Affordable housing in Canada

Following the Great Depression and World War II many Canadians lived in inadequate housing as fewer new homes were built, older homes needed repairs, and families lived in over-crowded dwellings.[33] The 1935 Dominion Housing Act (DHA) established the focus of federal policies on housing programs as market-oriented (as opposed to social welfare-oriented) for decades to come.[34]^: 19 For example, the DHA included no subsidized low rental housing; instead it introduced a joint government private lender mortgage loans for the 20% of Canadians who could afford to purchase real estate in the marketplace. During the post-WWII period federal housing policy included using taxation to revitalize the housing market, while also building social housing and subsidizing rental housing in the private sector.[33]

In 1946, the federal Wartime Housing Corporation was replaced with Central Mortgage and Housing Corporation—now known as Canada Mortgage and Housing Corporation (CMHC)—a federal Crown corporation. The CMHC administered the National Housing Act providing Canadians with grants, loans to purchase homes in the market system, and with mortgage insurance on credit financing through private lenders.[35] In the late 1940s the federal government provided 75% of funding and subsidies, with the provinces adding 25%, towards public social and rental housing for low-income families.[36]

In the 1950s, municipalities received federal grants towards urban renewal projects which included low-rent housing developments, some of which included rent-geared-to-income (RGI) subsidies. With the introduction of the CMHC's Mortgage Loan Insurance, home ownership became more accessible. The federally-backed insurance allowed homebuyers and private mortgage providers to take a greater risk on mortgages that had a 25% down payment.[36]

From the 1950s to the 1970s, the government built "dedicated affordable rental stock and public housing".[37]

During the 1960s, Canada's economy grew at a sustained pace.[38]^: 22 In the mid-1960s, Prime Minister Lester Pearson said that in a democratic society the goal must be for everyone to have "decent housing."[33]^: 2 In the 1970s, public housing policy obligation was based on ensuring all Canadians were adequately housed. Through amendments to the National Housing Act in 1973, 20,000 social housing units were built every year.[33]^: 2

During the Premiership of Pierre Elliot Trudeau, then-Minister of Urban Affairs Ron Basford introduced the amended National Housing Act by saying, "When we talk about people's basic needs—the requirements for survival—society and the government obviously have an obligation to assure that these basic needs of shelter are met." Housing strategies focused on "rehousing people into better housing and neighbourhoods."[39]

Starting in the early 1970s, for almost two decades there were approximately 16,000 non-profit or co-op homes built or acquired every year.[40][39] In the next ten years, the number of residential co-operatives dropped to about 1,500 homes a year.[40] This began to change in the 1970s, as government role was reduced.[37]

Starting in the 1980s, federal housing policies changed and more households across Canada began to experience housing affordability pressures, including those who own the residences in which they live and those who rent.

There was a consistent increase in housing affordability problems starting in the early 1980s in "all regions and major cities" and for almost all social classes of Canadian households, according to a 2004 article in the Housing Studies journal.[41] Affordability problems were "highly concentrated" in low-income households, particularly in households led by women.[41]

In 1984, the federal government began cutting back on social housing.[33]^: 2[lower-alpha 1] Around that time, the concept of "core housing need" was developed by the Canada Mortgage and Housing Corporation as a basis for evaluating those eligible for federal funding under the 1986 Global Agreements on Social Housing, an agreement between the federal and provincial/territorial governments regarding administration and cost sharing of social housing programs under the National Housing Act and the CMHC Act.[42][43] A household is considered to be in core housing need if it meets certain criteria—if it falls below acceptable standards of affordability, adequacy, or suitability and if the cost of housing exceeds 30% or more of its before-tax household income.

In the late 1980s, there was a major shift in housing policies which included amendments to taxation that benefitted those who could afford home ownership. At the same time, the federal government withdrew from funding projects for social and affordable housing resulting in a dramatic decline in affordable housing stock.[44] There was a "massive investment" in building houses and condominiums and a dramatic decline in purpose-built rental apartment units.[44] Investors purchased some condos for rental units but rents were priced at the "higher end of market"[44] and were affordable only for households with higher incomes.

During the 1990s, there was a devolution of new responsibilities, including affordable housing, from provincial governments to municipal governments without adequate revenue tools.[45] Since the early 1990s, the responsibility of providing support for affordable housing, and a number of other social issues related to the environment, Indigenous Peoples (First Nations, Inuit, and Métis), public health and security, had been down-loaded with no increase in sources of funding.

