The housing crisis cost the Quebec economy $4.2 billion in 2021.
The Quebec Inequality Observatory released this Wednesday the first part of a major study conducted with several public health departments entitled “The Collective Cost of the Housing Crisis in Quebec,” the results of which are thought-provoking.
This $4.2 billion figure represents the money that households spending 30 per cent or more of their gross income cannot inject into the economy by devoting it to other expenses. And the number of households in this situation in Quebec is staggering: a detailed analysis of cross-referenced data from the 2021 Canadian Housing Survey and the 2019 Survey of Household Spending concludes that more than 510,000 Quebec households spent 30 per cent or more of their total income on housing costs in 2021, or nearly one in six households.
Probably worse in 2025
Furthermore, this portrait is not up to date since it uses data from 2021, explains Ferdaous Roussafi, economist at the Observatory and lead author of the study, in an interview with The Canadian Press. “With the rise in rents in recent years, we assume that this number increased between 2021 and 2025.”
This assumption is undoubtedly justified in light of the rental data released last week by Rentals.ca, which shows an average rent increase of 15.8 per cent over the past three years in Quebec.
Although renters are the largest group in this group, there is also talk of homeowners in this situation of “exceeding the affordability threshold.” As expected, this burden falls primarily on low-income households, with 40 per cent of the population with the lowest incomes, or less than $38,000 per year, bearing 70 per cent of the hefty $4.2 billion bill.
“These vulnerable households bear a disproportionate burden for housing compared to their other expenses,” explains Ms. Roussafi.
Too Much Expensive Housing…Vacant
The study also shows that the losses also affect landlords. For example, in the metropolitan areas of Montreal and Gatineau alone, researchers identified nearly 3,000 unaffordable housing units (those with a monthly rent of more than $1,700) vacant in 2024.
This represents an economic loss of more than $41 million, demonstrating that we are not building what the market needs. “Demand is stronger for affordable rentals, whose vacancy rate is very, very, very low, approaching zero per cent. So yes, investments are being directed to where demand is truly weaker.”
Certainly, Quebec has enhanced its assistance programs, investing $204 million in the Housing Allowance and $140 million in the Rent Supplement in 2024, providing relief for overwhelmed tenants, but also placing additional financial pressure on public finances.
“These are temporary measures to mitigate the crisis, not to resolve it,” notes Ferdaous Roussafi, “but they are not structural measures. In times of crisis, these investments remain very important, but a large part of them could be avoided if there were structural solutions such as increasing the supply of social housing or diversifying and protecting the affordability of the residential rental stock.”
“An investment, not an expense”
“We must view housing as a societal investment and not an expense,” argues Dr. Mylène Drouin, Director of Public Health for the Montreal region.
Citing the example of several European countries, notably Denmark and Austria, “their model shows that it’s profitable to invest in social and community housing, and we end up recouping our initial investment, because it costs so much not to house people adequately,” she explains, thus justifying public health’s intervention in this matter.
“Housing is probably one of the most important and fundamental determinants of health in terms of its multiple impacts on the health and well-being of populations. And also on social inequalities in health,” she continues.
Significant healthcare costs
“Poorly housing people is extremely costly in healthcare,” she emphasizes, pointing out the negative effects on child development, domestic violence, mental health, and the physical health of people living in cramped, unsanitary, or poorly insulated housing. Ultimately, unaffordability can lead to homelessness, which has very high social costs.
“One of the repercussions,” continues Dr. Drouin, “is that people are having to cut back on groceries, obviously. Now, at food banks, we’re told that the faces have completely changed. We have people who have one or two jobs, yet still have to go to food banks.”
The list of costs associated with the housing crisis grows longer when we add exile, adds Ferdaous Roussafi.
“Unaffordability can push people to move to the outskirts,” she says, noting that census data shows that 8 per cent of people who moved in 2021 did so to reduce housing costs.
The consequence? The distance between home and work can have negative effects on quality of life, increased transportation costs, as well as environmental impacts and wear and tear on road infrastructure.
In all regions
And we’re not just talking about urban areas, emphasizes Mylène Drouin.
“For several years now, all regions have been affected, sometimes with issues that are experienced a little differently, but the fact that people, with urban sprawl, have to go much further to try to find something that meets their needs is something that is experienced in all regions. We’re also seeing this in the issue of homelessness, which is clearly linked to this crisis and is now no longer a uniquely Montreal phenomenon.”
This first part, focusing on the impact of the housing crisis on economic prosperity, will be followed by several others to provide evidence on what we already know intuitively, says Roussafi.
“We still need to measure the real costs in terms of health, homelessness, domestic violence, or in relation to academic performance, the energy consumption of poor-quality housing, and so on.”
The final component will consist of offering possible solutions that Mylène Drouin hopes will involve a clear recognition of the right to housing, the development of social and community housing, the protection of affordable housing stock, and curbing the speculation that constantly pushes rents upwards.
“It would be a great social project. We did it for education in the 1970s, and we did it for daycare centers later. Perhaps now we’ve reached a social project on the subject of housing for all.”
–This report by La Presse Canadienne was translated by CityNews