Canada’s housing crisis hits a new low with a 1.5 per cent vacancy rate in 2023, the lowest since 1988.
On Jan. 31, the Canada Mortgage and Housing Corporation (CMHC) reported that Canada’s rental market has hit a new low, with the national vacancy rate having plunged to 1.5 per cent in 2023. This rate, the lowest since the CMHC began tracking it in 1988, underscores a growing crisis in housing affordability and availability across the country.
The CMHC’s annual Rental Market Report paints a concerning picture of the state of housing in Canada, where demand for rental units far outstrips supply. This imbalance has put renters in a tight spot, facing increased competition and higher costs for available spaces. With average rent growth for two-bedroom units hitting 8 per cent in 2023—which is well above historical norms—the financial strain on Canadian renters is intensifying.
Urban planner Jason Prince, has two decades of experience in housing and community development. Currently teaching at Concordia’s School of Community & Public Affairs, he actively shed light on the CMHC’s findings in an interview with The Concordian.
“When the vacancy rate falls below 3 per cent, tenants are at a disadvantage,” he explained. This situation gives landlords the upper hand, enabling them to set rents at will, due to the scarcity of available units.
The roots of this crisis, according to Prince, can be traced back to systemic issues within Canada’s approach to housing. He referred to a continuous rise in construction costs and a significant reduction in federal investment in affordable housing since the early 1990s.
“The federal government has not been actively constructing permanently affordable rental housing like it used to,” Prince stated, highlighting a shift away from social and community housing projects that once provided viable options for lower-income Canadians.
Prince believes that the solution to this problem is not as simple as increasing the total number of housing units. “Building condos and new rental units that nobody can afford are not solving our housing crisis,” he said. Instead, he advocates for a substantial investment in social and community housing—tens of thousands of units that are permanently affordable and not subject to market fluctuations.
To address this crisis effectively, Prince calls for a comprehensive national program focused on community and cooperative housing. He stressed the need for a collective effort that employs the resources and tools of municipal, provincial, and federal governments. Such a program would mark a significant shift towards de-commodified, nonprofit housing models, away from profit-driven market dynamics that exacerbate affordability issues.
The Montreal-based urban planner further suggested that smart development around transport nodes can enhance accessibility and affordability, reducing the need to encroach on green spaces and agricultural lands. “There is a connection between transportation and housing, but it must not destroy our remaining green spaces,” Prince asserted.
As Canada grapples with this housing crisis, Prince’s insights offer a path forward that prioritizes affordability, sustainability, and inclusivity. His call for a critical mass of nonprofit housing stock and a reevaluation of urban development strategies underscores the urgent need for a shift in how Canadians think about and address housing.
With the CMHC’s report laying bare serious challenges, the time for action is now, lest the dream of affordable housing for all Canadians slips further out of reach.