Affordability of housing in Canada
Affordability of housing in Canada presents a complex paradox. By 2004 1.7 million Canadians had housing affordability issues, yet Canada is considered to be among the more affordable places to live, using a market-oriented analyses of affordability such as those provided by the Royal Bank of Canada. Canadian government public policies intervene when affordability of housing is stressed to the point home ownership becomes inaccessible even to individuals with full-time employment. The continuum of affordable housing in Canada includes market (affordable rental housing, affordable home ownership), non-market (affordable rental housing, affordable home ownership), Government Subsidized Housing (Emergency Shelters, Transitional Housing and Social Housing). Measuring affordability of housing is complicated by Canada's vast physical and human geography which includes remote northern communities and affluent urban regions. Housing prices and construction costs have risen dramatically in Canada as they have elsewhere in the world. Income levels in the upper quintile have increased exponentially while those in lower quintiles have remained stagnant. The rising inequality gap presents a significant challenge for Canadian households who are "priced out of rental and ownership housing markets.
- 1 Market-based housing
- 2 Housing affordability and the middle class
- 3 Fundamental Forces of Supply and Demand in the Canadian Housing Market
- 4 Measuring Affordability of Housing
- 5 Housing Affordability Index
- 6 Affordability Problem
- 6.1 Causes and Consequences of the affordability problem
- 6.2 Consequences of the affordability problem
- 7 Public Policy and Tools
- 8 Historical Context of Affordability of Housing in Canada
- 9 Affordability by Province
- 10 The Canadian Housing and Renewal Association
- 11 Notes
- 12 Citations
- 13 References
Eighty percent of Canadians are served by market-based housing, which includes individual home ownership and private rental housing. In the market-based housing system, individuals finance their own housing, independent of government assistance.
The latest RBC Economics report on home affordability says its index deteriorated only slightly.[notes 1] However, the shelter-cost-to-income ratio (STIR) is well above 30% for the median income. Nationally, it is 48.7% for two-story homes. Major cities such as Vancouver rate worst in the world at 88.9%. Calgary is considered affordable at 36.7%. Montreal is 41.8% and Toronto is 53.4%. The RBC Indicator provides data on a quarterly basis on home ownership affordability, it measures the proportion of homes currently for sale that are affordable to a median income household. Measurements of affordability that are oriented exclusively to the ability to buy using mainly shelter-cost-to-income ratio (STIR) provide useful information for one end of the continuum of housing in Canada, home ownership in the private market at market price.
Housing affordability and the middle class
Many parts of the country also report that key workers – teachers, nurses, police officers, construction workers and others – who earn reasonably good income from their professions are finding it increasingly difficult to afford the high cost of housing." Statistics Canada reported that while Canada's "real gross domestic product (GDP) per capita increased by roughly 50% between 1980 and 2005," and the workforce increased educational attainment and work experience during this same period and median earnings among the top 20% of full-time full-year employees grew by 17.9%", among those in the bottom one-fifth of the distribution median earnings decreased by 13.3%." Full-time full-year median earnings of Canadians edged only slightly higher from $41,348 in 1980 to $41,401 in 2005. Between the year 1997-2007,1% or 246,000 Canadians earned average incomes of $405,000 representing 32% of all growth in incomes.[notes 2]
Lack of affordable housing is one of the complex set of factors that lead to homelessness. In the mid-1990s in Canada, homelessness — at the most extreme end of the housing affordability continuum — reached a level of a recognized national crisis affecting a diverse population of individuals and families. All levels of government in Canada began to include housing policies and strategies that respond to the crisis although anti-poverty and ending-homelessness activists argued that the efforts are not sufficient, efficient, or sustainable.[notes 3] However, Canadian public policy on the affordability of housing is more aligned with the concept of need than in the United Kingdom for example where the concept of affordability is more market-oriented.[notes 4] Various levels of governance in Canada explore policy solutions to assist challenges faced by the low-income renter and homeowner overburdened with shelter costs.
