Advertisement

Unifor Leaderboard

Navigating the housing crisis with poverty wages: What hope for young Canadians?

Canada’s red hot real estate market has been great for investors, but it has shut out many young Canadians, possibly forever

Economic CrisisHousing

We need to change course and start thinking of housing as a human right. Photo by Louis Tricot/Unsplash.

For the last 15 years, young people in Canada have been struggling to meet basic needs amidst a growing housing crisis and a stagnant minimum wage. Now they are trying to navigate a global pandemic in the middle of a climate catastrophe, while wondering if they will be able to afford rent and groceries.

Earlier this year, the Canadian Real Estate Association revealed that the average selling price of a home was $716,000, up 38 percent from 2020. Canada has witnessed a surge of investor activity thanks to falling mortgage rates, which have allowed investors to borrow against their existing properties. While Canada’s red hot real estate market has been great for those looking to invest, retire, or both, it has shut out many young Canadians and first-time home buyers, quite possibly forever.

And while the goal of buying a home is increasingly out of reach, the prospects of finding decent housing on the rental market are not much more promising.

According to Rentals.ca the average rent for a one-bedroom apartment in Canada was $1,800 per month in November, while cities like Vancouver and Toronto topped out at $2,216 and $2,006, respectively. As a result, young Canadians working in service and retail jobs that pay minimum wage can no longer afford rent. As the Canadian Centre for Policy Alternatives showed in a 2019 report, “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.”

How did we get here?

Canada used to have a housing system established to help those most financially vulnerable. From the mid-1960s to the 1970s, the federal government created a national housing supply program that created co-op and non-profit housing. This resulted in the production of 20,000 new non-market housing units a year, offering affordable rent or ownership protected from market forces. But in the 1990s the federal government chose to stop funding new social housing, passing the responsibility of addressing housing needs to provincial and municipal governments. Given the lack of funding for social housing, Canada’s housing system was left almost entirely to the marketplace.

“When the government started to retreat from the housing market, we started to shift the blame onto individuals. So then it became an individual’s fault if they couldn’t afford housing,” says Julieta Perucca, deputy director of The Shift, a right-to-housing advocacy organization.

Zoning also plays a major role in this. Single-family zoning is the primary form used in Canada, especially in major cities. Consequently, Canadian cities have far lower densities than their international counterparts, resulting in high real estate and rental costs as more land is needed to produce the same quantity of available homes.

Greater density doesn’t necessarily mean high-rise complexes. In North America there is a concept in urban planning known as the “missing middle,” which refers to the zoning constraints on building medium density neighbourhoods. Mid-rise apartment buildings, duplexes, and townhouses are missing from much of Canada’s urban landscape. The prospect of these housing types often induces anxiety in those privileged enough to own a single-family home and don’t want their views obstructed by ten-storey buildings. But consider popular cities such as Amsterdam, Sydney, and Berlin, where residential neighbourhoods are almost entirely comprised of the “missing middle.”

The insufficient supply and increasing demand for housing in Canada has resulted in a housing bubble, exacerbated by a speculative real estate market. Young people who work for minimum wage (and the not-so-young—over 10 percent of employees in Canada earn minimum wage) cannot wait for the bubble to burst.

The original purpose of the minimum wage was to prevent employers from exploiting workers and is the minimum amount an employer is legally obliged to pay. This should not be confused with a living wage: the amount needed to provide adequate food, clothing, and shelter.

What currently constitutes a living wage in Vancouver is $20.52 per hour, while minimum wage for the province is $15.20. In Toronto it is $22.08 per hour, with a provincial minimum wage of $15.00. Even in less expensive provinces like Saskatchewan, Manitoba, and New Brunswick where the minimum wage is less than $12.00 per hour, the living wages average at $19.00. In Winnipeg for instance, the living wage has been pegged at $21.20 by the Canadian Centre for Policy Alternatives.

The job market has completely changed as Canada has de-industrialized, and most jobs available to young people are minimum-wage jobs in retail and the service industry.

Young people are sometimes accused of spending too much on extravagances like eating out, or they are told to get a second job to supplement their income, or more education to qualify for better paying jobs. However, millennials are the most educated generation and still many cannot find jobs that pay a living wage.

Some measures have been taken to address these issues. The federal minimum wage will be raised to $15.00 per hour on December 29, 2021. And in 2019, the federal government legislated housing as a human right through the National Housing Strategy Act (NHS). But since the implementation of the NHS, funding for low-income housing has declined, and spending on new construction has been less than promised.

The federal minimum wage of $15.00 does not reflect the cost of fulfilling basic human needs in much of Canada, and it needs to be higher. While raising the federal minimum wage won’t solve the housing crisis, it would provide some young Canadians, and some members of the working poor, the ability to support themselves. Most urgently, we must bring pressure to bear on the Canadian government to implement a new National Housing Strategy that injects billions of dollars into non-market housing and eliminates zoning laws that impede the construction of mid-density housing.

Ayla Peacock is a geography student at the University of Victoria.

Advertisement

Delivering Community Power CUPW 2022-2023