Media Release: Housing Co-ops Are Getting More Affordable: Report
Published November 08, 2022
Today, a new report comparing housing charges (rents) in co-op housing with rents in similar private market rental buildings was released. It looked at Vancouver, Victoria, Edmonton, Toronto and Ottawa between 2006 and 2021.
The report shows that rent trends in non-profit co-op housing differs dramatically from that of the private rental sector, where rents have increased nationally by 11 percent in the last year alone.
The report found that housing charges (rents) in co-ops have been consistently lower than rents in comparable buildings in the private market, and that the gap has widened over time. While in the early years, the co-op housing costs were, on average, $150-$200 less per month than similar market rental buildings, this gap widened to upwards of $400 to $500 per month in the later years in all cities, except Edmonton.
“Of course, co-ops benefitted from public investment which supported their construction and operation in their early years” said Tim Ross, Executive Director of the Co-operative Housing Federation of Canada. “But the long-term payoff of that investment is clear. 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 individuals and families living in co-ops tend to have lower than average incomes, the affordability of co-op homes has an outsized impact” added Tom Clement, Executive Director of the Co-operative Housing Federation of Toronto.
The report did not consider the impact of separate rental assistance often provided to low-income households living in co-op housing through federal and provincial programs. These programs bridge the gap between the co-op housing charge and what the household can afford. But as governments increasingly support low-income households through rental assistance programs (sometimes called housing benefits), the value of co-op housing is clear.
“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 Officer 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.
And there was no trade-off in the condition of the co-op buildings with their affordable rents. 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,” concluded Ayanna Inniss, Executive Director of the Northern Alberta Co-operative Housing Association.
The Co-op Difference: Comparing co-op and market rents in five Canadian cities was commissioned by the Co-operative Housing Federation of Canada, in partnership with the Co-operative Housing Federation of BC, the Northern Alberta Co-operative Housing Association, the Co-operative Housing Federation of Toronto and the Co-operative Housing Association of Eastern Ontario. It was authored by Greg Suttor, Chidom Otogwu and Nick Falvo in July 2022.
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Background information: key data by city:
- Ottawa experienced elevated rates of market rent increases in 2017–2020.
- Co-op rents were about 80% of market in early years of the study period, and this gap widened to about 65% of market rents in the latter years. There was a very similar widening of the co-op/market gap for all unit sizes (10 to 15 percentage points), except less for studio units.
- Average monthly 1-bedroom co-op rent was about $170 lower than market initially and $420 lower by 2019-2021; for a 2-bedroom, this gap widened from $200 initially to about $525 by 2019-2021.
- Toronto experienced a notable surge in market rents in 2016-2021, which widened the gap between co-op and market.
- Toronto co-op apartment rents were at about 70-80% of market until 2016, and the gap widened to 60-70% of market by 2020-21.
- Average monthly 1-bedroom co-op rent was about $160 lower than market initially and $450 lower by 2019-2021; for a 2-bedroom, this gap widened from about $200 initially to more than $500 monthly by 2019-2021.
- Edmonton’s average market rents were largely flat from 2015 through 2021. This reflected difficult economic conditions and slower growth in the latter 2010s. Edmonton did not experience the post-2015 escalation of market rents that widened the co-op/market rent gap in most cities.
- In that context, though co-op rents were consistently 15 to 25 percent below market, the percent difference between co-op and market rents did not widen but narrowed slightly over the study period.
- Average monthly 1-bedroom co-op rent was about $185 lower than market initially and $235 lower by 2019-2021; for a 2-bedroom, the rent gap stayed the same, at about $257 monthly.
- Co-op apartment rents in Vancouver were at 60-70% of market rent until 2016, and this gap widened to reach 50-60% of market by 2020-21. This trend was driven by escalating market rents.
- Average monthly 1-bedroom co-op rent was about $260 lower than market initially and $560 lower by 2019-2021; for a 2-bedroom the gap widened from $450 initially to over $900/ month by 2019-21.
- Co-op rents were at 65-75% of market in the early years, with a narrowing gap in 2012-2015 (75-85% of market), and then a widening gap to reach 60-65% of market by 2018-2021. The gap between co-op and market rents widened by 5 to 16 percentage points over the period, more for larger unit sizes than for smaller ones.
- Average monthly 1-bedroom co-op rent was about $160 lower than market initially and almost $400 lower by 2019-2021; for a 2-bedroom this gap widened from $200 initially to over $600 monthly by the later years.
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