According to a Federation of Canadian Municipalities 2012 report, one third of Canadians are renters. The construction and rehabilitation of affordable rental units has not keep pace with the number of affordable rental units lost to demolition, urban intensification projects and the more profitable conversion to condominiums. Fewer than 10 per cent of new housing starts are rental units. Since 2005 the number of rental units declined. Since 2000 the cost of renting increased by more than 20 per cent. The FCA finds the shortage of available rental housing is worsening at the same time that more Canadians are being priced out of home ownership.
Measuring affordability of housing is complicated by Canada's vast physical and human geography which includes remote northern communities and affluent urban regions. Housing prices and construction costs have risen dramatically in Canada as they have elsewhere in the world. Income levels in the upper quintile have increased exponentially while those in lower quintiles have remained stagnant. Energy rich Alberta has a thriving economy while other provinces struggle with high unemployment. Calgary has its share of multi-million dollar homes, and in spite of overpriced housing the real estate market remains healthy but a fireman earning $40,000 in Calgary, Alberta cannot afford to purchase a home near his work. A teacher now has a lifelong mortgage monthly payment higher than she can afford even at a low interest rate and is using up her line of credit secured by her home equity. Quebec houses are affordable if one only considers (STIR) but combined provincial and federal income and sales taxes are high. Many remote and rural areas have housing that is affordable but have inadequate employment and education opportunities and a lack of access to adequate social services from health care to transportation. The economy has grown from the mid-1990s onward at the "strongest, most sustained pace since the 1960s" and Canada has a strong real estate market while many Canadian households face housing insecurity. About 1.5 million Canadian households or 12.7 per cent of Canadian households were in core housing need. Housing policies across Canada that address the issue of affordability of housing acknowledge a housing continuum that encourages home ownership and rental in the private sector but also provides rental and/or income assistance to low income households, high level support services to the most vulnerable citizens (frail elderly, disabled, mentally challenged, single parents, etc.) from short-term transitional housing, longer-term supportive housing, to emergency shelters for the homeless. Housing policies and strategies consider repeat users and those who face multiple barriers to meet and maintain core housing needs and therefore provide a wide range of support services including life skills training and assistance programs to break the cycle of poverty (BC Housing Strategy 2006). In this way housing strategies and housing studies related to affordability of housing overlap with anti-poverty strategies and studies.
Fundamental Forces of Supply and Demand in the Canadian Housing Market
The Canadian housing supply market responds to housing price changes with relative speed and flexibility compared to other OECD countries. New housing supply is relatively more flexible in Canada than in continental European countries and in the United Kingdom. Caldera and Johansson argue that new housing supply depends on "national, geographical and urban characteristics but also on policies, such as land use and planning regulations." Affordability of housing is affected by the way in which housing supply markets respond to changes in prices either through increased construction or raising prices. In supply-constrained markets like Vancouver, most adjustment occurs in higher prices rather than expanding housing supply. In the short to medium term supply-constrained/high-demand markets result in higher prices. Greater supply and low demand result in lower prices. Unresponsive housing markets cause price volatility including demand shocks that affect residential investment resulting in economic instability.[notes 5]
According to Mark Carney, the Governor of the Bank of Canada (2011–06) household formation in Canada (the underlying demand force) is broadly consistent with housing supply. "Canadian housing market developments in recent years have largely reflected the evolution of supply and demand.
However, Carney warns that even though measures of housing affordability in Canada remain favorable in most cases (albeit with some housing markets already severely unaffordable even at current rate), demand forces in the housing market have been supported by historically unusually low interest rates. Given the historically "higher stock of debt" owed by Canadian households combined with an historically low mortgage rate, with even a small correction in interest rates to 4 per cent, housing affordability would fall to "its worst level in 16 years."
Measuring Affordability of Housing
Governments, financial institutions (banks, mortgage providers), housing sectors (real estate agencies), consumers, and advocacy organizations use different definitions of affordability.
