IN THIS ISSUE

• What makes housing so expensive?

• When can landlords legally increase your rent?

• This week’s good news in housing

• Share your story

TOP STORY

💸 What makes housing so expensive?

Canada’s housing crisis is a complicated issue that cannot be easily fixed. These three points explain the biggest challenges in addressing the problem.

• Imbalance between supply and demand

• Length of housing approvals adds costs

• Tough macroeconomic environment

• 5 min summary — Homes Don’t Just Happen

Imbalance between supply and demand

The supply of available homes in Canada is less than the demand for these homes, which drives up the price. Research from Canada’s housing agency, CMHC, says that we need to build 3.5 million housing units by 2030 to restore affordability and meet the demand for housing. Canada has spent years prioritizing sprawl over densification by expanding suburbs outward and creating more single-family homes. To achieve this target, governments are changing building rules to allow for more small, multi-unit buildings in cities and suburbs to create new housing and fix the imbalance as soon as possible. Housing researchers argue that we need a mix of housing created by the government and the private sector to tackle the problem, given the exorbitant cost of creating 3.5 million units of housing by 2030.

Side note: the researcher quoted in both works linked above was the author of the foreword for our 2024 Outlook.

Housing approvals timeline 

While the need for lots of new housing is clear, the path to achieve this is complicated. The process to get new housing projects approved across the country can take years, which makes the end product more expensive. As builders progress through the long approvals process, they still have costs to pay, like the property mortgage or consultant fees. The longer it takes before construction starts, the more the costs add up. In order for builders to continue to create housing, their company must be financially viable, or at least break even. This means that costs added on during the approvals process must be recouped by making the housing more expensive. If units could be approved and constructed more quickly, there would be less costs to make up, thus bringing down the price of housing.

Macroeconomic environment

Despite the dire need for large amounts of new housing, as indicated by CMHC, the number of housing units starting construction in the past year has decreased. Canada’s difficulty increasing housing starts can be linked to four big-picture factors:

• High interest rates

• Rising construction costs

• Lack of skilled trades

• Increasing fees and taxes

Video Summary: Homes Don’t Just Happen

Homes Don’t Just Happen is a campaign that aims to educate Canadians about our housing system, why it’s not working, and how it might be fixed. Building homes in Canada can be incredibly complicated and risky. The video below spends five minutes explaining why.

📈 Legal rent increases — what applies?

When can a landlord raise rent?

Landlords can only raise rent if it has been at least 12 months since rent was set at the beginning of your tenancy or since rent was last legally increased during your tenancy. Yearly rent increases are capped in some provinces, at a limit set by its tenancy governing body.

If you have remained as a tenant in the same unit, there’s a limit on how much your landlord is legally allowed to increase rent. The amount depends on location. Read more about conditions in BC here and Ontario here.

What is the limit in my province for 2024?

• British Columbia: 3.5%

• Ontario: 2.5%

• Alberta: No limit (read more)

How is the limit decided and why does it exist? 

The limit is put together by the governing body of residential tenancy in your province. It exists to keep rent growth aligned with changes in interest rates and inflation.

👏 Good news in housing

UBC receives historic funding for 1,500-bed student housing project

The BC government will fund $300m of an overall project cost of $560m to bring five student housing buildings and a total of 1,500-beds to UBC’s campus. BC Premier David Eby commented that this was the province’s “largest investment in student housing to date.” Keep reading…

Federal government announces a 56 property public land bank for new housing development

This news is the first step towards taking action on the Public Lands for Homes Plan, which was featured in Budget 2024. The properties are underused sites owned by the Federal Government. Land will be leased to builders so that the purchase price won’t add costs to new projects, thus maintaining control and some affordability. Keep reading…

Ontario updates planning policy with affordable housing minimums and transit area densification

Going into effect on October 20, the policy requires local districts to set and implement a target for affordable housing that caters to low and middle-income renters. Like most policies, this one’s success will be judged on how well it translates into new housing. It may be a step in the right direction, but critics say it doesn’t account for rising costs to build in Ontario. Keep reading…

🎙 Share your story

We’re looking for young people across the country who want to share their experience finding housing. We’d ask where you’re located, how long it took to find a place, and how satisfied you are with where you live.

If you respond above, we’ll reach out to you via email.