A new report on Canada's rental market argues for a new policy approach in favour of building new rental supply. Learn what this means for Canada's biggest cities.

Canada’s largest cities have a rental housing deficit. Strong demand has pushed rental vacancy rates to historically low levels and rents are now reaching uncomfortable highs. In the coming years, rental demand is only set to go up—way up in the case of Toronto and Vancouver, where high home prices have crushed some home-ownership dreams.

If big cities have any hope of tackling affordability issues, rental supply must increase significantly. There are reasons to be optimistic about Montreal and Vancouver, where strong apartment and condo construction will send a wave of new rental units to market. Calgary, meanwhile, has breathing room thanks to elevated rental vacancies. But Toronto is a different story. Despite purpose-built apartment construction rising four-fold since 2014, rental supply is unlikely to come close to demand in the coming years. A deliberate policy to boost rental supply is needed—with specific targets and incentives to achieve them.

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