Canada needs more students, but that means fixing housing woes first

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Canada must prioritize higher education and affordable student housing to enable a technology-enabled economic future

Published on November 16, 2023Last updated 2 days ago4 minutes reading time

Volunteers help families move their belongings into student residences on University of Regina Student Move-In Day.Volunteers help families move their belongings into student residences on University of Regina Student Move-In Day. Photo by KAYLE NEIS/Regina Leader-Post Files

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Canada’s future economic growth depends on fostering technological innovation enabled by a growth-oriented, productivity-focused workforce. That’s why it’s critical that colleges and universities produce much-needed talent and research.

But the lack of affordable housing stands in the way of attracting domestic and foreign students. To achieve shared prosperity in the future, higher education institutions must be surrounded by affordable student housing.

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Colleges and universities face enormous challenges when it comes to facilitating access to affordable student housing. Only a fraction of students have access to their own apartments, so many have to compete in a very tight rental housing market. Due to low vacancies, high rents and much lower incomes, students are unable to keep up, forcing many to live in precarious housing conditions.

The tragic death of an international student in Sydney, NS should serve as a warning to colleges and universities to be proactive in providing affordable housing alternatives to students.

The recent influx of international students poses an even greater challenge. Nearly one million international students, mostly from low- to middle-income countries, arrived with study permits between 2021 and 2022. The lack of sufficient funding has exposed their affordability issues, with food banks reporting a significant increase in demand from international students. A food bank in Brampton, Ontario recently refused to serve international students, citing insufficient resources and arguing that they should arrive with sufficient funds.

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Demand for skilled workers and higher education student demographics suggest that the proportion of international students in Canada is likely to increase. The rapid aging of the workforce also creates a need for more college graduates, but Canada is seeing a decline in the number of school-aged children.

According to the Fraser Institute, “the number of Canadians aged five to 17 fell by 0.2 per cent between 2000 and 2020.” According to Statistics Canada, the number of students enrolled in post-secondary institutions increased from 1.34 million in 2000 to 2.17 million in 2021.

Adverse demographic trends suggest that Canada’s economic engine requires an influx of international students to populate university research laboratories and fill full- and part-time entry-level positions.

International students account for a growing share of demand for student housing, but most of the demand comes from domestic students who need affordable housing close to campus locations. Because their income is significantly lower than that of workers, their ability to compete in the open rental market is limited, especially for international students who lack networks and sufficient resources.

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Admission to a college or university does not guarantee accommodation in institution-owned residence halls. Given the lack of affordable rental housing in small towns, some universities have made new admissions contingent on students finding housing before the start of the academic semester.

At the same time, local planning authorities have not given a clear priority to student accommodation, so student accommodation plans are not offered by local authorities, large or small.

Some try to solve the problem. For example, the industry-led Student Housing and University Real Estate Initiative (SHURE) regularly brings together relevant stakeholders at conferences to share and learn from best practices, such as this week’s two-day SHURE conference at the University of Toronto.

The choice between acquiring and converting existing buildings, such as hotels, or building from the ground up requires foresight regarding student demand, the availability of venture capital, and understanding and anticipating regulatory changes that may enable and facilitate construction or conversion.

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The challenge does not exist without viable solutions. For example, federal and provincial governments could explore establishing a Canadian student housing fund. And private equity firms, institutional investors and real estate investment trusts could pool resources to develop, own and operate student housing in high-demand jurisdictions.

Universities and colleges will be at the heart of the decision-making process as they are among the largest owners of the most expensive institutional real estate. In populous cities, their real estate and, more importantly, land have enormous value that could be used to bring together public and private sector players to increase the supply of student housing.

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The continued high vacancy rates in centrally located office markets also provide the opportunity to convert unneeded office space into student housing, although the acceptance of shared facilities (such as washrooms and kitchens) may enable relatively easier conversion of office floor plans into student housing.

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The shift from manufacturing to digitalization has been underway for decades. The recent emergence of generative artificial intelligence will accelerate the transition to an economic base that is increasingly reliant on knowledge economy workers, most likely those educated at universities and colleges. Canada must prioritize higher education and affordable student housing to enable a technology-enabled economic future.

Murtaza Haider is a professor of real estate management and director of the Urban Analytics Institute at Toronto Metropolitan University. Stephen Moranis is a real estate industry veteran. They can be accessed on the Haider-Moranis Bulletin website at www.hmbulletin.com.

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