Over the past decades, the wealth of Canadian renters went from being 20 times less than that of homeowners in 1969 to a startling 70 times less when this measure was last taken in 1999. Through the early part of the last decade, a continuation of this trend was being observed.
And this isn't the only situation getting worse for renters. Despite rent controls, in many of Canada's urban areas increases in rental costs are outpacing inflation.
Taking Toronto as an example, from 1991 to 2005, the average cost to rent a two-bedroom apartment increased 46 per cent, while inflation for this period was only 30 per cent. This increased burden on renters is exacerbated when they first move into a rental property and are required to pay the equivalent of three months' rent upfront (first and last months' rent plus security deposit).
Renting was traditionally seen as a bridge to eventual homeownership, however the decreased relative wealth of renters and increased cost to rent are seriously challenging this idea.
Statistics Canada reported in 2009 that the average Canadian household spent 27.8 per cent of their earnings on shelter, a figure that is often much higher among Canada's low-earners. Without access to homeownership, low-income renters will never see a return on this portion of their earnings devoted to shelter costs, nor will they ever benefit from housing price market trends, which have largely been favorable over the past decades.
Not being able to access affordable home ownership is a major barrier to Canada's most vulnerable families getting ahead.
Improvements in health, education, and financial security are all common benefits experienced by families as they transition to homeownership -- over the coming weeks, revisit this blog to find out just how low-income families "get ahead" when they are able to access a safe and decent home they can afford.