- One in five young adults in Canada lives in unaffordable housing, with rising housing costs, declining real wages, and increasing job instability as key reasons for limited access to affordable housing.
- Young adults living alone with their children have the highest predicted risk of having unaffordable housing, with foreign-born young adults facing greater risks than Canadian-born peers.
- To reduce young adults’ risk of having unaffordable housing, the Canadian government should increase the supply of affordable housing units that meet their housing needs and allocate more resources to address the housing needs of newcomers to Canada.
Canada is currently facing a housing affordability crisis, with housing prices rising at double the rate of income growth over the past 20 years. This has resulted in a significant number of young adults struggling to afford to house, with one in five living in unaffordable housing, spending 30% or more of their pre-tax income on housing costs. Rising housing costs, declining real wages, and increasing job instability are key reasons why young adults have limited access to affordable housing.
Diversification of young adults living arrangements
As a result of the housing affordability crisis, Canadian young adults are diversifying their living arrangements, with more choosing to live with their parents, extended family, or roommates. The ability to transition into an adult economic role and gain access to private safety nets during financial crises often dictates a young adult’s living arrangement.
Young adults’ housing vulnerability
A study has been conducted to address two questions that have arisen due to the diversification of Canadian young adults’ living arrangements: Who is at the highest risk of having unaffordable housing? To what extent does living with family or roommates reduce young adults’ risk of having unaffordable housing?
The study focused on young adults between the ages of 25 and 34 and found that young adults living alone with their children have the highest predicted risk of having unaffordable housing. Over half of Canadian-born young adults living alone with their children live in unaffordable housing. Young adults who live alone are a close second, with 38% living in unaffordable housing. Living with parents, extended family, or roommates does reduce the predicted risk of having unaffordable housing, but living with parents or extended family provides greater protection than living with roommates.
Unequal risks based on nativity status
Foreign-born young adults are generally more likely than Canadian-born young adults with the same living arrangement to live in unaffordable housing. Fifteen percent of foreign-born young adults who live with their parents live in unaffordable housing, compared to seven percent of Canadian-born young adults. However, foreign-born young adults who live alone with their children are less likely than their Canadian-born peers to live in unaffordable housing. This is partly because a higher share of foreign-born single parents have been previously married.
Particularly concerning is that foreign-born young adults with housing unaffordability issues are disproportionately more likely to have severely unaffordable housing, spending at least half of their pre-tax income on housing.
Reducing housing vulnerability
Canada’s National Housing Strategy aims to invest at least $82 billion to address the housing needs of Canadians, with young adults identified as one of the groups with the most unmet housing needs. To reduce young adults’ risk of having unaffordable housing, the Canadian government should increase the supply of affordable housing units that meet the housing needs of young adults in Canada.
The government should create more affordable housing that can accommodate young adults who live alone or only with their children. Doing so will reduce the burden on families who are forced to subsidize the housing needs of young adults.
To fuel the post-pandemic economic recovery, Canada is aiming to welcome 500,000 new immigrants a year by 2025. Immigration and Settlement Services should consider allocating more resources to address the housing needs of these newcomers into Canada. Doing so will protect immigrants from having severely unaffordable housing and ensure that housing affordability in Canada does not erode any further. Access to affordable housing will create an environment where young adults and all Canadians can thrive.
Conclusion
In conclusion, the housing affordability crisis in Canada has resulted in a significant number of young adults struggling to afford to house, with one in five living in unaffordable housing. The diversification of young adults living arrangements, such as living with parents, extended family, or roommates, has become a common practice to address this issue. However, the study found that young adults living alone with their children have the highest predicted risk of having unaffordable housing, with foreign-born young adults facing greater risks than Canadian-born peers.
To address this issue, the Canadian government should increase the supply of affordable housing units that meet the housing needs of young adults and allocate more resources to address the housing needs of newcomers to Canada. Access to affordable housing is crucial to creating an environment where young adults and all Canadians can thrive.
