Now that's grim: Two Canadian spots among 10 of the most "impossibly unaffordable" cities
A new housing report lists the top 10 “impossibly unaffordable” cities; unfortunately, two major Canadian cities are among them.
The Frontier Centre for Public Policy (FCPP), a Canadian think tank, released the 2024 Demographia International Housing Affordability Report on June 3.
Authored by FCPP senior fellow Wendell Cox, the report assesses housing affordability in eight countries across 94 major markets — Australia, Canada, China, Ireland, New Zealand, Singapore, the UK, and the US — and covers the third quarter of 2023.
Cox used a median price-to-income ratio (median multiple) to determine affordability and rated housing markets from “affordable” to “impossibly unaffordable” based on this median multiple.
Reserve Bank of Australia and Demographia (FCPP)
Canada’s housing affordability falls in the “severely unaffordable range” (median multiple 5.6). Still, the report stresses that affordability varies significantly between markets within the same country, and national averages aren’t always representative.
Any market with a median multiple over 9.0 was considered “impossibly unaffordable.
Hong Kong was the least affordable market (in the English-speaking world) (16.7). Three Australian cities were also in the top 10: Sydney (13.3), Melbourne (9.8), and Adelaide (9.7).
The list included US markets San Jose (11.9), LA (10.9), Honolulu (10.5), and San Diego (9.5).
Toronto’s score of 9.3 fell into the “impossibly unaffordable” category, while Vancouver’s was a whopping 12.3.
“Vancouver is the least affordable in Canada and the third least affordable of the 94 markets. [It] has been the first, second or third least affordable major market for each of the last 16 years,” Cox noted.
The report also highlighted how housing affordability, in particular, has decreased in BC and the Greater Toronto Area and Greater Golden Horseshoe region since 2015.
“Troublingly, impossibly unaffordable housing in the Vancouver market has also spread to smaller BC markets in British Columbia, such as Chilliwack, the Fraser Valley, Kelowna, and markets on Vancouver Island,” the FCPP senior fellow shared.
“From 2015 to 2023, housing affordability worsened by the equivalent of 2.5 years of median household income in smaller markets outside Vancouver, an even greater loss than the 1.2 years in the Vancouver market itself.”
Toronto made for the second least affordable market in the True North, ranking 84th out of 94 markets in international affordability.
“As in Vancouver, severely unaffordable housing has spread to smaller, less unaffordable markets in Ontario, such as Kitchener-Cambridge-Waterloo, Brantford, London, and Guelph, as residents of metro Toronto seek lower costs of living outside the Toronto market,” added Cox. “From 2015 to 2023, housing affordability has worsened by the equivalent of 3.3 years of median household income in smaller markets outside Toronto, a greater loss than the 2.6 years in the Toronto market itself.”
According to Cox’s analysis, Edmonton was the most affordable market in Canada, with a “moderately affordable” median multiple of 3.6.
Calgary was not so lucky — with a score of 4.6, it fell in the “seriously unaffordable range.
Both Montreal (5.8) and Ottawa-Gatineau (5.3) were in the severely unaffordable category.
What should be done about this?
Cox said a strong association exists between severely unaffordable housing and net domestic out-migration in Canada.
The fast-increasing inability to own a home is threatening the middle class.
On Thursday, June 13, Cox FCPP’s David Leis interviewed Cox on his YouTube show Leaders On The Frontier.
He noted that the inability to buy a home can be devastating for a country and affect fertility rates dramatically. He agreed with Leis when he said, “We’re killing the future of the next generation.”
“We all know about the one-child policy in China and the devastation that’s created. Korea never had a one-child policy. Yet, it has a lower fertility rate than that of China. It’s got the lowest in the world,” he said, referring to housing unaffordability in Korea.
“And why people can’t afford housing [is] because they played around the same with the same kind of regulations that your planners in Toronto and Vancouver have been playing around with for between 20 and 50 years at this point.”
The analyst said housing planners have many zoning ideas, but none considering Canadian families’ needs.
“The City of Vancouver allows up to six units on a single-family lot. But, you know, a family is not looking to live in a garage or an accessory development. Accessory units are fine. Yeah, grandma, grandpa, put them in there. That’s great. That’s wonderful. But raising a family, you don’t do it in a condominium building, and you don’t do it in the backyard,” he stressed.
Cox said housing planners don’t understand this because they see housing as a commodity.
He believes Canada can make affordable cities a reality if it “opens up the land.”
“The amount of agricultural land in Canada has been reduced by 8000 square kilometres in the last 70 years. Now everybody will say, ‘Oh, that’s because the cities have spread.’ No. If you take every square kilometre of urban land developed since John Cabot landed, it is only 18,000 square miles or square kilometres,” he shared.
“The urbanization of Canada is very, very small. There is plenty of room to allow cities to grow without compromising your ability to grow crops and livestock. The planners are very much opposed to what they like to call ‘urban sprawl.’ Urban sprawl is when a city grows crops,” he argued.
“Urban expansion vs. poverty”
Cox said Canada’s housing planning woes exist between the question of urban expansion vs. poverty.
“When someone has to go and wait 10 years for an affordable house because the local affordable housing wait list is 10 years long, they’re in poverty! If you have to live in subsidized housing, you are in poverty,” she shared in the interview.
“This is a question of urban expansion versus poverty, and if you’re in favour of poverty, then by all means, support urban growth boundaries and agricultural preserves. But if I hear a politician who will not allow the city to expand to accommodate new people at prices they can afford so they can live as well as you and I do, they aren’t serious, and this is a real problem.”
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