Affordability as Needs Based Concept: Core housing need
Canada Mortgage and Housing Corporation (CMHC) considers a household to be in "core housing need if its housing: falls below at least one of the adequacy, affordability or suitability standards and would have to spend 30% or more of its total before-tax income to pay the median rent of alternative local housing that is acceptable (meets all three housing standards)(CMHC, 2012)." About 5.1 per cent of Canadian households were considered to be in severe housing need, spending 50 per cent or more on shelter in 2006.
The CMHC consider households that spend 30% or more of total before-tax household income on shelter expenses, have a "housing affordability" problem. Shelter expenses include "rent and any payments for electricity, fuel, water and other municipal services" for renters and "mortgage payments (principal and interest), property taxes, and any condominium fees, along with payments for electricity, fuel, water and other municipal services" for home owners. In 1986 CMHC entered into Global and Operating Agreements under the National Housing Act and the CMHC Act, with the provinces and territories regarding administration and cost sharing of social housing programs. The core housing need concept was developed and adopted as an eligibility criterion to target households who were in need and as a basis to allocate federal funds through CMHC to participating provinces and territories. Core housing need does not measure progress against some measurable indicator.
Pomoroy suggests that affordability of housing public policy analysts should also monitor other indicators that are more appropriate for the contemporary Canadian context such as, what proportion of rental units are affordable to a median income rental household, a comparison of wage requirement needed to rent unit, the demand for housing assistance, the number of households in core need as a milestone measure, the number of people using emergency homeless shelters, number of people filing notice of eviction, arrears or foreclosures, rental vacancy rates at market prices, rental vacancy units at modest-low income stock and the number of MLS sales affordable to marginal buyers.
The Bank of Canada's "affordability index represents the proportion of the average personal disposable income per worker that goes toward mortgage payments, based on current house prices and mortgage rates. A decline in the ratio indicates an improvement in affordability."
Mortgage lending institutions define affordability in terms of potential home buyers consider the relative cost of debt based on interest rates and average household incomes. This measure of affordability is not oriented towards renters. A 2012 report produced by the Bank of Canada argues that affordability of housing "has been consistently favourable by historical standards since the late 1990s. . . Despite increases in house prices, generally favourable labour market conditions (gains in real income) and low interest rates have supported affordability and contributed to the significant increases in home ownership and mortgage debt."
Although affordability of housing is a problem for low and middle income Canadians households in the upper quintile, particularly in large affluent urban areas, can afford to purchase houses for investment and/or residency at higher prices while benefitting from historically low interest rates.
"Affordability is a relative measure, especially in a country with a booming real estate market. Housing market growth, in part fuelled by availability of debt and mortgage financing, augments existing inequities. While many homeowners benefit from low interest rates, the national pool of private affordable rental stock remains small and affordable rental vacancy rate remains low, less than one per cent in many cities." Renters in the lowest income quarter are 18 times more likely to experience housing affordability problems than other Canadians.
The shelter-cost-to-income ratio (STIR)
A commonly accepted guideline for housing affordability is a cost that does not exceed 30 percent of a household's gross income. When the monthly carrying costs of a home exceed 30–35 percent of household income, then the housing is considered unaffordable for that household. Determining housing affordability is complex and the commonly used housing-expenditure-to-income-ratio tool has been challenged. Canada, for example, switched to a 25 percent rule from a 20 percent rule in the 1950s. In the 1980s, this was replaced by a 30 percent rule. Unresolved issues remain about the elements of affordable housing. Affordability of housing may have differing definitions to governments, mortgage providers, developers, urban planners, economists and individual householders seeking a residence. Income levels in relation to housing prices are the most frequently used variables in deciding housing affordability but other factors such as employment trends, access to (and the cost of) finance, demographic shifts, housing preferences and other housing costs besides the price of purchase impact on housing affordability. One question is what should be included in 'housing' costs. Such expenses could include taxes, insurance, utility costs, maintenance and/or furnishings and rent for owners and/or tenants. Another question is what is meant by 'income'. Does this include gross or net income; one or all adults' income; and children's income, if any. It is also unclear how sharp temporary fluctuations in income and non-cash sources of goods and services get factored into the calculation.
