New Research Shows the Effects of Filtering on Affordability

OTTAWA, ON, June 27, 2024 /CNW/ - As Canada faces a housing supply and affordability crisis, building a mix of housing cost types is the most effective way to create a vacancy chain and improve affordability over the long term, across all households. This process, also known as filtering, is the gradual transition of existing housing stock from higher-income to lower-income households, as new housing stock is built and vacancies are created.

New research released by Canada Mortgage and Housing Corporation (CMHC), Understanding Filtering: A Long-Term Strategy to New Supply and Housing Affordability, finds that as buildings mature, rents tend to fall nearly 20% after 20 years compared to new builds. As new market-rate and affordable housing stock is brought online and existing units turn over, existing stock becomes available and more affordable to lower income households through the resulting filtering process. In other words, the new housing of today will, over time, become the affordable housing option of tomorrow.

Read the full article on CMHC's Housing Observer: Understanding Filtering: A Long-Term Strategy to New Supply and Housing Affordability

Listen to CMHC's Chief Economist, Bob Dugan and Deputy Chief Economist, Aled ab Iorwerth, discuss the research on CMHC's YouTube channel.

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SOURCE Canada Mortgage and Housing Corporation (CMHC)