In the 1990s, although the price of houses remained "remarkably stable," income inequality increased and housing affordability problems became more prevalent and more severe.[41] Throughout the decade, the federal government was focused on cutting the federal deficit, and began to transfer responsibility to supply social housing for those in need—including low-income housing—to the provinces and territories.[33] The provinces and territories transferred some of these responsibilities to municipalities without providing corresponding financial resources.[45]

By 1991, Canadian public policy on the affordability of housing was more aligned with the concept of need than in the United Kingdom in the 1980s, for example, where the concept of affordability was more market-oriented.[46][lower-alpha 2]

By 1996, the federal government revoked the Canada Assistance Plan of 1966, which made it mandatory that people whose income was inadequate to meet basic needs (including the working poor) have access to an established appeals procedures in the provinces and territories regarding social assistance.[47] In the same year, the federal government transferred responsibility for most existing federal housing program to the provinces.[33][48]^: 9

By the mid-1990s, Canada had a recognized national homelessness crisis. Homelessness, which is at the most extreme end of the housing affordability continuum—affected a diverse population of individuals and families.[33] With that said, however, from the mid-1990s until at least 2010, the pace of growth in the Canadian economy was the strongest and most sustained since the 1960s.[38]^: 22

Between 1993 and 2003, while federal government revenues increased 12% and the provinces and territories increased 13%, municipalities' revenues only increased by 8%.[45] From 1993 to 2004, federal and provincial fiscal transfers to municipalities decreased from 25 cents per dollar of municipal revenue to 16 cents, representing a decrease of 37% while their responsibilities had increased resulting in a fiscal imbalance.[45]

Also in the 1990s, real estate investment trusts (REITs), hedge funds, private equity firms, and publicly listed real estate firms entered the urban rental market in large North American cities, and later on nationally and in other anglophone countries like the United Kingdom, Australia, and Ireland; for the next 15 years they expanded exponentially.[9] REITs emerged in Canada when the Canadian Income Tax Act in 1995 allowed REITs to qualify as closed-end trusts,[49] with the first REIT established in Canada being in 1997 in Toronto. In the 15 years between 2000 and 2015, the ownership of Toronto apartments was increasingly concentrated among REITs, institutional investors, private equity funds and some large family-owned firms.[50][9]

Since 2000 the cost of renting increased by more than 20%.[51]

To support affordable housing in 2001, the Canada Mortgage and Housing Corporation introduced Canada Mortgage Bonds, with a focus on low-cost interest rates and mortgages.[36]

The Affordable Housing Initiative (AHI), operating from 2001 to 2011, was an intergovernmental multilateral housing initiative on affordable housing in Canada.[52] The federal government, working through the CMHC, provided funding for the supply of new affordable rental housing under the Affordable Housing Program with CA$1 billion from 2001 to 2008 (to be matched by provinces and territories).[lower-alpha 3] The federal government placed the AHI within the Affordable Housing Framework 2011–2014 to improve "access to affordable, sound, suitable and sustainable housing."[53] The Framework acknowledged that a wide range of solutions was required to respond to the diversity of affordable housing program needs and priorities specific to each jurisdiction. Under the Framework, it was reiterated that the responsibility for the design and delivery of affordable housing programs lay with the provinces and territories. The provinces and territories would be given flexibility in how to invest federal funds that were to be matched by provinces and territories, if the overall intended outcome was reached. The goal was "to reduce the number of Canadians in housing need by improving access to affordable housing that is sound, suitable and sustainable" Examples of initiatives that could be undertaken under the Framework included "new construction, renovation, homeownership assistance, rent supplements, shelter allowances, and accommodations for victims of family violence."[54]

A 2003 TD Economic report recommended that government initiatives should focus on raising market incomes at the lower end, as the number of low-income households was too high. The report raised concerns about low-income households that were subject to provincial and federal claw backs and tax backs, for example, on back to work and the federal-provincial National Child Benefit (NCB).[55] The report said that decreasing the number of low income household would be more effective than the inefficient, expensive, publicly funded expenditure-based or tax-based incentives to increase the number of affordable rental units.[55]

The TD report concluded that municipalities need a more sustainable funding arrangement, and provinces need to play a more active role in affordable housing, becoming leaders within the Affordable Housing Framework agreement.[55]

By 2004, 1.7 million Canadians experienced housing affordability issues.[12]^: 4

As of 2006, the CMHC directed those needing subsidized housing for low-income households to the municipal government.[56] In 2011 the Canadian Federation of Municipalities called for better coordination between the three levels of government as the expanded responsibilities were either "unfunded or underfunded."[57]

