In nearly every neighbourhood, in all parts of Canada, the hourly wage needed to afford an apartment rental is far above minimum wages and rising quickly, according to a new study released today by the Canadian Centre for Policy Alternatives (CCPA).
There are no neighbourhoods in Canada’s biggest cities (Greater Toronto Area and Metro Vancouver) where a full-time minimum wage worker could afford either a modest one- or two-bedroom apartment without spending more than 30% of their earnings, which is Canada Mortgage and Housing Corporation’s income threshold for “Core Housing Need.” In Vancouver and the GTA, a minimum wage worker would have to work 112 or 96 hours a week, respectively, to afford a two-bedroom apartment—84 or 79 hours a week, respectively, for an average one bedroom.
The picture isn’t much better across all of Canada, where the average wage needed to afford a two-bedroom apartment is $22.40/h, or $20.20/h for an average one bedroom. It’s worth noting that rent is almost always higher for unoccupied apartments.
“When we talk about housing affordability the focus is usually on home ownership,” says study author and CCPA Senior Economist David Macdonald. “But a third of households, or 4.7 million families, rent. Many of these renters—particularly those working at or near minimum wage, on fixed incomes or single-income households—are at risk of being priced out of modest apartments no matter where they look.”
The new report, Unaccommodating: Housing Rental Wage in Canada, determines the hourly wage a full-time worker must make to be able to rent an average apartment, in 795 neighbourhoods across the country. Rental wage in each of Canada’s major cities can be found at the interactive website that maps cost by neighbourhood from coast-to-coast.
There are only 24 of 795 neighbourhoods (3%) in Canada where a full-time minimum wage worker can afford to rent an average two-bedroom apartment, and in only 70 neighbourhoods (9%) can they afford a one bedroom. One in four Canadians earn within $3 of their province’s minimum wage.
Among the study’s findings:
- Of the 36 metro areas in Canada, 31 have no neighbourhoods where a two-bedroom apartment—the most common type—is affordable for a minimum wage worker;
- Vancouver has the highest two-bedroom rental wages ($35.43/h), followed by Toronto ($33.70/h), Victoria ($28.47/h), Calgary ($26.97/h) and Ottawa ($26.08/h);
- One of the most significant drivers of rental wage increases since the 1990s has been the drop in new purpose-built rental construction (apartments) in favour of condominium buildings;
- New federal government spending on affordable housing is having an impact, but annual unit construction will remain insufficient and far below the pace set in the 1980s and 1990s.
“Across the country, skyrocketing rents for decent apartments show no signs of falling. Building more dedicated affordable housing would increase vacancy rates, cool rental prices and better accommodate the many people shut out of Canada’s overheated housing market,” adds Macdonald. “Affordability for renters, not just home buyers, should be top of mind for all parties headed into the federal election. In a country as rich as Canada everyone deserves a reasonable place to live. In too many communities, this is just not the case.”