There is nowhere to hide from Canada’s rental housing crisis.
That’s the conclusion of a new report from the Canadian Centre for Policy Alternatives (CCPA), which found there are very few places left in the country where minimum wage workers can afford to rent apartments without stretching their finances.
And the blame lies with a continuing lack of apartment building construction, the CCPA concludes, urging governments to do more to bring rental buildings online.
Watch: Vancouver tops two-bedroom rental prices. Story continues below.
The CCPA surveyed 795 neighbourhoods across Canada and found that just 24 of them ― or 3 per cent ― have two-bedroom rental housing that’s affordable for someone earning the minimum wage in that location.
Only 9 per cent have one-bedroom units that are affordable for minimum wage earners.
“When we talk about housing affordability the focus is usually on home ownership, but a third of households, or 4.7 million families, rent,” CCPA senior economist David Macdonald said in a statement.
“Many of these renters — particularly those working at or near minimum wage, on fixed incomes or single-income households — are at risk of being priced out of modest apartments no matter where they look.”
The report estimated that you would need an income of at least $35 per hour to afford a two-bedroom apartment in Vancouver, and $34 to afford the same in Toronto. The most affordable cities are in Quebec and Atlantic Canada, but even there, the $16 per hour needed to afford rent in many places is above minimum wage.
Statistics Canada’s measure of rental housing costs shows rents went up by 2.4 per cent, on average, over the past year. But that measure reflects all renters, including those who continue to live in housing they’ve been renting for years. Looking only at the prices of apartments available for rent, it’s a whole different story.
Data from rental site Padmapper shows the cost of available rental apartments continues to rise faster than incomes in the vast majority of Canadian cities.
Rates for one-bedroom apartments rose by about 10 per cent in Toronto and Vancouver over the past year, and nearly as quickly in Montreal, the data showed, to an average of $2,290 in Toronto, $2,200 in Vancouver and $1,430 in Montreal.
Over the past three years, rents in Kitchener, Hamilton and Montreal have spiked by more than 40 per cent, according to Padmapper’s data. A majority of cities saw price growth stronger than income growth, while only a few Prairie cities have seen rents decline.
The CCPA report says there are many reasons for the apparent shortage of affordable housing, some of which are specific to certain locations, but one key factor everywhere is the lack of rental apartment construction.
Many housing market experts have argued in recent years that the decline in rental apartment construction a generation ago is now translating into a shortage of rental housing today.
“In the late 1970s and early 1980s, over 100,000 new rental apartments were being built a year,” the CCPA report started.
“That number dropped to 10,000 in the 1990s due in part to federal cuts to affordable housing funding. … Between 1983 and 1993, 49 per cent of all new rental builds were affordable housing units paid for with public money.”
The report notes that various levels of government and the CMHC have launched a number of programs recently to help with home affordability. Those programs combined bring the total number of affordable housing units being built to about three-quarters of the level seen in the 1970s and 1980s, the CCPA said, before government cuts to affordable housing budgets. And Canada’s population was considerably smaller in those days.
The report also noted that the federal government is introducing a Canada Housing Benefit that will allow low-income taxpayers to get up to $2,500 in help paying the rent.
The government estimates 300,000 households will get help with rent when the benefit kicks in in 2020, but the CCPA figures the benefit’s rules will keep many people from receiving it.
“In the long term, rental subsidies are no substitute for the construction of new affordable housing, which would increase vacancy rates, cool rental prices and allow more people to live closer to where they work,” the report argued.