The Canadian Housing Crisis
Canada’s housing and homelessness crisis has greatly impacted renters – in particular those living on lower incomes – resulting in an increase in the number of renters in core housing need, meaning that their housing is unaffordable, in need of major repairs, and/or overcrowded.
For the majority of renters, affordability is the primary challenge. The loss of affordable housing options and government retreat from the development and regulation of affordable housing has resulted in an increase in homelessness and housing insecurity across the country.
This is because the number of rental homes that are affordable to Canadian households is rapidly dwindling. Right now, for every new affordable unit built with public funds, two are lost, either to demolition and conversion, or as a result of excessive rent increases that render the units unaffordable. Moreover, only a fraction of the new housing being built with public funding is affordable to lower income households.
Developers are incentivized to build housing that is targeted towards higher income households, and minimal government investment in non-market, community housing, means that there are few housing options available to people in greatest housing need. As a result, households are increasingly facing displacement from their homes and communities, in some cases leading to segregation into poorly resourced areas far away from socio-economic opportunities, and in other cases, leading to homelessness.
The Ontario Housing Crisis
The lack of secure, affordable rental housing and rising rental costs are key issues in Ontario. Average asking rents in the province are the second highest in the country and the rental vacancy rate remains low at 2.7 per cent. Compared to the rest of Canada, the proportion of Ontario renters in core housing need has grown tremendously, reaching 34 per cent. While Ontario has given municipalities ambitious housing targets and introduced new policies that aim to accelerate homebuilding, local governments are limited in their ability to implement these directives.
Moreover, supply alone cannot solve the growing housing and homelessness crisis in Ontario, which is no longer confined to large urban centres, but is spreading to smaller communities and rural areas, too. On the one hand, the pace of housing starts has declined in Ontario over the last two years, and is unlikely to pick up in coming years, given the devastating impacts of US tariffs on the residential construction industry. On the other hand, the majority of the existing rental housing stock in the province is deteriorating, and more and more renters living in older buildings are facing displacement – often through “renovictions” or “demovictions” – with limited alternative, affordable housing options available in the private market or community housing sector.
The province’s focus on attainable home ownership over secure, affordable rental housing has resulted in a worsening of the housing and homelessness crisis, as evidenced by the staggering increase in homelessness. Municipalities are on the frontline of this crisis. As the operational arm of any provincial housing strategy – and in particular in Ontario, where many responsibilities have been downloaded to the local level – municipalities play a central role in the provision of adequate and affordable housing that can respond to local needs.
To address the crisis, it is urgent to shift towards policies and strategies that create and protect truly affordable rental housing. Municipalities have several tools at their disposal to incentivize new affordable housing supply, in addition to preserving affordable rentals and tenancies, and ultimately preventing displacement and homelessness.
Solutions for Affordable and Secure Housing
A) Policy tools to preserve existing affordable housing
Much of Ontario’s rental supply is aging: over 80 per cent of the province’s stock of purpose-built rental housing was built in the 1980s or earlier. While some progress has been made to rehabilitate the stock of community housing, inadequate regulations around the preservation of market rentals has led to a rise in economic evictions resulting from above-guideline increases (AGIs), renovations, conversions and demolitions.
To preserve Ontario’s crucial existing affordable housing stock, property owners must continuously invest in upkeep and repair. In the current regulatory environment, landlords are incentivized to neglect building maintenance, as it allows for short-term cost savings until extensive renovations or demolition become unavoidable. Lack of service and deteriorating conditions also serve to push existing renters out of their homes to bring in higher income households.
To preserve the existing affordable housing stock, local governments can enforce robust regulations to protect renters from building neglect and displacement:
- Municipal governments can improve the effectiveness of property and maintenance standards by ensuring thorough and adequately resourced enforcement programs that include proactive inspections.
- Municipalities can adopt rental licensing programs, through which landlords and property owners must register their rental units and regularly renew their license by demonstrating that their property is in a good state of repair and maintenance.
- Municipalities can also use their regulatory powers to prevent renovictions by introducing regulations to verify whether landlords need to proceed with a renovation, and if so, whether they have taken all measures to accommodate the renters who may have to move out. This includes ensuring that evictions are carried out for the intended purposes and that evicted renters are adequately compensated for the loss of affordable housing as a result of bad faith evictions.
- For aging rental properties that are facing demolition, municipalities can introduce rental replacement policies to ensure that new housing developments offer the same number of affordable rental units at previous rates, and that original residents have a right to return. In addition, renter assistance policies can provide transitional supports for renters who are temporarily or permanently displaced by a demolition.