All levels of government in Canada began to include housing policies and strategies that responded to the homelessness crisis although anti-poverty strategies and programs to end homelessness. Activists said that the efforts were insufficient, inefficient, or unsustainable.[58][lower-alpha 4]

The number of rental units declined starting in 2005.[51]

The 2006 Canadian federal budget "provided $300 million for affordable housing in the territories."[59]

By 2007, affordability of housing was a problem for low and middle income Canadians.[12]^: 4 Canadians in the lowest quintile who were in renters households were 18 times more likely than the average household to experience affordability problems.[12]^: 4[60]

With historically low interest rates, and readily available debt and mortgage financing in 2007, Canada's housing market was in a period of strong growth. Affordable housing was a relative measure.[12] At the same time private affordable rental stock across Canada was low. In many cities the vacancy rate for affordable rental units was less than 1%.[12]^: 36

According to reports in 2006 and 2010, the gap between incomes of the upper quintile and lower quintile reached unprecedented extremes in the 21st century.[38][61] Households in the upper quintile—particularly in large affluent urban areas—could afford to purchase houses for investment and/or residency at higher prices by taking advantage of the low interest rates.[12]^: 89 Between 1997 and 2007, 1% or 246,000 Canadians earned average incomes of $405,000 representing 32% of all growth in incomes.[38] There were 24.6 million tax filers in Canada in 2007. The richest 1% made more than $169,000 and had an average income of $404,000. The richest 0.1% made more than $621,000 and had an average income of $1.49 million. The richest 0.01% made more than $1.85 million and had an average income of $3.83 million.[38]

Income levels in the upper quintile have increased exponentially while those in lower quintiles have remained stagnant.[38]

From 2009 through 2014, the federal government budgeted $388 million a year for the housing sector.[62]

The 2009 Canadian federal budget allocated funds for the period covering 2009–2011: renovation and energy retrofits to social housing ($1 billion); to build housing for low-income seniors ($400 million); to build social housing for persons with disabilities ($75 million); to support social housing in the North ($200 million); low-cost loans to municipalities to improve housing-related infrastructure ($2 billion) as part of Canada's Economic Action Plan.

As of 2010, housing prices and construction costs rose dramatically in Canada as they did elsewhere in the world.[38]

There was a modest improvement in housing affordability across Canada in the third quarter of 2011 after two consecutive quarters of deterioration. Part of this was due to decreased costs in home ownership resulting from lower mortgage rates.[63]

By 2012, the rising inequality gap had presented a significant challenge for Canadian households who were "priced out" of rental and ownership housing markets.[64] By that year, there was a slight deterioration in housing affordability, according to the Royal Bank of Canada (RBC).[65][lower-alpha 5]

Many parts of the country that year also reported that key workers—teachers, nurses, police officers, construction workers and others—who earned reasonably good income from their professions, were finding it increasingly difficult to afford the high cost of housing."[64] According to a 2012 report by the Federation of Canadian Municipalities, one third of Canadians were renters. The construction and rehabilitation of affordable rental units did not kept pace with the number of affordable rental units lost to demolition, urban intensification projects and the more profitable conversion to condominiums. Fewer than 10% of new housing starts by 2012 were rental units.[51] The FCA found that the shortage of available rental housing is worsening at the same time that more Canadians are being priced out of home ownership.[51]

In 2012, while Canada had a strong real estate market[66] many Canadian households faced housing insecurity.

In November 2017, the federal government expanded its role in housing with the introduction of the National Housing Strategy (NHS).[67][68][lower-alpha 6] The goal of the Strategy was "to ensure everyone in Canada has access to housing that meets their needs and that they can afford."[67] Prior to 2017, Canada was the only G8 nation that lacked a national housing strategy.

Through the NHS, the Government of Canada promised to spend $40 billion over the next decade on housing,[40] funding that would go to build 100,000 new affordable units, repair 300,000 affordable units, and to cut homelessness by 50%.[69]

In April 2019, the National Housing Strategy Act was passed in Parliament as part of the 2019 Budget Implementation Act, setting out the Government of Canada's housing policy. Based on a human rights-based approach to housing, the federal policy "recognize(s) that the right to adequate housing is a fundamental human right affirmed in international law."[67][70] It also commits Canada to further the progressive realization of the right to adequate housing. This right is recognized in the International Covenant on Economic, Social and Cultural Rights (ICESCR).

