MONTREAL — If policymakers want to help solve Canada’s housing affordability crisis, they should start by building rental housing near colleges and universities.
That’s the implication of a new study from CIBC, which estimates that Canada has a shortage of about 300,000 housing units because of the way it counts — or doesn’t count — students.
In Canada’s census, a student who lives away from home during the school year but returns to their parents’ home in summers is counted as living with their parents.
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That census data is used by Canada Mortgage and Housing Corp. (CMHC) to generate estimates of the demand for housing across the country, which are closely watched by the real estate industry.
As things stand, CMHC’s data shows a perfect balance between the number of new homes built and the number of new households formed in the country. Thus, developers aren’t building the housing needed to fill this demand because they simply don’t know it’s there.
“If we are undercounting young people, and most of them are renting, then we have to increase rental supply,” said Benjamin Tal, CIBC’s deputy chief economist and author of the report.
Tal told HuffPost Canada it’s “reasonable to assume” that urban centres with large universities would be most impacted by this.
And the problem is growing in its impact on Canada. The percentage of Canadians who attend university has been rising steadily for decades, while at the same time Canadian schools have been attracting larger numbers of international students.
Tal notes that, among international students, the demand for housing is likely even more intense than among domestic students, because “most foreign students don’t have a parent’s house in Canada as a base.”
The 300,000 figure is a rough estimate, the CIBC economist admits. Lacking data on how many Canadian students live away from home during the year, Tal used U.S. data to fill in the blanks.
He says policymakers need a new measure to calculate actual housing demand from students.
“First, we have to be aware of this, before we can do anything about it,” he said.