbishly down on this notion from their Ivory igloos, and are as sure as the sun rises that the Great White North is, well, greater.
These notions are fundamentally flawed, as evidenced in lackluster quality of life metrics, and the failure to agree on, let alone pass, important legislation to fight the problems of the day. How can you solve a problem when you can't even admit that there is one?
All of this to say, I love my countries. But they are not perfect. Which brings me to my point: as much as I try to abide by my no-politics rule on this blog, I have to share what I have observed as a troubling phenomenon: a lot of Canadians think Canada is perfect when it isn't. Like it or not, Canada has some problems--big problems. And one of the biggest is...
Housing in this country is chaos. It's a complete crisis. And I implore anyone and everyone who has any power over housing in this country to do something about it. But Tyler, how do you know it's so bad?
Because for the past four months, I've lived it.
The playing field
Figure A. Figure A is a satellite image of a neighbo(u)rhood not far from where I grew up. I'm no city planner, but on a basic level you'll notice some features of this town that are characteristic of most villages in the Northeastern United States: there's an older settlement in the core, centered on a few short streets in a grid layout. Today these modest Cape Cod houses and colonials are generally owned by middle class families, or have been converted to multi-dwelling units marketed to tenants, or they're downtown "boutiques." Immediately outside of town will be some more organized housing developments with larger houses marketed toward upper middle class clientele, along with your local shopping plaza or big box stores. Further out of town, you'll notice "arteries" spindling out and going off to neighboring towns. Along the way, there are some farmhouses and ranches dotting the main thoroughfares or some side streets. | Figure B. Figure B is a satellite image of a neighborhood not far from where I live now. If you're American, you'll probably be immediately struck by the "neatness" and precision of this layout. This image is not spliced or photoshopped. Cities in Ontario are strictly zoned up and down, though in a less natural, more unsettling way. Whereas the neighborhoods of my youth have a certain gradient character to them, where similar houses are arranged next to each other and sort of become more and more spaced out as you go further out of town (until there are none at all), you will notice that Figure B has houses tightly arranged around perfectly imperfect cul-de-sacs, which border, erm, nothing. Beautiful house after beautiful house stacked on top of each other, all across the street from...your local turf farm. Generally speaking, houses in Ontario are smaller and closer together than their nearby American counterparts, and are tightly arranged into square plots along neat arterial grids, more akin to the subdivisions of, say, maybe Florida? And much like Florida, it is common for Ontarians to rent homes, buy condominiums, and to join HOAs, making much of urban and suburban Ontario look like those suburban utopias you always hear about. |
To put it bluntly, there is a debilitating shortage of housing stock in Canada, causing house prices to skyrocket. Consider Figure C and D, comparable 3 bedroom, 2, bath homes, in neighborhoods A and B.
Rent or Buy?
I remember, as a kid, thinking that renting anything was the dumbest thing in the world. Why would anyone ever want to pay money to somebody else to not only use, but rely on, their property, with the idea that it could be taken away at any time? My education led me further down this not-so-nuanced line of thought, with business classes in high school and university talking about what a horrible investment in your future renting is. It also didn't help seeing several old friends buy houses over the years, asking me for help moving out of their crummy apartments and waving Sherwin-Williams paint swatches in my face.
But of course, I've learned over the years that life is a lot more complicated than that, and people rent for all different reasons. And of course, life doesn't always work like textbooks tell you it does. Here's the thing: the average cost of a house in Ontario fluctuates incredibly rapidly, making the market extremely volatile. Houses have been losing value in a dramatic fall the last quarter, for example, making it one of the worst times in history to buy a house from an investment standpoint.
Not to mention, the average cost of a home in Ontario last month was $665,000 CAD/$492,000 USD. The required minimum down payment on houses in Canada is 5% of the purchase price, but the preferred down payment for most real estate transactions is 20%, because if you have less than this you are required to secure your mortgage with mortgage insurance, so this is the number Canadian real estate experts generally say you should have to buy a house.
