Q&A: Max Fawcett on why renting a home is better than buying
A Calgary renter makes the case against home ownership in the city's real-estate market
Owning your home is orthodoxy in Calgary.
The city has the highest rate of home ownership among all major metropolitan centres in the country, according to the Canada Mortgage and Housing Corporation.
But Max Fawcett, who has worked as an editor for Alberta Oil and Alberta Venture magazines, is challenging the established order.
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In a recent article in Swerve magazine, Fawcett made the case against home ownership in Calgary and, on Friday, he caught up with David Gray on The Calgary Eyeopener.
You can listen to the interview here or read excerpts from Gray's questions and Fawcett's answers below.
Q: You start the article with comparing the passion for home ownership with religion. Why?
It has a lot of the same dimensions — certainly, the fervour of people who are proselytizing on its behalf and the desire to convert people to the cause.
When I published this article and put it on Facebook I had a lot of my friends, who are homeowners, sort of gently try to convert me over to their side, which is a really interesting response.
Q: Walk me through it. What are some of your arguments against owning a home?
I don't like the way numbers look, in terms of buying today. Certainly, if you bought 10 or 15 years ago, great decision. And, if I could time travel my way back to 1992, I would definitely buy a home.
But today, with rates where they are, with prices where they are, and with rents where they are, it just doesn't make much sense going forward. The risk is not balanced out.
Then there's the lifestyle side. Renting actually has a lot of advantages. If your fridge breaks, you don't have to pay for it, your landlord does. If you get a great job offer in a new city or a different part of town, you can just move. You don't have to deal with realtors and commissions and fluffing your house and all the rest of it.
The advantages of renting are not as widely talked about as the advantages of home ownership because there is no one who directly benefits from it. People don't get commissions from renting, generally speaking. So, there's this whole industry — banks, realtors, you name it — on one side of the conversation and there's not really anybody on the other side.
Q: What about the argument that you're paying somebody else's mortgage?
Well, it's a great argument. As someone who works in communications, I tip my hat to whoever came up with that. But when you buy a home, let's say you put 10 per cent down, you're just renting the bank's money, until you own it.
Unless you're paying cash for your house, and few people are, it's just a question of whose mortgage you want to pay. Do you want to pay your landlord's, or do you want to pay the bank's?
You can crunch the numbers a lot of different ways, but if your rent is less than the equivalent home payment and you take out the principal portion, you can save that money yourself. People talk a lot about the forced savings effect of paying down a mortgage, but I think grown-ups can force themselves to save in other ways.
Q: Are renters unrepresented, under-represented, politically and in the decision-making in this city and in this province?
Hugely. There's no lobby groups on behalf of renters. There's no industry associations on behalf of renters.
If you look at the political conversation around the secondary suite debate, it is one that I don't think that would be carrying on the way it does if there was more political clout on behalf of renters.
I talked to (city councillor) Brian Pincott about this. He's actually a renter. No one really knows that because he doesn't talk about it, because it's obviously not politically advantageous to do it. But he's dismayed at the tone and the discourse around renters in this city and I think it's negatively affecting the city.
Q: Talking about stereotypes against renters, what do you say to all those disapproving, tsk-tsking father-in-laws out there who are saying, "Look, kid, you don't understand. When I bought, everybody told me I was crazy 15 years ago to pay that much for that house." What do you say to those people out there?
It's hard to say anything to convince them because their experience is so strong and they've done so well but I would encourage them to look at the numbers, really crunch the math and understand that today is not 15 years ago.
Fifteen years ago, Facebook didn't exist. Fifteen years ago, we didn't have a black president. Things change.
I'm certainly not suggesting that buying is as terrible decision and it never makes sense. I'm simply suggesting that it doesn't default to making sense, that there is a case for renting, and it can be made.
Q: As a renter, do you promise not to sneer at homeowners if the housing market crashes?
You have my word. I have a lot of friends who have bought recently against my better judgment but I support them and I would hate to see them get hurt.
I'm an obnoxious person already. I don't need to be more obnoxious by celebrating in other people's misfortune.