“Just buy a house, it’ll all work out. What are you waiting for?”

Many parents and politicians, unfortunately, refuse to look at the math before condemning their children as lazy or lacking courage. They have chosen to ignore the fundamentals and simply question why their children haven’t “settled down” and sired grandchildren. “Just take the plunge” is the common refrain. For Baby Boomers, purchasing a house was like stepping off a diving board. For Millennials, buying a house is like jumping off Everest with a lacerated parachute.

But Millennials aren’t stupid. Perhaps they’ve heard the old joke that mortgage comes from two Latin root words — mort meaning death, and gage meaning grip. Millennials realize that the modern real estate game is a rigged debt trap.

Instead, many are trying to live within their ever-shrinking means. 35% still live with their parents — they don’t want to, but they have to. Millennial parents are living in rented basements and attics while raising children. They’re even sub-letting rentals and taking on roommates in the apartments they rent, just to make their monthly payments. The prohibitively high rental markets are always nipping at their heels, always chasing, and they know that if they jump into the mortgage debt trap, they’ll likely never be able to invest and get ahead.

Millennials need to start quoting a single number to their parents and elected officials: 2.9

In 1984, a young couple (the parents of today’s Millennials) could purchase an average Canadian house for $76,351 on their average family income of $32,400. Their price-to-income (PTI) ratio was 2.36X.

The equivalent in today’s prices is simply unfathomable. Would the average Millennial earning a modern median income of $63,900 be willing and able to spend $150,804 on a house today? They would weep with joy. Instead, Millennials are being saddled with enough debt to make their grandparents choke on their dentures.

A household earning the 2016 national average of $63,900 would have to shell out $486,917 for the average Canadian house today. Their PTI ratio would be 6.9X. Across the 11 major cities covered in the Globe and Mail a few months back, the average house price was $624,931.48, so their PTI would be even higher.

For Millennials — who now make up nearly 28% of Canada’s population — it is at least 2.9 times harder to purchase a house than in 1984. How is this progress?

But it gets worse.

There were far more single-earner families in 1984. The dictates of justice and fairness would suggest that house prices should be tuned to serve the poorest of our neighbors, not the richest — especially in a nation where single parents, single-earner families, the unemployed, and disabled folks exist by the millions. As automation sweeps away millions of jobs, this factor will become increasingly important.

Accordingly, we need a new, gold-standard PTI ratio: A single-earner household’s annual after-tax income versus the average house price. Call it PSI. When it comes to real estate affordability, this is the single most important number every politician must seek to lower. At current interest rates, we should be aiming for a price-to-single-earner ratio of 3 or less.

As everyone knows, wages have been stagnant for decades, but inflation has been steadily eroding purchasing power with every passing quarter. We’re earning less, yet spending more. So what actually pays for houses these days? It’s obviously a colossal pile of dangerous debt which threatens to needlessly undermine the entirety of the Canadian economy.

To be clear, I’m not suggesting that we’re in the midst of a real estate debt bubble, though we likely are. As bankers are quick to point out, the dynamics have drastically changed since the eighties; banks now require smaller down payments and their interest rates are far lower, to name two. They’re right, but this doesn’t actually make things better for Millennials. Now they have to take on far more risk and debt to purchase a property. Some argue that CMHC makes up the difference. Americans even praise our diligent stress-testing, but Canada is no bastion of stable and affordable housing. The reality is that the CMHC has virtually pre-committed a taxpayer bailout to banks while they pile Canadians with more debt than almost any nation in history. If you’d like to see house prices skyrocket, just make it easier for young people to get into debt.

Whether this bubble is going to burst or not is irrelevant to the point at hand: that it is effectively far more difficult for this new generation of adults to purchase a house.

What’s truly maddening for many Millennials is the knowledge that high house prices are totally unnecessary and completely avoidable.

The question, of course, is “who profits?” The answer, of course, is lenders. Bankers are all too happy to add extra zeros to digital mortgage documents. In 2017, the big five banks (TD, BMO, Scotia, CIBC, and RBC) raked nearly $36 billion in profits out of their customers’ pockets. Their nearly singular gain is our mass collective loss.

