I grew up in a joint family comprising my maternal grandparents, parents, my brother, and I, in the state of Kerala in southern India. I benefited enormously from the active caregiver role played by my grandparents, alongside my parents. This summer, I lost both my grandparents within five months of each other, and it has made me think more acutely about how my life was shaped by having multigenerational guardians. This is unfortunately not a luxury afforded to most children these days, as we move further and further away from home, in pursuit of a better life. One of the cornerstones of this improved quality of life sought by many, is finding a place to call home. However, the dream of becoming a homeowner is becoming more elusive with each passing year, as younger buyers grapple with being priced out of an overheated housing market. 

Ruminating on this loss of intergenerational living arrangements and the housing crisis in Canada, led me to formulate the policy idea delineated below. Here, I discuss the present state of the housing market in Canada, currently planned governmental actions to mitigate the housing crisis, and a proposal to allow senior citizens to age-in-place while providing a path for younger families to find a home in an intergenerational setting. 

Housing Crisis: Current Status

Shelter is one of our basic needs as humans. Having an affordable home in which you feel safe and secure used to be an attainable goal for previous generations. However, this is proving to be a challenge, especially for younger Canadians. This situation is exacerbated by increases in rent in major cities across Canada, inhibiting Canada’s ability to attract and retain talent in these economic hubs. According to the Organisation for Economic Co-operation and Development (OECD) Questionnaire on Affordable and Social Housing (2021), Canada has a lower number of houses per person compared to other OECD member countries like France, Germany, Japan, and the United Kingdom1. The house price-to-income ratio is a fundamental measure of housing affordability which denotes the market price of a standard residential property as a share of the average household income. An increase of this ratio means that house prices are overtaking household incomes, thereby resulting in a decline in housing affordability. According to OECD, in Q4 2021, Canada had the third highest price-to-income ratio among its members, and highest among the G7 nations.1 Also, its price-to-income index of 142 means that Canadian real estate prices grew 42% faster than its household incomes. While this sluggish growth in income plays a significant role in poor housing affordability, another key factor is a major deficit in supply1. Though Canada constructs over 200,000 new homes a year, acquisition by foreign investors and speculators, real estate flipping, and large corporations buying them up to use as investment properties all prevent them from being fully available to the general Canadian public.2 

Planned Mitigative Measures

In the 2022 Budget, the Canadian government proposed various measures to attenuate the housing crisis by improving the affordability of homes for younger Canadians by introducing a Tax-Free First Home Savings Account, doubling the First-Time Home Buyers’ Tax Credit, and by extending the First-Time Home Buyer Incentive.2 This budget also aims to directly increase the supply of affordable housing available to Canadians via a federal review of housing as an asset class to evaluate acquisition of residential housing by large investors, a two-year ban on foreign commercial entities and individuals who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada, and enforcing full and fair taxation on profits from property-flipping.2 While these measures could bring some degree of relief to the overheated Canadian Housing Market, it might not be sufficient. Here I propose a novel program to supplement these governmental initiatives. 

In Canada, there were around 14.1 million private households in 2016. Of these, approximately 25% (3.5 million) are led by people 65 years old or above and 75% of them are homeowners (2.7 million).3 In 2020, an Aging in Place report surveyed 1,764 homeowners aged 54 years or older in the four largest Census Metropolitan Areas in Canada: Metro Vancouver, Greater Calgary, Greater Toronto, and Greater Montreal. They discovered that 86% of baby boomers/older adult homeowners surveyed wished to live in their current home for as long as possible.4 Given the large number of senior homeowners and their desire to age gracefully in place, and the need for finding affordable housing, especially for younger families, I propose the following program. Young families (a couple — with or without children, married or common-law — or a lone parent with at least one child in the same house, where the youngest adult’s age is less than 45 years) could be matched with homeowning seniors. Upon mutual agreement, the senior could then sell the majority share of their home to the young family at a discounted market value. The senior could then continue living in an independent suite within this home alongside the young family, thereby being allowed to age gracefully in place. 

