Income Inequality


Dreams and Realities on the Home Front: Canadians’ Call for Government Action on Housing Affordability

Key Findings

Overall, a strong majority of respondents from both the BC Lower Mainland and the GTHA want to see the federal government get back into building housing (80%), with 41% wanting the Government of Canada to get back into building more non-market housing, and 39% looking for a “mixed” approach to let developers build more market housing with non-market housing.

Housing affordability is a concern for most respondents (81%)-it’s either a top concern (24%) or within their top five concerns (57%).

More than a third of respondents in the Lower Mainland and the GTHA (37%) say that they cannot afford their current housing situation if the cost of their monthly rent or mortgage payments increased by 10% in the next year.

Most (57%) think they are spending over 30% of their before-tax househoAAld income on their rent or mortgage and half (52%) have at some point felt at risk of losing their home or becoming housing insecure.

80% of renters hope to own their home at some point, but most think it's unlikely (23%) or very unlikely (56%) that they could purchase a home in the next five years.

Most think that foreign investors (48%) are the most responsible for housing becoming more expensive, followed by the federal government (39%), real-estate developers (32%) and corporate landlords (31%).

More than half of respondents thought the following policies would really or might help them:

  • Instructing the Bank of Canada to consider lowering interest rates (68%)
  • Giving people the option of more easily moving to different lenders when they re-negotiate their mortgage (63%)
  • Offering incentives to developers to build affordable, non-market rental housing (60%)
  • Using government-owned land to develop affordable rental units with rent caps (57%)

Introduction

Housing has been a priority concern for Canadians, particularly those living in the most unaffordable urban centres across the country, for years before the COVID-19 pandemic led to economic shocks and inflationary pressures across the economy, sending rent and house prices sky-high. Since 2023, housing affordability has become one of the hottest political issues in Canada - as more and more Canadians struggle to find a place to call home, political parties are defining themselves around their response to this pressing issue.

Housing is a social good, like public healthcare, and is recognized as a human right in Canada under the federal government’s 2019 National Housing Strategy Act. Despite this, since major federal funding cuts in the 1990s, the federal government itself had largely divested itself from housing, contributing to today’s crisis.

Chart 1  — The federal government has stepped away from investments in affordable housing since the 1990s, only now increasing in recent years

Chart by Brian Clifford; Data from CMHC “Canadian Housing Statistics, 1955-2012” and CMHC Progress Report on Housing Investments

The disappearances over decades of public investment in affordable housing supply and the financialization of housing–where mortgages and homes are treated as assets for financial investment–are major factors contributing to the present affordability crisis.

While federal Conservative leader, and former housing minister, Pierre Poilievre claims that the government should get out of home-building as the solution to the crisis, the reality is that the federal government has already been absent for decades.

Where markets fail, it is up to governments to ensure that no one is left behind and to meet the government’s commitment to housing as a human right.

Today, housing affordability is the most pressing political issue in Canada. According to Leger’s August 2023 survey on The Housing Crisis in Canada, a clear 95% of Canadians think increasing rental costs and the lack of affordable rental homes in Canada is a serious problem.

 

Chart 2 — In 2023, a record share of income would have been required to pay for the monthly homeownership expenses of a condominium apartment in the GTA

(median household before-tax income in the region as % of condominium median market price)

Source: CMHC Rental Market Report—January 2024, CMHC calculations based on data from CMHC, Statistics Canada and the Bank of Canada.

In late 2023, Leger found that 66% of Canadians surveyed think the federal government should allocate more funds to its housing strategy. According to Abacus Data in October 2023, 90% of young Canadians believe the government should prioritize ensuring housing is affordable.

It’s a stark reality that ordinary Canadians face today. According to the Canadian Mortgage and Housing Corporation’s (CMHC) January 2024 Rental Market Report, in the BC Lower Mainland region the average two-bedroom purpose built rental unit grew in rental price by 8.6% from the previous year to $2,181 while the vacancy rate was 0.9%. Vacancy rates were even lower for the most affordable units, where households already spend a greater share of their income on rent. Similar trends appear in Toronto, where purpose-built rental market prices increased by 8.7% and housing expenses have dramatically eaten into the proportion of household income.

Governments can address this issue by getting back into housing, but how exactly should they be getting back into housing? In the Greater Toronto & Hamilton Area (GTHA) and BC Lower Mainland, two of the most unaffordable housing markets in the country, the government of British Columbia and the new Mayoral administration in the City of Toronto have begun bold initiatives over the past year, bringing in programs that lead to decommodification, increased supply, and housing protections for working-class families.

With these recent announcements, backed by federal government support to increase their impact, provincial and municipal administrations are certainly getting government back into housing. But what exactly are the current affordability pressures faced by ordinary Canadians living in the two most expensive housing regions in the country? How are people thinking about these pressures, and what are their aspirations and worries around housing? And what are the government housing policies that, in their view, are needed to relieve those pressures?

This survey looks at BC Lower Mainland and the Greater Toronto & Hamilton Area, where housing prices have increased dramatically in the most expensive regions for housing in Canada, and where governments are looking to get back into the business of building housing and acting on affordability. It reveals key findings demonstrating the uneven effects of the housing crisis, and what policy changes are seen as needed and effective by those experiencing some of the most severe housing affordability challenges in Canada.

 

'Dreams and Realities on the Home Front: Canadians’ Call for Government Action on Housing Affordability' is a joint research project between the Broadbent Institute and the Friedrich-Ebert-Stiftung Canada.

The survey was conducted in the field by Viewpoints Research. See the full report for methodology, results and analysis.

Download 2024-03 Dreams and Realities on the Home Front - BI-FES Housing Survey Report