By: Hannah Baillie, General Member, Young Canadians Roundtable on Health
“I’ll never be able to own a home” is a statement that many young Canadians believe to be true.
And they’re probably right. Especially if you adhere to the commonly stated principle that housing should consume no more than 30% of your income. In major Canadian cities, spending only 30% of your income on housing is laughable. The average expenditure on housing across the country is over 60% -- more than double what was historically “recommended.” In Vancouver, it takes an average of 95.8% of a household’s income to keep a roof over their head.
Unfortunately, the issue of housing affordability is not restricted to home ownership. High rental costs have also burdened a generation that feels priced out of the lifestyle they once thought they could afford. Coupled with rising food and gas prices, the cost of being Canadian has never been higher.
It’s the old issue of supply and demand… or is it?
While it would be convenient if the current housing crisis could be explained so simply, in reality, there are a multitude of factors that have contributed to housing unaffordability in Canada.
The first is low mortgage rates. In the 1980s and 1990s, home buyers were forced to take on double digit mortgage rates to purchase their home. In the past decade, these rates have lowered significantly into the single digits. While this trend preceded the COVID-19 pandemic, the worldwide economic downshift caused mortgage rates to plummet even further – meaning that more Canadians could afford to buy more expensive homes.
Investment properties are another contributing factor to Canada’s housing crisis. In 2021, 20% of homes purchased were intended for investment purposes. Many of these homes ended up as short-term rentals on sites such as Airbnb and VRBO. In fact, a 2019 study done by McGill University indicated that short term rental properties reduced Canada’s housing supply by roughly 31,000 homes. Thankfully, many Canadian cities have caught on to this trend and are introducing new measures to curb investment purchases and short-term rentals. Vancouver, for example, introduced an empty house tax, which successfully transitioned some short-term rentals into long-term housing rentals.
Okay, you caught me – supply and demand do, in fact, contribute to the housing crisis. The number of new houses built in Canada lags well behind population growth. A surge in immigration – which accounted for 80% of Canada’s population growth in 2020 – has led to a greater number of house hunters in the market. Similarly, international student enrollment has increased the demand for apartment rentals in university towns and cities. Consider the situation at Cape Breton University (CBU), where 67% of students are international. The influx of students at the start of each semester far exceeds the supply of available apartment units, leading to overcrowding and unsafe living conditions. Sadly, this issue is not isolated to CBU.
This list of factors is not exhaustive. Indeed, there are a variety of other complicated financial, economic, and even criminal contributors to the current housing crisis. Nevertheless, the lack of available (and more importantly, affordable) housing has exacerbated pre-existing socioeconomic and health challenges faced by Canadians.
A long-term study called the National Longitudinal Survey of Children and Youth compared health outcomes of youth facing housing insecurity to national standards. They found that youth without adequate housing experienced a variety of negative health outcomes, such as diminished school performance, aggression, asthma, and faster spread of communicable diseases. Concerningly, the high cost of housing is often cited as the most frequent contributor to hunger and food insecurity. For a nation whose healthcare system is crumbling beneath our feet, the high rates of housing insecurity – with seemingly no relief in sight – should be enough to prompt systemic, social, and infrastructural change.
If abysmal health outcomes are not enough to prompt action, consider the impact of housing insecurity on the economy as a whole. High housing costs leave less money in Canadians’ pockets to spend on other things, like dining, entertainment, vacations, and other non-essential activities that improve the economy. Even for essential items, like food and home heating oil, high housing costs drive up inflation – what we’re experiencing right now. And lastly, expensive homes and rental units force low-wage earners to live further away from their jobs, requiring costly commutes that damage the environment and diminish productivity.
The housing crisis is not an isolated issue. The social, economic, environmental, and health impacts of housing insecurity are far reaching. With homelessness on the rise in Canada, the need for affordable housing has never been greater.
It’s about so much more than just a place to live.