What will affordability be?

In the ongoing debate about affordability in the housing market, I have yet to see “affordability” defined in concrete terms. What exactly will it look like? If it means that house prices must come down, and existing homeowners must watch the worth of their assets depreciate in the name of the public good, how much of a decline on, say, a million-dollar home must there be before affordability is reached? Ten per cent? Thirty per cent? Fifty per cent?

It matters because existing homeowners are, in effect, being asked to subsidize the hopes of those aspiring to home ownership, and to see the price of their homes descend to a level where they are “affordable,” whatever that is. If all things were relative in the world, it could be argued that even with a significant price decline, nothing really would change, that an existing homeowner’s home would retain its value in relation to the rest of market. But all things are not relative in the world, and there would be real losers on the road to affordability — the heavily mortgaged, those who bought at the peak of the market, those whose sole asset is their home and see it as their retirement fund.

Affordability, I suppose, is a lovely prospect, although so far it has only wavered on the horizon, oasis-like — a destination to be yearned for, but as yet as substantial as a mirage. But what we can expect when, if ever, we get there? Anybody care to venture a guess? The housing critics? The academics? The politicians? The media? Can you tell us, not of the need for affordability, which is an easy argument to make, but what it looks like in dollars and cents?

Pete McMartin, Delta