Millennials and Gen Z deserve compensation for protecting the housing wealth of homeowners who’ve come before them
Over the last half century, homeowners have gained $1.5 trillion in wealth. Rising prices have driven up their equity, building savings and retirement nest eggs on which many are now counting.
Our housing policies are designed to protect these homeowner equity gains. By choosing policy levers that sustain high prices, governments have insulated wealth windfalls for many existing homeowners.
The cost of this choice is punishingly high rents and home prices that harm the finances of Millennials and Gen Z. This limits their housing options, as well as their choices about work, education and starting families.
Compensation for this profound act of intergenerational solidarity is long overdue. Add your voice to our call to deliver it.
What is compensation?
Millennials and Gen Z deserve a larger share of the $1.5 trillion in housing wealth their economic pain has helped build. Our plan would deliver $14 billion without any new taxes, so it’s time for young people to think BIG about how they want their share paid out. So tell us your ideas!
Would you like…
- A Housing Wealth Dividend that pays every adult aged 18-39 $1,000 a year?
- Billions more invested in postsecondary education to bring down tuition and shore up student housing?
- To pay no income tax on the first $200,000 to $500,000 of lifetime earnings, as proposed by thought leaders like Sean Speer and Max Fawcett?
- Billions more invested in speeding up the roll out of $10 a day child care, so no family faces rent- or mortgage-sized child care payments?
- Every child born to receive a Head-Start Fund of $10,000, as proposed by Build Canada?
We compensate workers hurt on the job to minimize the social and economic costs of their injuries. Compensating young people for protecting homeowner wealth will similarly reduce the social and economic burdens our housing policy choices have imposed on them.
How do we pay for compensation?
By bringing retirement policies in line with Canadian values about supporting those in need
$14 billion in compensation could be delivered by modernizing outdated retirement policy.
- Old Age Security gives $18,000 a year in taxpayer funded cash benefits to retired couples with $180,000 in income. Better targeting OAS subsidies to those who actually need them would save $7 billion/year.
- Two largely unknown tax shelters remain on the books even though they primarily benefit financially secure retirees, and fail to reach most poor seniors. Since retirees have the lowest poverty and the most wealth, the $7 billion/year they cost could be better spent.
Most of us agree that it’s time to ask financially secure retirees to take slightly less, so we can invest more in building a Canada that works for all generations – including eliminating seniors’ poverty and compensating Millennials and Gen Z for protecting retiree nest eggs.
By eliminating ageism in Canada’s housing policies
$5 billion in compensation could be delivered by asking those who’ve gained the most from rising home prices to show some reciprocity to the young people who’ve protected their wealth gains.
There is structural ageism in housing policies that protect wealth gains from (primarily older) homeowners at the cost of affordable homes for the generations who follow. A first step to eliminate it is making property taxes progressive – just like income taxes.
Our approach asks the 10% of owners with homes over $1 million to contribute slightly more (just 0.2% – 1%) to invest more in affordable homes. This design better captures wealth gained from decades of home value increases than changes to capital gains or the principal residence exemption.
