Affordable Housing in Canada

The Canada Mortgage and Housing Corporation is primarily responsible for facilitating housing for Canadians and making it easier for them to meet their needs.  However, the real estate sector in Canada is efficient and around 80% of Canadians are being handled through the marketplace, which takes advantage of CMHC’s housing finance schemes. Nevertheless, not everyone is able to survive in the competitive marketplace or use it to meet their housing needs, especially people with disabilities. For such cases the government is working along with community, non-profit and private organizations to provide affordable housing.

Affordable housing is determined by comparing the before-tax income of a household with the shelter cost it pays. The shelter cost should be under 30% of the before-tax income for a house to be considered affordable. Contrary to popular belief, social housing and affordable housing is not the same thing, since social housing only includes rental housing subsidized by the government, while affordable housing also includes the efforts of private and non-profit organizations.

According to the Royal Bank of Canada’s analysis in May 2012, housing affordability had only seen a slight decline, while the STIR (shelter-cost-to-income ratio) was actually well above 30%. Lack of affordable housing effectively means that many segments of the society are priced out of the housing market, even those who earn decent incomes. In the 1990s, the level of homelessness in Canada reached the stage of a national crisis, which pushed the government to enact policies to address the situation.

A 2012 report by the Federation of Canadian Municipalities showed that one in every three Canadians was a renter, while the number of affordable rental houses was not keeping up with the numbers lost to construction projects, urbanization and conversion to condominiums. The CMHC on the other hand, reportedly provides $1.7 billion every year so that around 594,000 household, on and off reserve, can continue to afford social housing.

Canada’s Economic Action Plan 2009 also included proposals for government investment in social housing. The plan resulted in a $2 billion investment over a period of 2 years, which improved employment rates and living conditions for senior citizens, low-income households and people with disabilities.

The Economic Action Plan 2013 has proposed an annual $253 million investment for five years to improve affordable housing in Canada and a further $100 million investment over two years for new constructions in Canada’s newest and largest territory, Nunavut.