'Very concerning' numbers highlight huge challenges, says CMHC
The latest Rental Market Report from Canada Mortgage and Housing Corporation (CMHC) has put a spotlight on a pressing issue that's been brewing in Canada for years: the acute shortage of affordable housing.
CMHC senior vice president Mathieu Laberge revealed that Canada is wrestling with its lowest national vacancy rate since the 1980s—a mere 1.5%. To make matters worse, rents have surged by 8%, a figure starkly above the historical average of 2.8%.
“These numbers are very concerning and paint a sobering picture of our current reality. Even in a G7 country that consistently ranks amongst the best in the world, the problem persists. Too many people in our communities cannot find a rental housing unit they can afford on their own. At. All,” Laberge said.
The report traces the roots of this crisis back to the early 2000s, when demand began to exceed supply in cities like Toronto and Vancouver. Initially, those priced out of the housing market had alternatives—they could either find more affordable neighbourhoods or opt to rent longer, saving up for a down payment. However, as this displacement of demand from homeownership to rental continued, it led to a tightening of the rental market.
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Then came COVID-19, bringing with it a shift towards remote work and causing many to seek housing outside of the expensive urban centres, further spreading the affordability issue to new areas, including Montreal and Ottawa-Gatineau.
Laberge points out how the resulting social fallout has impacted the housing market: “The pandemic that sparked increased geographical mobility for many workers eventually led to social immobility.” This has led to more Canadians choosing to "stay put," as moving to a new, affordable place becomes increasingly difficult.
In particular, cities like Vancouver, Ottawa, and Toronto are seeing their affordable rental stocks dwindle to nearly nothing for the lowest income earners. The report starkly highlights that over one in four Canadian renters are living in housing that's unaffordable by their standards.
Despite the grim overview, Laberge sees a silver lining. Housing starts in recent years have hit historic highs, and there's been a noticeable shift towards more apartment living and purpose-built rentals. However, he cautions that these developments alone won't solve the issue overnight.
Moving forward, Laberge suggests considering alternative housing solutions, like shared living spaces or converting commercial properties into residential units, to help ease the crisis. It is ultimately innovative thinking and further research that can forge a uniquely Canadian approach to tackling housing affordability.
“While some may find this solution challenging to conceive, compromises in housing needs versus wants may be necessary. The idea here is not to reduce anyone’s current living standards, but what may come as a sacrifice to some, may very well be a sought-after improvement for others. The essence of that reflection is to provide new options to Canadian households living through our housing crisis,” Laberge said.
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