Canada’s housing co-ops beat the market on affordability, report shows

A study of rents in Victoria, Vancouver, Edmonton, Toronto and Ottawa and found the difference is becoming more marked as inflation hits the private sector

report comparing rents in five Canadian cities found that co-op apartment rents were consistently lower than market apartment rents over the 2006-2021 study period.

The study, commissioned by the Co-operative Housing Federation of Canada (CHFC), compared the housing rents in Victoria, Vancouver, Edmonton, Toronto and Ottawa. It comes at a time of renewed government interest in the sector, with federal plans for a CA$500m investment in co-op house building.

One of the report’s main findings was that for one and two-bedroom apartments, co-op rents were about 25% lower than market early in the period (75% of market rents), declining by the end to one third lower than market (67% of market).

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It says the widening gap between co-op and market rents was driven by the greater rate of annual increase in market rents (3% to 4% annually versus 2% to 3% in co-ops); this applied in most cities and sub-periods and most pronounced as market rents escalated in 2016-2021. As such, the rent gap between co-op and private sector one- and two-bedroom apartments was mostly between CA$150 and $250 per month in the early years, increasing to $400 to $500 monthly by the later years.

Figures varied across the cities, the report adds. If in Vancouver, a city with high market rents, the gap between co-op and market was greater than elsewhere, it did not widen as much over the period. By contrast, in Edmonton, which was characterised by flat rent trends in the private market, co-op rents were only 15 to 25% below market over the period.

The study also revealed that townhouses diverged less from market than apartments with the rent gap between co-op and private-sector townhouses being ranging between $200 and $500 per month and reaching $700 or higher in the more expensive cities in the later years of the period.

According to the report, Canadian housing co-operatives also tend to provide homes for disadvantaged communities, such as lone parent households or ethnic minority residents. The report mentions a 2017 survey by the Confédération québécoise des coopératives d’habitation (CQCH), which found that a majority of co-op members were women (61%) with an average age of 54. Around 18% of co-op members were born outside of Canada, and 31% had at least one child.

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The survey found that housing co-ops in Quebec also tended to provide homes to families and individuals whose average income was below the $47,000 average household income for renters across Quebec in 2016. The average household income in 2016 was just under $32,000 and more than one in three households had an income of less than $20,000.

“Because individuals and families living in co-ops tend to have lower than average incomes, the affordability of co-op homes has an outsized impact,” said Tom Clement, executive director of the Co-operative Housing Federation of Toronto, said in press release published by CHFC.

In light of the report’s findings, CHFC argues that public investment which supported the construction and operation of housing co-ops in their early years provided a “long term payoff”.

Tim Ross, executive director of the CHFC, said: “We now have permanently affordable co-ops across the country that enable people to put healthy food on the table and save for their children’s education, along with living securely.”

“Because of the relative affordability of co-ops, the cost to government of supporting low-income households in co-op housing is much lower than supporting those same households in the private market. And based on the trends outlined in the report, we expect the savings to government to only increase,” said Thom Armstrong, chief executive of the Co-operative Housing Federation of BC.

“Not only does the mixed-income model of co-op housing create inclusive, supportive communities, it makes financial sense,” added Jovette Fournier, executive director of the Co-operative Housing Association of Eastern Ontario.

The study points out that 97% of co-ops in the same administrative area as those studied in the report were rated as being in excellent, good or fair physical condition in 2020.

“Co-operative housing has long been a source of affordable, secure housing in a community setting, but given the inflationary situation all Canadians are facing – along with the insecurity that comes with rapidly rising rents in the private market – the benefits of co-operative housing have never been clearer. Now we just need to build more of it,” said Ayanna Inniss, executive director of the Northern Alberta Co-operative Housing Association.

With thanks to AncaVoinea,

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