Canada's Housing Crisis: A Nation Divided Over Homeownership and Renting

Strategic Insights -

Canada's once-promised formula for success - work hard, save money, and buy a home by age 30 - has been shattered, leaving young people and newcomers to face a vastly different landscape. Ene Underwood, CEO of Habitat for Humanity's GTA branch, and Steve Pomeroy, an industry professor at McMaster University's Canadian Housing Evidence Collaborative, weigh in on the nation's housing crisis, debating the merits of homeownership and renting.

Young Canadians are losing hope of owning a home, with half of them believing it's no longer possible. Despite this, more than 70% of Canadians under 60 still aspire to own a home. The housing crisis extends beyond homeownership, with renters facing sky-rocketing prices and increased numbers of unhoused residents.

Key Takeaways:

  • The Canadian housing crisis is a complex issue that affects not only homeowners but also renters, with over 70% of Canadians under 60 aspiring to own a home despite half of young Canadians believing it's unachievable.
  • Homeownership is a deeply ingrained Canadian value, but its economic benefits are offset by high transaction costs and lengthy processes, restricting mobility and productivity.
  • Rationalizing tenure and encouraging rental policies can improve labour mobility and productivity in today's economy, where workers frequently change jobs and locations.
  • A healthy Canada needs a housing stock across the entire continuum, with both owners and renters playing a crucial role in achieving this balance.
  • Canada's housing landscape would be healthier if renting were less stigmatized, with governments focusing on rental markets and exploring ways for people to own homes without causing an overheated housing market.
  • The solution to the housing crisis involves better regulation in the rental market to protect people from eviction, renovictions, and landlords raising rents.
  • Housing subsidies for those who can't afford rent can be more cost-effective than building new social housing, addressing the connection between housing and poverty.
  • The provinces need to provide greater renter protections, such as restricting vacancy decontrol, and governments must nearly double the current subsidized stock to reach the National Housing Council's recommended target of seven per cent.

Statistics:

  • Over 70% of Canadians under 60 aspire to own a home despite half of young Canadians believing it's unachievable.
  • The Ipsos poll across 30 countries found that almost three-quarters said ownership is an aspiration, with 60% stating that it is hard to feel secure without owning a home.
  • A 2023 Ipsos survey found that half of young Canadians would focus less on earning and more on enjoying life because home ownership seems unreachable, leading to complacency and a decrease in labour productivity.
  • Canada is near the bottom of the G7 in labour productivity, with the housing crisis having a significant impact on the nation's talent and economy.
  • In Germany, half of adults rent versus a third in Canada, demonstrating a more balanced rental policy in other countries.
  • The Canadian housing market has seen a transition from the notion of the house-as-savings to house-as-investment, with people buying for investment and worrying when the value of their house declines.
  • The current dynamic has encouraged flipping and the financialization of housing, with 16 million homes in Canada, but four million are occupied by one or two people who have three or four bedrooms.

Sources:

  • www.thestar.com
  • Ene Underwood, CEO of Habitat for Humanity's GTA branch
  • Steve Pomeroy, industry professor at McMaster University's Canadian Housing Evidence Collaborative
  • Ipsos poll across 30 countries
  • 2023 Ipsos survey
  • National Housing Council
  • Organization for Economic Co-operation and Development (OECD)