Homeownership affordability in Calgary: Now a middle class problem

Abstract

Homeownership is the tenure of choice for a majority of Canadians. Federal housing policy, since 1935, has fostered this preference through a myriad of Housing Acts and amendments over the years. Together with Provincial Governments, a continual array of both direct and indirect housing subsidy programs has occupied public sector housing agendas. Fiscal restraint has led to program erosion in recent years such that there is now no public sector assistance for prospective homeowners. This has coincided with an increased private sector role in society, epitomized by the current privatization environment in Western countries. It is argued that the private sector is no stranger to aspects of public pol icy 11 delivery, and that tax benefit driven policy can be a successful partnership 11 in some public policies. While not yet of crisis proportions, homeownership in Calgary is becoming more of a challenge to median family income and below groups. Increasingly, new home districts on Calgary's periphery cater to above average income Calgarians, with a declining inventory of "starter" and used affordable dwellings available to modest income Calgarians. It is concluded that the $25,000 to $40,000 income groups in Calgary are the real losers in the 1991 housing market in Calgary, especially given the erosion of previously targeted public sector homeownership assistance, and the tendency of private sector incentives to ignore this segment in favor of the more lucrative wealthy buyer. Given the leadership 11 void11 in homeownership assistance available to modest income groups, declining affordability and locational choice in Calgary's new and used housing markets, it is argued that a private sector led initiative can offer a financial alternative to these groups experiencing the increasing homeownership challenge. Representative of the growing private sector role in Canadian society, a "matching funds" down payment scheme can help modest income groups achieve homeownership, with a greater locational and dwelling unit choice. It is argued that an incremental assistance alternative can have the most success here and now, recognizing existing conceptual frameworks and institutional settings.