Four blocks, I should mention in a song if I want to get along with change, who doesn’t wanna change this? – Tegan and Sara, “Hell” (2010)
Ten years ago, circa 2006, Tegan and Sara wrote “Hell” about a neighbourhood that was part of the infamous downtown east side in Vancouver. It’s a song about a place with some real social and economic suffering going on. If I were to ask you where in Canada you’d pay a king’s ransom to live, you’d think that a place once dubbed “Hell” by the Vancouver Sun wouldn’t make the list. But now it’s 2016, and it costs over a million dollars to buy a house there. Or, if you are lucky, you can spend $300,000 on a condo there. And no, there was no rampant increase in wages and salary nor a magic cure for poverty and homelessness applied in the last decade. Housing prices and rents have skyrocketed and income has not. This in turn creates upward pressure in the suburbs, with the area of effect slowly increasing as people have to go farther and farther to where they can afford to buy. Meanwhile, it becomes harder and harder for regular people to put a roof over their heads. It’s crazy unsustainable.
But what does the outrageous inflation of a real estate bubble in Canada’s most famous city on the west coast have to do with my thoughts about games? In a word, title. What do you get your name on when you buy a slice of dirt with a house on top? A title. What does a person win in a finite game? A title. Considering this aspect of personal finance as a game might sound like a really odd thing to do, but remember that I’m the sort of person who chooses to write ~1000 words per week comparing games to obscure philosophy texts. And one of the reasons I do that is to look at things from a different angle in order to understand them better. So, home ownership vs. renting as a finite game. This helps me make sense of what would otherwise be an inscrutable case of people desperate to sink their own financial futures. I don’t live in Vancouver or Toronto, so I don’t feel the effects of this nearly as much. Yet even here I can hear the marketers and salespeople singing the siren’s song: stop throwing your money away on rent. The effects are less spectacular and headline-grabbing outside of Canada’s two hottest markets, but the sickness exists here too.
So why is it that the title of homeowner is so coveted? It’s considered uncouth to obsess about expensive clothes, big flashy jewellery, and luxury cars. Sure, it’s not necessarily unfashionable to buy those things if you’ve got the cash, but to focus your life on acquiring those things will earn you labels like materialistic. And so too will obsessing about ensuring your house is gigantic with all kinds of features unimaginable to middle income families in the 20th century. Yet it seems there is something magical and different about owning your dwelling rather than renting it. Taking on large debt to buy a car is considered irresponsible while going into epic debt to buy a house is rationalized as “good debt.” That makes sense, since the expensive car is usually an accessory for the title of rich while homeowner is a title unto itself. It is a title won in a game of life rather than a recreational game or other form of structured play. I think of it this way:
- The beginning: A person has to accumulate enough money for a down payment, which is presumed to be a reasonable measure of one’s value to society. Obviously a problematic one, but for the purposes of this game, people who have lots of money are presumed to be hard working savers and people who don’t are presumed to be on their way to that state, suffering as a result of poverty, or maybe they are just hard partying wastrels. In any event, we all start with nothing then begin accruing through various means.
- Consent to play: We consent to play this game by addressing issues of income inequality by looking for ways in which people who can’t afford to buy houses become able to rather than questioning the premise in the first place. When we congratulate our friends on their (illusory) equity gains. When we weep and gnash our teeth because affordability is a train to success that is about to leave without us, and consider long term tenancy as a state of failure.
- Rules are externally defined: we play by the rules of the industry and the banks, and can know what they are, though many choose to remain oblivious.
- Played within boundaries: houses in New Glasgow just aren’t coveted like they are in Kitsilano. Your title, in both senses, is worth more in Vancouver.
- The purpose of the game is to win: by being clever in your choice and timing, having the right stuff to be able to secure the deal, and being diligent and determined while you pay off the mortgage leads to you being a winner while I am a loser because I will never escape making a monthly payment. Nobody pays over a million dollars for a crappy house just because they just need a place to sleep.
- The game ends when someone wins: when the person who has captured the homeowner title either sells and pockets huge capital gains, or they hang on forever and reap the benefits of never having to make a monthly payment for their shelter again and the equity becomes a treasure hoard for their heirs. Assuming, of course, that a correction or crash does not wipe out the gains.
This aspect of life fits the characteristics of a finite game. The big question that I would like everyone to consider is this: should we consent to play this game? And if the answer is no, what does that look like? I choose not to play. Regardless of whether I remain a renter or somehow become a homeowner, it will never be my goal in life to own a house. My personal financial stability will remain paramount and I will not sacrifice it on the altar of real estate. Shelter is a need; owning is not. I am not saying there is inherently anything bad or wrong about buying a house, especially if you think of your house as a place to live rather than a guaranteed source of wealth and prestige. There are lots of good reasons and circumstances where it makes perfect sense to buy. I am saying there is something inherently wrong when prices start flying away from wages and salaries because of FOMO.
It’s been hard for me to come to the conclusion that never buying a house isn’t a fail condition. It’s been hard to listen to people talk about real estate like it’s a magic wealth machine that never fails to deliver long term wealth and happiness. But I’m up and over it and over them.