Study finds that non-market housing costs a fraction of emergency shelter or institutional care
A new report from the National Housing Council (NHC) is pushing Canada to double its supply of non-market housing as decades of underinvestment have made homeownership and renting increasingly unaffordable.
The report, Scaling-Up the Non-Market Housing Sector in Canada, was submitted to the minister of housing, infrastructure and communities, making the case for a major policy shift to address the growing housing crisis.
Non-market housing refers to permanent rental homes operated by non-profits, co-operatives, Indigenous organizations, or government agencies. Unlike private rentals, these units are insulated from speculation, making them more affordable over the long term.
Right now, only 3.5% of Canada’s housing stock falls into this category – far below the 7% average among OECD nations. To catch up, the report says Canada must build at least 576,625 new non-market homes.
This wasn’t always the case. In the 1970s and 1980s, Canada actively built non-market housing, but those efforts stalled in the 1990s when the federal government withdrew funding.
Meanwhile, countries like Denmark (21%), France (17%), Austria (23%), and the UK (16%) have continued investing in non-market housing, ensuring stable, long-term affordability. The Netherlands, which has 34% of its housing stock in the non-market sector, leads the way.
Read more: Could European housing models solve Canada’s housing affordability crisis?
The report argues that Canada has been treating non-market housing as an optional add-on rather than core infrastructure—a mindset that needs to change.
"For Canada to course correct, a federally orchestrated policy shift is required. It will not be enough to simply fund a few more projects," said Sam Watts, chair of the working group on scaling-up non-market housing in Canada. “Doing more of what we have been doing for 25 years will not respond to the need."
The report outlines three major policy recommendations to scale up non-market housing:
- Long-term funding – The federal government needs to provide stable, predictable funding and low-cost financing to support new construction, acquisitions, and ongoing maintenance.
- More rental assistance – Expanding rental subsidies for low-income households to make non-market housing accessible to those who need it most.
- Scaling up operations – Encouraging larger non-profit housing organizations, consolidations, and alternative funding sources to increase efficiency.
Existing programs aren’t enough
The federal government has rolled out several housing programs, including a $55 billion apartment construction loan program, a $14 billion affordable housing fund, and a $4 billion rapid housing initiative for vulnerable populations.
But the NHC report suggests these efforts aren’t making enough of a difference, partly because Canada has no clear definition of affordability. Many so-called "affordable" housing projects fail to target truly low-income renters, limiting their impact.
Critics of government spending on housing often point to high costs, but the report makes the case that failing to act will be even more expensive in the long run.
A study in four Canadian cities found that housing an unhoused person in affordable housing costs $5,000 to $8,000 per year – far less than the $13,000 to $42,000 for emergency shelters or $66,000 to $120,000 for institutional care like hospitals or prisons.
In other words, investing in non-market housing isn’t just about affordability—it’s about economic efficiency. Without intervention, rising housing costs could further strain social services, making the housing crisis even harder to solve.
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