Londerville also notes that the maximum Total Debt Service ratio (the "ratio of the borrower’s total debt payments, including mortgage payments and property taxes, to their gross household income") is underused in evaluating affordability. "There is an argument that the calculation should be based on take home pay rather than gross pay. It could be different for different income levels – 40 percent of $40,000 does not leave a lot of room for other household expenses. Young homeowners who have children in daycare can be paying a fee almost equivalent to a second mortgage payment; this is not taken into account when calculating the maximum the bank will lend because it is not defined as a debt."
Housing Affordability Index
Accurate measurement of housing affordability is needed to decide if a family qualifies for assistance in housing or for a mortgage to purchase privately. While the 30% rule may be used for the latter, banks and lending agencies might require a much higher Qualifying Income before approving a mortgage. The Royal Bank of Canada Housing Affordability Measure describes a qualifying income as "the minimum annual income used by lenders to measure the ability of a borrower to make mortgage payments. Typically, no more than 32% of a borrower’s gross annual income should go to ‘mortgage expenses’ — principal, interest, property taxes and heating costs."
"Housing affordability problems threaten both low and middle income households. While affordability in housing has improved for many Canadians, due mainly to income gains, the fortunes of the lower half of Canadians remain stagnant or have declined. Across Canada, renter households in the lowest income quarter have highly elevated – 18 times average – likelihood of housing affordability problems." 
Even though house prices have risen faster than income since the 1990s, there has been a rise in home-ownership rate from 62.1 per cent in 1981 to 68.4 per cent in 2006. The banking industry views greater credit growth and higher debt loads related to house purchases as a positive. But a "strong credit growth" from 2001 to 2011 means very high household indebtedness which now represents c. 150 per cent of debt-to-income ratio. According to the Bank of Canada's affordability measure (AFF) -the ratio of monthly mortgage payments to disposable income (DI)- "has been consistently favourable by historical standards since the late 1990s. Despite increases in house prices, generally favourable labour market conditions (gains in real income) and low interest rates have supported affordability and contributed to the significant increases in home ownership and mortgage debt."
There are concerns about aggressive marketing that began in the mid-1990s making secured personal lines of credit (PLCs) (often secured by housing assets) much more widely available. By 2011 secured PLCs represented 50 per cent of consumer debt. This places many households in a vulnerable exposed situation if housing prices drop, mortgage rates rise, or their income decreases.
Concerns over high Canadian household debt levels led to changes to mortgage regulations announced June, 2012 by Finance Minister Jim Flaherty. The federal government lowered the maximum amortization period for a government-insured mortgage from 30 to 25 years. The upper limit Canadian homeowners could borrow against their home equity was lowered from 85 per cent to 80 per cent.
Londerville of the Macdonald-Laurier Institute argues for 40-year amortizations in "certain markets and for certain age groups, perhaps with limits on the house price" for example in the case of young households in the high-priced Toronto real estate market who "may need a 40-year amortization period on their first home to make it affordable."
As well, government-backed mortgage insurance purchased at a flat, upfront fee for mortgage insurance through Canada Mortgage and Housing Corporation is obligatory for home buyers with down of less than 20 per cent of the home's value." In a 2005 article the Canadian Business journal reported that, "According to the federal Bank Act, every mortgage from a federally regulated institution with a down payment of less than 25% is required to carry mortgage insurance. Last year , 45 per cent of all home buyers, or 500,000 Canadian families, were required to buy a total of $1.6 billion worth of mortgage insurance ... According to its annual report, last year it earned $1.1 billion in premiums from homebuyers and paid out $51 million in claims--a payout rate of less than 5 per cent. While 2004 was an exceptional year for mortgage insurance, over the past 10 years CMHC has paid out at an average rate of 45 per cent, far lower than most other forms of insurance. In fact, there is probably no more lucrative line of insurance in Canada than mortgage insurance."
The CMHC turns a large profit from this mortgage insurance collected mainly from first time buyers and those unable because of lower incomes to pay more than 20 per cent down payment. Between 2001 and 2010 this mortgage insurance amounted to a $14 billion contribution towards reducing the Canadian federal deficit. Londerville of the Macdonald-Laurier Institute notes IMF concerns about some CMHC practices and the unnecessary burden placed on home owners at the lower end of income scale. This erodes affordability.
