This text is part of the special booklet For a housing reform
Housing affordability is at the heart of the Metropolitan Housing Policy project presented by the Montreal Metropolitan Community (CMM). But meeting the needs of low-income families, who currently spend more than 30% of their resources on housing, represents a colossal challenge.
Households considered to have this affordability problem are those with a family income of less than $50,000.
“We are talking here about people who work, and not about social housing clients,” says Massimo Iezzoni, director general of the Montreal Metropolitan Community (CMM). They have income, but not enough to meet their housing needs. One of the first assumptions of our housing policy is housing for all, but this affordability problem affects the private market as much as social and community housing. »
Housing affordability obviously depends on the overall situation in real estate. However, according to the bulletin of the month of June Spotlight on housing in Canada of the RBC-Royal Bank, soaring real estate prices and rising interest rates are severely restricting accessibility to property in Canada.
Thus, still according to the RBC, the share of household income necessary to cover housing-related costs in Montreal is 43.2%. The average for Canada is 54%, and Vancouver holds the record with 82%. Young households unable to access home ownership stay in their homes longer, which increases the pressure on the rental market.
“In the first quarter of 2022, affordability was at its worst level since the early 1990s in Canada,” said Paul Cardinal, director of the economic department of the Association des professionels de la construction et de l’habitation du Québec ( APCHQ).
A supply problem
This current affordability crisis is notably caused by an insufficient supply in the province.
“We haven’t built enough in recent years, and we’ve accumulated a housing deficit, including properties and apartments, which we currently estimate at 100,000,” says Paul Cardinal. In addition to housing for rent, there is also a lack of housing for owner occupiers, as there are not enough properties for sale, which has caused prices to soar,” he adds. he.
Among the other explanations put forward by the APCHQ, there is greater population growth than expected, due, among other things, to an increase in non-permanent residents who have come as students or temporary workers, 90% of whom are tenants.
For the Canada Mortgage and Housing Corporation (CMHC), it would be necessary to build 620,000 housing units for all of Quebec. These figures do not represent the total to be built, but rather the shortfall to bring back affordability. “In reality, in total, nearly 1.2 million homes need to be built by 2030,” says Paul Cardinal.
The big question is whether the construction industry will be able to make it happen. And the answer is no, he says. “That means that we would have to practically double the current number of housing starts,” he says. However, as elsewhere, there is a labor shortage in the construction industry. In 2020, we had built 56,000 housing units, and in 2021, we jumped to 68,000 housing starts in Quebec, but, according to the surveys that we do with our contractors, the labor shortage became the number one problem, and many made the decision to accept fewer contracts. »
Possible solutions
At the CMM, we estimate that the space is sufficient to accommodate the growth of housing by 2030 in all sectors of the territory. The problem is not there. “This concerns vacant spaces, but also spaces under redevelopment, for example, the conversion of commercial parking lots,” says Massimo Iezzoni. We have many first-generation shopping center owners who are beginning to consider the insertion of residential spaces. »
Soft densification
On the demographic side, the aging of the population favors the reduction in the size of households. In the future, we will have more households of two people or less.
“Over the past ten years, many more apartments have been built than individual houses,” he adds. Our development model is conducive to gentle densification. For couples with children, the stock of individual houses is sufficient to meet demand,” he predicts.
Several solutions to promote housing construction are also studied. “We must use all the tools possible so that cities promote housing, explains Massimo Iezzoni. […] At the CMM, we want to create predictable long-term conditions for densification and social housing targets. When we think of housing starts, we now have to think about the affordable, the social and the community. »
The Government of Quebec is asking municipalities to provide measures to promote the availability of housing in order to meet the needs of households.
“It’s a major project that is important because it is part of the foundations of land use planning. We see that in all sectors of the CMM, the population is aging and that we have to look at the type of household we will have, to adjust the housing supply accordingly, and set targets in this regard.
In the Montreal metropolitan area, the price of residential real estate has increased twice as fast as household income since 2010
“In the first quarter of 2022, affordability was at its worst level since the early 1990s in Canada”
100,000This is the number of housing units that are lacking in Quebec
43.2%This is the portion of a household’s income needed to cover housing costs in Montreal.