At the 2018 National Housing Conference hosted by the CMHC, concerns were raised about a stark increase in the financialization of the housing sector that had extended into the private rental market.[71]^: 6 Canadian Federation of Apartment Associations disagreed with the premise, and described conference featured speakers as "progressives."[72] Issues included the rise of "amateur landlords," condominiums, Airbnb, short-term rentals, increased rents, and problems with evictions. Multiple-residential buildings are being purchased as housing assets to generate wealth at a time when rental units are in short supply.[71]^: 6

The 2022 federal budget, released on April 7, called for a review of tax treatment for large corporate trusts that use residential real estate as financial investment instruments. This review would examine the impact of housing as an asset class on Canadian homebuyers and renters.[73] The budget also included $1.5 billion for housing cooperatives as part of the solution to the affordable housing crisis.[40] From the early 1990s to 2020, 25 of the biggest financial landlords—including REITs—consolidated about 330,000 rental suites representing 20% of Canada's "private, purpose-built stock of rental apartments."[10] REITs had no rental units in 1996; by 2020, they owned 200,000 suites.[10] As of 2021, REITs and other financial landlords benefit from preferential tax treatment, which Martine August described as state subsidies. August has called on the CMHC to stop providing financial landlords with "preferential mortgage lending rates", which are effectively subsidies to firms that are not providing public good. She also calls on the federal government to disallow financial landlords form accessing National Housing Strategy loans and grants since these firms "eliminate affordable housing as a business strategy."[10]

The 2020 report on the 2018 Survey revealed that 1,644,900 Canadian households or 11.6% were in core housing need,[74] compared to 12.7% reported in the 2016 Canadian census.[75] In 2016, the Canadian regions with the most households experiencing core housing need included Nunavut at 36.5%, Northwest Territories at 15.5%, Ontario at 15.3%, and Yukon at 15.2%.[75] The 2016 Census also showed that the highest rates of core housing need in metropolitan areas were Toronto at 19.1% and Vancouver at 17.6%.[75]

By May 2021, the price of housing increased with a "rapid acceleration," the supply of housing and mortgage rates were at historic lows and the demand increased, with economists at the Royal Bank of Canada and the Canadian Imperial Bank of Commerce raising concerns that speculators were entering the market, pricing young and lower income families out of affordable housing.[76] With 424 housing units per 1,000 people, Canada ranks lowest of the G7 nations[lower-alpha 7] in "average housing supply per capita" compared to France, which has 540 units per 1,000—the largest housing supply per capita. Within Canada, the available housing supply inventory is the lowest on record.[76] It reflects a chronic insufficiency of home supply. From 2016 to 2021, the population of Canada increased to about 37 million with the arrival of 1.8 million new residents who often prefer to live in the "downtowns and distant suburbs of large cities."[77]

The COVID-19 pandemic exacerbated housing pressures including the unpredicted preference for housing type and geographic location.[78] During the pandemic, in February 2022, it was reported that the Canadian housing market was experiencing an unexpected boom with record-breaking high prices, combined with historically low interest rates and a decreasing supply of real estate. In both 2020 and 2021 real estate sales records were broken. By the end of 2021, the MLS Home Price Index was a record 25.3% higher than 2020.[79] During the pandemic, inter-provincial migration was also strong and continued into 2022, which also contributed to high prices.[79]

In the 2022 federal budget, "A Plan to Grow Our Economy and Make Life More Affordable", released on April 7, the federal government responded to concerns about the role of the speculative market in sky-high real estate prices. A two-year ban on "foreign buyers" was introduced.[80][81][82] However, it was reversed with 2023 federal budget due to influence from foreign powerhouse's and corporate's that fund elections.[83][84]

By 2022, an unexpected demand occurred due to the government's policies enacted to achieve aggressive immigration targets. The import of over a million people yearly, temporarily and permanently to increase the size of Canada's economy per Century Initiative's guidance, as well as not following their recommendation regarding accelerating building of affordable housing resulted in unexpected demand increases. Housing affordability was severely affected across the nation.[17]

The Bank of Canada maintains a Housing Affordability Index (HAI) based on housing costs, which include mortgage payments and utilities, in relation to disposable income of an average family. Housing costs do not include property taxes.[91] The HAI represents the percentage of disposable income the average Canadian household would need to cover the mortgage and utilities of their home.[91]

