Rising Prices and Changing Expectations
When I was young, Harlem (Manhattan’s northern neighbour) was synonymous with poverty. It was a working class borough with a well publicized crime problem which nonetheless served as an affordable hometown for those who had been priced out of the Manhattan real estate market.
Harlem has changed. Today, the average per square foot price of a home in Harlem is well over $1000, or put into local perspective, 3 times ours. ‘What spurred this change was an increase in demand. But what brought about the increased demand? Was it good civic stewardship? Community leaders initiatives?’ Perhaps both played a role. But the biggest reason Harlem evolved had nothing to do with Harlem at all. Rather, Manhattan had run out of real estate, and what was already a pricey Manhattan, became un-affordable. Prices went up in Harlem.
To this day, I have never been to Harlem. But with the help of a calculator, I can ascertain that a working class family with both parents employed – say a policeman and a school teacher – cant afford to buy a home and raise a family in Harlem. What has happened to the working class folks? Some cashed in on the rising prices and moved elsewhere, be it in a more distant New York borough, or somewhere else altogether. Younger ones, without having the benefit of family help, would just not see Harlem as an affordable option. Is this sad? That would be a matter of perspective. Perhaps for some it is. But a family that sold their home, bought one twice as big with a big yard and hour away, and a condo in Florida with the leftover, may not feel any sadness at all.
A few years ago, Toronto, the 7th largest metropolitan region in North America, and the fastest growing, began to run out of developable land. And what land remained faced larger impediments to development than at any time in our history. (Whether this be good or bad, is not the intent of this article to surmise. Rather, it just be!) The result, not surprisingly for anyone who may recall Economics 101 from university, or the stampedes at Walmart when supplies of Tickle Me Elmo were limited, prices have risen to a level that some have referred to as a housing crisis.
Admittedly housing in our region has changed remarkably in the last decade or two and wages have not kept pace with housing costs, particularly for renters. But those changes are not without precedence. What has yet to follow is a curbing of our expectations. Our assumption that the next generation would live in the town in which they were raised may no longer be a realistic one. This shouldn’t surprise us. It is the reason some of us landed here in the first place, we (or our parents) couldn’t afford Toronto. What initially may have seemed an unfortunate outcome, has turned out to be a pleasant outgrowth indeed. There is no reason to believe the next option wont become just as great.
Thanks for reading,