Study warns renting a home is becoming unaffordable across Canada
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The rising cost of rents, while wages remain subdued despite some gains for household incomes, means that affordability of rental apartments is out of reach for many Canadian workers.
That’s the finding of a study by the Canadian Centre for Policy Alternatives that says There are no neighbourhoods in Canada’s biggest cities (Greater Toronto Area and Metro Vancouver) where a full-time minimum wage worker could afford either a modest one- or two-bedroom apartment without spending more than 30% of their earnings.
The 30% threshold is used by CMHC to determine core housing need.
In Vancouver and the GTA, the study finds that a minimum wage worker would have to work 112 or 96 hours a week, respectively, to afford a two-bedroom apartment—84 or 79 hours a week, respectively, for an average one bedroom.
“When we talk about housing affordability the focus is usually on home ownership,” says study author and CCPA Senior Economist David Macdonald. “But a third of households, or 4.7 million families, rent. Many of these renters—particularly those working at or near minimum wage, on fixed incomes or single-income households—are at risk of being priced out of modest apartments no matter where they look.”
A full-time minimum wage worker can afford to rent an average two-bedroom apartment in only 24 of 795 neighbourhoods (3%); and in only 70 neighbourhoods (9%) can they afford a one bedroom.
The study also found that:
Among the study’s findings:
- Of the 36 metro areas in Canada, 31 have no neighbourhoods where a two-bedroom apartment—the most common type—is affordable for a minimum wage worker;
- Vancouver has the highest two-bedroom rental wages ($35.43/h), followed by Toronto ($33.70/h), Victoria ($28.47/h), Calgary ($26.97/h) and Ottawa ($26.08/h);
- One of the most significant drivers of rental wage increases since the 1990s has been the drop in new purpose-built rental construction (apartments) in favour of condominium buildings;
- New federal government spending on affordable housing is having an impact, but annual unit construction will remain insufficient and far below the pace set in the 1980s and 1990s.
“Across the country, skyrocketing rents for decent apartments show no signs of falling. Building more dedicated affordable housing would increase vacancy rates, cool rental prices and better accommodate the many people shut out of Canada’s overheated housing market,” adds Macdonald. “Affordability for renters, not just home buyers, should be top of mind for all parties headed into the federal election. In a country as rich as Canada everyone deserves a reasonable place to live. In too many communities, this is just not the case.”
