It is obvious that Canada is experiencing a housing crisis.
Having a suitable place to live, whether it be purchased or rented, is appearing more out of reach for ordinary families as time goes on. What causes such a housing crisis, and is there an end in sight?
Perhaps the biggest driving forces behind the housing crisis are availability and affordability. These two factors are very closely related to each other.
Generally, the more available something is, the more affordable it is. This is why, for example, in the early stages of the COVID-19 pandemic, many jurisdictions, including Ontario, had laws in place forbidding anyone from selling commodities that were in short supply, such as toilet paper, at unfairly marked up prices. Otherwise, those desperate for toilet paper would have been willing to pay top dollar, leaving those with lesser financial means stuck.
Is this what is happening with housing? The short answer is, probably.
With not enough homes to satisfy all of those seeking housing, the market reached a remarkable climax earlier this year, with reports of houses being sold thousands or even hundreds of thousands over their already-inflated asking prices.
Simply put, with so many people seeking housing, potential buyers with good financial resources are able to secure a house by enticing its seller with a high bid, while others with less capital and lower credit are left with few viable options.
A recent Financial Post article suggests that housing has been in short supply in Canada for decades, because inadequate planning has gone into ensuring that there are appropriate accommodations to match the country’s population growth.
The article points to historical pieces in Maclean’s Magazine that discussed housing availability and affordability issues dating back to the 1960s. However, the extreme inflation and bidding wars that were seen during much of 2021, and continue to be seen to some extent, set the current situation apart.
An article published by Statistics Canada in 2020 argues that the COVID-19 pandemic has raised awareness of the importance of a comfortable, preferably large, home as people are generally spending more time at home.
This could explain the increase in demand and decrease in availability of housing, and therefore, the rising costs.
Of course, each region is different when it comes to housing. How do North Grenville, North Dundas, and Merrickville-Wolford compare with other regions of Canada when it comes to housing availability and affordability?
It can be difficult to get reliable data for specific municipalities. A report compiled by the Canada Mortgage and Housing Corporation lists rent cost data for North Grenville as “too unreliable to publish” in the reporting period between 2016 and 2020, and North Dundas and Merrickville-Wolford are too small to even be included.
However, inferences can be made from more general data released by the Canadian Real Estate Association (CREA). This data shows that average house prices in Ottawa rose 16.3% between September 2020 and September 2021, culminating in a $639,000 average home price.
Cornwall and District saw an 18.5% increase during the same period, with an average September 2021 home price of almost $381,000.
As our local region lies between these two districts, it stands to reason that the area falls somewhere in between in terms of average housing costs.
The market for renters is similar. With not enough rental units available for those seeking one, many landlords naturally welcome the financial advantages of having many tenants competing for one spot, with some recent reports of landlords requiring potential renters to bid on a unit.
Finding a solution to the housing crisis is not easy. For one, it seems that many more new homes are needed to meet the current demand, which would, in turn, lower inflated prices back down to fair market value.
North Grenville Mayor Nancy Peckford set up an affordable housing task force, which produced a final report in March of 2020. The report had 18 recommendations that cover areas such as defining affordability, planning infrastructure, and commissioning more action, including an Affordable Housing Advisory Committee.
It remains to be seen if the housing and rental markets will continue to unfairly favour those of greater financial means, or if, in time, this gap will be bridged.