Montreal Housing in Crisis
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Montreal's housing crisis has been an ongoing issue for many years. The city's 2019 apartment vacancy rate hit 1.5%, a low not seen for 15 years prior. The rental vacancy rate bounced back up to 3%, a rate understood as representative of a balanced rental housing market, only to drop back down to 1.5% in 2023 as reported in the CHMC's Rental Market Report of January 2024.
Sources: Statcan (1998-2022), CHMC (2023).
The situation is even more dire for people in need of social and affordable housing. The average wait for subsidized housing in Montreal was nearly six years in 2022. The city put in place the By-law for a Diverse Metropolis on April 1, 2021, to boost the development of social, affordable, and family housing. The By-law requires developers to incorporate diverse residential units in their projects or to pay financial compensation to get out of those obligations. The city of Montreal released a report on the state of the By-law after two years, which highlighted that most developers opt to pay financial compensation. Only 660 social housing units have been completed or are in development for the 10,821 units added since the By-law was put in place, far from the target of 20% of units built for social housing. Some are also pointing the finger at the By-law for a Diverse Metropolis for exacerbating the housing crisis by adding roadblocks and increasing construction costs.
How much has the current administration supported development? Are wait times for construction permits worse today than in previous years? The city makes data about construction permits available, but only granted permits are included. There is no visibility on permits that were denied or that are still under review, so we have a partial picture. From those permits, we look at the larger projects with plans to create 12 of more new units. The following chart shows when those construction permits were requested, how long it took for permits to be granted, and how many new units each permit is expected to create.
Source: Données ouvertes - Permis de construction, transformation et démolition
We can see a construction boom between 2016 and 2021 and a general trend upwards for wait times to grant permits. We can take a closer look to see how many new units have been planned recently compared to previous years. The following chart shows the cumulative number of new housing units planned by permits granted under each mayor since they started their mandate.
Source: Données ouvertes - Permis de construction, transformation et démolition
There is still more demand than supply for housing in Montreal, and it may be true that some projects are delayed by questionable roadblocks, but the growth of new units of recent years far outpaces developments that took place during previous administrations. The following chart shows the distribution of wait times for each year of requested permits.
Source: Données ouvertes - Permis de construction, transformation et démolition
There isn't enough data for 2022-2023 as many permits are still under review and therefore not part of the dataset made available by the city. However, there's a clear trend upwards from 2017 to 2021. For all permits requested in 2017, 50% were granted within 225 days compared with slightly over 300 days in 2021.
An updated version of the By-law for a Diverse Metropolis went into effect on March 18, 2024. The city updated the requirements of the By-law in large part to incentivize developers to build and assign land instead of paying their way out. It remains to be seen how the updated By-law will impact new developments. Can the city catch up and build the needed social and affordable housing to meet their targets? Will wait times continue to increase as the city and developers work out agreements to meet the new By-law requirements?