Affordability concerns loom large in several Canadian cities, with municipalities reporting a dearth of affordable units for lower-income renters, as highlighted in a recent report.
The report underscores the growing unaffordability of suitable housing for many low-income households across Canada. With the country's rental vacancy rate hitting a historic low of 1.5 per cent, the challenge of finding affordable housing has intensified, propelled by robust labor markets and surging populations in some urban centers.
According to the Canadian Mortgage Housing Corporation (CMHC), an affordable unit should not exceed 30 per cent of a household's income. However, the reality starkly contrasts with this ideal, especially for renters in the bottom 20 per cent income bracket.
Major cities like Vancouver, Toronto, Ottawa, Calgary, and Edmonton are grappling with acute shortages of affordable rental units. In Vancouver, for instance, only one per cent of rental stock was deemed affordable for lower-income earners in 2022, a figure that dwindled to virtually zero in 2023. Similarly, Toronto and Ottawa witnessed negligible availability of affordable units for lower-income households during the same period.
In Calgary, the proportion of affordable rental stock dropped from five per cent in 2022 to 3.1 per cent in 2023, while Edmonton experienced a marginal decline from 13 per cent to 12.7 per cent. Despite relatively higher vacancy rates in some cities like Ottawa and Edmonton, the affordability crisis persists, with rental prices soaring beyond the means of low-income renters.
The report attributes the escalating rental prices to various factors, including soaring home prices, high borrowing rates, and imbalanced supply and demand dynamics. In cities like Vancouver and Toronto, where home prices far exceed median household incomes, the availability of affordable rentals remains severely constrained.
As the affordability crisis deepens, the prospects of owning a home recede for many renters, exacerbating the strain on already stretched budgets. With demand outstripping supply in most major markets, the report warns of a protracted period of reduced affordability and tighter rental markets, signaling an urgent need for targeted interventions to address the housing affordability crisis gripping Canadian cities.
