Race for affordable housing as Waterloo booms

Updated: Jun 16, 2021

The Waterloo region is the second fastest growing area in Canada and it’s easy to see why. Part of the GTA’s ‘tech-triangle’, well known giants of the tech industry have been moving into Waterloo city in droves, students come to study at the esteemed innovation universities, drawn by the largest co-op program in North America and find that as graduates, they want to stay and work in the area, plus with remote work now a perk of the job thanks to COVID-19, more and more people are moving away from Toronto in search of a better work-life balance.


Those looking to call Waterloo home will find everything they could ever ask for in a burgeoning city; vibrancy, young demographic, restaurants and shops, recreational activities, a reliable and fast-growing transit system, access to walking and cycling trails, above average access to healthcare and more conservation spaces than you can shake a stick at. The one thing the region does lack however, is affordable housing.


What’s the scale of the affordable housing problem?


Waterloo isn’t on its own in this by any means, but the need for additional housing is more pressing in the region than in other municipalities because of its large student population and the lure of jobs for workers in the tech industry. The Waterloo region record reported on the housing crisis looming in the city just before the pandemic took hold and if it wasn’t a crisis before, it certainly is now following a mass exodus of over 80,000 people from big cities into suburban communities that seemingly offered more ‘bang for the buck’.


Those fleeing cities over the past 18 months or acquiring property speculatively aren’t the main ones impacted by the lack of housing and have in fact contributed to the problem which is essentially demand outstripping supply to propel house prices upwards. In the Kitchener-Waterloo region, house prices soared by over 34% year-on-year April 2020 to 2021 and rents in the area are also on the rise, increasing 4% between 2019 and 2020 to an average of $1,221 and well above provincial guidelines for the 8th consecutive year according to the CMHC. Incomes have failed to keep pace with increasing prices so that locals growing up in the area and those most vulnerable to the economic effects of COVID, are increasingly priced out of the market. Even the lower income families who were fortunate enough to remain in employment may then have been subjected to ‘renovictions’ as landlords were motivated to renovate and re-lease to more affluent tenants at a premium price.


Prioritizing more housing stock


There are two pressing concerns for the region coming out of COVID that require immediate attention to alleviate short supply of affordable housing;


1) Lack of housing at sub-market rates for those on low incomes including students, seniors, homeless and those being displaced through pandemic-related unemployment.


Over 7000 people from these groups are on waiting lists for community housing, finding themselves without enough income to cover basic human needs when spending upwards of 50% of their income on somewhere to live. Once pandemic relief measures are withdrawn, these numbers will spiral further.


2) Lack of affordable housing at market prices for newcomers to the area through inter-provincial migration, federal immigration programs and those that would have transitioned from rental to home ownership.


The median family income for the area at just over $80,000, is nowhere near enough for most renters to realize their dream of owning their own home, the cost of which, according to the Kitchener-Waterloo Association of Realtors (KWAR) exceeded an astounding $900,000 average on a detached property for the first time in February 2021.


Rental units are not turning over at the same rate either as tenants struggle to find anything affordable to move to in the private market. As international borders start to open up again, the system will come under even more pressure as the thousands of skilled workers finally make their landing and those still in progress start filtering through, helping the federal government in meeting their huge economic immigration targets.


Who’s going to take the baton?


Private construction creates the majority of new housing but the sector needs forward-thinking policies from the city and federal government around land usage, zoning and incentives to make this development beneficial. Waterloo city has been working hard in promoting the housing needs of the area for additional federal funding and approving pilot projects for the development and redevelopment of affordable mixed-use housing such as the Beechwood project recently awarded to Southside construction, which sees the developer effectively gifted the surplus land alongside other incentives totaling over $3.8M, in return for building housing that will be made available at 80% or less of the current market rental rate.

Projects such as this are reliant on cities’ engagement with private developers and increases in housing will only materialize through encouraging and incentivizing higher density development around transit areas whereas previous policies erred towards low density development of single family homes that only contributed to urban sprawl and carbon emissions and did little-to-nothing to provide housing for those most in need.


Developers are starting to take advantage of the grants on offer to build high density in the area with affordable housing as part of their design but collaborative projects are so far, few and far between and merely scratch the surface of a growing dilemma. Waterloo city are considering all manner of other policies to support private development including: tighter restrictions on the demolition of property that might be usefully redeveloped, restricting the conversion of existing affordable housing into higher-end units, the development of ‘inclusionary’ zoning policies which dictate that a certain percentage of new developments be dedicated to affordable housing, and; providing an increasing number of funding opportunities to developers to stimulate affordable housing creation and redevelopment.


Waterloo City Development Initiatives



The affordable housing crisis will be the proverbial ‘thorn in the side’ of planners and policy makers in the years to come as they attempt to make decisions as to how best to balance economic recovery with sustainable urban development. Providing people with places to live that are within their means is not something that can be ignored, not least because all the homeless and soon-to-be homeless that were given a temporary reprieve during the pandemic will soon be expected to fend for themselves again.


Intervention is required now on both a local and national level. Waterloo city has committed to 25,000 new affordable housing units by 2025 and gone so far as identifying the greenfield sites and built-up areas that are ripe for development it just remains to be seen which developers will seize the opportunity; key partnerships with private commercial real estate entities and progressive planning policy will be key in achieving these targets and ensuring everyone has a place to call home in Waterloo.




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