Economic and Social Reports
Do international students and temporary foreign workers pay more than Canadian-born individuals in the rental market?

Abstract

Amid growing concerns in Canada over housing affordability, questions have arisen about non-permanent residents’ experience in the Canadian rental market. Some media sources have indicated that non-permanent residents are disproportionately affected by the ongoing housing crisis. This study uses data from the 2021 Census of Population to examine whether international students and temporary foreign workers face higher rental costs than the Canadian-born population (non-immigrants) and longer-term immigrants (those who were admitted more than five years preceding the census year). It also explores the factors contributing to disparities in rental expenses among these groups.

The study shows that, on average, international students paid 10% more in monthly rental costs per rental unit, while temporary foreign workers paid 21% more, compared with Canadian-born individuals living in the same urban area before adjusting for neighbourhood, dwelling and household characteristics. The differences in rental costs observed for temporary foreign workers relative to Canadian-born individuals dropped to 5% when comparing renters with similar household characteristics living in the same neighbourhood and in similar dwellings. The higher rental costs paid by international students within a given urban area (or neighbourhood) can be entirely accounted for by differences in dwelling characteristics, as international students were less likely than Canadian-born individuals to reside in subsidized housing and more likely to live in condominiums and newer buildings.

Keywords: international students, temporary foreign workers, rental cost, neighbourhood

Authors

Wendy Kei is with the Data Access Division and Feng Hou is with the Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada. Haozhen Zhang is with the Research and Data Branch at Immigration, Refugees and Citizenship Canada.

Acknowledgments

This study was conducted by Immigration, Refugees and Citizenship Canada and Statistics Canada. The authors would like to thank Nicolas Bastien, Brahim Boualam, Chantal Goyette, Cesur Kavaslar, René Morissette, Ritchie Paul, Jing Shen, Parvin Soleymani-Olyaei and Catherine Tuey for their advice and comments on an earlier version of this paper.

In recent years, rising concerns over housing affordability in Canada have stimulated interest in exploring non-permanent residents’ experience in the Canadian rental market. For instance, media reports have suggested that international students are paying high shelter costs because of limited vacancies in certain specific geographical markets, potential discrimination against newcomers and obstacles in securing affordable housing (CBC News, 2022; Cooke and King, 2023; Rana, 2023, 2024; Triandafyllidou, 2023).

This article uses data from the 2021 Census of Population to examine the association between non-permanent resident type and rental costs in Canada.^Note  The focus of this paper is to investigate whether international students and temporary foreign workers pay higher rent than the Canadian-born population (non-immigrants) and longer-term immigrants (those who were admitted more than five years preceding the census year). Because many asylum claimants (those who claimed refugee status in Canada) initially stay in shelters or other transitional accommodations provided by municipalities and non-profit organizations, their experience in the rental market may be different from that of other non-permanent residents. This article uses descriptive statistics and regression models to determine whether the discrepancies in rent paid by international students and temporary foreign workers are associated with their underrepresentation in less expensive housing markets or whether they pay more for similar rental units, compared with Canadian-born individuals and longer-term immigrants. The analysis was conducted at the dwelling level, focusing exclusively on rental dwellings in municipalities with international students and temporary foreign workers (see the “Data description” section for details on the study sample and measures).

On average, international students and temporary foreign workers tend to live in more expensive rental units than the Canadian-born population and longer-term immigrants

Table 1 shows the shelter costs and dwelling characteristics among renter households, by immigrant status. Shelter costs refer to monthly dwelling-related expenses, which include (where applicable) rent and costs of electricity, heat, water and other municipal services. In 2021, the average monthly shelter costs per rental unit were $1,440 for international students and $1,610 for temporary foreign workers. By comparison, the average shelter costs were $1,300 for asylum claimants, $1,510 for recent immigrants who were admitted within the five years preceding the census year, $1,330 for longer-term immigrants and $1,220 for Canadian-born respondents.



Table 1 also presents group differences in selected community, dwelling and household characteristics that may be related to the gap in shelter costs by immigrant status.

The location of the dwelling unit could be an important explanatory factor. In 2021, 33.5% of international students and 41.0% of temporary foreign workers reported their place of residence to be in either the Toronto or Vancouver census metropolitan area (CMA), while 17.0% of the Canadian-born population reported living in one of these two CMAs (see Table 1). These two CMAs reported the highest average monthly rent amounts for a two-bedroom rental apartment in 2021 (Canada Mortgage and Housing Corporation, 2022).^Note  Relative to the Canadian-born population, foreign-born respondents were also more likely to live in immigrant-dense municipalities (i.e., municipalities with a higher share of non-permanent residents and recent immigrants).