5% of $665,000 is $33,000.
20% of $665,000 is $133,000.
Assuming you have a good job and are able to save, if you saved $1000 per month, you would have enough saved up for the minimum down payment (5%) in about 3 years, but you would end up paying a lot more for the same house because of mandatory mortgage insurance. So to get to that $133,000, the "acceptable" down payment on an average home, it would take you 133 months, or...11 years. Considering the volatility of the market (and also the general upward trend of house prices in the past decade), along with closing costs and taxes, there is pretty much a zero chance that that house you want will still be $665,000 11 years from now, so it's more likely you'll be saving for a few more years on top of that.
And the thing is, life happens! What if, in those 11 years, you get a new job, or lose one? Medical emergency? You have to take care of a family member, or you add a new one! What if you decide to up and move to another country, or maybe just another school district? Even if you check all the boxes for being financially responsible, buying a house just doesn't seem to make sense for a lot of people who value flexibility, and at the present time, I think I'm included in that. In the past five years, the trajectory of my life has completely changed. I couldn't possibly predict to you where I'll be in another 11.
Of course, the argument can be made that buying a house is always good from an investment standpoint because you're building equity as you pay it off. But with market fluctuations affecting house value and interest rates, and the fact that you won't even be buying it for years anyway, let alone paying it off, a counterargument can also be made that the potential for equity may not outweigh the challenges of home ownership.
Now look, I'm not an expert on any of this stuff. Just a trying-to-be-informed consumer. If you're reading this and you're my age wondering if buying a house is for you, don't let me dissuade you. But I gotta say, I have yet to be persuaded myself.
So, never say never, but until we are on a more certain footing in life and until the housing market improves, Syd and I made the decision to rent. Hey, you can't take it with you, right?
Of course, regardless of whether or not renting is the right choice at the right time for me or anybody else, the way housing costs have increased, buying or renting, cannot be sustainable in the long term, and I am seriously concerned where we are heading on the current trajectory.
With the big dogs
The nice lady explained to me that her line of work doesn't deal as much in finding housing as it does with the boring, bureaucratic finer points of moving, like getting a driver's license. Before I ended our meeting, though, I expressed my concern about the current state of housing. She referred me to a friend of hers, who we'll call Richard. Richard is an accomplished real estate agent, based in a wealthy Toronto suburb. Richard dabbles in selling homes in one of the most expensive cities for house-buying in the world, and he gets his clients top dollar.
I had my doubts about Richard at first, partly because I felt he was out of our league, selling homes in the few-million range to old money Torontonians. But more importantly, Sydney and I are only renting. What in the world would us renters do with a real estate agent? Aren't those only for buying and selling?
As it turns out, no. As Richard explained to me when we first met, renting a home in Ontario is not like renting in the U.S. As a college kid jumping from apartment to apartment, my tenant-landlord experience was that of:
- Respond to ad: "Hey, can I come look at this place?"
- Look at said place
- "I like this place. Where do I sign?"
- A biography of yourself, including a summary of your family, your hobbies, your living habits, links to social media, and a photo. A little much, no?
- Multiple personal references
- A full credit report. That's right, not just the score, but your entire credit history. (For me, this included two countries' worth of credit reports, one of which I only have about four months of credit history in so I'm pretty disadvantaged from the get-go)
- A summary of other bills you pay
- Bank statements for all your accounts, because they "want to see how you manage your money." I found this one especially insulting. If I can afford to pay the rent every month, is how I manage the rest of my money any of your business? But I digress.
The hunt
Because we were well aware of the dangers of going into homes sight unseen, we decided to do things the "proper" way and schedule showings with Richard. Richard is a broker who works on our behalf as the "buyer," and he is the one who finds houses, responds to the listings, sets up showings, and when the slipper fits, reaches out to the listing agent (who works on the landlord's behalf) and facilitates the transaction.