Proposed Plan: Aging in place in a synthesized multi-generational household

There are now more Canadians over the age of 55 years than children in Canada for the first time in the country’s history.3 Given longer life expectancies, it is estimated that older Canadians (approximately 16 million) will account for a quarter of Canada’s population by 2041.3 While a larger number of older Canadians remain an active part of the workforce, they are not doing so by choice.3 The program I propose here will allow older Canadians, especially empty-nesters or childless seniors, to age in place while receiving a monthly income. The following are some of the critical features of this program:

1. A centralized program will need to be set in place by the federal government, in collaboration with their provincial and municipal counterparts to provide matching services for senior citizens and young families.
2. Social and traditional media campaigns will need to be designed to inform the public regarding this initiative. Town hall meetings or similar Q&A sessions will have to be conducted to address questions and concerns from the public.
3. Seniors looking to sell the majority share of their home while aging in place will need to be identified.
4. Young families looking to buy their first home at a significant discount but are willing to share the ownership and physical space in their new home with its previous owner will need to be identified.
5. All members of a young family, over the age of 18 years will have to voluntarily submit to and pass a Police Vulnerable Sector Check to be eligible to enroll in this program.
6. The home of the senior will be evaluated and the asking price for enrollment in this program should be set to reflect at minimum a 15% discount in return for allowing the senior to age in place. 
7. Ombudsmen, legal experts, and social workers will have to be engaged to help mediate and negotiate a transfer of partial ownership from the senior homeowner to the young family.
8. The percentage of home ownership retained by the senior, down payment, and amortization period can be decided during negotiation. 
9. Contingency plans for adverse life or health events will need to be put into place. 
10. The young family can make monthly payments directly to the senior in lieu of mortgage payments, thereby reducing the cost involved. 
11. Steps to address defaults in payments by the young family should be put in place, depending on frequency and/or time of incidence during agreement period.
12. In the event of death or incapacitation of the senior, their remaining share of the home ownership will pass to their estate. The young family will then continue payments to the beneficiaries of the estate until they gain complete ownership; these payments can be made in installments or as a lump sum.
13. Frequent (monthly or bi-monthly) surprise visits will be made by social workers assigned to each match to ensure the physical, emotional, and financial wellbeing of all concerned parties. 
14. Any disputes arising from such an arrangement will be mediated by an ombudsman appointed at the municipal level, supported by the case worker assigned to that file.
15. While the program should allow the senior homeowner to independently choose and design an agreement that best fits their lifestyle and goals, they should be encouraged to inform any potential beneficiaries of their estate about their intent to participate in this program, to avoid any future legal challenges. 
16. Social interactions between the senior homeowner and young family will be left up to their mutual consent and discretion, though the program will actively promote it.

This program has the unique ability to provide a senior homeowner with a steady income and an ability to age in place while allowing a young family to own a home at a discounted price without the need for a high interest rate mortgage. There is also the added social benefit of living in a multi-generational household of one’s own choosing. 

References:

1. OECD Affordable Housing Database (AHD), OECD Questionnaire on Affordable and Social Housing. 2021.
2. Department of Finance, Canada. 2022. The Budget Report. https://budget.gc.ca/2022/report-rapport/chap1-en.html
3. Canada Mortgage and Housing Corporation. 2020. Housing for Older Canadians: The Definitive Guide to the Over-55 Market – Understanding the Market. https://publications.gc.ca/collections/collection_2020/schl-cmhc/NH15-295-1-2020-eng.pdf
4. Sotheby’s International Realty Canada: https://www.globenewswire.com/news-release/2020/03/04/1994809/0/en/Aging-in-Place-Report-Reveals-86-of-Urban-Canadian-Baby-Boomers-Older-Adult-Homeowners-Want-to-Live-in-their-Homes-for-as-Long-as-Possible.html