Carolyn,

The Canadian housing crisis has garnered significant attention in recent years as housing affordability has become a pressing issue for many Canadians. This crisis is characterized by rapidly increasing housing prices, a shortage of affordable rental housing, and an increasing number of households facing housing insecurity (Canada et al. Corporation, 2018). There are several factors contributing to the housing crisis in Canada. One major factor is the rapid urbanization of the country's major cities, such as Vancouver, Toronto, and Montreal. As more people move to these urban centers in search of job opportunities, the demand for housing has surged, leading to rising housing prices. According to a study by the Canadian Centre for Economic Analysis (2018), housing buyers in these cities have outpaced supply, resulting in an imbalance between housing demand and supply. Another contributing factor is the need for more affordable rental housing options. The rise in housing prices has made it challenging for many Canadians to afford homeownership, pushing them toward the rental market. However, the demand for rental housing has also increased, resulting in a need for more affordable options. This situation has been exacerbated because Canada needs to build more new rental housing units to meet the growing demand (Canada et al. Corporation, 2018). The rise of foreign investment in the Canadian housing market has also contributed to the housing crisis. Foreign investors, particularly from China, have been purchasing homes in Canada as an investment opportunity, driving up housing prices. This action has worsened the housing affordability crisis, as these houses are often left vacant, leaving limited options for Canadians looking to purchase or rent homes (CBC News, 2019).

Furthermore, stagnant wage growth and a lack of affordable housing policies have also affected the housing crisis. As housing prices continue to rise, many Canadians need help to afford homes, particularly in expensive cities like Vancouver and Toronto. Low wage growth and high housing costs have pushed many households into housing insecurity, facing the threat of becoming homeless or spending a significant portion of their income on housing (McMahon & Desai, 2019). The housing crisis in Canada is a complex issue caused by a combination of factors, including urbanization, a lack of affordable rental housing, foreign investment, stagnant wage growth, and a scarcity of government policies to address housing affordability. These factors have created an imbalance between housing demand and supply, making it difficult for many Canadians to afford suitable housing. A comprehensive approach that addresses all these factors is necessary to address this crisis.

References:

Canada Mortgage and Housing Corporation. (2018). A snapshot of housing need in Canada. https://www.cmhc-schl.gc.ca/odpub/pdf/68224.pdf

Canadian Centre for Economic Analysis. (2018). Understanding the balance between supply and demand in Canada's housing market. https://cancea.ca/wp-content/uploads/2018/07/EconomicsAndHousingMarketBalance.pdf

CBC News. (2019). How foreign buyers' taxes drive money toward Canada's rental housing sector. https://www.cbc.ca/news/business/rental-market-foreign-buyers-taxes-1.5046249

McMahon, C., & Desai, S. (2019). The state of Canada's rental housing market. Canadian Centre for Policy Alternatives. https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2019/01/State%20of%20Rental%20Housing%20in%20Canada.pdf

Carolyn, This is a more recent approach.

Canada is currently facing a housing crisis, as evidenced by rapidly increasing housing prices and a shortage of affordable housing options. This crisis has significant economic and social implications, as it affects the well-being of individuals and families and contributes to growing income inequality in the country. Several factors have contributed to this crisis, including government policies, demographic changes, and economic factors. One of the major contributors to Canada's housing crisis is government policies, particularly the low supply of affordable housing. Since the 1990s, there has been a shift towards market-based solutions, with a decrease in government funding for affordable housing projects (Marom et al., 2021). This switch has resulted in a shortage of affordable housing units, making it difficult for low-income individuals and families to find suitable housing options.

Furthermore, strict zoning regulations and increasing development costs have made it harder for developers to build affordable housing units (Marom et al., 2021). As a result, the supply of affordable housing has not kept pace with the rising demand, leading to a housing crisis. Another factor contributing to the housing crisis in Canada is the country's changing demographics. Canada's population is aging, with the proportion of seniors expected to increase from 17.4% in 2017 to almost 30% by 2036 (Statistics Canada, 2020). This phenomenon has led to a shift in housing demand, with a greater need for smaller and more accessible housing options (Marom et al., 2021). However, the current housing stock in Canada needs to be equipped to meet the needs of this aging population, leading to a need for more adequate housing options and contributing to the overall housing crisis. Economic factors also play a significant role in Canada's housing crisis. The country has experienced a surge in housing prices, particularly in major cities such as Toronto and Vancouver, driven by low interest rates, foreign investment, and speculation (Picot et al., 2020). This has made it challenging for first-time homebuyers and low-income individuals to enter the housing market, further exacerbating the housing crisis. Canada's housing crisis is a complex issue with multiple contributing factors. Government policies, demographic changes, and economic factors have all created and perpetuated this crisis. There is a need for increased government funding to address affordable housing, zoning regulations reforms, and measures to cool down the housing market to make it more accessible for all Canadians.

References:

Marom, N., Ikeguchi, E., Juurlink, D., & Ross, M. (2021). Canada's housing crisis: Policies and programs that could make a difference. C.D. Howe Institute Commentary, 585.

Picot, G., Worswick, C., Beach, C.M., & Norris, M. (2020). Housing prices and affordability in Canada: Trends, drivers, and policy implications.

Statistics Canada. Statistics Canada. (2020). Population projections for Canada, provinces, and territories: 2018 to 2068. Retrieved from https://www150.statcan.gc.ca/n1/pub/91-520-x/91-520-x2019001-eng.htm

https://earthsharing.ca/front

https://earthsharing.ca/page/earthsharing-economics

https://www.canadahousingcrisis.com/making-housing-affordable/

Key issues:

One of the main factors is the imbalance between housing supply and demand, where Canada’s inventory of available homes is being outpaced by demand from potential buyers.

As homeownership becomes more and more inaccessible to Canadians, it is crucial that both federal and provincial governments implement policies that directly target the impact of the housing crisis.

Inflation in Canada is showing no signs of slowing down, and the cost of rent and mortgages continues to rise — leading to an affordable housing crisis across the country.

At the same time, the federal government has increased immigration targets and aims to bring in 500,000 permanent residents per year by 2025.

Whatever the cause, a land value tax might help to fix it!