Rents in most Canadian cities are unaffordable for lower-income earners: study

Roughly one-third of households, or 4.7 million, are renters

A minimum-wage worker could afford to rent in just a few neighbourhoods in Canada, suggests a new analysis of the country’s rental market that also raises questions about a promised federal rent-supplement program.

The report being released Thursday by the Canadian Centre for Policy Alternatives says someone earning minimum wage would only be able to afford a one-bedroom rental in nine per cent of 795 neighbourhoods in Canadian cities in the study.

The figure drops to three per cent of neighbourhoods when looking at the affordability of two-bedroom units.

The federal Liberals’ decade-long national housing strategy includes programs to build more rental housing, hoping a boost in supply will drive down costs.

At the same time, negotiations with provinces are winding along on the design of a new rent supplement for low-income tenants that will average about $2,500 a year.

Study author David Macdonald said the benefit could provide some short-term help while the country awaits new rental units. But he said the benefit may not be enough for low-income renters to close the affordability gap.

The report defines “affordable” rent as 30 per cent or less of a renter’s pre-tax income, the same cut-off used by federal officials.

The new portable housing benefit is to roll out next year, which will be tied to a person rather than a unit — meaning the person can carry it with them through the housing market rather than losing the financial help when they move out of a government-supported dwelling. Its design will be tailored to each province.

Spending is set at $4 billion — split among federal and provincial governments — which will require tough decisions about who gets it, how much they can receive, and when it gets taken away.

“You really have to ration it based on some simple criteria, otherwise you blow through your (spending) cap,” said Macdonald, a senior economist at the centre.

“Second of all, it’s likely not generous enough to substantially reduce the rent for renters, particularly at the lower end of the income spectrum and particularly in big cities like Vancouver, Toronto, Victoria, Calgary, Ottawa.”

Roughly one-third of households, or 4.7 million, are renters and they are often low-income earners, or young adults, or newcomers to Canada.

Average rents, adjusted for inflation, have increased since the early 1990s as construction of traditional apartments declined in favour of homes and then condominiums, Macdonald said.

In the 1970s, he said, it wasn’t uncommon to see 100,000 new, purpose-built rental units being constructed each year, “which is an incredible amount of new rental housing being put into the market.”

While there has been some uptick in rental construction over the last decade — mostly in the luxury rental market, Macdonald said — the Liberals hope to use billions in federal funding to help finance more than 100,000 new rental units.

At the rate that money is being committed to projects, the study estimates most units won’t come open until the late 2020s. Combining provincial and federal commitments, the study projects an average of 15,400 new rental units annually, well below the number the country saw decades ago when the population was smaller.

“The Canada Housing Benefit is a good short-term solution as we wait 10 years for the rental housing market to build up and then hopefully increase vacancy rates and also stabilize rents,” Macdonald said.

READ MORE: June sees drop in home sales, prices for real estate across B.C.: report

READ MORE: Greater Vancouver condo prices drop for the first time since 2014

Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

BCHL: Bulldogs new coach Joe Martin looking for hard skill, winning attitude

Alberni Valley team heads into new era with new owners, coaches, expectations

China Creek bullhead derby a hit

Derby was organized by the Port Alberni Port Authority

Go Bearfoot in the Park and help kids too in Port Alberni

Fundraising event will take place at Blair Park on Aug. 24

B.C. manhunt suspects left cellphone video before they died: family

Two B.C. suspects of a Canada-wide manhunt reportedly recorded a cellphone video… Continue reading

Sproat Lake residents oppose large-scale cannabis production in their neighbourhood

Community group calls public meeting for Aug. 21 to discuss implications to ACRD land

UPDATE: Wildfire east of Port Alberni under control

Crews continue to mop up 3.1-hectare fire

Vancouver Island RCMP hunt for man after pair of indecent exposure incidents

Elderly Qualicum Beach woman grabbed by man who had been masturbating in the woods

Bodies of two missing Surrey men found near Ashcroft

Ryan Provencher and Richard Scurr have been missing since July 17

Pile of wood mulch ‘spontaneously combusts’ at Vancouver Island industrial site

Business owner thanks fire department for quick response

Five hedgehogs quickly adopted after being left at BC SPCA

Lucky new owners picked up their pets from Maple Ridge branch on Aug. 20

B.C. cricket players get interrupted by racist remark

Community has had protocols in place for years to respond to prejudice

Groovy B.C. wedding a throwback to Woodstock ‘69

Couple hosts themed wedding 50 years after legendary festival

Nearly 50% of Canadians experience ‘post-vacation blues’: poll

48 per cent of travellers are already stressed about ‘normal life’ while still on their trip

Most Read