Canada Mortgage and Housing Corporation (CMHC) deemed that 20 percent of Canadian households (1.7 million households) fall within the core housing need. These households could not find adequate and suitable housing without spending 30 percent or more of their pre-tax income. CMHC found that a disturbing 656,000 households (7 percent) spent at least half of their before-tax income on shelter in 1996, up from 422,000 households, or 5 percent, in 1991. While accounting for only 35 percent of all households, almost 70 percent of those in core need were renters.
The United Nations Committee on Economic, Social and Cultural Rights issued a highly critical and detailed report on Canada’s social policies in its 1998 review of Canada’s compliance with these rights (United Nations, 1998) particularly about disastrous levels of homelessness. It concluded "that while Canada has a long history of housing successes, the housing cuts starting in the late 1980s have effectively prevented Canada from meeting its international housing obligations."
The mayors of Canada’s largest cities, declared the lack of affordable housing a national housing disaster in 1998. The federal government responded by announcing cost-shared conditional federal-provincial initiatives to construct affordable housing, worth $1 billion. However, during this period of tax cutting and debt reduction initiatives, the devolution of federal responsibilities to the provinces, without an accompanying transfer of funds, made it impossible for the provinces to contribute their share for affordable housing projects. Provinces were focused on reducing government size and increasing provincial tax cuts.
in 2006 5.5% of Canadians, 1.7 million people of a total population of 31 million were under-housed or non-housed.(Canadian Housing and Renewal Association).
Causes and Consequences of the affordability problem
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Wealth inequalities have intensified
There are too many low-income households in Canada. One of the major causes of the affordable housing problem is the number of low-income households in Canada who are also subject to provincial and federal claw backs and tax backs, for example, on back to work and the federal-provincial National Child Benefit (NCB).
A Toronto Dominion report (2003) recommended that government initiatives should be focused on raising market incomes at the lower end. This would be more effective than the inefficient, expensive, publicly funded expenditure-based or tax-based incentives to increase the number of affordable rental units.
Devolution of Responsibility without Corresponding Funds to Municipalities
In 2011 the Canadian Federation of Municipalities called for a resolution of the municipal fiscal imbalance with municipalities receiving less from the federal and provincial governments while their responsibilities, for affordable housing for example, increased.
"During the 1990s, federal deficit cutting caused provincial and territorial governments to off-load some of their responsibilities to municipal governments, without providing resources to meet these responsibilities. Municipal governments now deliver programs that support immigration, the environment, Aboriginal peoples, affordable housing, public health and emergency preparedness, and public security. [In 2011] many of these responsibilities remain unfunded or underfunded and require improved coordination with other orders of government... From 1999 to 2003, federal government revenues increased 12 per cent, provincial and territorial revenues 13 per cent, and municipal government revenues eight per cent. In 1993, transfers from other governments accounted for 25 cents of every dollar of municipal revenue. By 2004, they accounted for 16 cents, a 37 per cent decrease."
Role of urban planners
American economist and Edward L. Glaeser, who focuses on urban economics, argued that over zealous zoning by municipal land planers cause some of the problems of affordability of housing. They argued that dramatic differences in price of housing versus construction costs occurred in places where permits for new buildings had become difficult to obtain (since the 1970s). Compounded with strict zoning laws the supply of new housing in these cities was seriously disrupted. Real estate markets were thus unable to accommodate increases in demand, and housing prices skyrocketed.
Glaeser and Gyourko argued that public policy should reflect the ways in which housing affordability differs from region to region, affecting classes differently. Public policies should reflect those differences. Removing municipal zoning restrictions would resolve some of the affordability issues faced by the middle class. They suggest federal government should provide incentives for local governments to allow for more construction. They argue that affluent families benefit most from mortgage interest deductions, allowing them to purchase an even larger home and they may drive prices even higher. Interest deductions, which are meant to make housing more affordable to the middle class, can lead to an increase in the amount families can pay for a house, driving up prices even higher. They question construction supply subsidies for low-income housing in areas that offer few employment possibilities. These subsidies discourage private-sector developers and benefit those with political connections. Direct income transfers for low income families would resolve their specific housing needs.