Stay tuned for upcoming blog posts from the Canadian Centre for Housing Rights (CCHR), which will dive deeper into specific municipal tools to preserve the stock of existing affordable rental housing.
B) Policy tools to incentivize new affordable housing
While cities across Ontario have seen consistent investment in new housing, markets alone do not generate housing that is affordable or appropriate for households on lower incomes. While it is essential to implement policies that enable the private sector to meaningfully contribute to the supply of affordable housing, all levels of government also need to substantially increase their investments in non-market homes that are deeply affordable, i.e. non-profit, co-operative, and public housing.
Research shows that local governments can most effectively support the construction of affordable housing when they combine development incentives – including capital grants, waivers of development charges, and favourable financing – with the provision of free land to a non-profit housing developer. Programs that stack these measures with housing subsidies have the potential to provide deeply affordable housing options.
To spur the development of new affordable housing, local governments can implement several incentives for both private and non-profit developers:
- Municipalities can create more affordable housing by increasing residential density and enabling “missing middle” housing. This can be achieved by adopting upzoning policies to allow for more intensive land use, while requiring that rents in new housing developments be affordable. For example, municipalities can use inclusionary zoning to designate areas where a portion of housing units must have affordable rents.
- Municipalities can also make allowances to increase residential density selectively in areas where more housing is needed, for example near transit stations, hospitals, or schools. To ensure that new units in these areas are affordable, density bonusing can allow developers to build additional floor area in exchange for contributions towards affordable housing and public amenities.
- Municipalities can also increase residential density by allowing the addition of accessory dwellings or the partial subdivision of a home to create secondary suites. To ensure that secondary suites offer affordable rents and are not converted into short-term rentals, municipalities can enact policies to legalize secondary suites and attach affordability and security of tenure conditions to building incentives.
- Municipalities can leverage surplus land that is vacant or underutilized to create more affordable housing by removing land acquisition from development costs. Municipalities can make in-kind contributions for the development of affordable housing through land leasing or land sales at discounted prices to developers that guarantee a minimum number of affordable housing units. To avoid losing perennial public assets to private markets once the mandated affordability period is over, land sales should be restricted to non-profit housing providers that can guarantee affordability in perpetuity.
- Municipalities can invest directly in the development, preservation, and acquisition of deeply affordable housing. This can be achieved by prioritizing funds to maintain and build new community housing and by developing rental housing acquisition funds that support non-profit housing providers to acquire and preserve private market rentals for long-term affordability and security.
To ensure that zoning incentives, cash or in-kind contributions go towards reducing core housing need and homelessness, local governments can prioritize non-profit developers in the allocation of development incentives, or require that private developers partner with non-profit providers. Municipalities can also use conditional incentives and mandatory affordability requirements to ensure that publicly funded private developments are affordable to the households in greatest need.
Developing Rights-Based Responses to Local Housing Needs
Affordable and secure housing is a human right, and all levels of government must work together to ensure that public investments in housing effectively contribute to greater housing security and homelessness reduction. Solving the housing crisis requires Canadian governments to adopt a human rights-based approach and prioritize the groups most impacted by the housing crisis.
As the level of government closest to impacted communities, municipalities are uniquely positioned to provide timely and localized responses to the housing crisis by meaningfully engaging with people with lived experience of housing insecurity and/or homelessness. Through the adoption of a rights-based framework, municipalities can develop long-term housing strategies and action plans informed directly by impacted communities and truly responsive to their needs. There should be mechanisms in place at the local level to develop housing solutions and monitor progress on the implementation of these solutions, that rely on deep engagement with local communities and their participation in decision-making.
The Canadian Centre for Housing Rights (CCHR) has been working with municipalities across Ontario and Canada to support the development of evidence-based housing policies aligned with local priorities. Using a rights-based approach and drawing upon our extensive in-house policy and legal expertise, we can help your municipality advance housing solutions through expert evaluations of municipal housing policies and bylaws, inclusive community research and consultation, and local impact assessments.
Beyond this, CCHR can also fill needs gaps in your municipality by providing direct legal supports and public legal education for people experiencing housing instability. To learn more about how you can advance the right to housing in your municipality with CCHR, please contact Olivia Meader, Manager of Development at omeader@housingrightscanada.com.
About CCHR:
The Canadian Centre for Housing Rights (CCHR) is Canada’s leading registered charitable organization working to advance the right to adequate housing. For over 35 years, we have worked tirelessly at the intersection of human rights and housing, providing free services to renters facing evictions and human rights violations to remain housed, providing education and training about housing rights across Canada, and advancing rights-based housing policy through research, policy development, advocacy, and law reform.