The Bank of Canada's 2011 HAI "represent[ed] the proportion of the average personal disposable income per worker that goes toward mortgage payments, based on current house prices and mortgage rates. A decline in the ratio indicate[d] an improvement in affordability."[98] Mark Carney, the Governor of the Bank of Canada, warned in 2011 that even though measures of housing affordability in Canada were favourable in most cases—with some housing markets already severely unaffordable even at current rate—interest rates were at a record low. He raised concerns that Canadian household debt was high and therefore vulnerable to increases in mortgage interest rates which could cause housing affordability fall to "its worst level in 16 years."[98]

A commonly accepted guideline for housing affordability is shelter-cost-to-income ratio (STIR), in which a cost that does not exceed 30% of a household's gross income is considered to be affordable. Unresolved issues remain about the elements of affordable housing. Affordability of housing may have differing definitions to governments, mortgage providers, developers, urban planners, economists and individual householders seeking a residence. Income levels in relation to housing prices are the most frequently used variables in deciding housing affordability but other factors such as employment trends, access to (and the cost of) finance, demographic shifts, housing preferences and other housing costs besides the price of purchase impact on housing affordability. One question is what should be included in 'housing' costs. Such expenses could include taxes, insurance, utility costs, maintenance and/or furnishings and rent for owners and/or tenants. Another question is what is meant by 'income'. Does this include gross or net income; one or all adults' income; and children's income, if any. It is also unclear how sharp temporary fluctuations in income and non-cash sources of goods and services get factored into the calculation. The shelter-cost-to-income ratio (STIR) is well above 30% for the median income. Nationally, it is 48.7% for two-story homes. Major cities such as Vancouver rate worst in the world at 88.9%. Calgary is considered affordable at 36.7%. Montreal is 41.8% and Toronto is 53.4%. The RBC Indicator provides data on a quarterly basis on home ownership affordability, it measures the proportion of homes currently for sale that are affordable to a median income household. Measurements of affordability that are oriented exclusively to the ability to buy using mainly shelter-cost-to-income ratio (STIR) provide useful information for one end of the continuum of housing in Canada, home ownership in the private market at market price.

The CMHC recognizes the limitations of STIR for understanding affordability. In a very low income household for example, even 15% of a household's before-tax income for housing may be unaffordable.[99]

In 1986, CMHC entered into Global and Operating Agreements under the National Housing Act and the CMHC Act, with the provinces and territories regarding administration and cost sharing of social housing programs. The core housing need concept was developed and adopted as an eligibility criterion to target households who were in need and as a basis to allocate federal funds through CMHC to participating provinces and territories. A household is considered to be in core housing need by CMHC if it meets certain criteria—if it falls below acceptable standards of affordability, adequacy, or suitability and if the cost of housing exceeds 30% or more of its before-tax household income.[56]

Households are considered to have a housing affordability problem by CMHC if they have to spend 30% or more of total before-tax household income on shelter expenses.[130] Shelter expenses include "rent and any payments for electricity, fuel, water and other municipal services" for renters and "mortgage payments (principal and interest), property taxes, and any condominium fees, along with payments for electricity, fuel, water and other municipal services" for home owners.[130]

Data on core housing need is collected by Statistics Canada through the Canadian Housing Survey.

In 2006, about 5.1% of Canadian households were considered to be in severe housing need, spending 50% or more on shelter.[75][131]

In 2011, about 1.5 million Canadian households or 12.5% of Canadian households were in core housing need,[75] and various levels of governance in Canada were exploring policy solutions to assist challenges faced by the low-income renter and homeowner overburdened with shelter costs.[42]

In 2016, about 1.7 million Canadian households or 12.7% of Canadian households were in core housing need.[75] The percentage was slightly higher in urban areas, with about 13.6% of all Canadian households living in urban areas—1.6 million urban households—were in core housing need.[132][75] In 2016, the regions with the highest percentage of households in core housing need, were Nunavut with 36.5%, Northwest Territories at 15.5%, Ontario at 15.3%, and Yukon at 15.2%.[75] In 2016, the highest rates of core housing need in metropolitan areas included Toronto at 19.1%, Vancouver at 17.6%, Belleville at 15.4%, and Peterborough at 15.1%.[75]

The 2020 report on the 2018 Survey revealed that 1,644,900 Canadian households or 11.6% were in core housing need.[74] Only 6.5% of homeowners experienced core housing needs compared to renter households, where 23% were likely to live in core housing need.[74] Twenty one per cent of renters did not live in core housing need.[74]

Core housing need does not measure progress against some measurable indicator.[133]

The National Housing Strategy (NHS), Canada's federal strategy for housing, says that affordable housing is a cornerstone of "sustainable, inclusive communities,"[134] and has the primary goal "to ensure everyone in Canada has access to housing that meets their needs and that they can afford."[67]