Randal O'Toole of a Fraser Institute in his report entitled "Unliveable Strategies: The Greater Vancouver Regional District and the Liveable Region Strategic Plan" argued that the CVRD's land use planners "left the region with the least affordable housing and some of the worst traffic congestion in Canada". He concluded that Greater Vancouver Regional District planners in 1996 "Livable Region Strategic Plan" (1996) were too narrow in their focus on "avoiding urban sprawl and minimizing automobile driving." He also argued that the protection of green spaces, farm lands, from development limited growth and was the cause of the escalation of prices.
Consequences of the affordability problem
Health Issues Related to Lack of Affordability of Housing
A Conference Board of Canada 2010 report entitled "Building From the Ground Up: Enhancing Affordable Housing in Canada" argued that the shortage of affordable housing was "having a detrimental effect on Canadians’ health, which, in turn, reduces their productivity, limits our national competitiveness, and indirectly drives up the cost of health care and welfare." Stress, asthma, and diabetes are connected to inadequate housing.
Public Policy and Tools
National Housing Strategy
Canada is the only major country in the world, and the only G8) nation, that lacks a National Housing Strategy. Canada has no coordinated strategy on affordable housing. Housing initiatives have been introduced and funded by the federal, provincial, territorial and municipal governments, along with civil society organizations (including the charitable sector).
A detailed plan to create a long-overdue national housing plan for Canada was introduced in February 2012. MPs Marie-Claude Morin, Andrew Cash and Michael Shapcott introduced the draft legislation of Bill C-400, An Act to Secure Adequate, Accessible and Affordable Housing For Canadians in the House of Commons.
Affordable Housing Initiative (AHI)
Affordable Housing Initiative (AHI) (2001–2011), an intergovernmental multilateral housing initiative on affordable housing was created. The federal government, working through Canada Mortgage and Housing Corporation provided funding for the supply of new affordable rental housing under the Affordable Housing Program was CAD$1 billion from 2001 to 2008 (to be matched by provinces and territories). There were promises to invest an additional CAD$1.9 billion from 2008 to 2013 for housing and homelessness programs for low-income Canadians.
Affordable Housing Framework 2011–2014
Affordable Housing Framework 2011–2014 announced by the federal government in July 2011 in order to improve "access to affordable, sound, suitable and sustainable housing."
The Affordable Housing Framework acknowledges that a wide range of solutions are required to respond to the diversity of affordable housing program needs and priorities specific to each jurisdiction. Provinces and territories are reminded that it is their responsibility to design and deliver affordable housing programs, but they will have flexibility in how to invest federal funds (matched by provinces and territories) through programs and initiatives, as long as the overall intended outcome is reached: "to reduce the number of Canadians in housing need by improving access to affordable housing that is sound, suitable and sustainable. . . Initiatives under the Framework can include new construction, renovation, homeownership assistance, rent supplements, shelter allowances, and accommodations for victims of family violence."
Historical Context of Affordability of Housing in Canada
By 1996, the federal government revoked the Canada Assistance Plan of 1966, which made it mandatory that people whose income was inadequate to meet basic needs (including the working poor), have access to an established appeals procedures in the provinces and territories regarding social assistance. In the same year, the federal government transferred responsibility for most existing federal housing programes to the provinces." During the 1990s there was a devolution of new responsibilities, including affordable housing, from provincial governments to municipal governments without adequate revenue tools.
The TD report concluded that municipalities need a more sustainable funding arrangement, and provinces need to play a more active role in affordable housing, becoming leaders within the Affordable Housing Framework agreement.
The 2009 Canadian federal budget allocated funds for the period covering (2009–2011): renovation and energy retrofits to social housing ($1 billion); to build housing for low-income seniors ($400 million); to build social housing for persons with disabilities ($75 million); to support social housing in the North ($200 million); low-cost loans to municipalities to improve housing-related infrastructure ($2 billion) as part of Canada’s Economic Action Plan.