Brokers and brokerages are very popular in Canada, I have found. While they certainly exist in America, I had never personally used one, nor did I ever feel the need to. But in Canada, they are a weird sort of necessity of life, for reasons I can't quite understand. It feels kind of like how you're not allowed to pump your own gas in New Jersey; it's just a sort of outdated anomaly that was nominally created as a job saver, and now feels like people deal with it more because it's just the way it is and it would be harder to get rid of it. So most things involving a complicated financial transaction in Canada, such as investments, insurance, or real estate involve three middlemen.
This was a challenge, since a lot of the agents working on behalf of the landlords were inept, sending us to wrong addresses, houses that were still being built and not livable, houses that were locked with those "real estate locks" but nobody could find the code, leaving us to spend hours on hold with them as we stood out in the late winter wind.
And oh, the things we saw. Over the four weeks we were looking, we looked at nearly 50 houses, of all shapes and sizes, in all different locations, with all different features. But oddly enough, all in a similar price range. Richard, if you're reading this, well, first of all I hope you don't mind me using Richard as your fake name, but also, I can't thank you enough for your diligence with this house search. You were so candid with us in pointing out shoddy construction work, bad use of space, problems with the elevation of the home, and basement torture chambers. At one point, we were walking across a suspiciously freshly-painted basement floor of an old house, and Richard sniffed out trouble:
"I guarantee you there is water damage in the basement that the landlord here is trying to conceal."
We saw things that you simply couldn't make up. The amount of stories would fill multiple posts. But here are a few quick examples:
- A house with ceramic-tiled bedrooms, 2 bathrooms right next to each other on the main floor for no reason at all, and a third "bathroom" that was a working toilet in a closet and nothing else.
- A house previously owned by botanists. What were they growing? Well, let's just say I think their business died down because their biggest crop recently became legal.
- A house taken over by mice, to an extent that somebody took a white truce flag and drew a mouse on it and hung it over the doorway.
- A house where all the bedrooms were in the basement, next to each other and joined by a doctor's office waiting room.
- A house where the front door opened to a stairwell, which you had to go up to get to another stairwell, which you then had to use to go down to the backyard. Genius.
- A house where the only bedroom is a long, skinny room with no windows, and the hardwood was finished with a thick, beautiful lacquer, making the place look much akin to a bowling lane. There was also only a two-foot wide space used to wedge oneself between the fridge and the kitchen sink, so washing dishes felt like you were in a vice.
The offers
Real estate law in Ontario says that when one places an offer on a property, the association of Realtors has an obligation to inform all others who have also been shown the property, so they have an opportunity to put a better offer in. Unfortunately for us, that meant everywhere we went, as soon as we applied for it, so did others, usually people who already had money for investment properties and were laying in waiting. It was infuriating. And, because "blind bidding" is allowed in Canada, we had no way of knowing what others were offering, so we had no way to counteroffer.
And keep in mind, these are offers just to rent, not to buy. People rent for all different reasons. Some out of desire, some out of necessity. Think of college students needing to move to the area to study, without a snowball's chance in a very hot place of ever getting a place to live because they're outbid within hours.
The herons
"A lot of people going after these houses have unlimited resources. They are wealthy. They have passive income themselves. They're well-established. They have it all.
But you do have something they don't: a great story. You have a story of love, loss, and love again, of hard work and responsibility, of hope and patience. You two are very patient, and that's an admirable, classy quality to have. People may seem heartless, but everybody loves a great story. Good things do come to those who wait."
That day, I received an email from Richard. Subject: "He wants to negotiate".
That's when a flurry of emails started. Remember, I communicate through my Realtor, who communicates with the landlord's Realtor, who communicates with the landlord. So we began a long day of playing a game of telephone: hurry up and wait, rushing to agree to different leasing terms, like paying utilities, deposit amounts, paying rent with post-dated checks ("cheques" for my Canadian readers).