Before, housing initiatives were introduced and funded by the federal, provincial, territorial and municipal governments, along with civil society organizations (including the charitable sector).[48]^: 8–9 In 2016, the federal Minister of Families, Children and Social Development said that strategies for a national affordable-housing strategy were being considered.[135] The NHS was introduced in November 2017, and promised the funding of $40 billion over 10 years to build 100,000 new affordable units, repair 300,000 affordable units and to cut homelessness by 50%.[69]

With Canada being the only major country in the world,[64][136] and the only G8 nation, that lacked a national housing strategy,[48]^: 7[69][137] the NHS marked a significant shift in housing policy for the federal government.[69][137] However, since its inception, the NHS did not make any serious inroads into challenging the dominance of market housing in Canada, which constitutes about 95% of the housing stock.[32]

The National Housing Strategy Act followed in April 2019, setting out the Government of Canada's housing policy. Based on a human rights-based approach to housing, the federal policy "recognize(s) that the right to adequate housing is a fundamental human right affirmed in international law."[67][70] It also commits Canada to further the progressive realization of the right to adequate housing. This right is recognized in the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The main funding buckets of the NHS are the Rental Construction Financing Initiative (RCFI), which supports new market rental housing (for-profit development); the National Housing Co-Investment Fund (NHCI), which funds social (co-op and non-market) housing in partnership with non-profits and other levels of government; and the Rapid Housing Initiative (RHI), which supports the acquisition of social and supportive housing.

As an unintended consequence in the process of providing affordable housing, NHS ended up supporting private developers for building market rental housing and turning Canadian homes into financial assets by generously providing low-interest loans. In 2023, the Canadian government's spending on housing was small, and only accounted 0.1% to 0.2% of the country's GDP. It is also projected to decrease as a proportion of GDP in the future. Critics have also observed that despite its establishment many years ago, there has been no comprehensive strategy or a significant implementation plan for the creation of dedicated non-market housing.[32]

The Canada Mortgage and Housing Corporation (CMHC) is one of the main federal organizations responsible for administering the various programs and initiatives of NHS. It was supposed to efficiently administer seed funding, co-investment fund, the innovation fund, the federal lands initiative, and rental construction financing, as well as expanding the mortgage loan insurance to include market properties and flexibilities for affordable housing.

During the premiership of Justin Trudeau, the federal program called the National Housing Co-investment Fund (NHCF) was introduced offering low-cost CMHC loans for developers who are building affordable housing projects.[138] Funds for affordable housing was increased in the spring federal budget and in the fall of 2021. This included an additional $2.7 billion for the NHCF. The NHCF budget allocated $250 million to target housing for domestic violence survivors. In November 2021, Jeff Morrison, head of the national non-profit association advocacy group, the Canadian Housing and Renewal Association, said that while more federal funding for community housing is the right step, the CMHC loan approval process is too slow.[138]

According to the City of Calgary, as of 2016, the majority of households in Calgary, 78%, were able to meet their housing needs in the marketplace.[139] A small percentage of the households who have inadequate income to acquire housing the market, 3%, are supported by the government. This leaves about 19% of households who are in need of affordable housing, as defined by the city.[139]

Approximately 21% of Alberta's population spends more than 30% of their income on housing.[140]

According to the 2016 census, Fort McMurray, which is the urban centre of the municipality of Wood Buffalo, Alberta with a population of 66,000, which is dominated by the oil sands industry, had the highest median household income in Canada of $193,511 before tax in 2015.[141] Seven of the ten highest-income Canadian cities in 2015 were in Alberta.[141] Fort McMurray's median income was 106% higher than Alberta's median income of $103,720,[140] which in turn was higher than Canada's median annual household income of $90, 390.[142] In spite of the high cost of housing and living in FMWB, only 12% of FMWB households spent over 30% of their income on housing in 2015.[140]

As of 2022, there were 84,000 households in Calgary that had an annual income of less than $60,000 and spent more than 30% on housing, representing about 20% of Calgary's households.[13] This meets the definition of a household in need of affordable housing. Seventy-five per cent of Calgary households did not have sufficient income to purchase a single-family home.[13] Calgary had the highest market rental rates in Canada. In order to rent a two-bedroom apartment a household would need to have an income of $53,000. Approximately 42,000 households were spending over 50% of the annual income on housing, putting them at risk of homelessness. Over 3,200 people in Calgary were homeless in 2022.[13] Most urban centres in Canada have more non-market housing than Calgary, where only 3.6% of all housing in Calgary is non-market.[13] The Calgary Housing Company manages Calgary-owned affordable housing units, which in 2022 consisted of more than over 10,000 units with over 25,000 tenants. This includes near market housing where rents are lower than market rates and subsidized housing such as rent supplements for tenants that rent from private landlords.[13][139]

