- Housing affordability in HRM has collapsed since 2014
By Alex Whalen and Austin Thompson
Opinion, Fraser Institute
No major Canadian city has been spared from the housing crisis, but few have seen affordability deteriorate as steeply as the Halifax Regional Municipality (HRM). But this trend is neither inevitable nor irreversible. The solution lies in building more homes—a goal that, in large part, depends on government allowing new housing developments.
The HRM’s housing reality is grim. For many families, buying a typical home is simply out of reach. But of course, it wasn’t always like this.
For example, as noted in a new study, in 2014, a typical family earning the HRM’s median income had to save $51,500 (the equivalent of 12.6 months of after-tax income) for a 20 per cent downpayment on a typical home. A decade later, in 2023 (the latest year of available data), that figure had ballooned to 20.2 months ($104,660).
Of course, the down payment is only half the battle. In 2014, that same family had a monthly mortgage payment of $1,092 (or 26.8 per cent of its after-tax income). By 2023, that mortgage payment had increased to $2,689 (or 52.0 per cent of its after-tax income)—a huge financial burden unless that family can share housing costs (e.g. live-in tenants) or rely on support from family or other sources.
Put differently, buying a typical HRM home in 2023 cost twice the share of the median family’s after-tax income as it did in 2014. As a result, many middle-income families cannot realistically afford to buy typical homes in today’s market.
Rents, too, have skyrocketed. In 2023, renting the median-priced rental unit required 28.5 per cent of the median after-tax family income ($1,475)—up from 20.9 per cent ($850) in 2014.
As Canadians across the country know all too well, the HRM is not the only urban area with affordability woes. In 2023 (again, the latest year of data), the HRM ranked 17th out of 36 major Canadian cities in terms of housing affordability relative to family income—the same rank it held a decade earlier in 2014. That’s because, while the HRM has suffered a sharp decline in affordability, many other cities have, too.
But dig below the surface, and the HRM’s housing affordability crisis is unique in many respects. From 2014 to 2023, the HRM saw the largest increase in typical home prices (relative to median after-tax family income) of any major Canadian city outside Ontario and British Columbia—the two most expensive provinces in the country. Homes in the HRM are considerably more expensive (relative to family incomes) than in other Atlantic Canadian cities. And renters in the HRM paid the fifth-highest rent in the country (relative to family incomes) in 2023, behind only Toronto, Vancouver, Kelowna and Kitchener-Cambridge-Waterloo.
The key question—why?
At its core, the HRM’s housing crisis stems from housing supply not keeping up with housing demand. Immigration-fuelled population growth has spiked demand for housing, and while homebuilding has increased, it hasn’t kept pace. Simply put, when more people chase too few homes, prices rise.
But while the HRM and the provincial government have little say over federal immigration policy, they can enact policies that encourage more—and more affordable—housing development. And to their credit, both the HRM and the provincial government have taken steps in this direction—but more can be done.
Between 2022 and 2024, the HRM halved the time it takes to approve new housing projects (from 20.8 months to 9.8 months), yet homebuilders still wait roughly three times as long for municipal approvals as they do in Charlottetown (3.5 months) and Moncton (2.4 months). Although the city and province have relaxed rules around what types of homes can be built, builders still face restrictive rules and a variety of government-imposed costs that make housing harder to build. Meanwhile, provincial rent controls continue to deter the investment needed to expand the rental housing stock—a policy the Houston government should abandon.
To make real progress in tackling the housing affordability crisis, the HRM and the Houston government must move faster and go further to help make homebuilding easier, cheaper and quicker. That’s the best way to help families realize their dreams of homeownership.
Alex Whalen and Austin Thompson are analysts at the Fraser Institute.
Alex Whalen is director of prosperity Atlantic region for the think-tank, Fraser Institute. His office is at Duke Tower, Scotia Square (The Notebook).
