Canadian Housing Crisis Requires Government Action

A report by National Housing Accord advises the authorities to get together and form a strategy to tackle the issue

Canada’s housing situation is a crisis that requires decisive federal government action to spur affordable rental housing creation, along with buy-in from both non-profit organizations and for-profit developers. That is the conclusion of the National Housing Accord, which includes members ranging from the Canadian Alliance to End Homelessness to the development industry's Real Property Association of Canada (REALPAC). The group concludes the country is failing to provide affordable housing for millions of economically vulnerable Canadians in its ‘A Multi-Sector Approach to Ending Canada’s Rental Housing Crisis’ report.

Across 10 recommendations, it advocates policies for the federal government to:

• increase the supply of non-market housing
• create conditions for more market housing to be built
• provide financial assistance to families in precarious housing situations who are at risk of becoming homeless
   

It serves as a blueprint to build two million affordable and market purpose-built rental units in the next seven years, encourage private investment into rental housing construction and raise federal investment in deeply affordable, co-op and supportive housing.

Michael Brooks, CEO of REALPAC and co-author of the report, said the accord members got together and did the math to determine just how daunting of a problem this is. Stressing on the fact that it is not business-as-usual anymore, he said, “It’s finally dawning on people that no one has a plan. This is a whole-of-government approach. No one has an industrial strategy for housing in Canada yet. This is what we need: align everything and find a way forward.”

The facts and figures

The report lays out a series of figures to illustrate the extent of affordability challenges for many renters.

• In each of the past 13 years, the average monthly rent on a one-bedroom apartment has increased at or above Canada's two per cent inflation target, according to Canada Mortgage and Housing Corporation (CMHC) data, and outpaced the rise in average weekly earnings.
• In 2022, average monthly rent spiked by 7.1 per cent in Canada, the highest since 2010.
• Canada’s social housing stock is at half the level of its Organisation for Economic Co-operation and Development and Group of Seven peers – an average of 3.5 per cent of available homes.
• Though the construction of purpose-built rental units has increased, it is not catching up to population growth driven by record-high immigration and, recently, a low number of housing and apartment starts.
• Most of Canada’s purpose-built rental stock is over 40 years old.
   

These factors have put Canadians in precarious economic situations – young adults, seniors, Indigenous Canadians, students, low-income households, those on fixed incomes, single-parent households – at risk of homelessness. Brooks also blamed skyrocketing construction costs during the COVID pandemic and interest rate hikes for bringing rental projects to a halt and slowing condo sales across the country.

To really hit home with the numbers, Brooks reiterated the amount of housing needed to stabilize costs. Brooks said the private sector needs to “get stoked and (incentivized) to get back building,” but developers cannot do much on their own unless the government gets involved with reforms and incentives.

“Every government at the provincial or local levels has a different plan. There is no coordination. Within the federal government, there are departments working at cross purposes to each other,” Brooks said, highlighting that alignment on the issue is crucial.