By Jordon Cooper, The Starphoenix, September 22, 2014
I was bored a couple of weekends ago and decided to try something new by visiting open houses.
I had never done this before and had some anxiety about it. After stressing about it for a while, I donned a pair of jeans and a T-shirt, hoping there isn't a dress code. I found myself underdressed at more than one home, but I stayed long enough to learn that a starter home in a new Saskatoon neighbourhood - the ones without any amenities or bus service - will set you back almost $400,000. With a minimum down-payment, the monthly mortgage payment would be just under $2,000.
That seems like a lot of money. However, I realized that I could rent out my garage, since I wouldn't be able to afford my car. And without any transit service to speak of, I wouldn't be going out at all. This seemed almost workable.
The average house price in August in Saskatoon was $352,810, among the highest in Canada. Averages are always skewed by both high and low prices, but after looking at half a duplex selling for $309,000 just a block down the street from my home and searching out a lot of houses online, it seems about right.
Bank economists say we shouldn't worry about house prices. They would say that, as their bonuses are based on people like you and me shelling out for huge mortgages. They all tell us that we should be OK as long as we aren't facing unemployment, rising interest rates, or a recession. Since there isn't any sign of bad economic news coming up this week, sign up for your 30-year mortgage. It's as if 2008 never happened.
Other than take on the kind of debt that keeps the Bank of Canada governor up at night, what is the alternative? At Huston-Tillotson University in Austin, Tex., there's a green Dumpster sitting beside a small garden. It looks like almost every other garbage container, except this one has a weather station and a mailbox. It also is the full time residence of Prof. Jeff Wilson.
When Wilson got divorced, he went from a 2,500-square-foot home to an apartment one-fifth that size. That's when he started to wonder about the baseline that a person needs to be happy. So he moved from living close to how the top one per cent lives to how the bottom one per cent lives.
For those of us who have never resided in a Dumpster, Wilson has a total of 36-square-feet to live in. It's uninsulated, features a bed and some storage in the floor where he keeps his impressive bow-tie collection. No one expects a hipster to give up his bow-ties no matter how little storage he has.
No one is proposing Dumpster living in Saskatoon, but it does offer up an interesting question: What does a house really need?
Affordable housing projects are starting in Europe that feature an insulated shell of a house as a base, with additional amenities such as framed-in bedrooms and extra bathrooms. To keep the cost down, some come without a water heater. The idea is that people can live there now and add features as families grow and finances allow. These homes are selling as fast as they can be built.
Currently in Saskatoon, "affordable housing" starts at around $220,000 for a semi-detached house. At going mortgage rates, the monthly payment is around $1,200, which is more than what those who make an average hourly wage should be paying for housing.
In some ways that is the story of cities. You need a six-figure income to live in places like Calgary, Vancouver, Boston and New York, where home ownership is for the rich. With average housing prices at almost $600,000 in Calgary, it is becoming one of the most expensive cities in North America.
Is that what we want Saskatoon to become? We are on the way. Our average home price has leaped by more than $100,000 in a few years. We aren't that far behind other unaffordable cities.
If we want Saskatoon to remain affordable, it will take more than back-lane suites to make up the difference. It won't be Dumpsters, but it is going to take something different from a $400,000 starter home. The cities that figure this out the soonest will be the ones that keep and attract people the easiest. Let's hope ours is that city.
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