International students and temporary foreign workers were less likely to access subsidized housing.^Note  In 2021, proportionately fewer international students (3.5%) and temporary foreign workers (3.1%) lived in subsidized housing, compared with Canadian-born individuals (10.5%) and longer-term immigrants (16.6%).^Note 

The descriptive statistics indicate the possibility that international students and temporary foreign workers lived in dwellings with better conditions than their Canadian-born counterparts, and better conditions tend to be associated with higher shelter costs.^Note  A relatively smaller proportion of international students (19.4%) and temporary foreign workers (17.6%) reported living in dwellings that needed major or minor repairs (i.e., beyond the need for regular maintenance). By comparison, 30.7% of Canadian-born respondents and 28.0% of longer-term immigrants indicated the need for major or minor repairs in their rental units.

A higher proportion of international students and temporary foreign workers lived in relatively new dwellings (built within 10 years) than the Canadian-born population and longer-term immigrants. The percentage of respondents living in condominiums was also higher for international students (32.0%) and temporary foreign workers (33.9%), compared with the Canadian-born population (15.7%) and longer-term immigrants (18.0%). Furthermore, international students and temporary foreign workers were more likely to live in the downtown area and close to transit systems than longer-term immigrants and Canadian-born respondents.

International students and temporary foreign workers also had different household characteristics, relative to longer-term immigrants and the Canadian-born population. Table 1 reveals that international students and temporary foreign workers were, on average, younger than all other immigrant status categories. In addition, international students and temporary foreign workers tended to reside in dwellings with a larger household size and were more likely to be recent renter households (households that lived in a different place one year ago), compared with the Canadian-born population. Previous studies (e.g., MacIsaac, 2023; Gorski, 2023) have shown that rental costs, on average, are higher for new renters.

The higher propensity to reside in more expensive rental markets primarily accounts for the higher shelter costs paid by international students and temporary foreign workers

This section of the article uses ordinary least squares regression models to examine whether group differences in shelter costs can be accounted for by group differences in community, dwelling and household characteristics. The estimations use the natural logarithmic transformation of shelter costs as the outcome, and the model coefficients can be interpreted approximately as a percentage change in monthly shelter costs when a particular explanatory variable increases by one unit, while holding other variables constant.^Note  Table 2 illustrates the results for four different model estimations, where each specification incorporates CMA and census agglomeration (CA) fixed effects.

Model 1 in Table 2 initiates the analysis by regressing the natural logarithm of shelter costs on a categorical variable for the primary household maintainer’s immigrant status, controlling only for CMA and CA fixed effects. Without accounting for dwelling, household and community-related characteristics, results indicate that, on average, international students paid 10% more in monthly shelter costs per rental unit, while temporary foreign workers paid 21% more, relative to the amount paid by the Canadian-born population if they resided in the same CMA or CA. Recent immigrants also paid more than Canadian-born renters, while asylum claimants paid similar amounts as Canadian-born renters.

Model 2 includes dwelling and community characteristics in addition to CMA and CA fixed effects to determine whether international students and temporary foreign workers faced higher shelter costs because of their relative concentration in certain rental market segments. Results show that international students, on average, did not pay higher rent than Canadian-born renters when similar dwellings were compared. However, temporary foreign workers still paid higher rent after controlling for dwelling- and community-related control variables, but the difference dropped by half. Similarly, recent immigrants paid higher rent than the Canadian-born population in similar dwelling types.

Further decomposition analysis reveals that the smaller shares of international students and temporary foreign workers living in subsidized housing and the larger shares living in condominiums and newer dwellings account for a large portion of their higher rental costs, relative to the Canadian-born population.

Model 3 further controls for some household-level characteristics. The results show that with similar community, dwelling and household characteristics, there was no difference in shelter costs between international students and the Canadian-born population, while the gap with the Canadian-born population remained at about 10% for temporary foreign workers, 9% for recent immigrants and 4% for asylum claimants.

Model 4 further controls for household size. This final model shows whether, on a per capita basis, non-permanent residents paid more for rental housing than the Canadian-born population and longer-term immigrants. The results indicate that international students and asylum claimants paid similar shelter costs per person as the Canadian-born population. Conversely, temporary foreign workers and recent immigrants still faced higher shelter costs per person after controlling for dwelling, community and household characteristics.



