There’s considerable debate in Canada and the U.S. about “housing affordability.” People want younger generations to have easier access to affordable housing, yet almost nobody wants their own home’s value to drop.

In highly financialized economies like ours, housing acts as critical collateral underpinning substantial economic activity. A broad-based decline in housing prices isn’t feasible without risking severe economic instability, which would trigger a liquidity injection, which would raise the price of housing....

The first political leaders who clearly acknowledge this paradox and thoughtfully address potential solutions will earn significant credibility.