The CBC recently reported that the high cost of living will be biggest issue for Canadians leading up to the federal election which is scheduled for later this year. The article showcases a recent report on the the cost of rental housing, just published by the Canadian Centre for Policy Alternatives (CCPA). See in the CBC: What’s The Ballot Issue In 2019? The High Cost Of Living
The CCPA’s report starts by following the lead of the National Low Income Housing Coalition in the United States. Both look at the amount of income it would take to afford to rent in neighbourhoods across the country. Then they compare that amount with the number of work hours at minimum wage needed to make renting affordable. It is now possible to compare affordability for renters between the two countries.
There’s an interactive map that shows differences between cities in Canada. See CCPA: Rental Wages in Canada
Why this report is groundbreaking in Canada
The CCPA report analyses data from rental surveys of units specifically built to be rented (purpose built) and units that are rented in condominiums (condo rental). This is a major breakthrough because the surveys of the two types of units are conducted separately. Canada Mortgage and Housing Corporation (CMHC) has been surveying purpose built rental housing market for decades. When condos first started showing up as rental units, in the early 1990’s, CMHC initiated a separate survey to monitor the rents.
The separate survey design was necessitated by differences between the condo rental market and the purpose built rental market. The condo market consists of units with individual owners, while the purpose built rental market consists of whole buildings. Vacancy rates are reported in the purpose built rental market, but this isn’t possible in the condo market because the rental units in condo building can be withdrawn from the market at any time.
While it isn’t possible to report vacancy rates, both surveys do gather and report rents. The condo market houses a significant share of renters in some cities. Combining the data, as the CCPA has done, is important because the two markets have significantly different rents.
Why this report matters outside Canada
The CCPA report adds on to the approach of the National Low Income Coalition report by tracking new unit construction (purpose built and condo rental) against changes in tax policy and program funding since 1980. The relationship between these changes and rental housing starts is remarkable. It will be helpful to policy writers and decision makers regardless of jurisdiction.
For this and more details, see at the CCPA: Unaccommodating: Rental Housing Wage in Canada
