The recent announcement by the Canadian government to impose a cap on international student visas has brought the issue of Canada’s student housing shortage under the spotlight. The two-year cap, announced in late January 2024, is motivated in part by a desire to provide space for a range of quality measures to prevent the exploitation of international students to be implemented. The cap is also seen as being critical to ease pressure on the rental market, where it is claimed that students are “squeezing” low-income families out of the market.

Following the announcement of the cap, Ontario, Canada’s most populous province and home to half of the country’s international student population, announced a range of measures aimed at preventing the exploitation of international students, including a requirement that all colleges and universities must be able to guarantee that housing is available for incoming students. The government of British Columbia is expected to announce similar measures next week.

The focus on student accommodation is likely to become even more intense, with the federal government planning to implement a “recognized institution” framework in fall 2024. The framework that will see students who apply to study at universities and colleges with higher levels of support, housing, services and outcomes for international students receive fast-track study permits. Marc Miller, Canadian Minister of Immigration, Refugees and Citizenship, has said that the new policies aim to “punish the bad actors” and reward the good ones “who provide adequate outcomes for the success of international students.

Some experts have criticised the cap on international students for unfairly scapegoating international students and as a failure on the part of the government to address supply issues. Carolyn Whitzman, a housing policy expert, told Global News that the cap is unlikely to have a significant impact on vacancy rates or rent:

“It says we’re doing something, but it doesn’t address any of the underlying causes, which include (the government having) no idea of how many students are coming in, what kind of housing they need and at what cost … I think this demand side stuff is nonsense. And surely at this point, we recognize that there’s just this critical housing shortage. Trying to temporarily dampen demand through choosing this particular scapegoat (international students) isn’t really going to solve the supply shortage, which has gotten worse over the last year.”

However, some provinces in Canada have been working for some time on initiatives to alleviate the student housing shortage. In 2018, the British Columbia (BC) government pledged to invest $450 million in 5,000 additional student accommodation spaces. The BC government also enabled post-secondary institutions to take on debt for new student housing initiatives. Prior to 2018, post-secondary institutions, except for the University of British Columbia, were unable to do so, making it challenging for them to build on-campus housing without private sector support.

Following the introduction of the international student cap, Canada’s federal housing minister announced that post-secondary institutions will be able to apply for low-interest loans to build student housing starting this fall.

Canadian universities and colleges are racing to respond to the student housing crisis, with a range of initiatives. The University of British Columbia has plans to increase its number of student beds from nearly 14,000 to 17,300 by 2030. Other universities have rented old hotels, while some have bought and converted hotels to student accommodation. Some initiatives, such as the University of British Colombia’s “nano-suites” product – 120-square-foot (11.14 square-metre) spaces that include a bathroom, a fold-down bed that doubles as a desk, and a micro-kitchen are aimed at creatively maximising available space.

In spite of the range of initiatives underway, Canada has a much larger purpose-built student accommodation (PBSA) supply gap than the United States and many European countries.

A 2023 BONARD report, Why Canada’s PBSA sector is a great opportunity for investors highlights that of the 24 Canadian student cities studied by BONARD, “856 PBSA assets are currently offering a total of 165,762 beds, but only 46 new assets with 16,735 beds are in the pipeline, a figure dwarfed by the impressive rise in international student numbers.”

According to BONARD, Canada had a “10.3% PBSA provision rate and a 16.7% per cent private PBSA provision rate,” much lower than most European countries.