There is also another unintended consequence of high real estate prices. It is a quieter loss, but perhaps equally as important: as prices rise, culture disappears. Restaurants close. Cinemas wither. Bookshops die. Stores can’t compete. A common refrain is small retailers simply couldn’t afford the increasing rents. And thus, downtowns are turned over to insurance brokerages and real estate agencies. Everything that makes cities worth living in simply disappears. All that remains is Domino’s delivery.

But perhaps our rulers want it this way. Nietzsche said if you don’t know the motive, you can look at the outcome and infer the motive. It appears that our current crop of putrescent politicians are all too happy to have the likes of Amazon take over prime farmland for their distribution centres while refusing to pay their full share of all taxes. It should be clear to Millennials that their ruling (and aging) elites are all too happy to gut their children’s ability to afford or enjoy the places they call home, while simultaneously requiring them to pay for their elders’ work-free retirements. It’s a rather brilliant play, despite the fact that it’s so obviously a pyramid scheme.

Basically what Boomers and Busters are telling Millennials is that they will have to settle for earning less, while paying far more, for a lower long-term quality of life, all while financing the retirement and health care benefits of their parents and grandparents. It’s a rubbish deal that all Millennials should reject immediately.

Let’s start with a national fair housing plan

What follows is a ten-step proposal for creating real equity in the Canadian real estate market without raising interest rates or qualifications for first-time house buyers, or forcing developers to build so-called affordable housing. These ten tools are free legislative weapons for any Parliamentarian with the courage to defy their corporate backers in support of the masses. Fair warning: you’re not going to like some of these, but it’s good to have a conversation about how we can work together to bring permanent improvements to the housing situation in the land we all love so much.

1. Ban foreign investment in residential real estate

Or annually increase the foreign buyers tax until speculative vultures simply stop circling our residential real estate. Purchasing residential real estate should be a benefit for citizens and permanent residents only — call it the Residential Sovereignty Act. In addition to the affordability effects, it’s important that neighbourhoods feel and act like neighbourhoods. When they’re filled with empty units, or leased to transient renters, it’s hard to establish communities of trust and friendship. It’s also a political no-brainer, as such a tax is supported across the nation.

2. Ban Airbnb arbitrage

I’m not against Airbnb, but when one in four Paris apartments turns into a hotel room, there’s a problem. Airbnb was conceived as a way to earn money off a spare room, or when the owners were away on holiday, not to turn a home into an ATM. We should pass a law that allows, say, fifteen or twenty rental nights per year, and only permits Airbnb on primary residences. If people wish to invest in holiday real estate, let them put their money into crowd-funded Airbnb hotels.

3. Increase the qualifications for second residential property acquisition

When a city’s wealthier residents are allowed to compete against first-time buyers, the rich will inevitably end up richer, and society will end up poorer. A house is supposed to be a home, not a tradable commodity. While I’d personally suggest an outright ban on owning secondary residential property as an investment, we should, at least, implement massive down payment and personal income pre-qualifications, if not a surtax to encourage investors to allocate elsewhere. This should especially apply to “turf adds twenty” property scalpers who buy up new developments and flip them upon completion. Additionally, we must immediately end the depreciation of investment property as a taxpayer-funded write-off.

4. Increase rental standards to drive absentee and subpar landlords out of the market

In Hamilton, a single company controls more than 10,000 units. They effectively set the standard for prices and quality in the area, and the city is suffering for it. I’ve been in several of their buildings, and it’s obvious they’re doing the most they can do to maximize profits while doing the least to ensure their crumbling structures stay liveable. It’s important to remember that for-profit corporations will always do the absolute legal minimum that is required of them to stay profitable, so the nation should always be pushing for higher rental standards, be they stricter rent controls, increased health and safety standards, structural requirements, standard leasing contracts, faster repair times, sustainability improvements, and so forth.

5. Ban for-profit purpose-built rentals

Such companies exist to extract regular income from communities for generations while providing very little in the way of long-term commons value. They are a drain on local resources and should be sent packing immediately. The only exception to purpose-built rentals should be high density, locally owned-and-managed, not-for-profit housing associations, with high standards, such as Indwell in Hamilton.