In 2011, the president of the Calgary Region's Canadian Home Builders' Association, Carol Oxtoby, explained the increase in luxury homes construction and sales in Calgary. As of 2011 with its oil and gas and high-tech industries, young entrepreneurs and head offices, Calgary has some of the highest income earners and highest personal wealth in Canada per capita. In 2011 "448 homes in Calgary were resold for more than $1 million."[143]

A 2010 study by M. Lio on "The Impact of Higher Energy Efficiency Standards on Housing Affordability in Alberta"[144] funded by NAIMA Canada and the Consumers Council of Canada, investigated the impact of total selling price of the house, cost of land, cost of labour, and the cost of materials on housing affordability for the cities of Calgary and Edmonton in 2010. The results showed that the rising cost of labour and materials were attributable to the total selling price of the house, but that the rate of increase in these two attributes was outweighed by the significant rise in land value. The trend in the cost of land for both cities by 2010 showed a strong impact on the new housing price index. The study concluded that—compared to the cost of labour and materials, the main reason for the increase in house prices was primarily due to land costs.[144]

Since at least 2010, Calgary has had the "highest median after-tax income of all the major CMAs in Canada. Calgary also has the "highest concentration of millionaires" and the "highest proportion of individuals with after-tax income of $100,000.[145] Because RBC Economics and other mortgage and loan providers, measures affordability based on the percentage of medium income that a household requires to pay for ownership costs, housing in Calgary is considered to be the most affordable in Canada.[146]

According to a 2017 report by economist Ron Kneebone, based an analysis of the cost of rent and the rates of social assistance over a ten-year period, Calgary is the "least-affordable city in Canada...if you're poor."[147]

The non-profit Housing Services Corporation delivers programs for the affordable housing sector in Ontario.[148] It was created under the Housing Services Act, 2011 to replace the Social Housing Services Corporation (SHSC) which was operational from 2002 until 2012.

The SHSC was created in 2002 following the devolution of responsibility for over 270,000 social housing units from the province to the municipalities to "provide Ontario housing providers and service managers with bulk purchasing, insurance, investment and information services that add significant value to their operations."[149]

Over 20% of home owners residing in Ontario had housing affordability issues as of 2006.[87] A 2010 survey by the Ontario Non-Profit Housing Association revealed that the number of households on affordable housing waiting lists was at an "all-time high of 141,635".[150]

Through partnerships with the government, private investors became interested again in investing in multi-family rental housing in the 1990s.[50][9] CAPREIT was established in 1997 becoming Canada's first REIT. As more REITs were created, more multi-family rental housing were owned by these institutions.[50][9] By 2015, CAPREIT was Toronto's biggest landlord with about 11, 000 rental units. In the fifteen years between 2000 and 2015, the ownership of Toronto apartments was increasingly concentrated among REITs, institutional investors, private equity funds and some large family-owned firms.[50][9]

On 29 January 2020, a motion to declare a housing and homeless emergency in Ottawa was passed unanimously by Ottawa City Council, becoming the first Canadian city to declare such an emergency. Faced with an urgent need for more affordable housing, new housing subsidies, and more assistance to those who are chronically homeless, to people who need supportive housing for a number of reasons—including those with disabilities or serious injuries—the city called on all levels of government to respond.[151] The municipality provides 56% of funding for programs related to housing and homelessness, and the federal and provincial governments provide the remainder.[151]

As of 2018, research shows that there is a "disconnect between evidence and public policy" in terms of urban planning based on promoting increased density and mixed-use zoning in cities like Toronto.[37][152] An unintended negative consequence of these "quintessential tenets of good urban design, has been a decrease in affordable housing.[37][152] A 2018 Journal of the American Planning Association article showed that in mixed-use zones, high-income earners in sectors such as "management, business, technology, and health" experienced greater housing affordability—they spent a smaller percentage of their income on housing even with higher priced housing because their incomes had increased. Housing affordability worsened for those with occupations in manufacturing, trades and cultural and social services. Their incomes had either remained stagnant or decreased over time and/or housing costs had increased.[37][152] While this study focused on Toronto, the findings would be similar in other major census metropolitan areas (CMAs) like Vancouver.[37]