There was a modest improvement in housing affordability across Canada in the third quarter of 2011 after two consecutive quarters of deterioration. Part of this was due to decreased costs in home ownership resulting from lower mortgage rates.
Affordability by Province
President of the Canadian Home Builders’ Association, Calgary Region, Carol Oxtoby explains the increase in luxury homes construction and sales in Calgary. With its oil and gas and high-tech industries, young entrepreneurs and head offices, Calgary has some of the highest income earners and highest personal wealth in Canada per capita. In 2011 "448 homes in Calgary were resold for more than $1 million." 
The Housing Services Corporation (HSC) was created in January 2012 to replace the Social Housing Services Corporation (SHSC) as affordable housing needs evolved under the Housing Services Act. Housing Services Corporation "is a non-profit organization that delivers province-wide programs that benefit Ontario’s affordable housing sector. Our value-added services help affordable housing providers and Service Managers develop safe, affordable, people-centred homes and communities."
The Social Housing Services Corporation (SHSC) was created by Province of Ontario in 2002 following the devolution of responsibility for over 270,000 social housing units from the province to the municipalities. Its mandate was to "provide Ontario housing providers and service managers with bulk purchasing, insurance, investment and information services that add significant value to their operations."
A 2010 survey by the Ontario Non-Profit Housing Association revealed that the number of households on affordable housing waiting lists was at an "all-time high of 141,635" in 2010.
Over twenty per cent of home owners residing in Ontario had housing affordability issues.
Vancouver had the least affordable housing market in Canada by 1980; the average home cost 5.7 times the average family income (Statistics Canada, 1983a, table 7; Statistics Canada, 1983b, table 19) cited in (O'Toole 2007). O' Toole calculated that given the high interest rates in 1980, "an average family would have to devote more than 70 percent of its income to pay off a mortgage on an average home in 30 years." 
The Governor of the Bank of Canada noted that affordability of housing has been eroded as wealthy Asian investors seeking diversification and hard assets purchase housing in Vancouver. Consequently, "[t]he average selling price of a home in Vancouver is now nearly 11 times the average Vancouver family’s household income, a multiple similar to those seen in Hong Kong and Sydney—cities that have also become part of a more globalized real estate market."
There has been a move toward the integration of affordable social housing with market housing and other uses, such as the 2006-2010 redevelopment of the Woodward's building site in Vancouver. Woodward, a heritage site, was re-invented and has reinvigorated Gastown in Downtown Eastside, one of Vancouver's oldest and "most challenged" yet "resilient" communities.
O'Toole argued that the GVRD urban planners focused too much on housing affordability as a lack of affordable housing for low-income families who would need some form of housing subsidy. He noted that GVRD reports failed to mention the there was also a lack of affordable housing for people with middle incomes.
The capital of Nunavut faces an extreme affordability challenge mainly due to the supply side. In 2010 Iqaluit had the most expensive rental market in Canada:a two-bedroom apartment cost $2,365 rental a month in Iqaluit compared to $1,195 in Vancouver.
The Canadian Housing and Renewal Association
- RBC measures erosion, deterioration and/or improvements in affordability of housing in terms of levels of ease or difficulty for Canadians to carry the costs of home ownership comparing price, mortgage rate, utilities and taxes and income while also considering fundamentals such as supply-and-demand and market slowdown. Vigorous housing demand raises prices if supply has not kept pace. RBC also examines soft factors such as weather; mild weather, for example, motivates consumer demand for housing (RBC 2012-08).
- "There were 24.6 million tax filers in Canada in 2007. The richest 1% made more than $169,000 and had an average income of $404,000. The richest 0.1% made more than $621,000 and had an average income of $1.49 million. The richest 0.01% made more than $1.85 million and had an average income of $3.83 million (Yalnizya 2010)."
- Stephen Gaetz is director of the Canadian Homelessness Research Network and the Homeless Hub and secretary of the Canadian Alliance to End Homelessness.
