Nova workboard

a blog from young economists at Nova SBE

Affordable Housing in Canada

Affordable housing in Canada is in place to support low-income individuals who are struggling to pay rent in addition to their other daily expenses. It is a necessary program, given the rising number of eligible individuals, growing alongside trends of increasing poverty and housing rent prices. While subsidized housing puts a roof over many Canadian’s heads, it also serves the purpose of increasing citizen’s well-being, safety, and health, and allows them to be contributing members of society.

There are a variety of conditions that ensure that those who receive affordable housing are actually in need. These include residency requirements, situations such as senior citizenship,  supporting dependents, having a disability, or being at risk of homelessness, income levels, and more. However, many of those who are in need are not receiving it. Demand continues to grow, while subsidies have continued to decrease to date.

Canada has seen a shortage of affordable housing for many years. According to CPJ, this low supply has been met with increasing demand from low-income individuals and families, putting a strain on government policies. One major contributor to this strain is record-low rental property vacancies across the country. Since it is often less lucrative for developers to build rental housing, they are focusing more on properties for the ownership market. As a result of the supply-demand gap, rent prices have been slowly increasing, which ultimately has pushed increasing numbers of renters to not be able to afford their current rents, sending them looking for subsidized housing. According to the Liberal website, about 25% of Canadian households is paying rent that exceeds their budgets or abilities, and “one in eight cannot find affordable housing that is safe, suitable, and well maintained”.

Unfortunately, obtaining subsidized housing is not as easy as one would expect. Waiting lines can often exceed up to 5 years if an individual is living on their own and not supporting children or elderly. An article in the Globe and Mail stated that “in Ontario alone, 171,360 households are waiting for rent-geared-to-income housing, according to the most recent data released by the Ontario Non-Profit Housing Association.” Actions must be taken at all levels of government in Canada; federal, provincial, and municipal policies need to take into account the shortages and work together to mitigate the problem.  Municipalities are pushing for Ottawa to fund half of all major building projects in the country, with provinces covering one-third and municipalities paying the rest.

The Greater Vancouver Area is a prime example of a city in need of significantly more affordable housing. First, the area is experiencing far-too-high levels of homelessness; according to the Vancouver Sun, the homelessness count conducted this year found a dramatic increase across the metropolitan area. This is a result of continually rising house prices, as the benchmark price for a detached property in Greater Vancouver rose above the $1.5 million benchmark. Simultaneously, thousands of Federal Housing subsidy agreements have been coming to an end for the past couple of years, and the NIMBY factor (objecting to public benefit developments) is playing a role in inhibiting new projects. The combination of these is pushing more people to the streets, exhibited by the tent cities of homeless people forming around the city. With this increased number of people taking to the streets, the need for more subsidized housing and other policies grows ever-more urgent.  Fortunately, with the city’s municipal election fast approaching in May and affordable housing at the top of voter’s priorities, pressure is being put on the government to make changes.

All levels of government are taking steps to eradicate the supply-demand gap of affordable housing. When Justin Trudeau was elected Prime Minister of Canada in 2015, his Liberal Party platform included a number of affordable housing initiatives. As a first step towards combatting rising house prices, Trudeau introduced the foreign buyers tax, which taxes the wealthy incoming foreign home buyers who have been driving up prices. More significant, however, is the party’s budget for affordable housing across the country. An estimated 11 billion dollars will be provided in the coming years to cities that are experiencing affordable housing shortages. Mayors in all major cities are excited by the prospects of this funding, and are striving to match funds in order to create more affordable housing, as an investment in the future of the country.


Author: studentnovasbe

Master student in Nova Sbe

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