I stumbled on a story about immigration’s effect on housing recently. Wait, don’t go. This one is different from what you’ve been reading lately. There are no population traps, diploma mills or vitriol. This one is about an idea, grit and the potential of innovation. 

Jonathan Faerman emigrated to Montreal from Argentina in 2012 with a business degree, a master’s in data mining and a job lined up at TD Bank’s insurance arm.  

Canada was good to Faerman—and Faerman was good for Canada. Digital technology was taking off and we were short on people with the skills required to exploit data. He took his talents to the company that managed the Air Miles program in 2014 and bought a condo in Montreal’s Griffintown neighbourhood in 2015, back when a younger person with a salary could purchase property in one of Canada’s big cities without giving it much thought.  

Taking full advantage of the demand for workers with his skills, he shifted to Equifax in August 2019, then jumped to Ubisoft in 2021 and to Shopify in 2022. Along the way, he got an MBA at Concordia’s John Molson School of Business as a part-time student. But maybe the highlight was when he met an English teacher on Plenty of Fish who became his wife in 2018. They have two boys, one four years old and the other two years of age. 

You can’t raise a family that large in a one-bedroom condo, at least not easily. Faerman bought a house in the suburbs in 2020. He rented his condo for a year, and then decided to sell—at a price that was about 60 per cent higher than what he originally paid. That was 2021, during the post-pandemic housing frenzy. Faerman became what he calls a “real estate enthusiast.” Like so many other Canadians, he was hooked on housing. 

“Everyone wants to invest in real estate,” Faerman said in an interview. 

Indeed. Some 10 million households owned their homes in 2021, the most ever, according to Statistics Canada’s latest census. The incentive to buy is bigger than simply having a place to call your own. The average net worth of those people was about $685,000 in 2019, compared with about $324,000 a decade earlier. At the same time, the average net worth of renters was a mere $24,000. Many of those homeowners are leveraging their wealth to buy property: more than three-quarters of the condos in B.C. that aren’t inhabited by the owner belong to individuals, rather than companies. In Ontario, it’s more than two-thirds. 

But higher costs appear to be frustrating that desire to get into the housing market. A record number of households own their homes, but the homeownership rate actually dropped to 66.5 per cent in 2021 from a peak of 69 per cent a decade earlier and 68.4 per cent in 2006. (The homeownership rate was 63.6 per cent in 1996.) Maybe a growing number of Canadians became uninterested in dealing with everything that comes with owning a home, but it seems the barriers to entry were at least as important and probably moreso. 

That was Faerman’s problem. The budding real estate enthusiast wanted to do more than study the market, but was wary of taking on so much risk alone. He tried to convince family and friends to pool their money and go in on a property with him, but they all demurred. People were intrigued, but ultimately lacked at least one of the same three things: time, money and knowledge.  

Most people would have given up at this point. But Faerman couldn’t accept that such an obvious solution to the problem of accessing the real estate market—pooling resources and sharing risk—was so difficult to execute. This is what separates entrepreneurs from salary workers: when the former encounter friction, they feel compelled to solve it. There was obviously a critical mass of people who would like to invest in real estate, and the only thing that kept them from joining forces was an opportunity to meet and join forces. 

Faerman thought of Plenty of Fish, the dating platform that brought him and his wife together. “To meet people, it’s a numbers game,” he said. “You can only meet a few people at a time at [industry] meet-ups.” On a social platform, you could network with hundreds or even thousands of like-minded people. That’s how Investium was born. 

Faerman would work a full day, help get his children to bed and then spend a few hours each night working on creating a dating app for fellow real estate enthusiasts. He recruited some silent investors, hired local software developers to build a site and signed up some experts to advise Investium users on the intricacies of investing in real estate, such as legal matters and evaluating market conditions. Faerman’s targets are individuals who would like to pool resources to buy property and smaller developers who need help bidding against the real estate behemoths. His site offers novel security features unavailable on sites such as Facebook, and anyone who signs up will know everyone is there for roughly the same reason. 

It’s a good idea. Faerman’s platform could create new pools of capital that have a greater risk tolerance than individual investors, and perhaps also more flexible expectations of what constitutes a reasonable return on investment than the big real estate firms. Will Investium succeed? Who knows. Most startups fail. Some become Shopify. But we need more people like Faerman with the grit and wherewithal to try. According to calculations by University of Calgary economist Trevor Tombe, Canadians are creating new businesses at less than half the rate of the mid-1980s and much significantly slower than the current exit rate. “Canada’s economy seems to have become less dynamic,” Tombe said in an article published by The Hub. “That’s a problem.”

Faerman said “hundreds” of people have joined his site since it launched last year, a significant increase, but not enough to become a going concern: he intends to make money by enticing sellers and developers to solicit investors on the site, a strategy that will require scale to be successful. The next step is getting the word out. That won’t be easy, but Faerman continues to spend a few hours a night working on his second full-time job. 

Investium is an example of innovation in an industry that is notoriously averse to change, a source of dynamism that Tombe worries the economy lacks. I trust none of you missed that it took a relative newcomer to Canada to do something about this market failure. When people say immigration can be a solution for Canada’s housing crisis, Faerman is an example of what they mean. 

Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.