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As classes begin this week and students settle into their new on- and off-campus housing, a new report from Desjardins warns of a shortage of affordable student housing and the resulting consequences for the housing market in general.
“The shortage of student housing should be a concern for all Canadians,” wrote economists Kari Norman and Randall Bartlett of Desjardins. While demand for higher education in Canada continues to rise, the availability of student housing has not kept pace, the authors said.
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Because of Canada's lack of purpose-built student housing (PBSA), many students live in off-campus housing, which is often more expensive and increases their debt burden. The influx of students into the surrounding community, in turn, reduces the housing supply and drives up rental prices for everyone, particularly affecting low-income families and young adults.
Desjardins estimates that 1.2 million students rent in the neighborhoods surrounding their post-secondary educational institutions.
“Increased demand from students means there are fewer rental apartments available for other residents,” the report says, especially given that rental housing construction in some cities has lagged behind population growth for decades.
Although many students—especially first-year and international students—would prefer to live in PBSAs or on-campus residence halls, there simply aren't enough spaces. On-campus residence halls, which provide students with a close-knit community and access to valuable programs and services, help reduce isolation, and promote academic success, are at nearly 100 percent capacity.
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As a result, such accommodation is available to only about one in ten (or 10.3 percent) of Canadian students, according to a survey conducted by Bonard Global Market Research and cited by Desjardins. The lack of safe and affordable housing could deter international students from pursuing post-secondary education in Canada, the report warns.
In most Canadian cities, the vacancy rate for rental apartments is already very low—in many of them it is almost zero. This makes it even more difficult to find available spaces.
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The Desjardins report found that investors often charge more to students paying per room than they would to a single family for the same apartment. And potential investors often bid more than potential homeowners, further driving up real estate prices.
“The student housing crisis is not just a student problem,” the Desjardins report says.
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