Quebec's housing crisis is worsening, data confirms

Housing in Quebec is becoming increasingly expensive and increasingly difficult to find.

Data from the Canada Mortgage and Housing Corporation (CMHC) shows the housing crisis is worsening, both in terms of rental costs and availability.

Although landlord and tenant groups interpret the federal agency's data differently, both agree: it's no longer possible to ignore the situation or rely on the market to correct it.

The Association des professionnels de la construction et de l'habitation du Québec (APCHQ) predicts a 32 per cent decrease in the number of rental housing starts in 2023 compared to 2022. In 2022, the decrease was 14 per cent from the previous year.

SERIOUS HOUSING SHORTAGE

The APCHQ estimates a shortage of 100,000 housing units in Quebec, and vacancy rates published by the CMHC support this.

A vacancy rate of approximately 3 per cent is generally accepted as representing the balance between supply and demand.

However, this rate, which was 2.5 per cent across Quebec in 2021, dropped to just 1.7 per cent last year.

In several regions, it's below 1 per cent and even reaches 0 per cent in certain cities such as Gaspé and Roberval, where no housing is available.

In fact, the vacancy rate has fallen below the equilibrium threshold everywhere. In Montreal, it was at 2 per cent, in Quebec City at 1.5 per cent, and it was below 1 per cent in the metropolitan areas of Gatineau, Sherbrooke, Saguenay and Trois-Rivières.

HARMFUL INTEREST RATES

Meanwhile, rental costs have increased everywhere due to too much demand and insufficient supply.

This situation is aggravated by several factors, starting with soaring interest rates. High rates prevent many young households from acquiring property, forcing them to stay on the rental market.

On the other side of the equation, interest rates are slowing down developers, who are forced to charge unaffordable rents to recover their investment financing costs.

In addition, builders are faced with rising construction costs due to inflation, again pushing rents out of line with market prices.

Add to that the catch-up of newcomers, who largely rent upon entering the country, and you have ever-increasing pressure on the market.

As for the calculation of rental cost increases, this is a matter of dispute.

The Corporation des propriétaires immobiliers du Québec (CORPIQ) maintains rents have remained below inflation, which was 6.7 per cent in Quebec in 2022. However, the CMHC's calculations rely on data limited to two-bedroom units and exclude new units.

The group's spokesperson admitted that, even when following the CMHC's method, some rental increases have exceeded inflation in Gatineau, reaching 9.1 per cent.

DISPROPORTIONATE INCREASES

For its part, the Regroupement des comités logement et associations de locataires du Québec (RCLALQ) has calculated increases from data including all types of apartments, including new units, which usually go for a higher price.

The RCLALQ's calculation is hair-raising for moderate-income households that don't receive government assistance.

The organization thus reports average increases of more than 20 per cent in Rawdon (Lanaudière), Cowansville (Eastern Townships), and Gatineau, and more than 18 per cent in Chambly, Brossard and Boucherville (Montérégie), as well as in Verdun and Anjou-Saint-Léonard on the island of Montreal.

Average increases between 10 and 18 per cent, according to the RCLALCQ's calculation, were reported in several Montreal neighbourhoods, but also in the suburbs of the metropolis and in the cities of Longueuil, Shawinigan, Sherbrooke, Saint-Jean-sur-Richelieu, Sainte-Agathe, Granby and Baie-Comeau.

In fact, according to the tenants' rights organization, "no place in Quebec is spared from major increases."

REQUESTS FOR GOVERNMENT INTERVENTION

What can be done? Unsurprisingly, the solutions are diametrically opposed depending on which side of the apartment door you live on.

The RCLALQ is calling for an immediate freeze on rents, followed by a rental cap and the creation of a rent registry. Secondly, it's calling for the accelerated construction of social and affordable housing.

CORPIQ, on the other hand, has always been strongly opposed to rent control. The organization of some 30,000 landlords maintains that this approach would place the rental housing sector "in permanent crisis."

Instead, it wants massive and rapid assistance for the construction of new housing, as well as an overhaul of the regulatory and fiscal framework "that favours the renovation of the current stock, and the massive addition of new housing."

However, the two groups are united in their call to Housing Minister France-Élaine Duranceau to act quickly and with authority to correct a situation that has become untenable for everyone.  

This report by The Canadian Press was first published in French on Jan. 26, 2022.