It was hard, but more importantly, it was something. He, whoever he was, really did want to negotiate. And after taking several painstaking hours to agree to to the negotiating terms, another email. Subject: "I think we have it"
The text: the landlord agreed to accept our offer, under the condition that they receive a security deposit of first and last months' rent within 24 hours, by wire transfer or cashier's check (or as we call it here, a "bank draft"). Sounds great. Just one problem: The banks are closed for the day. I go to my bank app; they don't do transfers of this amount in the app. I scramble to call the bank's customer service number; for my security, they don't allow wire transfers of this amount over the phone, and even if they did, it would take several business days. I only have 24 hours. 24 hours to get the money to my Realtor, who gets it to this guy's Realtor, who gets it to him. I call Richard in a panic; "what are my options?"
The only option: meet me with the money, in Niagara Falls. You have 24 hours.
In what felt like a scene out of a thriller movie, the next morning I tore off for Niagara Falls. On the New York State Thruway, about a half-hour outside of Buffalo, a severe rainstorm caused a pileup, where I sat for hours. HOURS. I almost didn't make it, but Richard called me to tell me he too was running late, and he worked out an agreement to give me an extra two hours. That's all fine and good, but the bank was still open the same hours and they weren't about to change for me. Cutting through rainy fog at long last, I clear the border, tear off the highway to the closest bank, and the teller lets me buy a cashier's check three minutes before they close. Three. Minutes. I grab the check and race off to Niagara Falls, now almost sunset, where I pull into a McDonald's parking lot in the pouring rain, with the foggy falls behind in the background. I arrive about ten minutes late, where Richard is waiting for me. Thinking it's too late, I walk over to him hanging my head low. He says, "Why the long face?" I start in on my apology, before stops me midway:
"I'll take your certified check for myself. I paid the deposit on your behalf. You have a house. Congratulations."
The next morning, I drove into work again, and saw the heron soaring above me, just as it was two days before. Patient and graceful, just like me. I couldn't help but notice the coincidental timing of the heron with the song playing on my car stereo: "Fly" by The Tragically Hip, a quintessential Canadian rock band. The song, like many songs by "The Hip," is of unspecific origin and vaguely poetic subject matter, but I interpret it to be a song mostly about flying, particularly when nobody else wants you to, and particularly when you're not sure you can, but there's something you want so badly to get. As the lyrics say:
I fly, cause woe betide a guy who just lives to fight. Fly, Love is to try and die trying.
...
Fly, turn your back, get your face in the sky, Fly, love is to try and die trying.
Try, left and right, across your mind, Try, love is to try and die trying.
Final thoughts
Indeed, house hunting was not a fun experience. 0/10 do not recommend. This whole thing had me doubting myself and wondering why I was doing this. There are so many beautiful places in the world to live. Why, oh why did I pick one of the most expensive, most inaccessible, most hostile housing markets in the world? Why give up the quaint, organically laid out communities of my youth for densely populated squares of identical condos? Sure, the healthcare is free, but is the higher cost of living for everything else justifiable? WHAT AM I DOING???
But what kept me grounded through this whole process was the realization of the one thing Ontario has that no other place does: the love of my life, and our future together. The person who has been there for me through all of this, who makes it all worth it. Sometimes, well, a lot of times, it has felt like nobody has wanted us to be together. Friends, foes, federal agents, and forces of nature have tried to keep us apart over the years we've been together. This fight was no different, with leasing agent after leasing agent telling us we weren't worth the time or the risk to be given a livable home.
We could have laid down and given up. We could have fought everyone and each other. But in the end, we chose a different kind of fight. A five year-long, patient, persistent, painstaking fight where we land gracefully on two feet. We chose to fly, like the herons, at the expense of a lot of life's other things: our finances, our mental health, our relationships with others. Just because things are hard doesn't mean they aren't worth it. We chose to fly and we will continue to as we take on every new battle in this life. Love is to try and die trying.
Have you ever gone through a stressful moving/relocating experience? How long did it take you to find a place? Did you find yourself having to make any painful life adjustments when moving to a new place, culturally or financially? What suggestions do you have to fix our housing crisis?