It is an indisputable truth that people under the age of 40 are having genuine trouble getting a foothold in the modern global economy.
The financial path to success was fairly straightforward for Baby Boomers and Gen-Xers. But later generations, the Millennials and Gen Zs are having a much rougher time, especially those who want to buy a house, raise a family, and comfortably plan for their future.
Higher rates of student debt, wage stagnation, job market instability, and skyrocketing property prices have put a dent in the argument that you just need to get a great education and work hard to build equity. This just isn’t a dependable route for financial autonomy these days.
It is now a ubiquitous problem, one that is pronounced in North America but global in nature, as evidenced by a report from UN-Habitat. And it doesn’t appear to be going away any time soon, as evidenced by a study from the Organization for Economic Co-operation and Development (OECD).
One of the few voices offering a viable solution for this situation is Adam Gant, a real estate investor, housing researcher, philanthropist, and co-author of A House Shared, a novel that tells the story of several people who come together to live in a shared house. The book, released in 2020, provides a fictional blueprint for individuals seeking to weather the current global housing crisis while still working to improve their overall financial situation. The crucial element to that blueprint? Shared Equity.
“Shared equity is an innovative and practical solution to the housing crisis, allowing younger generations to invest in real estate without the burden of full ownership upfront,” says Gant. “It’s a model that can help break the cycle of renting, which often sabotages upward mobility and the accumulation of wealth over the long term, and enable young people to build a better future for themselves.”
By partnering with others or with organizations that offer shared equity programs, youthful buyers can enter the market at a much lower cost. “It’s about shared responsibility and shared reward,” Adam Gant continues. “This sort of collaborative approach provides financial benefits first and foremost, but it can also foster a greater sense of community through forwarding the collective effort toward homeownership.”
As the housing market continues to be a barrier for many individuals and couples, especially in urban areas, the solution Gant is proffering is one that more Millennials and Gen-Zers may need to seriously consider. “In today’s economy, the traditional approach of saving for years to buy a house alone is simply unrealistic for many,” he explains. “Shared equity, on the other hand, offers an opportunity to invest in the future while allowing people to keep enough money on hand to provide for their present-day needs.”
It could be the bridge needed to allow younger generations to step into the housing market. By adopting the model, individuals would no longer be isolated in their pursuit of homeownership and could work along with other housemates to overcome the admittedly daunting financial obstacles that stand in their way. Indeed, it could conceivably have many long-term benefits, such as offering a more sustainable approach to homeownership in an increasingly volatile market.
“The pooling of resources by different parties in order to reach a common goal is an age-old way to deal with a seemingly insurmountable problem,” says Adam Gant. “I and other real estate strategists like me are simply proposing applying this method to the context of modern home ownership.”
In the near future, shared equity could be a key factor in mitigating the global housing crisis and creating new opportunities for those who may have otherwise been excluded from the market. With ongoing research taking place in many economic think tanks and pilot programs in place in several regions, it is showing potential to change the trajectory for many young adults struggling to secure stable housing.
As the characters that Adam Gant helped create in A House Shared come to realize by the end of their story, their collective situation improved drastically when they worked together to buy a house. Let us hope for the sake of the world’s beleaguered yet hopeful young people that shared equity proves to be an effective solution in the real world and one that can be built upon to eventually reach the ultimate dream of outright homeownership and the financial freedom that it brings.
