STUDENT HOUSING SHORTAGE BECOMES EVEN MORE ACUTE WITH RECORD IMMIGRATION FLOWS
The record arrival of more than one million new immigrants and non-permanent residents (mostly international students) last year has further fuelled the demand for rental housing while the growth in rental supply has been deficient.
Large rent increases have been reported in large and small towns across the country, and that affects low-income households more. College and university students constitute a large segment of the low-income population, so they are facing increasing hardship because of insufficient affordable rental accommodation on or near campus. Furthermore, most international students come from countries with lower incomes than Canada, making them even more susceptible to rapidly escalating rents.
Rental housing shortage is a big concern for students in large housing markets such as Toronto and Vancouver, but shortages can be an even bigger problem in small university towns. The housing stock in less populous towns simply does not provide enough safe and affordable off-campus housing opportunities within a short commute. Students, therefore, must compete for space with higher-earning would-be renters.
Already, on- and off-campus housing shortages are restricting the growth of universities and colleges. In Sydney, N.S., Cape Breton University had to cap admissions to its two-year post-baccalaureate program because of a lack of housing opportunities in a town that is home to fewer than 20,000 residents. The program was hugely popular with international students, but the housing shortages got in the way.Until recently, the United States was the destination of choice for hundreds of thousands of international students. But policy changes under former president Donald Trump made the U.S. less welcoming to international students, who shifted their attention to Canada, among other places, as a result.
Those international students who choose to stay will help address the impending labour shortages in Canada since the pandemic motivated many workers to retire sooner. But that’s a double-edged sword. On one hand, tens of thousands of international students are needed to help sustain innovation in engineering and other labs. On the other hand, they are exacerbating the rental housing shortage.
“International students get hit particularly hard as they are ineligible to collect the $500 top-up to the Canadian Housing Benefit, which is designed to help households facing surging rents,” Mike Moffatt, founding director of Smart Prosperity Institute, said in a recent assessment of the 2023 federal budget.
Student housing shortages have already attracted the real estate industry’s attention. A trade conference by the Student Housing and University Real Estate Initiative (SHURE) will be held later in April at the University of British Columbia that will bring together representatives from universities, colleges, real estate management firms, investors, institutional landlords and others.
Numerous new student housing initiatives are in the works in British Columbia. For example, Vancouver Community College is building 3,300 apartments to provide affordable housing alternatives for students.
The initiative benefits from a 2018 promise by the B.C. government to invest $450 million in 5,000 additional student housing spaces. A crucial part of the B.C. government plan was to enable colleges and universities to take on debt for new student housing initiatives. Before 2018, such institutions (except UBC) were not authorized to do so.In Hamilton, McMaster University plans to construct a 30-storey academic hub downtown, which will include 600 graduate student housing spaces. The $100-million hub will be accompanied by another $150-million project offering 1,366 beds for undergraduates. In addition, the mixed-use buildings will house supporting facilities, such as fitness centres, to help meet students’ shelter and related needs.
Universities across Canada offer an extensive portfolio of student housing spaces and services. For example, McMaster provides 4,000 student beds spread across 13 residences, and UBC houses 13,000 students in Vancouver and 2,120 students at its Okanagan campus.Providing additional student housing should be a priority to attract the best talent from across the globe to Canadian universities. Provinces such as B.C. have taken steps to expand student housing facilities, but much more is needed, especially from the federal government, which regulates the flow of international students, but does not do much to assist with student housing.
Story by: Financial Post