May 13, 2015
This report examines the pressures on access to affordable housing in Canada and the options available to address housing needs.
A place to live is the most significant expense for the average Canadian household. Yet, about 1 in 7 Canadian households cannot find decent housing without spending over 30 per cent of their income. This undermines their ability to improve their lives and has an impact on economic growth, labour markets, social service costs and public safety.
Government efforts to improve access to affordable housing primarily focus on addressing the gap between what is available in the private market and what people can afford to meet their housing needs. Governments should do so in a way that complements other public policy objectives and minimizes unintended consequences on the housing market more broadly.
While most media attention and water cooler conversation focuses on the price of purchasing a home and the rapid growth of the condo markets in Canada’s larger cities, the primary pressures of housing affordability challenges in Canada fall on the shoulders of renters. Renter households are about 4.5 times more likely to be in housing need than owner households. This is not surprising given the tendency of Canadians to prefer to own their homes, whereas renters are more likely to have lower incomes and fewer assets. The Survey of Household Spending shows that the average renter household budget is about half of that of the average homeowner household, with renter households spending a higher share of their smaller pot on shelter costs.
When housing becomes unaffordable, it has ripple effects for low-income households in other areas of their lives. The cost of housing can crowd out spending on health and education, or otherwise force cutbacks on day-to-day costs like nutritious food. These pressures can have long-term costs to these individuals and to society in increased need for health and social services and lost productivity. At their most extreme, housing affordability pressures can push people into homelessness, with devastating impacts on health and high costs to hospital emergency rooms and shelters.
There are two main areas of policy today aimed at access to housing:
• Policies geared towards affordable rental options for low-income Canadians.
• Policies aimed at making home ownership more accessible.
Because the burdens of housing affordability challenges fall primarily on low-income renters, this paper will focus primarily on how our housing policies and programs are addressing the needs of that group, and that these policies and programs are in need of renewal.