A potential shortcoming of the model estimates in Table 2 is that rental prices can vary considerably across different neighbourhoods within a large urban area. This variation could lead to higher average shelter costs for international students and temporary residents if they tend to reside in more expensive neighbourhoods. To account for this possibility, the model specifications in Table 3 adjust for neighbourhood fixed effects. These fixed effects include census tracts for CMAs and for CAs that have census tracts, and census subdivisions (also referred to as municipalities in this article) for remaining geographical regions.^Note 

The results in Model 1 show that international students faced approximately 7% higher shelter costs, while temporary foreign workers faced about 16% higher costs, compared with the Canadian-born population in the same neighbourhood. These differences were less pronounced than those observed when controlling for CMA and CA fixed effects, as shown in Table 2, yet they remained statistically significant. The results for international students in subsequent models largely align with those in Table 2, except for Model 3, where international students paid less for shelter costs after controlling for similar community, dwelling and household characteristics. For temporary foreign workers, the difference in shelter costs was smaller in Table 3 than in Table 2, but still statistically significant.^Note  When differences in neighbourhood, dwelling and household characteristics were adjusted for, temporary foreign workers still paid about 5% more than Canadian-born renters.

Interpreting these estimates with adjustments for neighbourhood fixed effects requires caution. It is plausible that international students and temporary foreign workers may cluster in specific neighbourhoods because of factors like housing availability or proximity to educational campuses (Mocanu and Tremacoldi-Rossi, 2023; Moraga et al., 2019).^Note 

Overall, results from tables 1 to 3 imply that the higher shelter costs paid by international students were associated with their underrepresentation in less expensive rental markets. However, temporary foreign workers still faced higher shelter costs even after controlling for these rental market characteristics.



Conclusion

This article examined whether international students and temporary foreign workers experienced higher rental costs relative to the Canadian-born population and longer-term immigrants, using data from the 2021 Census of Population. This article also explored the factors that were associated with higher rental costs faced by these population groups. The study found that international students’ higher shelter costs can be entirely accounted for by the characteristics of their housing because they were less likely to reside in subsidized housing and more likely to live in condominiums and newer dwellings within urban areas or neighbourhoods. However, even after controlling for neighbourhood, dwelling and household characteristics, the study found that temporary foreign workers still faced higher shelter costs, compared with their Canadian-born counterparts.

Data description

The data in this analysis are from the 2021 Census of Population. The analysis is conducted at the dwelling level because the information on shelter costs was collected at this level. This study includes only rental dwellings. To increase the comparability of shelter costs by immigrant status, the computations exclude municipalities that had no international students and temporary foreign workers. The study further excludes dwellings where the primary household maintainer was an Indigenous person, because very few non-permanent residents and immigrants reported their identity as Indigenous. The final sample includes 977,760 dwellings (unweighted counts).

The outcome variable is monthly shelter costs, which include—where applicable—rent and the costs of electricity, heat, water and other municipal services. The analysis is also replicated by using monthly rent as the outcome measure, and the results are broadly similar.

The focal variable is the immigrant status of the primary household maintainer in a dwelling, which refers to whether the individual is a non-immigrant (born in Canada), an immigrant or a non-permanent resident. This study then breaks down the non-permanent resident category into the international student, temporary foreign worker and asylum claimant subcategories, and the immigrant category into the recent immigrant and longer-term immigrant subcategories. International students are non-permanent residents who hold a study permit only, or who hold a work and study permit at the same time. Temporary foreign workers are non-permanent residents who hold a work permit only. Asylum claimants are non-permanent residents who have applied for refugee protection status in Canada and are waiting for a decision on their claim from the Immigration and Refugee Board of Canada. Recent immigrants are those who were admitted to Canada five years or less before the 2021 Census, and longer-term immigrants are those who were admitted to Canada more than five years preceding the 2021 Census.

Multivariate models are used to control for community, dwelling and household characteristics. In Table 2, community-level variables include detailed CMAs and CAs; percentage of newcomers (all non-permanent residents and recent immigrants) in the municipality’s total population; percentage of Canadian-born youth (aged 18 to 24) in the municipality; proximity to public transit, which measures the closeness of a dwelling’s neighbourhood to any source of public transportation within walking distance of 1 km and is a normalized index with values ranging from 0 to 1, where 0 indicates the lowest proximity and 1 the highest proximity (Statistics Canada, n.d.); and whether a dwelling is located in a city’s downtown. Unlike Table 2, Table 3 includes neighbourhood fixed effects and excludes the following control variables: (1) percentage of newcomers in the municipality’s total population, (2) percentage of Canadian-born youth in the municipality, (3) proximity to public transit and (4) whether a dwelling is located in the downtown of a city. The neighbourhood fixed effects include census tracts for CMAs and for CAs that have census tracts, and census subdivisions (municipalities) for remaining geographical regions.

Dwelling characteristics include dwelling condition (regular maintenance needed, minor repairs needed and major repairs needed), condominiums, subsidized housing, dwelling type (apartments, detached or row houses, and other dwelling types), period of construction (built within 10 years and older dwellings) and number of bedrooms.

Household characteristics include the primary household maintainer’s age, gender, population group (Black, Chinese, South Asian, White and Other racialized groups), recency in the dwelling (lived in a different place one year ago, based on the “mobility status, one year” variable) and household size.^Note 

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