Twenty per cent of Canadian households have trouble finding the money to live in their homes because of a lack of affordable housing, the Conference Board of Canada says.

In a study released Tuesday, the think-tank estimates 75 per cent of Canadian families can comfortably afford their homes — meaning that housing costs consume no more than 30 per cent of their pre-tax incomes.Housing affordability has deteriorated in the last 15 years in Canada, the Conference Board notes. (Nathan Denette/Canadian Press)

Another five per cent live in subsidized rental housing. That leaves 20 per cent struggling with mortgage or rent payments that eat up more than 30 per cent of their incomes.

For that 20 per cent, it means making sacrifices in other areas, such as buying less food. As a result, the Conference Board says health suffers, productivity and competitiveness are reduced and the cost of health care and welfare is indirectly increased.

The report found that private-sector developers have tended to focus on building homes that are aimed at higher income Canadians. That leaves a wide swath of the market underserved.

But it is the private sector that has the efficiency and expertise in innovation that can best help to close the housing affordability gap.

“Developers can be helped to build more affordable housing units through a combination of incentives and assistance from government, and increased awareness of the opportunities to make a profit serving this segment of the market,” said Diana MacKay, the board's director of education and health.

She urges developers, governments and other groups to work together to address the shortage of affordable housing. The report, "Building from the Ground Up", suggests ways of financing and building affordable homes.

The report notes census data showing that housing affordability has worsened over the last 15 years.