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Newcomers to Canada Struggle with Rental Housing Crisis

FILE - A masked pedestrian walks through downtown Toronto, Canada, Sept. 10, 2021.
FILE - A masked pedestrian walks through downtown Toronto, Canada, Sept. 10, 2021.

Canada is engaged in a losing race to keep up with an unprecedented level of demand for rental housing, leaving a record number of new immigrants to scramble for a place to live.

In several of the country's major cities, including Montreal, Vancouver and Halifax, vacancy rates stand at 1% or lower. In Toronto, the nation's largest city, the rate is only slightly better at 1.8%, with monthly rents averaging more than $2,260.

"When we say Canada has a housing crisis, we mean it," said Lisa Hayhurst, chair of the Dartmouth, Nova Scotia, chapter of social justice organization ACORN, in a statement emailed to VOA.

"Unaffordable housing has for years been a reality for low income renters. Now it is so bad that it is crippling for even some middle income renters. People on fixed incomes without subsidies are out of options.

"Seeing people living in tents is a common sight in parks across the country," Hayhurst continued. "New Canadians are quickly realizing that they can't afford an apartment on the low-wages they earn. Something has to give."

Canadian bank RBC predicts that the current unmet demand could quadruple by 2026, warning that there needs to be faster construction of rental housing. But it is not clear how that can be achieved.

The Financial Post newspaper reports that 2022 was a banner year for rental housing construction, with 70,000 units completed, "the highest rate of completion in almost a decade." But experts told the Post that annual construction will need to increase by 20% to avoid an even more serious shortage.

Among the groups most affected by the housing crisis are immigrants — often referred to as "new Canadians" or "newcomers" — who are being admitted to the country in record numbers, partly in response to a post-pandemic labor shortage.

The Canadian immigration department has set a target of admitting 465,000 permanent residents for this year, 485,000 in 2024, and 500,000 in 2025. Altogether that would boost the total population, now at 38.5 million, by almost 4%.

Carolyn Whitzman, a University of Ottawa professor who has studied the issue, said only single mothers with children are more likely than new migrants and refugees to end up in crisis-level housing need.

She told VOA that Canada is offering life in the biggest Canadian cities to migrants, including students whom the country needs to prop up its universities in the face of declining enrollment. But, she said, this is proving to be "a false promise."

An example of what many new Canadians are experiencing was described by Setareh, a single 41-year-old public relations professional who arrived in Toronto from Tehran a year and a half ago.

"Last August, I began searching for a one-bedroom apartment and encountered what I believe to be one of the most challenging periods in recent years, exacerbated by the ongoing pandemic," said Setareh, who asked for privacy reasons to be identified by only her first name.

"Numerous individuals outbid me on every apartment I considered. Furthermore, as a newcomer, I lacked a credit history, a vital requirement for landlords. Despite offering to pay six months' rent in advance, along with the last month, I found myself competing against a few individuals willing to pay an entire year's rent upfront. As you may know, newcomers often have limited budgets.

"I reached a point where I had to increase my budget, consider alternative locations, and lower my expectations," she said.

A tent encampment of the unhoused in Halifax, Canada, on the grounds of a downtown hospital near Dalhousie University campus.
A tent encampment of the unhoused in Halifax, Canada, on the grounds of a downtown hospital near Dalhousie University campus.

Shashank Mutalik, a 37-year-old marketing professional, encountered many of the same problems when seeking rental housing for his family of three in Vancouver.

"As newcomers you have no past landlord references in the country and with no one to vouch for you," Mutalik said.

"As a newcomer you aren't earning that well and the rent forces you to consume your settlement funds very, very quickly. What's more you get outpriced — decent apartments routinely get offered higher than asking rent, and you are left gasping trying to match the more established competition looking for rentals."

Mutalik told VOA that his family was rejected from all 35 apartments they have applied to so far and was lucky to find temporary housing while continuing the search.

As difficult as it is for immigrants, native-born Canadians are also frustrated by the housing shortage and rising rents, a problem that has been years in the making, according to Kate Choi, a Western University professor who wrote about the rent crisis in the popular progressive publication The Conversation.

"There's quite a bit of work that suggests over the past few decades, the housing shortage has been partly generated by the fact that the supply of housing has not kept pace with the demand in housing and the growth of population, particularly metropolitan areas," Choi told VOA.

She noted the rapid growth in major population centers, "whether from internal migration of Canadians or international migrants."

"That usually has the benefit of filling a lot of the labor shortages that exist in different areas," she said. "But in places that there is a housing shortage, it is possible that you will have more people needing housing. The best way to mitigate is to take active steps to build more housing."

Whitzman outlined several policy changes that she believes could ease the crisis, including changes to tax laws that would incentivize property owners to build more housing rather than simply waiting for properties to appreciate in value.

She also called for various levels of government to make a major investment in social housing — a term that applies to a range of models involving some degree of public financing and management of rental properties.

"By social housing I mean housing outside the private market," Whitzman explained. "Public housing provided by provincial or municipal government, community housing by nonprofit organizations [including supportive housing], and co-operative housing are the three main categories. Of 650,000 social homes in Canada, 600,000 date from before 2000."