Study Links Rising Rent Prices to Increased Homelessness in Canada

📅 3 days ago

A new study by the Canadian Alliance to End Homelessness reveals a direct correlation between rising rental costs and increasing homelessness across Canada, particularly affecting communities with dwindling low-cost housing options.

A recent study conducted by the Canadian Alliance to End Homelessness (CAEH) has unveiled a significant relationship between rising rental prices and increasing homelessness in Canadian cities, marking the first research of its kind in the country. The report asserts that there is a clear link between housing affordability, vacancy rates, and the surge in homelessness, challenging previous assumptions that merely observed correlation without establishing causation.
The CAEH's findings indicate that homelessness has escalated in regions where the availability of low-cost rental housing has diminished and become more expensive. According to their research, which analyzed data from 36 Canadian communities, the areas experiencing the steepest rent increases and the lowest vacancy rates for affordable rental units also recorded the sharpest spikes in homelessness.
Hamilton, Ontario, serves as a prime example within the report. The city witnessed a significant decline in vacancy rates for its lowest-cost rental units, plummeting from 2.3% in 2018 to just 1.2% in 2024. During the same timeframe, rental prices surged by approximately 47%, reaching an average of $1,200 per month. In stark contrast, the median income for a single person in Hamilton only increased by about 18.9%. This disparity has contributed to a staggering 224% rise in homelessness within the city.
The CAEH emphasized the strong correlation between homelessness rates and rental prices for the lowest-quartile units, concluding that communities where rent prices escalated most steeply tended to experience the highest homelessness rates. Their analysis further revealed a statistically significant relationship between increased asking rents and rising rates of homelessness across the most populous Canadian Census Metropolitan Areas (CMAs).
Communities such as Toronto, Kelowna, and Kitchener-Waterloo, which boasted the highest average rent prices in 2024, also reported elevated levels of homelessness. Conversely, cities with lower average asking rents, including Edmonton and Winnipeg, generally exhibited lower rates of homelessness.
The study also indicated a troubling trend: as vacancy rates for low-cost rental units decreased, homelessness rates increased in tandem. Areas with the most significant declines in affordable housing saw the largest upticks in homelessness, while those with improved vacancy rates experienced only modest increases in homelessness.
The CAEH's preliminary findings underscore the urgency of addressing the growing affordability crisis in the rental market. Their analysis suggests that while average rents across Canada are on the decline, the situation for low-cost rentals remains dire. Notably, even in markets such as Halifax and Moncton, the lowest-cost rental options are becoming increasingly unaffordable.
To quantify this crisis, the researchers employed an affordability ratio metric, revealing that out of the 36 communities analyzed, 27 reported an increase in the affordability ratio. Alarmingly, 24 of these communities found that the average price of low-cost rentals had more than doubled beyond what is considered affordable based on income levels.
Despite the expansion of rental housing supply in recent years, the benefits have not reached Canadians at the highest risk of homelessness. The new supply is predominantly targeted at the higher end of the market, leaving those at the lowest end of the rental spectrum to face rising prices and dwindling availability. The report concludes with a clear warning: many Canadians are finding it increasingly difficult to afford even the cheapest rental units in their communities, exacerbating the growing affordability gap and pushing more individuals into homelessness.

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