$32 hourly minimum wage needed to afford renting in Vancouver: report

Housing in Vancouver is so unaffordable that the minimum wage would have to practically double to bring people into “affordable” housing – and even then, it wouldn’t be enough.

According to a new report from the Canadian Centre for Policy Alternatives (CCPA), exactly 0% of Vancouver neighbourhoods have affordable one- and two-bedroom rental units for full-time minimum-wage workers.

The study looked at the gap between minimum wage and what it costs to rent an apartment in Canada, calculating a “rental wage” needed to work a standard 40-hour week and spend no more than 30% of one’s income on rent.

CCPA found that the rental wage is higher than the minimum wage across Canada. And higher minimum wages don’t translate into better living conditions “because landlords capture a larger share of those wages through high rents.”

Here’s what the study shares about affordability in Canada and what steps can be taken to bring people into affordable housing.

What does affordable housing mean?

For housing to be considered “affordable,” it must cost folks no more than 30% of their income.

“In Vancouver and Toronto, even two full-time minimum-wage workers cannot afford a one-bedroom unit without spending more than 30% of their combined income on housing,” reads the report.

In cities with rental markets like Vancouver, people aren’t always able to meet this affordability threshold. According to liv.rent data from October 2022, renters on its platform were spending 51.37% of their income on rent.

Earning a rental wage

Back in October 2022, a minimum wage earner in Vancouver was bringing home $15.65 per hour. Now, the minimum wage is higher, at $16.75 per hour. In October 2022, minimum wage earners needed to bring home $32.36 per hour to afford a one-bedroom apartment or $42.60 per hour to afford a two-bedroom apartment.

This data is based on October 2022 rental prices. Last fall, it cost $2,256 on average for an unfurnished one-bedroom apartment in Metro Vancouver. As of July 2023, that price has jumped to $2,381, according to liv.rent rental data.

Helping people afford to live here

The CCPA says that looking at these issues in terms of supply and demand is a problem and that simply adding more supply won’t be enough to bring get folks into affordable housing.

“More housing anywhere at any cost will simply enrich developers and allow landlords to continue to extract ever higher rents from the tenant class,” reads the report.

Purpose-built rental units, a larger share of rental housing outside of the for-profit rental market, and regulation that prevents profiteering in the private rental market are all needed.

What do you think we should do about the affordability crisis?

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