- In the United Kingdom for example since the late 1980s, housing policy debates shifted away from discussion of housing need to more market-oriented analyses of affordability (Whitehead 1991-12).
- "A crucial factor determining the functioning of housing markets is the responsiveness of housing supply to changes in prices. Differences in supply responsiveness to prices are important since they determine the extent to which the housing market responds to demand side shocks with more construction or higher prices, with potential implications for the evolution of housing prices and housing affordability. Indeed, existing evidence suggests that in supply-constrained markets, most of the adjustment occurs in the price of housing rather than in expanding housing supply. Supply conditions also matter for house price volatility and aggregate economic stability. An unresponsive housing supply can increase the sensitivity of house prices to demand shocks and, thus, influence private consumption patterns and residential investment. For instance, in the short to medium term, an increase in housing demand will translate into lower increases in real house prices in areas with more responsive housing supply. However, the flip side is that in flexible-supply areas, housing investment adjusts more rapidly to large changes in demand contributing to more cyclical swings in economic growth, as witnessed by recent developments. A quantification of the responsiveness of housing supply with respect to prices can, therefore, shed light on the trend evolution and volatility of house prices in OECD countries and inform housing policy reforms aimed at dampening housing price volatility and, in interaction with macro policies, increase macroeconomic resilience to shocks. (Caldera and Johansson 2011. p.5)."
- Laird 2007, p. 4.
- Royal Bank of Canada 2012.
- Yalnizyan 2010.
- Shapcott 2012.
- CMHC nd.
- Statistics Canada 2006.
- Hulchanski 2009.
- Gaetz 2010.
- Whitehead 1991.
- Pomeroy 2011.
- Federation of Canadian Municipalities (FCM) 2012.
- Yalnizyan 2010, p. 22.
- Canadian Press 2012.
- CMHC 2011.
- Caldera & Johansson 2011.
- Glaeser & Gyourko 2008.
- Carney 2011.
- Laird 2007.
- Canada Mortgage and Housing Corporation 2011a.
- Canada Mortgage and Housing Corporation 2011.
- Statistics Canada 2009.
- Pomeroy 2011, p. 1.
- Pomeroy 2011, p. 14-5.
- Bank of Canada 2012.
- Drummond & Tulk 2006.
- Laird 2007, p. 89.
- Laird 2007, p. 36.
- Statistics Canada 2006a.
- Hulchanski 1995.
- Londerville 2012.
- RBC 2011.
- Bank of Canada 2012, p. 9.
- Bank of Canada 2012, p. 11.
- CBC 2012.
- Taylor 2005.
- Hulchanski 2005.
- OHCHR 2009.
- The Poverty and Human Rights Centre 2007.
- Yalnizyan 2004.
- TD Economics 2003.
- Canadian Federation of Municipalities 2011, p. 1.
- Glaeser & Gyourko 2003.
- O'Toole 2007a.
- The Conference Board of Canada 2006, p. 1.
- OHCHR 2009, p. 7.
- OHCHR 2009, pp. 8-9.
- CMHC nda.
- Canada's Economic Action Plan 2011.
- CMHC 2011a.
- Canada Assistance Plan, 1966
- OHCHR 2009, p. 9.
- Canadian Federation of Municipalities 2011.
- Government of Canada 2011.
- HSC 2012.
- Social Housing Services Corporation 2007.
- Shapcott 2010.
- O'Toole 2007.
- City of Vancouver 2011.
- Narvey 2010.
- CMHC 2011c, p. 13.
- Bank of Canada (2012). "Bank of Canada Review: Winter 2011–2012: Special Issue: Household Finances and Financial Stability" (PDF). Bank of Canada. http://www.bankofcanada.ca/wp-content/uploads/2012/02/review_winter11-12.pdf. Retrieved 17 August 2012.
- "Backgrounder: Investment in Affordable Housing 2011-2014 Framework Agreement". Canada's Economic Action Plan. 25 July 2011. Retrieved 5 June 2012.
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