The price of the average home in most cities and towns in Canada increased by double digits. In Toronto, the increase was 15% breaching the "$1 million mark for the first time" in February 2021.[76]

According to Reuters, by October 2022, the shortage of construction workers in Canada was a major factor in responding to housing shortage challenges, particularly in Ontario, British Columbia and Quebec.[153] According to a June 2022 CMHC report, the labour shortage could contribute to making housing less affordable. The CMHC report said that in order to make housing affordable in Canada by 2030, millions of new homes had to be built.[153]

The "More Homes Built Faster Act", which was introduced in November 2022 in response to Ontario's housing supply problems, raised concerns as it would make sweeping changes to a number of statutes.[154][155]

Unhoused man in Vancouver

Vancouver had the least affordable housing market in Canada by 1980; the average home cost 5.7 times the average family income.[lower-alpha 8][156]^: 16–17 O' Toole calculated that given the high interest rates in 1980, "an average family would have to devote more than 70 percent of its income to pay off a mortgage on an average home in 30 years."[156] According to a report in The Economist, a factor contributing to Vancouver's high property prices may be Canadian laws which enable foreigners to buy Canadian property—possibly for purposes of tax evasion or money laundering—while shielding their identities from tax authorities, a practice which is known as snow washing.[157]

The governor of the Bank of Canada noted that affordability of housing has been eroded as wealthy Asian investors seeking diversification and hard assets purchase housing in Vancouver. Consequently, "[t]he average selling price of a home in Vancouver is now nearly 11 times the average Vancouver family's household income, a multiple similar to those seen in Hong Kong and Sydney—cities that have also become part of a more globalized real estate market."[113]

There has been a move toward the integration of affordable social housing with market housing and other uses, such as the 2006–2010 redevelopment of the Woodward's building site in Vancouver.[158] Woodward, a heritage site, was re-invented and has reinvigorated Gastown in Downtown Eastside, one of Vancouver's oldest and "most challenged" yet "resilient" communities.[159]

The project has also been said to contribute to Vancouver being an inclusive city.[160]

Randal O'Toole of the Fraser Institute in his report entitled "Unliveable Strategies: The Greater Vancouver Regional District and the Liveable Region Strategic Plan" (2011) argued that the GVRD urban planners focused too much on housing affordability as a lack of affordable housing for low-income families who would need some form of housing subsidy. He noted that GVRD reports failed to mention that there was also a lack of affordable housing for people with middle incomes.[156] O'Toole said that the GVRD's land use planners "left the region with the least affordable housing and some of the worst traffic congestion in Canada".[161] He concluded that Greater Vancouver Regional District planners' "Livable Region Strategic Plan" (1996) were too narrow in their focus on "avoiding urban sprawl and minimizing automobile driving." He also argued that the protection of green spaces, farm lands, from development limited growth and was the cause of the escalation of prices.[161]

Vancouver's high-rise apartments helped defer urban sprawl, but it is argued, led to higher housing prices

As of 2012 Vancouver was the most stressed area in the province in terms of affordability of housing in Canada.[65] In 2012, Vancouver was ranked by Demographia as the second-most unaffordable in the world, rated as even more severely unaffordable in 2012 than in 2011.[162][163][164][165] The city has adopted various strategies to reduce housing costs, including cooperative housing, legalized secondary suites, increased density and smart growth. As of April 2010, the average two-level home in Vancouver sold for a record high of $987,500, compared with the Canadian average of $365,141.[166]

In June 2016, Generation Squeeze, a non-profit organization that advocates on behalf of young adults, labeled the situation in the province a crisis and commenced a "Code Red" campaign.[167][168][169]

In 2016, the BC government announced a $516 million investment in 68 new affordable housing projects to build 2,900 units across the province, targeting renters with incomes that were low to moderate. This included 68 projects with 1441 units in Lower mainland and Fraser Valley, 774 units on Vancouver Island and the Gulf Islands, 256 units in Thompson-Okanagan, and the rest to Coast, Kootenays, Cariboo, and North/Northeast.[170]

The capital of Nunavut faces an extreme affordability challenge mainly due to the supply side. In 2010 Iqaluit had the most expensive rental market in Canada: a two-bedroom apartment cost $2,365 a month in Iqaluit compared to $1,195 in Vancouver.[171]^: 13 In 2018, over 10,000 Nunavut residents were without housing of their own, translating to a deficit of 3,500 housing units.[172]