Talent makes the world go-round. The key to retaining talent goes well beyond competitive wages. Other important drivers include team dynamics, alignment of values between employees and their employer, the ability to make a difference and quality of living/work life balance. A key driver of quality of life is affordability of housing and in this area the Edmonton region is a clear leader in North America.
Having housing that is both high quality and affordable can be an important tool for helping companies attract and retain highly skilled staff.
Housing affordability is a hot topic and also a very personal one. There are many associated terms which can cause confusion- even the order of words can change the meaning. For example, “affordable housing” often means “non-market, social housing”, whereas “housing affordability” can mean the ability for individuals to afford housing. I’m focusing on the latter. There are various ways of defining housing affordability.
A common way of measuring housing affordability is to look at the proportion of income that is used for housing. The United States-based, Urban Reform Institute measures affordability using a version of this method, with a ratio of median income and median housing price. Although imperfect, the methodology provides a high-level indication of where citizens can and cannot afford housing. According to their latest research (2022 edition) the Edmonton region’s housing is the most affordable in Canada and the third most affordable housing in the world (of the 92 major markets considered)1. The first table (Figure. 1) below shows the North American cities that were analysed; and the second also includes the international cities they considered.
Source: Urban Reform Institute, 2022
Data from the Canadian Real Estate Association shows that the Edmonton region also has among the lowest housing costs in Canada based on price alone (Figure 3).
Source: Canadian Real Estate Association
Another way of looking at housing affordability is as a percentage of income required for housing- with 33% of income being considered the maximum for housing to be affordable. Data for 2022 from RBC Research shows that the Edmonton region is a leader using this metric both in th most recent year (Figure 4) and over time (Figure 5):2
Source: RBC Research
The region’s housing affordability advantage also holds true in the rental market. According to the Canadian Center for Policy Alternatives, the Edmonton region is second after Montreal for rental affordability among Canada’s major cities (Figure 6).
Source: Canadian Centre for Policy Alternatives, 2022
Data from the CMHC shows that the Edmonton region is second (after Montreal) for Median rent across unit types (Figure 7).
Source: Canadian Housing and Mortgage Corporation, 2022
Undoubtedly one of the reasons homes in the Edmonton region are affordable is because the region punches above its weight when it comes to the construction of housing. If we look at data from the Canadian Housing and Mortgage Corporation, we can see the region consistently ranks well on a per capita basis with the construction of housing units compared to its peers, as measured by housing starts (Figure 8).
This consistent construction of homes is certainly one of the factors that Edmonton’s housing is so affordable.
The number of housing starts may in turn be driven by the region’s efficient permitting process relative to other jurisdictions. The Canadian Home Builders’ Association commissioned a report in 2020 which concluded that the City of Edmonton is number two in Canada for the efficiency of its permitting process (Figure 9).
Source: Canada Home Builder’s Association, 2020
Also interesting to me is that, although there is still a long way to go towards densification (Edmonton is still the second least dense major city in Canada) we can see based on CMHC data a trend of increased densification over time. Figure 10 shows that between 2016 and 2020 multiunit housing increased from 57% of new units to 64% of new units.
This trend is also born out by another data set from the Canadian Housing and Mortgage Corporation released in April 2022 which shows the Edmonton region leads the country in the rate of increase of construction of non-single detached housing as measured in year over year percent change.
Source: Canadian Mortgage and Housing Corporation, 2022
This trend of increased densification is interesting to me for a few reasons:
The costs of housing in many jurisdictions remains a huge obstacle in the attraction and retainment of top talent. Even in the Edmonton region, housing is not accessible to all, however, if you are a business trying to attract talent you will find the Edmonton region has a competitive advantage in housing affordability.
