Where is the data? Outdated CMHC rental market data is hurting housing across Canada
As of October 2020, CMHC is more than a year behind on providing updated rental market data for municipalities and provinces across the country. The lack of information is having an impact on efforts to address housing needs and is disproportionately impacting some of the most vulnerable people in our society.
While the last available rental market data from CMHC appears to be October 2019, CMHC’s annual fall market updates are based on data collected from Q1 and Q2 of 2019. This means that the most recent rental data available from CMHC is actually based on January to June of 2019. That’s nearly two years ago now; a lot has changed since 2019.
During that reporting period, CMHC had reported that vacancy rates had dropped a staggering 2.6% in Saskatoon.
Since then need and demand had steadily increased prior to the COVID-19 pandemic, with pressure rising in the rental market after years of federal government changes to mortgage rules. The result has been declining rental vacancy rates and rising monthly rents as more people began to compete for rentals.
Now, after years of slower economic activity and rental market tightening, Canadians have had to struggle with the effects of economic shutdowns and record high unemployment due to COVID-19.
Fall 2020 Rental Market Survey Results will be shocking
You can see these market pressures on popular rental listing sites such as kijiji.ca, with fewer listings and higher rental rates. Real time vacancies in Saskatoon may now be much lower and rental rates much higher than CMHC’s last reported rental market information with CMHC data dating back to June 2019.
Nationally, vacancy rate trends across the country dropped for the third year in a row for most major CMAs as the demand for rental housing continues to grow faster than supply. The national average vacancy rate fell from 3% in 2017 to 2.2% in 2019 with many economists citing mortgage rules changes, migration, youth employment and population aging as contributing factors.
Since the pandemic hit, some markets have seen dramatic shifts in demand. In Toronto, many people have exited the once popular city centre in droves, buying large homes in the suburbs to live-work at home as they are no longer required to go into the office for work because of physical distancing measures. Sports and entertainment centers downtown are no longer hosting events or crowds, further reducing the demand for convenient nearby living options. Condos previously rented out units as short term or Airbnb rentals have flooded into the rental market because demand for vacation rentals is now low; this added so many units to the rental market that monthly rental rates have dropped drastically.
Vacancies and monthly rental rates for many rental portfolios have changed so drastically that CMHC’s data is likely to report shocking changes and news to Canadians once the data is finally made available.
CMHC's data would show these shifts. The data helps point to potential housing solutions and opportunities to help return a market to balance. This includes options where more vulnerable persons could be housed or where those who are now underemployed due to the pandemic could be helped.
What would be the reason for delaying previously available and useful quarterly housing information to Canadians? Perhaps delaying the data in this case has bought CMHC time to regroup and prepare before Canadians are made aware of the drastic housing shifts in their municipalities and raising the rental market alarm.
Marginalized populations are disproportionately impacted
The NAHC firmly believes that Saskatoon was trending towards a shortage of rental stock prior to COVID-19; now the impact of the shortage is becoming undeniable and noticeable to the public as they grapple with reduced employment, rising rents and limited options.
As vacancies tighten, landlords become more selective when approving tenants. They tend to give preference to tenants who demonstrate they can pay higher rents and may appear to have the potential for less disruption, unit damage or ongoing maintenance (i.e., fewer children, a confirmed history of good rental references, no pets, etc.).
In these rental markets, younger first-time renters (students), low income households and marginalized populations are disproportionately impacted and left without suitable housing options.
All levels of government, builders, and financial institutions and more rely heavily on CMHC’s timely reporting of housing market data and insights. It has become increasingly difficult to build financially viable affordable housing projects because funding bodies are so reliant on the data from CMHC, which is currently only providing grossly outdated information.
Lack of information problematic for leadership
Service providers continue to advocate for these underserved and under-housed individuals, couples, and families. There is a consensus among the groups NAHC works with that there is an unmet need for affordable rental housing options – specifically, units in good condition, safe neighbourhoods, and deconcentrated options throughout various areas of the city.
This lack of information can be problematic, as evidenced when Saskatoon’s McNab Park homes were demolished this fall. At the time, one city councillor had said he hoped the displaced tenants can take advantage of the city’s depressed rents.
Without the actual data, leaders may be making decisions that don’t align with the reality of the situation. Moreover, financial institutions that are reliant on CMHC’s data are left approving or denying housing project financing without up-to-date information. Many are left drawing anecdotal conclusions or shooting from the hip when facts and data could be available.You can find the most recent data from CMHC on the Housing Market Information Portal.